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World Bank works to redirect frozen funds to Afghanistan for humanitarian aid only -sources

WASHINGTON – The World Bank is finalizing a proposal to deliver up to $500 million from a frozen Afghanistan aid fund to humanitarian agencies, people familiar with the plans told Reuters, but it leaves out tens of thousands of public sector workers and remains complicated by U.S. sanctions.

Board members will meet informally on Tuesday to discuss the proposal, hammered out in recent weeks with U.S. and U.N. officials, to redirect the funds from the Afghanistan Reconstruction Trust Fund (ARTF), which has a total of $1.5 billion.

Afghanistan‘s 39 million people face a cratering economy, a winter of food shortages and growing poverty three months after the Taliban seized power as the last U.S. troops withdrew from 20 years of war.

Afghan experts said the aid will help, but big gaps remain, including how to get the funds into Afghanistan without exposing the financial institutions involved to U.S. sanctions, and the lack of focus on state workers, the sources said.

The money will go mainly to addressing urgent health care needs in Afghanistan, where less than 7% of the population has been vaccinated against the coronavirus, they said.

For now, it will not cover salaries for teachers and other government workers, a policy that the experts say could hasten the collapse of Afghanistan‘s public education, healthcare and social services systems. They warn that hundreds of thousands of workers, who have been unpaid for months, could stop showing up for their jobs and join a massive exodus from the country.

The World Bank will have no oversight of the funds once transferred into Afghanistan, said one of the sources familiar with the plans. A U.S. official stressed that UNICEF and other recipient agencies would have “their own controls and policies in place.”

“The proposal calls for the World Bank to transfer the money to the U.N. and other humanitarian agencies, without any oversight or reporting, but it says nothing about the financial sector, or how the money will get into the country,” the source said, calling U.S. sanctions a major constraint.

 

‘NOT A SILVER BULLET’

While the U.S. Treasury has provided “comfort letters” assuring banks that they can process humanitarian transactions, concern about sanctions continues to prevent passage of even basic supplies, including food and medicine, the source added.

“It’s a scorched earth approach. We’re driving the country into the dust,” said the source. Crippling sanctions and failure to take care of public sector workers will “create more refugees, more desperation and more extremism.”

Any decision to redirect ARTF money requires the approval of all its donors, of which the United States has been the largest.

A State Department spokesperson confirmed that Washington is working with the World Bank and other donors on how to use the funds, including potentially paying those who work in “critical positions such as healthcare workers and teachers.”

The spokesperson said the U.S. government remains committed to meeting the  critical needs of the  Afghan people, “especially across health, nutrition, education, and food security sectors … but international aid is not a silver bullet.”

 

BYPASSING TALIBAN

Established in 2002 and administered by the World Bank, the ARTF was the largest financing source for Afghanistan‘s civilian budget, which was more than 70% funded by foreign aid.

The World Bank suspended disbursements after the Taliban takeover. At the same time, Washington stopping supplying U.S. dollars to the country and joined in freezing some $9 billion in Afghan central bank assets and halting financial assistance.

A World Bank spokesperson confirmed that staff and executive board members are exploring redirecting ARTF funds to U.N. agencies “to support humanitarian efforts,” but gave no further details. The United Nations declined to comment.

Initial work has also been done on a potential swap of U.S. dollars for Afghanis to deliver the funds into the country, but those plans are “basically just a few PowerPoint slides at this point,” one of the sources said. That approach would deposit ARTF funds in the international accounts of Afghan private institutions, who would disburse Afghanis from their Afghan bank accounts to humanitarian groups in Afghanistan, two sources said.

This would bypass the Taliban, thereby avoiding entanglement with the U.S. and U.N. sanctions, but the plan is complex and untested, and could take time to implement.

One major problem is the lack of a mechanism to monitor disbursements of funds in Afghanistan to ensure Taliban leaders and fighters do not access them, a third source said.

Two former U.S. officials familiar with internal administration deliberations said that some U.S. officials contend that U.S. and U.N. sanctions on Taliban leaders bar financial aid to anyone affiliated with their government. – Reuters

Cyber Monday spending expected to slow as shoppers see fewer deals

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U.S. retailers’ online sales likely slowed this Cyber Monday, as fewer discounts and limited choices due to global supply-chain disruptions deterred shoppers, but other data points suggested American consumers are in pretty good health.

