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Putin wants ‘unfriendly’ countries to pay for Russian gas in roubles

RUSSIAN President Vladimir Putin. — REUTERS

LONDON — Russia will seek payment in roubles for gas sold to “unfriendly” countries, President Vladimir Putin said on Wednesday, and European gas prices soared on concerns the move would exacerbate the region’s energy crunch.

European nations and the United States have imposed heavy sanctions on Russia since Moscow sent troops into Ukraine on Feb. 24. But Europe depends heavily on Russian gas for heating and power generation, and the European Union (EU) is split on whether to sanction Russia’s energy sector.

Mr. Putin’s message was clear: If you want our gas, buy our currency. It remained unclear whether Russia has the power to unilaterally change existing contracts agreed upon in euros.

The rouble briefly leapt after the shock announcement to a three-week high past 95 against the dollar. It pared gains but stayed well below 100, closing at 97.7 against the dollar, down by more than 22% since Feb. 24.

Some European wholesale gas prices were up to 30% higher on Wednesday. British and Dutch wholesale gas prices jumped.

Russian gas accounts for about 40% of Europe’s total consumption. EU gas imports from Russia this year have fluctuated by 200 million to 800 million euros ($880 million) a day.

“Russia will continue, of course, to supply natural gas in accordance with volumes and prices… fixed in previously concluded contracts,” Mr. Putin said at a televised meeting with government ministers.

“The changes will only affect the currency of payment, which will be changed to Russian roubles,” he said.

German Economy Minister Robert Habeck called Mr. Putin’s demand a breach of contract and other buyers of Russian gas echoed the point.

“This would constitute a breach to payment rules included in the current contracts,” said a senior Polish government source, adding Poland has no intention of signing new contracts with Gazprom after their existing deal expires at the end of this year.

Major banks are reluctant to trade in Russian assets, further complicating Mr. Putin’s demand.

A spokesperson for Dutch gas supplier Eneco, which buys 15% of its gas from Russian gas giant Gazprom’s German subsidiary Wingas GmbH, said it had a long-term contract denominated in euros.

“I can’t imagine we will agree to change the terms of that.”

According to Gazprom, 58% of its sales of natural gas to Europe and other countries as of Jan. 27 were settled in euros. US dollars accounted for about 39% of gross sales and sterling for about 3%. Commodi-ties traded worldwide are largely transacted in the US dollar or the euro, which make up roughly 80% of worldwide currency reserves.

“There is no danger for the (gas) supply, we have checked, there is a financial counterparty in Bulgaria that can realize the transaction also in roubles,” Energy Minister Alexander Nikolov told reporters in Sofia. “We expect all kinds of actions on the verge of the unusual but this scenario has been discussed, so there is no risk for the payments under the existing contract.”

Several firms, including oil and gas majors Eni, Shell and BP, RWE and Uniper — Germany’s biggest importer of Russian gas — declined to comment.

“It is unclear how easy it would be for European clients to switch their payments to roubles given the scale of these purchases,” said Leon Izbicki, associate at consultancy Energy Aspects. He said, however, that Russia’s central bank could provide additional liquidity to foreign exchange markets that would enable European clients and banks to obtain needed roubles.

Moscow calls its actions in Ukraine a “special military operation.” Ukraine and Western allies call this a baseless pretext.

ONE-WEEK DEADLINE

Mr. Putin said the government and central bank had one week to come up with a solution on moving operations into the Russian currency and that Gazprom would be ordered to make the corresponding changes to contracts.

In gas markets on Wednesday, eastbound gas flows via the Yamal-Europe pipeline from Germany to Poland declined sharply, data from the Gascade pipeline operator showed.

“The measures taken by Russia may also be interpreted as provocative and may increase the possibility that Western nations tighten sanctions on Russian energy,” said Liam Peach, emerging Europe econo-mist at Capital Economics.

The European Commission has said it plans to cut EU dependency on Russian gas by two-thirds this year and end its reliance on Russian supplies “well before 2030.”

But unlike the United States and Britain, EU states have not sanctioned Russia’s energy sector. The Commission, the 27-country EU’s executive, did not respond to a request for comment.

Mr. Habeck said he would discuss with European partners a possible answer to Moscow’s announcement. Dutch Prime Minister Mark Rutte said more time was needed to clarify Russia’s demand.

“In their contracts it’s usually specified in what currency it has to be paid, so it’s not something you can change just like that,” Mr. Rutte said during a debate with parliament.

Russia has drawn up a list of “unfriendly” countries corresponding to those that have imposed sanctions. Deals with companies and individuals from those countries must be approved by a government com-mission.

The countries include the United States, European Union member states, Britain, Japan, Canada, Norway, Singapore, South Korea, Switzerland and Ukraine. Some, including the United States and Norway, do not purchase Russian gas.

The United States is consulting with allies on the issue and each country will make its own decision, a White House official told Reuters. The United States has already banned imports of Russian energy. — Reuters

By offloading rote tasks to bots, retailers can focus on strategy

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By Patricia B. Mirasol, Reporter

The use of robotic process automation (RPA), in conjunction with artificial intelligence (AI), will free retailers from rules-based tasks and allow them to focus on strategic and creative ones.

RPA is a form of automation that uses software bots to carry out structured and repetitive tasks. The combination of RPA, AI, and machine learning (ML) working together is often referred to as intelligent automation, said Kevin Redmond, vice president of data, AI & automation at IBM Asia Pacific.

“We can say AI and ML is like our brain, taking in available information and making decisions, while RPA is like our hands, performing actions that need to be done — possibly based on the decisions made by AI and ML,” he explained in an e-mail to BusinessWorld.

RPA is an effective way to streamline workflows in supply chain management and tailored promotions, added Natalie Pia H. Azarcon, managing partner at IBM Consulting, IBM Philippines.