Retailers had also spread out promotional deals across more weeks to protect profit margins from surging supply chain costs and to better manage inventories amid widespread product shortages ahead of the Christmas shopping season.

Those attempts have pinched sales on what are traditionally some of the biggest shopping days of the year, with Adobe Analytics data over the weekend showing spending online during Black Friday fell for the first time ever.

“Online sales on big shopping days like Thanksgiving and Black Friday are decreasing for the first time in history, and it is beginning to smooth out the shape of the overall season,” said Taylor Schreiner, director, Adobe Digital Insights.

U.S. spending on Cyber Monday crossed $7 billion as of 9 p.m. ET, according to the Adobe Digital Economy Index.

Adobe now expects consumers to spend between $10.4 billion and $11.1 billion and forecast that customers could spend $2.5 billion between 7 p.m. PT and 11 p.m. PT.

Early estimates showed spending to be between $10.2 billion and $11.3 billion. That translates to roughly flat growth at the midpoint compared to last year’s $10.8 billion, which was a near 15% jump from 2019.

Excitement on social media around Cyber Monday is also ebbing.

Cyber Monday continues to be extremely relevant, particularly in the digital world, but the buzz has been more muted than we’ve seen in recent history,” said Rob Garf, general manager of retail at Salesforce.

Discount rates in the United States in the week leading up to Cyber Monday were on average 8% lower than last year, according to Salesforce.

The holiday season kicks off just as the new Omicron coronavirus variant has triggered uncertainty over the economic reopening, but experts say it is too early to predict the impact on consumer spending.

On Black Friday, the day after Thanksgiving, U.S. shoppers spent roughly $8.9 billion online, down from $9 billion a year earlier, according to Adobe data.

A separate data point released Monday by MasterCard SpendingPulse, which calculates overall U.S. retail sales across payment methods, found U.S. shoppers spent 14% more on merchandise excluding automobiles from Nov 26 to 28, compared to the same holiday weekend a year earlier. The estimates include purchases made in stores.

Shoppers spending online increased 5% over the three-day period compared to a year earlier, and by 28.7% when compared to the same period in 2019, according to MasterCard SpendingPulse. – Reuters

China factory activity unexpectedly grows as some bottlenecks ease

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BEIJING – China‘s factory activity unexpectedly picked up in November, growing for the first time in three months as the crippling surge in raw material prices and power rationing eased, taking some pressure off the manufacturing sector.

The official manufacturing Purchasing Managers’ Index (PMI) rose to 50.1 in November from 49.2 in October, data from the National Bureau of Statistics (NBS) showed on Tuesday.

The 50-point mark separates growth from contraction. Analysts had expected it to come in at 49.6.

The world’s second-largest economy, which staged an impressive rebound from last year’s pandemic slump, has lost momentum in the second half of this year as it grapples with slowing manufacturing, debt problems in the property market and COVID-19 outbreaks.

Analysts expect the slowdown in gross domestic product (GDP)seen in the third-quarter to continue in the fourth with demand expected to remain soft.

“A series of recently introduced policies and measures to ensure energy supply and stabilise market prices has been proven to be effective,” said Zhao Qinghe, senior statistician at the NBS.

“Power rationing eased somewhat in November while prices for some raw materials dropped significantly, driving an expansion in manufacturing PMI.”

Reflecting the positive headline PMI, a subindex for production rose to 52.0 in November from 48.4 in October while new orders fell at a slower pace, although November marked the fourth straight month of declines in customer demand.

 

TEMPORARY REPRIEVE

There were also signs of relief elsewhere in Asia with Japanese factory output rising for the first time in four months in October as facilities in other parts of the region resumed operations after COVID-19 closures.

The supply resumption helped cool the prices of crucial production materials.

A sub-index for input prices in the Chinese PMI stood at 52.9 in November, down significantly from 72.1 in the previous month, pointing to easing cost pressures.

That drove prices charged lower, falling for the first time since May 2020.

Despite the improvement, Nie Wen, an economist at Hwabao Trust, said he expects the manufacturing PMI to hover around 50 for the months to come, due to constraining factors such as power curbs, high raw material prices and weaker consumption.

Analysts also warn that there could be new restrictions on manufacturing in northern China due to the upcoming Beijing Winter Olympics while the impact from new COVID-19 strain Omicron on China‘s economy remains to be seen.

Factory gate inflation hit a 26-year high in October, further squeezing profit margins for producers and heightening stagflation concerns. As a result, policy sources say China‘s central bank will likely move cautiously on loosening monetary policy to bolster the economy.

Premier Li Keqiang last week acknowledged that China‘s economy faces new downward pressures but said authorities should avoid “aggressive” one-size-fits-all policy responses.

In contrast to the uptick in the factory sector, growth in the services sector slowed slightly with the official non-manufacturing PMI in November easing to 52.3 from 52.4 in October.

Fresh lockdown measures as China raced to contain the latest COVID-19 outbreak have weighed on services activity, which has been otherwise propped up by brisk construction.

The construction activity subindex rose to 59.1 in November from 56.9.

China‘s official October composite PMI, which includes both manufacturing and services activity, stood at 52.2, up from October’s 50.8. – Reuters

UN urges Philippines to let Nobel laureate Ressa travel to Norway

PHILSTAR

UNITED NATIONS – The United Nations on Monday urged the Philippines to allow Nobel Prize winning journalist Maria Ressa to travel to Norway next month to accept the award.Ressa, the first Nobel laureate from the Philippines, shared the Peace Prize with Russian investigative journalist Dmitry Muratov, a move widely seen as an endorsement of free speech rights, which are under fire worldwide.Ressa has requested government approval to travel to Norway to receive the Nobel Peace Prize on Dec. 10.Stephane Dujarric, spokesman for U.N. Secretary-General Antonio Guterres, said the United Nations was “very concerned” about travel restrictions placed on Ressa by the government.“We urge the government of the Philippines to immediately withdraw any such restrictions and allow her to travel to Oslo,” Dujarric told reporters in New York.The license for Ressa’s news site, Rappler, has been suspended and she has faced legal action for various reasons. Supporters say she has been targeted for her scrutiny of government policies, including a bloody war on drugs launched by President Rodrigo Duterte.The ranking of the Philippines in the 2021 World Press Freedom Index dropped two notches to 138 out of 180 countries, and the Committee to Protect Journalists ranks the Philippines seventh in the world in its impunity index, which tracks deaths of media members whose killers go free.The government denies hounding media and says any problems faced by organisations are legal, not political. It says it believes in free speech. – Reuters

Duterte’s preferred successor quits presidential race

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MANILA – Philippine Senator Christopher “Bong” Go, the preferred successor of Rodrigo Duterte, said on Tuesday he was withdrawing his candidacy for presidency.Go, President Duterte’s long-time aide, had recently hinted he may drop out of the race and his withdrawal leaves the administration without a presidential candidate. It was not clear yet who Duterte will now support. “I and President Duterte are ready to support whoever will truly serve and can continue and protect Duterte’s legacy towards a more comfortable and safe and prosperous life for our children,” Go said in a short speech streamed on Facebook.Go said he was making the “supreme sacrifice for the good of the country and for the sake of unity among our supporters and leaders.” Duterte’s daughter, Davao Mayor Sara Duterte-Carpio is running for the deputy post alongside the son of late Philippine dictator and namesake, Ferdinand Marcos Jr., who has emerged as an early frontrunner. The Southeast Asian nation of 110 million people holds elections in May 2022 for positions from president down to governors, mayors and local officials.Duterte, 76, is barred by the constitution from seeking re-election but he will run for a seat in the senate next year. – Reuters

BSP: Nov. inflation likely on target

INFLATION this month is likely to be within target, as a stronger peso and oil price reductions tempered the rise in consumer prices, according to the Philippine central bank.

The consumer price index would probably increase by 3.3% to 4.1% this month, based on estimates by the Bangko Sentral ng Pilipinas (BSP), Governor Benjamin E. Diokno told reporters in a Viber message on Monday.

The estimate is much slower than the 4.6% rise in consumer prices last month and could be within the BSP’s 2-4% target. The central bank had forecast November inflation at 3.7%, faster than 3.3% a year earlier.