“Retailers can author [RPA] bots capable of copying data from supply chain management systems like Oracle into standardized order forms. The bots can even submit orders through online portals, or help process invoices by entering data into accounting systems,” she said in a separate e-mail.

Customer experience can likewise be improved through a bot’s transfer of customer purchase data into a marketing system.

“The data can be used to segment customers for tailored offers and advertisements,” Ms. Azarcon told BusinessWorld. “RPA can also communicate personalized offers to customers through interactive voice response technology… encouraging repeat business.”

Other retail use cases of RPA, which can be deployed in the cloud or on-premise, include fraud detection, sales analytics, and returns processing.

Continuing with his human analogy, Mr. Redmond noted that chatbots are like our ears and mouth. RPA chatbots go beyond the scope of normal chatbots, he said. For instance, instead of sending customers step-by-step instructions on how to change their mailing addresses like the latter is wont to do, the former can go ahead and change the detail itself from the backend.

Mr. Redmond added that the potential for RPA is “limitless,” given that many tasks are candidates for automation. The pandemic — which puts a stress on effective operational management in the face of hybrid work — accelerated its growth.

“RPA is focused largely on cost reduction and is an innovation and survival game plan for companies to stay competitive,” he said. “Manpower cost is one of the top three cost components of organizations, and companies need to optimize their human labor with digital labor to maximize productivity.”

A November 2021 study released by Forrester, a research and advisory company, found that a credit union system organization’s use of RPA resulted in a productivity gain of about $740,000 over three years. The time needed for account creation also fell from two days to 40 minutes, allowing 80% of the 40,000-strong workforce to move on to higher skill tasks.

On invasion milestone, Ukraine urges solidarity as Western leaders gather

Ukrainian President Volodymyr Zelensky — UKRAINIAN PRESIDENTIAL PRESS SERVICE/HANDOUT VIA REUTERS

LVIV/KHARKIV, Ukraine/ BRUSSELS — Ukraine’s leader called for solidarity on Thursday, a month since Russia’s invasion began, warning he would see who sells out at summits in Europe where bolstering sanctions and NATO is planned but restrictions on energy could prove divisive.

US President Joseph R. Biden, Jr., has arrived in Brussels for meetings of the alliance, Group of 7 (G7), and European Union over a conflict that began on Feb. 24 and has caused more than 3.6 million refugees to flee the country.

Mr. Biden’s visit could also shine light on a dispute with European allies, some of whom are heavily reliant on Russian oil and gas, over whether to impose further energy sanctions.

The issue has been a “substantial” topic and the subject of “intense back and forth” in recent days, White House national security adviser Jake Sullivan told reporters. The United States has already banned imports of Russian oil.

President Vladimir Putin on Wednesday said Moscow planned to switch gas sales made to “unfriendly” countries to roubles, causing European gas prices to soar on concerns the move would exacerbate the region’s energy crunch.

As the humanitarian toll from the conflict continues to rise, driving a quarter of Ukraine’s population of 44 million from their homes, President Volodymyr Zelenskyy called on people around the world to take to the streets and demand the war end.

“Come from your offices, your homes, your schools and universities, come in the name of peace, come with Ukrainian symbols to support Ukraine, to support freedom, to support life,” he said in a video address.

The United States planned to announce more sanctions on Russian political figures and oligarchs on Thursday, and officials would have more to say on Friday about European energy issues, Sullivan said.

Ahead of his meeting with Mr. Biden, NATO Secretary-General Jens Stoltenberg said the alliance would boost its forces in Eastern Europe by deploying four new battle groups in Bulgaria, Hungary, Romania, Slovakia.

Mr. Zelenskyy said on Thursday he expected “serious steps” from Western allies.

He repeated his call for a no-fly zone and complained that the West had not provided Ukraine with planes, modern anti-missile systems, tanks or anti-ship weapons.

“At these three summits we will see who is our friend, who is our partner and who sold us out and betrayed us,” he said in a video address released early on Thursday.

KYIV HIT 

Moscow calls its actions in Ukraine a “special operation” that it says is not designed to occupy territory but to destroy its southern neighbor’s military capabilities and capture what it regards as dangerous nationalists.

The West says this a baseless pretext for an unprovoked war.

Although the Kremlin says its operation is going to plan, Russian forces have taken heavy losses, stalled on most fronts and face supply problems. They have turned to siege tactics and bombardments, causing huge destruction and many civilian deaths.

Kyiv Mayor Vitali Klitschko told reporters on Wednesday that 264 civilians in the city had been killed by Russian attacks. He later said one person was killed and two wounded on Wednesday when shells hit a shopping center parking lot.

Russia has denied targeting civilians.

US Secretary of State Antony Blinken said the United States had assessed that members of Russia’s forces had committed war crimes.

Mr. Blinken said there had been “numerous credible reports of indiscriminate attacks and attacks deliberately targeting civilians, as well as other atrocities.”

Worst hit has been the southern port of Mariupol, where hundreds of thousands of people have been sheltering since the war’s early days under constant bombardment and with food, water and heating supplies cut.

Satellite photographs from commercial firm Maxar showed massive destruction of what was once a city of 400,000 people, with residential apartment buildings in flames.

A total of 4,554 people were evacuated from Ukrainian cities through humanitarian corridors on Wednesday, a senior official said, considerably fewer than the previous day.

Ukraine’s armed forces chief of staff early on Thursday said Russia was still trying to resume offensive operations to capture the cities of Kyiv, Chernihiv, Sumy, Kharkiv, and Mariupol.

To counter troop shortages, Moscow was moving in fresh units close to the Ukraine border and calling up soldiers who had recently served in Syria, it added in a Facebook post.

‘UNFRIENDLY’ COUNTRIES 

As Western leaders prepared to meet, British Prime Minister Boris Johnson said he would push for an increase in defensive lethal aid to Ukraine.