“Higher electricity and liquefied petroleum gas prices along with the uptick in the prices of meat, fish, fruits and vegetables are the primary sources of inflationary pressures during the month,” Mr. Diokno said.

“Moving forward, the BSP will continue to monitor emerging price developments to help achieve its primary mandate of price stability that is conducive to balanced and sustainable growth of the economy,” he added.

The Philippine Statistics Authority will report November inflation data on Dec. 7.

Manila Electric Co. said the power rates for typical households increased by P0.3256 per kilowatt-hour (kWh) from a month earlier to P9.463/kWh in November due to higher generation charges.

Mr. Diokno said oil price rollbacks and a stronger peso against the dollar during the month might have slowed price increases.

The peso closed at P50.39 a dollar on Monday, 2.5 centavos stronger than its P50.415 close on Oct. 29, according to data posted on the Bankers Association of the Philippines website.

This was the second straight month-on-month appreciation of the local currency, although it is still weaker than its P48.023 a dollar close on Dec. 29 last year.

The central bank kept the key policy rates steady on Nov. 18, saying it would focus on supporting economic recovery that had gained traction.

At the same Monetary Board meeting, it revised its average inflation forecast for the year to 4.3% from 4.4%.

Inflation for the 10 months to October averaged at 4.5%. It has exceeded the central bank’s target this year except in July, amid low meat supply and a surge in global oil prices.

The Monetary Board will decide on key interest rates for the last time this year on Dec. 16. — Luz Wendy T. Noble

Gov’t asked to regulate borders to prevent surge from Omicron variant 

KJPARGETER-FREEPIK

By Luz Wendy T. Noble, Reporter

THE PHILIPPINES should tighten border patrols and boost its vaccination drive to prevent another infection surge that could come from a potentially more contagious Omicron variant of the coronavirus, analysts said on Monday.

Failure to do so could force the government to enforce strict lockdowns again that could end up being too late, they said.

The risks from the new variant from Africa remained unknown, but it could potentially cause another infection wave, Moody’s Analytics said.

“First, will policy makers in the region respond by accelerating vaccination programs?” Moody’s Analytics Chief Asia-Pacific Economist Steven Cochrane said in a note. He added that countries including Myanmar, Laos, Indonesia, India, Hong Kong, Thailand, the Philippines and Vietnam have vaccinated fewer than 65% of their citizens.

The Philippines has fully vaccinated 40.58% of its population, based on data from the Johns Hopkins University. The government has launched a three-day national vaccination drive until Wednesday as it targets to vaccinate nine million Filipinos.

The World Health Organization has called the Omicron variant a variant of concern, citing its likelihood of becoming more contagious.

“Adequate public health facilities, particularly intensive care units and isolation beds would alleviate the pressure on the healthcare system,” Mr. Cochrane said separately in an e-mail. “Countries simply cannot let down their guard. They must learn from the past.”

Based on previous infection surges, border closures might help contain the latest coronavirus variant, said Nicholas Antonio T. Mapa, a senior economist at ING Bank N.V. Manila.

“The worst-case scenario is a potential return to hard lockdowns and as experience has shown, prevention is always less costly than the cure,” he said in a separate note.

“We can take comfort in the knowledge that the Philippines posted a remarkable 7.1% year-on-year growth in the third quarter despite the presence of the Delta strain,” he added. But such growth also came from an 11.6% contraction a year earlier.

Philippine economic output expanded by 4.9% in the nine months to September, which was within the government’s 4-5% goal. Last year, the economy shrank by a record 9.6%.

Mr. Mapa said the government should be aware of the potential threats from the Omicron variant after it relaxed quarantines amid decreasing coronavirus infections.

“We do know that higher cases generally lead to slower economic output and a possible unwanted detour for our nascent recovery,” he added.

Active coronavirus infections in the Philippines rose by 665 to 16,289 on Monday, the Health department said in a bulletin. Active cases reached almost 200,000 at the height of the Delta-induced surge in September.

An Omicron-induced infection wave could affect the deployment of Filipino workers overseas amid potentially more border closures, Michael L. Ricafort, chief economist at Rizal Commercial Banking Corp., said in a Viber message.

Cash remittances from migrant Filipino workers that fuel the country’s economy through increased household spending have risen by 5.6% to $23.117 billion as of end-September from a year earlier.

“The Omicron variant could also potentially add to the global supply chain disruptions in terms of production and shipments,” Mr. Ricafort said.

Fully vaccinated people from countries not required to get a Philippine visa may enter the country from Dec. 1 to 15, the government said on Friday, only to suspend the plan on Monday because of the threat from the Omicron variant.

The Philippines last week started suspending flights from South Africa, Botswana, Namibia, Zimbabwe, Lesotho, Eswatini and Mozambique, where the virus mutation that is potentially more contagious is present.

The variant was first discovered in South Africa and has since been detected in Australia, the United Kingdom, Germany, Israel, Italy, the Czech Republic and Hong Kong.

On Sunday, the Philippines also suspended flights from Austria, Czech Republic, Hungary, The Netherlands, Switzerland, Belgium and Italy.

Tourists trickle into Philippine paradise as latest variant stares world in its face

LAURENTIU MORARIU-UNSPLASH

By Luz Wendy T. Noble, Reporter

WAILING KIDS are at the jam-packed Caticlan seaport that leads to the world-famous Boracay Island in central Philippines.

A mother tries to bargain for quiet through nursery rhymes on YouTube, while fanning herself during an oppressively hot weather. It could well have been a picture before the coronavirus hit, only this time, people wore face masks.

Editha Regualos, a mother who works for a Netherlands-headquartered customer support company, went to Boracay with her husband and their four-year-old daughter this month after the government lifted a 20-month lockdown for children.

“My daughter knows Boracay and she was excited when she found out we were coming here,” she said in an interview while checking out fancy souvenirs at a stall along Boracay’s beachfront.

The government is banking on local families visiting tourist spots to revive an industry battered by various levels of lockdown for the past 20 months, even as the threat of an Omicron coronavirus variant from Africa looms.

The Philippine central bank held its seventh policy review this year at Shangri-La Boracay, the island’s most prestigious resort. It was also the first time the Bangko Sentral ng Pilipinas (BSP) allowed journalists to cover the event since a strict lockdown was first imposed on the entire Luzon Island in mid-March last year.

“This is our small contribution to the normalization of the economy,” central bank Governor Benjamin E. Diokno said in a speech at a welcome dinner. “What a comeback event — in Boracay.”

There are still not too many people at the D’Mall near the main white beach, but the sight of tourists slowly coming back gives Manny B. Danay, a hotel driver, hope.

Mr. Danay sold rice cakes online when there were no visitors, his market made up of locals and stranded tourists. He recalled how the island experienced a tourist drought in 2018, when Boracay was closed for rehabilitation.

It’s much worse this time, he said.

In 2020, foreign visitor arrivals shrank by 82% to 1.482 million from a year earlier, according to data from the Immigration bureau.

Gina O. Reyes, a saleslady at a souvenir shop, lost her job during the lockdown and her husband became the family’s sole breadwinner.

“The tourists are coming back, but it’s nowhere near the number in 2019,” she said in an interview in Filipino. “I don’t get my full daily salary yet.”

Emet R. Sendin, resident manager at Belmont Hotel Boracay, said they are already seeing signs of recovery. Before the crisis, 200 of their 300 rooms were occupied. Now, they have opened 50 rooms, 30 of which are occupied — higher than the 10 they used to have.

Belmont catered mostly to Chinese tourists before the crisis, he said.

“What this pandemic taught us is not to rely on a specific market,” he said. “We appreciate returning Filipinos for supporting tourism. It really helps us.”

Vanessa A. Andrade, restaurant manager at Cafe Del Sol Boracay, said tourism is far from what it used to be. “In terms of recovery, we’re still very far. There are still days when we have no customers at all.”

The tourism industry accounted for 12.7% of economic output in 2019, based on data from the local statistics agency. By 2020, when the pandemic started, its contribution to the economy had dropped to 5.4% — the lowest in two decades.

In 2020, the sector employed 11.9% of the country’s workers, down from 13.6% a year earlier.