The first US shipment from a new, $800 million arms package for Ukraine authorized last week will start flying out in the next day or so, a senior defense official said.

Mr. Putin’s threat to switch certain gas sales to rubles sent European futures soaring on concerns the move would exacerbate an energy crunch and jam up deals that run to hundreds of millions of dollars every day.

Russian gas accounts for some 40% of Europe’s total gas consumption.

Moscow has drawn up a list of “unfriendly” countries which have imposed sanctions. They include the United States, European Union members, Britain, and Japan, among others.

“The changes will only affect the currency of payment, which will be changed to Russian rubles,” said Mr. Putin.

And as an information battle also rages, a Russian regulator blocked Alphabet’s news aggregator Google News, saying it allows access to what it calls fake material about the military operation, Interfax news agency said.

Google said in a statement that some people were “having difficulty” accessing the Google News app and website in Russia and this was “not due to any technical issues at our end.”

Earlier the company said it would not help websites, apps and YouTube channels sell ads alongside content that it deemed exploited, dismissed or condoned the conflict. — Natalia Zinets, Vitalii Hnidiy, and Jarrett Renshaw/Reuters 

Madeleine Albright, former US secretary of state and feminist icon, dies at 84

Former US secretary of state Madeleine Albright (1937–2022), ca. 1997. US Department of State/Wikimedia Commons

WASHINGTON — Madeleine Albright, who fled the Nazis as a child in her native Czechoslovakia during World War Two then rose to become the first female US secretary of state and, in her later years, a pop culture feminist icon, died on Wednesday at the age of 84. 

Her family announced her death on Twitter and said she had died of cancer. Leaders, diplomats and academics remembered her as a trailblazer on the world stage. 

Albright served as US ambassador to the United Nations from 19931997 in US President Bill Clinton’s administration. He then nominated her to become the first female secretary of state and she served in that role from 19972001. 

“Madeleine Albright was a force. She defied convention and broke barriers again and again,” US President Joseph R. Biden, Jr., said. He directed US flags be flown at half-staff at the White House and government buildings, including embassies, until March 27. 

She was a tough-talking diplomat in an administration that hesitated to involve itself in the two biggest foreign policy crises of the 1990s — the genocides in Rwanda and Bosnia-Herzegovina. 

She once upset a Pentagon chief by asking why the military maintained more than 1 million men and women under arms if they never used them. 

The plain-spoken Albright took a tough line on a 1996 incident where Cuban jet fighters downed two unarmed US-based planes, saying: “This is not cojones, this is cowardice,” using a Spanish vulgarity meaning “testicles.” 

While at the United Nations, where Security Council members stood in silence on Wednesday to honor her memory, she pressed for a tougher line against the Serbs in Bosnia after Bosnian Serb military forces laid siege to the capital Sarajevo. 

During Mr. Clinton’s first term, many of his administration’s top foreign policy experts did not want to get involved because they vividly remembered how the United States became bogged down in Vietnam. 

In 1995, Bosnian Serb soldiers overran three Moslem enclaves, Srebrenica, Gorazde, and Zepa, and massacred more than 8,000 people. 

The United States responded by working with NATO on airstrikes that forced an end to the war but only after it had been going on for three years. 

Albright’s experience as a refugee prompted her to push for the United States to use its superpower clout. She wanted a “muscular internationalism,” said James O’Brien, a senior adviser to Albright during the Bosnian war. 

Early in the Clinton administration, while she unsuccessfully advocated for a quicker, stronger response in Bosnia, Albright backed a UN war crimes tribunal that eventually put the architects of that war, including Serbian President Slobodan Milosevic and Bosnian Serb leaders, in jail, O’Brien said. 

The painful lessons learned in Rwanda and Bosnia served the United States well in Kosovo, when Washington saw the more powerful Serbs begin a program of ethnic cleansing of ethnic Albanians. NATO responded with an 11-week campaign of air strikes in 1999 that extended to Belgrade. 

Kosovo President Vjosa Osmani said on Wednesday she was “deeply shocked by the loss of Kosovo’s great friend,” adding that the intervention “gave us hope, when we did not have it.” 

During efforts to press North Korea to end its nuclear weapons program, which were eventually unsuccessful, Albright traveled to Pyongyang in 2000 to meet North Korean leader Kim Jong-il, becoming the highest ranking US official to visit the secretive Communist-run country at the time. 

FEMINIST HEROINE 

Once the Clinton years and the 1990s were over, Albright became an icon to a generation of young women looking for inspiration in their quest for opportunity and respect in the workplace. Albright was fond of saying: “There’s a special place in hell for women who don’t help each other.” 

Albright was a marked contrast to her predecessors and male colleagues in uniform suits. She used clothes and jewelry to send tart, political messages. One favorite was a snake brooch, a reference to Iraqi leader Saddam Hussein calling her an “unparalleled serpent.” 

She wrote a book about her signature jewelry, one of several bestsellers, explaining that the pins were a diplomatic tool. Balloons or flower pins would indicate she felt optimistic, while a crab or turtle would indicate frustration. 

Born Marie Jana Korbelova in Prague on May 15, 1937, she and her family fled in 1939 to London when Germany occupied Czechoslovakia. She attended school in Switzerland at age 10 and adopted the name Madeleine. 

She was raised a Roman Catholic but after she became secretary of state, the Washington Post dug up documentation showing that her family was Jewish and relatives, including three grandparents, died in the Holocaust. Her parents likely converted to Catholicism from Judaism to avoid persecution as Nazism gained strength in Europe, the paper reported. 

After the war, the family left London and returned to Czechoslovakia, then in the throes of a communist takeover. 

Her father, a diplomat and academic who opposed communism, moved the family to the United States where he taught international studies at the University of Denver. One of his favorite students was Condoleezza Rice, who would become the second female secretary of state in 2005 under Republican President George W. Bush. 