Fully vaccinated people from countries not required to get a Philippine visa may enter the country from Dec. 1 to 15, the government said on Friday, only to suspend the plan three days later amid the threat from the Omicron variant.

The Philippines started suspending flights from South Africa, Botswana, Namibia, Zimbabwe, Lesotho, Eswatini and Mozambique, where the virus mutation that is potentially more contagious is present.

The variant was first discovered in South Africa and has since been detected in Australia, the United Kingdom, Germany, Israel, Italy, the Czech Republic and Hong Kong.

On Sunday, the Philippines also suspended flights from Austria, Czech Republic, Hungary, The Netherlands, Switzerland, Belgium and Italy.

REOPENING
Ms. Andrade, the restaurant manager, eagerly awaits the return of foreign tourists to Boracay. While they are grateful for local tourists, foreigners spend more on food during their vacation, she said.

Jose C. Clemente III, Tourism Congress of the Philippines president, said reopening the Philippines to foreign tourists would mark the beginning of the industry’s revival. “People are excited and hungry for travel,” he said in a Viber message before the policy for vaccinated foreigners was recalled.

Allowing the entry of foreign tourists resembles the “same mistake of March 2020,” when the country failed to quickly close its borders just as the global health crisis started, said John Paolo R. Rivera, associate director of the Dr. Andrew L. Tan Center for Tourism at the Asian Institute of Management.

“Opening our country to foreign tourists is similar to that same mistake, because we know that the COVID-19 situation remains fluid and we have yet to attain herd immunity.” he said in a Zoom Cloud Meetings interview.

The Philippines has fully vaccinated 40.6% of its population, based on data from the Johns Hopkins University. Thailand, which has reopened its border to foreigners, has a higher vaccination rate of 57.7%.

Mr. Rivera said it’s better to focus for now on domestic travelers, who accounted for about 80% of tourism receipts even before the coronavirus pandemic hit, compared with the 20% share of foreign travelers.

Meanwhile, Boracay’s tourism workers think there are better ways to help spur the return of travelers to the island. They cited how a QR code system has become a headache for some visitors, some of whom fail to get one before arriving in Aklan province where Boracay is.

“When the QR doesn’t work, we are affected because the travelers have a hard time entering Boracay,” Ms. Andrade said.

Mr. Sendin from Belmont said the government should streamline rules and make them uniform across key destinations to encourage more travel.

During the pandemic, Boracay remains a paradise where the weary can find rest just by watching its postcard-worthy sunset or by strolling barefoot on its powdery sand. But for the island’s workers, the island is also their lifeline.

Mr. Danay, the hotel driver, hopes the government’s vaccine rollout would lead to more visitors, whether local or foreign. “We hope and pray that more visitors will come. Many of us are raring to get our jobs back.”

Revenue from marked fuel hits P324 billion

JCOMP-FREEPIK

DUTIES AND TAXES collected from marked fuel products had reached P324.46 billion as of Nov. 25, counting back to 2019 when the program started, according to the Department of Finance (DoF).

The volume of levied fuel had hit 32.88 billion liters since Sept. 4, 2019, based on data sent by Finance Secretary Carlos G. Dominguez III to reporters via Viber on Monday.

Revenue included P294.64 billion in Customs duties and P29.81 billion in excise tax.

Almost three-quarters of the marked fuel came from Luzon, a fifth from Mindanao and 5.47% from the Visayas.

Diesel accounted for 60.98% and gasoline had a 38.49% share, with kerosene taking the rest.

The program seeks to deter fuel smuggling by injecting a special dye into the products to signify tax compliance. The absence of the dye means the fuel was probably smuggled.

The government in September last year started collecting a fuel marking fee of P0.06884 a liter, inclusive of value-added tax on manufactured, refined and imported petroleum products.

The government has lost as much as P40 billion from fuel smuggling, the DoF has said.

The House Committee on Ways and Means approved a bill on Nov. 11 that seeks to suspend or lower the excise tax on some fuel products for six months amid rising global oil prices.

Albay Rep. Jose Ma. Clemente S. Salceda, who heads the House body, said the House of Representatives was likely to approve the measure.

But the DoF has said suspending the excise tax on fuel would likely improve the disposable income of wealthier households faster than others, making the tax relief inequitable. — Jenina P. Ibañez

Major PHL telcos: Spectrum fees ‘excessive’

BW FILE PHOTO

By Arjay L. Balinbin, Senior Reporter

THE country’s major telecommunications services providers PLDT, Inc., its wireless arm Smart Communications, Inc., and Globe Telecom, Inc. said the spectrum fees are becoming excessive.

Spectrum user fees are collected annually from public telecommunications entities (PTEs), or those engaged in the provision of telecommunications services to the public for compensation.

“Currently, spectrum fees imposed on PTEs are becoming unreasonable and excessive,” Roy Cecil D. Ibay,  Smart Communications vice-president for regulatory affairs, said in a statement to BusinessWorld on Monday, when asked to comment on the approval at the House of Representatives of House Bill 9851, or the “Zero Spectrum User Fee (SUF) for Telcos Using Wi-Fi Act.”

Mr. Ibay said that, similar to last year, PLDT and Smart would “most likely” end 2021 with around P2.4-billion expenditure on spectrum user fees.

“While PLDT and Smart thank the House for passing the subject Zero Wi-Fi spectrum fees bill, we also take this opportunity to reiterate our call for the reduction and/or rationalization of SUF for other spectrum/frequencies,” he added.

The proposed measure, which was approved by the House of Representatives and transmitted to the Senate on Sept. 22, seeks to adopt a license-free, zero SUF policy in line with “best international practices.”

It also aims to protect public interest by limiting the use of outdoor Wi-Fi frequency access points or base stations and links to the government and duly enfranchised public telecommunications entities.

Globe expects that this policy will increase public access to Wi-Fi technology and, eventually, lower the cost of telecoms services for the public.

“When spectrum prices are set too high, operators are likely to invest less in their networks, which impacts the quality, affordability, and reach of services,” Globe General Legal Counsel Froilan Vicente M. Castelo said in an e-mailed statement on Nov. 26.

“We have been actively pursuing the lowering of spectrum user fees with the NTC (National Telecommunications Commission) and Congress, since we believe that telecommunications is now an essential service that should be made more affordable for users,” he pointed out.

The SUF should be set at “modest levels” to cover only the regulator’s spectrum management costs, Mr. Ibay of Smart said.

“Increased demand from mobile users put a strain on networks, necessitating the use of more spectrum,” he noted. As a result, increased spectrum use leads to increased spectrum prices.

“Operators will struggle to make the significant investments required to support dense 4G (fourth-generation) and 5G (fifth-generation) networks,” he said.

PLDT and Smart want a uniform computation of SUF across all frequency bands.

“There appears to be no basis for creating a price differentiation among the various frequencies,” Mr. Ibay said.

NTC Deputy Commissioner Edgardo V. Cabarios has yet to respond to a request for comment as of press time.

Moody’s Investors Service also said on Monday that telcos in Asia’s emerging markets, which include the Philippines, are expected to face higher spectrum liabilities.

“[B]ut these essential costs are not subject to refinancing and have limited immediate impact on cash flows and liquidity,” it said in a report e-mailed to reporters.

It noted that the ratings of telcos in the emerging markets could tolerate increased deferred spectrum liabilities at current levels if these costs are the main driver of high debt or weaker leverage.

“Deferred spectrum liabilities are distinct from bank or capital market debt and are not subject to refinancing,” said Nidhi Dhruv, a Moody’s vice-president and senior analyst.

“Moreover, in exceptional circumstances, governments are likely to provide more payment buffers, which can alleviate cash flow pressure for some telcos.”

Globe said that while the telcos incur “massive and sustained capital outlay” for telecommunications infrastructure and pay costly spectrum fees, revenues per megahertz of spectrum is “declining.”

Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a majority stake in BusinessWorld through the Philippine Star Group, which it controls.

Flag carrier PAL expands Vis-Min services via Iloilo

PHILIPPINE Airlines, Inc. (PAL) announced on Monday that it would expand its services in the Visayas and Mindanao in anticipation of increased demand during the upcoming holiday season.

The flag carrier will resume services from Iloilo to Cebu and General Santos City on Dec. 7 and from Iloilo to Davao on Dec. 8.