“It is quite remarkable that this Czech émigré professor has trained two secretaries of state,” Albright told the New York Times in 2006. 

Albright attended Wellesley College in Massachusetts, and got a doctorate from Columbia University. She became fluent or close to it in six languages including Czech, French, Polish and Russian as well as English. 

In 1959, she married newspaper heir Joseph Medill Patterson Albright, whom she met while working at the Denver Post, and they had three daughters. They divorced in 1982. 

She followed her father into academia but also became involved in Democratic Party politics. Albright joined the staff of Senator Edmund Muskie, a Maine Democrat, in 1976 and two years later became a member of President Jimmy Carter’s National Security Council staff. 

Since leaving the Clinton administration, she has written a series of books. One, Hell and Other Destinations, was published in April 2020. Others include her autobiography, Madam Secretary: A Memoir (2003), and Read My Pins: Stories from a Diplomat’s Jewel Box (2009). 

The plain-spoken Albright made forays into popular culture. Parks and Recreation star Amy Poehler’s character had a picture of Albright in her office. 

In 2005, the Gilmore Girls television series the character Rory dreamt that Albright, wearing a red suit and an eagle pin, was her mother. 

In 2018, she and fellow former secretaries of state Colin Powell and Hillary Clinton briefed a fictional secretary of state in Madam Secretary, a TV drama where she spoke passionately about the dangers of abusive nationalism. — Diane Bartz/Reuters

El Salvador turns to Binance for help on bitcoin adoption

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SAN SALVADOR — El Salvador is seeking support from cryptocurrency exchange Binance for its implementation of bitcoin as legal tender and the issuance of bitcoin bonds, the Central American country’s ambassador to the United States said on Wednesday.

Binance Chief Executive Officer Changpeng Zhao is visiting El Salvador and plans to meet President Nayib Bukele on Thursday, ambassador Milena Mayorga told reporters.

Ms. Mayorga said Mr. Zhao’s visit was a vote of confidence in Bukele’s decision to adopt bitcoin as legal tender last September, as well as its plan to issue bitcoin-backed bonds.

Mr. Zhao praised El Salvador for taking on a pioneering role in the adoption of bitcoin and said Mr. Bukele’s presidency would be remembered in “heroic” terms for its bold bet on the future.

The country’s adoption of bitcoin has been beset by public skepticism about the cryptocurrency, which has depreciated substantially since hitting a record high in early November.

On Tuesday, the government said it was delaying its planned issuance of bitcoin bonds. — Reuters

Taliban orders girls’ high schools to remain closed, leaving students in tears

United Nations Assistance Mission in Afghanistan (UNAMA)/Flickr

KABUL — The Taliban on Wednesday backtracked on their announcement that high schools would open for girls, saying they would remain closed until a plan was drawn up in accordance with Islamic law for them to reopen. 

The U-turn took many by surprise, leaving students in tears and drawing condemnation from humanitarian agencies, rights groups and diplomats at a time when the Taliban administration is seeking international recognition. 

Teachers and students from three high schools around the capital Kabul said girls had returned in excitement to campuses on Wednesday morning, but were ordered to go home. They said many students left in tears. 

“We all became totally hopeless when the principal told us, she was also crying,” said a student, not being named for security reasons. 

The last time the Taliban ruled Afghanistan, from 1996 to 2001, they banned female education and most employment. 

The international community has made the education of girls a key demand for any future recognition of the Taliban administration, which took over the country in August as foreign forces withdrew. 

United Nations Secretary-General Antonio Guterres said the Taliban’s decision was “a profound disappointment and deeply damaging for Afghanistan.” 

“The denial of education… violates the equal rights of women and girls to education,” Mr. Guterres said in a statement. “I urge the Taliban de facto authorities to open schools for all students without any further delay.” 

The Ministry of Education had announced last week that schools for all students, including girls, would open around the country on Wednesday after months of restrictions on education for high school-aged girls. 

On Tuesday evening a Ministry of Education spokesman released a video congratulating all students on their returning to class. 

However, on Wednesday, a Ministry of Education notice said schools for girls would be closed until a plan was drawn up in accordance with Islamic law and Afghan culture, according to Bakhtar News, a government news agency. Suhail Shaheen, a senior Taliban member based in Doha, said the postponed opening of girls’ schools was due to a technical issue and the Ministry of Education was working on standardized uniforms for students around the country. 

“We hope the uniform issue is resolved and finalized as soon as possible,” he said. 

Sixteen-year-old Khadija went to school on Wednesday having stayed up all night in excitement after seven months at home. But just minutes after lining up with her classmates for a welcoming speech, the school’s assistant manager instead approached the students, crying, and broke the news they had to leave. 

“We couldn’t believe we face such conditions… it was like a mourning day. Everyone was crying and hugging each other,” she said. 

Returning home, she unpacked her books from her bag and tried to imagine how she could stay motivated, by teaching younger children in her neighborhood to help her remember her lessons. Still, she said the disappointment was hard to overcome. 

“I would like to be a doctor in the future but for now I have no hope, I am like a dead body,” she said. 

Local media broadcast footage of girls holding a protest in Kabul. 

Many in the international community condemned the decision with the UN’s special envoy for Afghanistan formally conveying the organization’s “grave concern and disappointment” to Taliban officials, according to a UN statement. 

The Taliban is seeking to run the country according to its interpretation of Islamic law while at the same time accessing billions of dollars in aid that it desperately needs to stave off widespread poverty. 

“For the sake of the country’s future and its relations with the international community, I would urge the Taliban to live up to their commitments to their people,” US Special Envoy for Afghanistan, Tom West, said in a tweet. — Charlotte Greenfield/Reuters

Indians tighten belts as Ukraine war drives up prices of necessities

EVGENY NELMIN/UNSPLASH

NEW DELHI — Many Indians are cutting down on fried food and even vegetables as the Ukraine war inflates the prices of items from edible oils to fuel, threatening a sputtering recovery in the consumption-based economy after two years battling coronavirus disease 2019 (COVID-19)

Consumers in Asia’s third-largest economy are feeling the bite as companies pass on a surge in costs since the invasion, battling the first hikes in five months this week in the prices of diesel and petrol, as well as more expensive vegetable oils. 

“God only knows how we will manage this level of price rise,” said Indrani Majumder, the sole earner in a family of four in the eastern city of Kolkata, adding that the past two years of the pandemic had brought a halving in salaries. 

These days her family eats more boiled food to save on the cost of edible oil, she said. It is just one of almost a dozen homes where people said they were taking similar steps. 

India’s economy expanded at a pace slower than expected in the quarter from October to December, and economists forecast a further dent to growth in the current one, as high fuel prices bring a jump in inflation. 

Private consumption contributes the largest share of gross domestic output, at nearly 60%. 

But since the invasion late in February, which Russia calls a special operation, Indian firms have raised prices of milk, instant noodles, chicken and other key items by about 5% to 20%. 

About 800 million of a population of nearly 1.4 billion received free government supplies of staple foods during the pandemic, and even small price rises now can mean a knock for their budgets. 

Families’ finances could stay anemic for the third year in a row, warned Pronab Sen, formerly India’s chief statistician. 

“The process of rebuilding savings was only beginning post the pandemic,” he added. “Because of this latest shock, they will have to cut back on consumption.” 

DARKENING PICTURE 

Surging global prices of crude have prompted companies in the import-dependent nation to raise retail prices of petrol and diesel twice this week. India imports 85% of its crude oil, which has seen prices rise nearly 50% this year. 

The South Asian nation is also the world’s biggest importer of edible oil, shipping in nearly 60% of its needs. 

But the price of palm, the country’s most widely consumed edible oil, has jumped 45% this year. And supplies of sunflower oil, which Ukraine and Russia produce in large quantities, have been disrupted. 

Some wholesalers said their sales of edible oil had fallen by a quarter in the past month as prices rose. 

These factors helped keep India’s retail inflation in February above the central bank’s comfort level of 6% for the second month in a row, while the wholesale rate was more than 13%. 

“The timing of input price inflation could not have been worse in the context of a slowing consumption trend,” financial services firm Jefferies said in a note. 

The central bank has said it is monitoring crude and commodity prices ahead of its next monetary policy meeting in early April. But markets do not expect the Reserve Bank of India to change key rates, as it looks to prioritize growth. 

This stance compares with global central banks, which have either raised rates or are weighing whether to do so to curb inflation. For instance, policymakers of the US Federal Reserve called this week for big rate hikes in May. 

For consumers, there is little relief in sight. 

The Confederation of All India Traders estimates input costs for makers of consumer durables and fast moving consumer goods (FMCG) to rise another 10% to 15% this month as fuel prices rise, an expense destined to be passed on to the final consumer. 

In Kolkata, vegetable vendor Debashis Dhara said higher transport costs would bump up vegetable prices by a further 5% this week. His sales have already halved since February. 

India’s Mother Dairy and Amul raised milk prices by nearly 5% this month, while FMCG companies such as Hindustan Unilever and Nestle are charging more for items such as instant noodles, tea and coffee. 

Broiler chicken prices have jumped nearly 45% in six months to a record 145 rupees ($1.90) a kg this week, as key feed ingredients corn and soymeal have become costlier after supplies from the Black Sea region were affected. 

Fertilizer prices have shot up to a record $150 a tonne since Russia, one of the biggest producers, rolled tanks and soldiers into Ukraine. 

“It has become very difficult to manage our monthly budget,” said Archana Pawar, a housewife in the financial capital of Mumbai. “This kind of price rise is forcing us to cut down consumption.” — Aftab Ahmed and Rajendra Jadhav/Reuters

Smart brings back annual Infinity Golf Classic exclusive to members

FILIPINO PRIDE Rianne Malixi and PLDT Inc. and Smart President and CEO Alfredo S. Panlilio play golf at the Smart Infinity Classic The President’s Cup early this week at the Sta. Elena Golf and Country Club in Laguna. Smart, through its luxury postpaid brand Smart Infinity, has taken a huge leap into the new normal by bringing back the well-loved annual golf event. (Photo by Nino Carandang)

Mobile services provider Smart Communications, Inc., (Smart), through its luxury postpaid brand Smart Infinity, has taken a huge leap into the new normal by bringing back the well-loved annual Infinity Golf Classic President’s Cup exclusive to members at the Sta. Elena Golf and Country Club in Laguna last March 21.

Part of the many exclusive perks and privileges of every Smart Infinity subscriber, the revival of the Infinity Golf Classic The President’s Cup took on a much deeper meaning as it honored changemakers and advocates of social impact and coincided with the 11th anniversary of the MVP Sports Foundation (MVPSF).

“One of the most important lessons that I learned during this pandemic is that while our time here on earth is finite, we have the ability to make an infinite impact and leave a legacy. Throughout the pandemic, Smart Infinity has been inspired by powerful stories of individuals who contribute to society the best way they can. Now, we aim to empower Infinity members to become Changemakers in their own way and create infinite legacies for a better world,” said Alfredo S. Panlilio, President and CEO at Smart and its parent company, PLDT Inc.

Enabling members, championing Changemakers

Smart Infinity’s The President’s Cup served as a competitive reunion for Infinity members who have been going out of their way to create a positive impact in society.

As a sportsman himself and President of MVPSF, Panlilio recognizes that athletes giving their best for the sport they love is a powerful source of inspiration – be it at the golf course, on the basketball court, or even on the virtual arena.

Amongst the golfers in attendance was 15-year-old Filipino pride and Defending Philippine Amateur Champion Rianne Malixi, who is among the athletes backed by the MVPSF. Definitely a changemaker herself at a young age, the 2021 American Junior Golf Association (AJGA) winner and qualified US Women’s Amateur Championship golfer is expected to be part of Team Philippines in the 2022 Southeast Asian (SEA) Games in Hanoi, Vietnam in May.

Exclusive perks and privileges for Smart Infinity members

Apart from the one-day tournament, Infinity members were treated to a relaxing and rewarding day with exclusive offers from Smart Infinity powered by the country’s fastest 5G mobile network.

“Last year was a pivotal year for Smart Infinity when we relaunched the brand as the luxury postpaid brand of Smart Communications Inc. Today, Smart Infinity is here to highlight how we value our members as we continue to serve their lifestyle needs over and beyond mobile connectivity,” said Sofia Borromeo-Alvarez, Smart Infinity AVP and Brand Head.

“Smart Infinity is here to go the extra mile when it comes to serving our members — be it in sports, travel, and other lifestyle needs — our customer-centric Limitless Plans provide unlimited 5G connectivity, unlimited all-network mobile calls and texts, unlimited landline calls, and a wide array of luxury services though our Worldwide Concierge for both local and international lifestyle needs,” added Borromeo-Alvarez.

Smart Infinity also comes with the services of a personal relationship manager, a 24/7 dedicated hotline, and priority lane at Smart Stores nationwide. Know more about how Smart Infinity empowers changemakers at https://smart.com.ph/Postpaid/infinity.

 


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IMF sees need to adjust rates earlier

BW FILE PHOTO

By Luz Wendy T. Noble, Reporter

THE Philippine central bank may have to reassess its loose monetary policy earlier than planned as the surge in commodity prices raised inflation concerns, the International Monetary Fund (IMF) said.

“While there is still some policy space to absorb the price increases, as the latest numbers show that inflation is in the middle of the BSP’s (Bangko Sentral ng Pilipinas) target range, greater vigilance from the monetary authorities will be required, and the accommodative monetary policy may need to adjust earlier than expected,” IMF Representative to the Philippines Ragnar Gudmundsson said in an e-mail.

A poll held by BusinessWorld last week showed 15 out of 17 analysts expect the Monetary Board to retain its record low policy rates today (March 24), in line with signals from the central bank that it will remain patient in supporting growth.

BSP Governor Benjamin E. Diokno has earlier said the central bank would remain patient in supporting the economy and would wait until the second half of the year to assess the need for a rate hike.

The consumer price index (CPI) rose by 3% for the second straight month in February, which is within the BSP’s 2-4% target range. However, the BSP has warned that inflation could breach the target range in the second quarter if oil prices continue to climb.

Global crude oil prices have been extremely volatile in recent weeks after Russia’s invasion of Ukraine. This was due to worries over supply as Russia is the world’s second-biggest oil exporter.

Commodity prices have also spiked around the world. Wheat is a major export for both Russia and Ukraine.

Mr. Gudmundsson noted that oil and gas, energy and transportation, and wheat have a combined weight of about 18% in the country’s CPI.

“The current surge in energy and commodity prices has added to the inflationary pressures already caused by supply chain disruptions and the rebound from the coronavirus disease 2019 (COVID-19) pandemic,” he said.

“One should therefore expect some pass-through of these higher prices to headline inflation in the coming months,” he added.

Mr. Gudmundsson said the IMF estimates that the pass-through impact of world oil prices in emerging markets to prices paid by consumers is 25%.

“The war will affect the cost of living, especially for the poorest households disproportionately affected by the increase in energy prices,” he said.

Since the start of 2022, pump prices of gasoline, diesel and kerosene have increased by P14.90, P19.20, and P16.35 per liter, respectively.

Meanwhile, Mr. Gudmundsson noted the country’s strong external position serves as a safety net amid market volatility and the weakening of the peso caused by the war in Ukraine.

“While market uncertainty may prompt an increase in government bond yields and intensify pressure on the currency, it’s important to note that the Philippines benefits from its flexible exchange rate and a strong foreign exchange reserves position,” he said.

The IMF in a blog titled “How War in Ukraine Is Reverberating Across World’s Regions” last week has said Asia-Pacific economies will only experience limited spillover effect from the war due to the distant economic ties. However, it warned that a slower growth in Europe and the global economy could hit petroleum importers in Southeast Asia.

“Asia’s food price pressures should be eased by local production and more reliance on rice than wheat. Costly food and energy imports will boost consumer prices, though subsidies and price caps for fuel, food and fertilizer may ease the immediate impact — but with fiscal costs,” it said.

The IMF expects the Philippine economy to grow by 6.3% this year, which is below the 7-9% government target. In January, it said the impact of the Omicron variant will be limited to the first quarter of the year.

The economy expanded by 5.6% last year following a record 9.6% contraction in 2020.

Duterte signs EO on economic recovery

PHILIPPINE STAR/ MICHAEL VARCAS
A teacher assists students at an elementary school in San Andres, Malate, Manila, Feb. 9. President Rodrigo R. Duterte signed an executive order on a 10-point policy agenda for economic recovery, which includes resumption of face-to-face classes. — PHILIPPINE STAR/ MICHAEL VARCAS

PRESIDENT Rodrigo R. Duterte signed an executive order which lays down a 10-point policy agenda aimed at accelerating the economy’s recovery from the coronavirus pandemic, just a little over three months before he steps down from office.

“There is an urgent need to adopt policies on economic recovery to sustain current economic gains, minimize the pandemic’s long-term adverse effects, and restore the country’s development trajectory,” read Executive Order (EO) No. 166, which was signed by Mr. Duterte on March 21. A copy was made public on Wednesday.

The Philippine economy grew by 5.6% in 2021, rebounding from the 9.6% contraction in 2020. Economic managers are targeting a 7-9% gross domestic product growth this year.

The 10-point policy agenda, which was recommended by the Economic Development Cluster, includes strengthening the country’s healthcare capacity and accelerating the coronavirus disease 2019 (COVID-19) vaccination program. The EO stated that restrictions on the use of COVID-19 vaccines by the private sector will be reduced.

It also emphasized the further reopening of the economy, expansion of public transport capacity, and resumption of face-to-face learning.

To boost the local tourism industry, the government will streamline requirements for domestic travel, limiting these to vaccination cards or negative RT-PCR test results for unvaccinated individuals, and a QR code that can be scanned by various contact-tracing apps.

The EO also sought to further loosen the requirements for international travel, such as providing quarantine exemptions for vaccinated foreign tourists.

Also, the government will prioritize the passage of laws to accelerate digital transformation, and to allow the efficient rollout of emergency programs during a pandemic.

“The proposed legislation may include measures such as the establishment of a standby fund to be utilized during pandemics, grant of authority to re-allocate funds for pandemic response, lifting of ceilings on the use of quick response funds, relaxation of data privacy requirements and standardization of special risk allowance, hazard pay and other reasonable forms of compensation to healthcare workers,” the EO stated.

Lawmakers are now on a break to prepare for the May elections. Congress will resume session on May 23 and adjourn on June 3.

The EO stated the government will shift the focus of decision making and government reporting to “empowering metrics” such as the total number of severe and critical COVID-19 cases, case fatality ratio and total vaccinations. This will help the government avoid “unnecessary changes” in alert levels and encourage more people to get vaccinated.

The government will also develop a Comprehensive Pandemic Response Framework to ensure the country will be able to handle future pandemics.

Under the EO, all government departments, offices, including state corporations and local government units should ensure their policies and programs are aligned with the 10-point policy agenda.

“These measures would help further reopen the economy towards greater normalcy, especially to mitigate the adverse economic effects of the Russia-Ukraine conflict,” Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort told BusinessWorld in a Viber message, referring to the resumption of physical classes and loosening requirements for international tourists.

Asian Institute of Management economist John Paolo R. Rivera said in a Viber message the 10-point agenda would help drive Philippine economic growth “if implemented efficiently and effectively.”

De La Salle University law and business professor Antonio A. Ligon said in a text message that while the EO’s objective is “laudable… it is unrealistic to say that the 10-point policy can bring us immediately to the pre-pandemic level because as experts observed, the government did not respond effectively when pandemic set in.” — Alyssa Nicole O. Tan

BSP tells banks to strengthen guard against phishing attacks

REUTERS/KACPER PEMPEL/FILE PHOTO

THE Bangko Sentral ng Pilipinas (BSP) told banks to boost their efforts to prevent phishing attacks that have led to losses for their clients amid the rise in digital transactions.

Memorandum No. M-2022-015 signed by BSP Deputy Governor Chuchi G. Fonacier on March 22 laid down supplementary controls that supervised financial institutions can implement to help prevent unauthorized transactions.

“BSP-supervised financial institutions should conduct continuing risk assessment of its product features, business rules and application controls, and implement appropriate enhancements and mitigation, as necessary,” it said.

“Fraudsters are adept in exploiting legitimate application features and business rules as well as in bypassing layers of controls,” the BSP said.

The central bank identified account takeovers and social engineering attacks as the most prevalent schemes by fraudsters.

“These are intended to manipulate customers into disclosing sensitive personal and account information necessary to execute unauthorized transactions,” it said.

To counter the aggressive phishing schemes, the BSP suggested ways for financial institutions to step up their guard.

For one, the BSP said banks should remove clickable links in e-mails and messages sent to retail clients. This should be complemented by a campaign to ensure users know that clickable links have been phased out.

The BSP said financial institutions should also have a customer notification measure coursed through mobile or e-mail whenever there is a request to change a mobile number, e-mail address, or account credential.

Sending personalized one-time personal identification number (PIN) messages to clients for services like device registration, fund transfer, and profile update, among others were also suggested.

The BSP said officials or representatives of financial institutions should be restricted from requesting or obtaining passwords and other critical authentication like one-time passwords. These institutions should also have a dedicated customer assistance team that will focus on and prioritize fraud cases.

Control measures include mandatory transaction notification for fund transfers beyond a predefined account as well as a cooling-off period for account changes is also recommended after a thorough risk analysis and assessment.

To boost financial consumer awareness, the BSP said banks should conduct regular customer education campaigns that discuss online scams and phishing schemes, as well as prevention.

The BSP said financial institutions should be equipped with surveillance mechanisms that will promptly address the growing threat of online scams.

Financial institutions are encouraged to tap existing information sharing platforms within the industry to investigate and recover funds lost to fraud incidents. They are likewise encouraged to cooperate with law enforcement agencies to resolve cybercrime cases.

In January, the Bankers Association of the Philippines partnered with the Department of Justice to boost information sharing and training to prevent financial cybercrimes.

“Banks have been recently proactively implementing measures designed to help clients protect themselves from cybercrime. One example is the removal of clickable links in SMS messages and e-mails that banks send to clients,” the BAP said in a Viber message.

The industry group said ensuring cybersecurity is a shared responsibility of the government, the banking industry, and the public.

Unauthorized withdrawals in illegal transfers reached over P1 billion during the pandemic, Justice Secretary Menardo I. Guevarra has said.

BSP Governor Benjamin E. Diokno earlier said financial institutions may have to reassess their spending on cybersecurity as more users shift to digital transactions. He said a major cyberattack may have a possible systemic implication to the Philippine financial system. — Luz Wendy T. Noble

Hidden pandemic victims: Filipinos get sick or die, but not from COVID-19

The San Juan de Dios Hospital in Pasay City displayed a sign that read: “Full capacity for COVID cases” on Jan. 14. Most parts of the country experienced a surge in coronavirus disease 2019 (COVID-19) infections in January. — PHILIPPINE STAR/ MICHAEL VARCAS

By Jenina P. Ibañez, Senior Reporter

MEDICAL DOCTOR Frederic L. Ting remembers when his patient, a 33-year-old woman, was diagnosed with breast cancer in late 2019, months before Manila, the capital and nearby cities and provinces were locked down to contain a coronavirus pandemic.

She was due to show up at the doctor’s office in mid-March of the following year, but had to postpone it after the first lockdown was imposed that month. She managed to see an oncologist only in September 2020.

“Unfortunately, the early stage two breast cancer had already spread to the lungs and liver,” Mr. Ting said in a virtual interview via Zoom.

“This was a typical scenario that many of our patients experienced because of the treatment delays caused by this pandemic.”

The coronavirus disease 2019 (COVID-19) has sickened 3.7 million and killed almost 60,000 Filipinos. Treatment delays caused by lockdowns and public health fears also worsened other illnesses, including cancer.

About 475 million people have been infected by COVID-19, while deaths reached over six million worldwide, according to the Worldometers website, citing various sources including data from the World Health Organization.

Early stage breast cancer is curable, Mr. Ting said, but when it has worsened, the goals change from being cured to controlling the cancer.

These treatment delays could set back the county’s public health in the long term. And as Filipinos get sicker, the Philippine economy, already scarred by the pandemic, could worsen.

About a third of more than a hundred cancer patients at St. Luke’s Medical Center in Quezon City and Taguig experienced treatment delays in 2020, according to a study by the Cancer Reports journal.

The Philippine Society of Medical Oncology had asked doctors to prioritize treatment based on the patient’s cancer status to avoid coronavirus infection. They should consider shorter treatment if possible, or delay chemotherapy for patients in deep remission. 

Filipinos received delayed treatment for various non-COVID illnesses because of limited healthcare supply. Some of them lost their jobs and could no longer afford drugs whose prices have also risen.

The country’s limited healthcare facilities and manpower were transferred to coronavirus patients especially during an infection surge.

“Many of the machines used to diagnose tuberculosis were transferred for COVID-19 use,” Valerie Gilbert T. Ulep, a research fellow at the Philippine Institute for Development Studies (PIDS), said by telephone.

The Philippines could only offer 1.2 hospital beds for 1,000 people, the government’s health facility development plan showed.

“Every time a surge in coronavirus cases happens, patients infected with COVID-19 eat up valuable space in our hospitals that could have been used to accommodate non–COVID-19 patients,” Mr. Ting said.

“It’s not just the literal space or room, but also the manpower and other logistical functions.”

Although teleconsult services helped during lockdowns, doctors’ assessments were limited in the absence of a physical exam, he said.

Meanwhile, demand for healthcare treatment also declined, not because people were less sick but because they could no longer afford it.

In a study published by The Lancet journal, Mr. Ulep and his co-authors found that disease admissions and several healthcare procedures declined at more than a thousand Philippine hospitals in the first months of the pandemic. This continued to fall short of pre-pandemic levels for the rest of 2020.

The authors found that healthcare treatment for the poorest Filipinos declined at three times the pace for people who had insurance

“In the Philippines, 50% of healthcare services are out of pocket,” Mr. Ulep said in mixed English and Filipino. “If the economy sinks, household income will decline. You will not spend any more for healthcare services.”

LOST WAGES
In poorer countries, he said, income is a big indicator of healthcare use. “That kind of shift is more apparent among the poorer segments of the population.”

Mr. Ting said he had consulted with several patients whose conditions worsened because of treatment delays. “Unfortunately, this significantly decreased their quality of life and their chances of survival.”

Mr. Ulep in his study published by PIDS said the economy could lose P2.3 trillion because of the pandemic. Much of this is due to foregone wages and lost productivity due to untreated diseases and deaths unrelated to the coronavirus.

“And because of the pandemic, the prevalence of cardiovascular diseases, diabetes increased. That will linger throughout the lifespan of that person,” he said.

Socioeconomic Planning Secretary Karl Kendrick T. Chua has said the country is poised to reach upper middle-income country status — an economy with a gross national income per capita of $4,096 to $12,695, according to the World Bank — by end-2022.

Philippine gross national income per capita fell by 11% to $3,430 in 2020 from a year earlier, according to the multilateral lender.

But the country’s healthcare outcomes, such as infant and maternal deaths, don’t match upper middle-income countries, Mr. Ulep said.

“Even if we are transitioning to an upper middle-income country, our health status is actually not that great,” he said. “Because of COVID-19 that might also suffer. That’s how dismal it is. The problem in the Philippines is that the high infant mortality rate is actually because of the large disparity between the poorest and richest.”

He cited the need to boost state investment in public health.

The Philippine Health Facilities Development Plan 2020-2040 aims to provide 2.7 hospital beds to 1,000 people by 2040, requiring 400,000 more beds. Upper middle-income countries, the report said, have 3.8 beds for 1,000 people.

Southeast Asian governments should invest more in their healthcare systems to improve labor productivity and boost economic growth, according to the Asian Development Bank.

“We need to fully implement the Universal Health Care law,” Mr. Chua said in a Viber message.

Senator and presidential candidate Panfilo M. Lacson in January said the law, signed by President Rodrigo R. Duterte in 2019, had not been fully implemented to offer enough hospital beds and medical services because it lacks funding.

Meanwhile, Mr. Ting hopes that more people would get vaccinated against the coronavirus.

“It’s a vicious cycle,” he said. “We spend more resources every time we have a COVID-19 surge in the country, and we should remember the collateral damage of COVID-19 on patients whose conditions worsen because of treatment delays,” he said.

“We have to help each other out so we can end this pandemic soon and hopefully stop the vicious cycle.”