“The expanded route network will increase connectivity between the Visayas and Mindanao just in time for the peak holiday season, enabling more people to reunite with families in their home provinces,” PAL said in an e-mailed statement.

With various areas in the Visayas and Mindanao reopening for business and tourism, the airline anticipates that the new flights will contribute to the overall economic recovery.

“We also hope to restore more of our pre-pandemic routes and mount new services in the coming months, while strictly adhering to the latest health and safety protocols set by all local government units (LGUs) involved,” PAL Senior Assistant Vice-President for Philippine Sales Harry D. Inoferio said.

The airline said that each province, city or municipality might impose its own travel requirements, and the rules may be subject to change at short notice.

“For additional information and latest updates, passengers are encouraged to check the website of the LGU of their destination point. Additionally, they may also check https://www.philippineairlines.com/en/covid-19/travelingwithintheph. www.philippineairlines.com,” it added.

PHL ARRIVAL PROTOCOLS
PAL also announced on Monday that eligible travelers to the Philippines from countries or regions on the green list will now be subjected to the same quarantine and testing protocols that apply to arrivals from countries in the yellow list classification.

Travelers from yellow-listed countries are required to undergo facility-based quarantine until the release of a negative swab test that was taken on the fifth day from their arrival. They must quarantine at home until their 10th day.

The airline said the revised red list now includes South Africa, Botswana, Namibia, Zimbabwe, Lesotho, Eswatini and Mozambique, Austria, Czech Republic, Hungary, The Netherlands, Switzerland, Belgium, and Italy.

“Inbound international travel shall not be allowed for all persons, regardless of vaccination status, coming from or who have been to red-listed countries/regions within the last 14 days prior to arrival to any port of the Philippines,” PAL noted.

“Only Filipinos returning to the country via government-initiated or non-government-initiated repatriation and Bayanihan Flights may be allowed entry subject to the prevailing entry, testing, and quarantine protocols for red-listed countries,” it added. — Arjay L. Balinbin

ABS-CBN produces original content for iQiyi

TWO romance stories and a musical series are among Chinese on-demand streaming service iQiyi’s first Filipino originals shows after sealing a content deal with ABS-CBN.

Founded in China in 2010, iQiyi International is an on-demand video streaming service providing pan-Asian entertainment. It is currently available in 191 countries with more than 106 million subscribers worldwide.

The content deal with the network adds to iQiyi’s growing library of content from Japan, South Korea, China, Thailand, Singapore, and Malaysia.

“This partnership allows us to bring the best of Filipino content to an international market with iQiyi’s current reach of 191 territories,” Cory Vidanes, ABS-CBN Chief Operating Officer of Broadcast, said at online press launch on Nov. 23.

Negotiations with ABS-CBN began almost two years ago while the streaming platform was slowly building its brand in the country, said iQiyi country manager Sherwin dela Cruz.

“We’ve always known that we would go hardcore with local. We were just really waiting for the right time. [In as much as] all the Asian titles are very relatable, but nothing is more at home and authentic as our own Filipino stories,” Mr. Dela Cruz said.

THE SHOWS
Premiering on iQiyi this December is the ABS-CBN shows Saying Goodbye and Hello, Heart, while Lyric and Beat will premiere in 2022.

The young adult drama series Saying Goodbye stars Andrea Brillantes and Seth Fedelin whose characters meet at an old record store and fight over the same album. After that less than auspicious start, a friendship, then love, bloom. Joining the cast are Andi Abaya and Kobie Brown. Saying Goodbye premieres on Dec. 4, 8 p.m., with new episodes released weekly.

The romantic comedy Hello, Heart follows the hardworking yet unlucky Heart (played by Gigi De Lana) and the very serious Saul (Gerald Anderson). Heart is hired to pretend to be Saul’s wife to please his grandmother who has dementia. Hello, Heart premieres on Dec. 15, 8 p.m, with new episodes released weekly.

Lyric and Beat is a romantic musical series following the students in a music conservatory who are pitted against each other for the chance to represent the school at the prestigious National Music Competition. The series stars Andrea Brillantes, Seth Fedelin, Darren Espanto, and AC Bonifacio. Also in the cast are Nyoy Volante, Agot Isidro, Joanna Ampil, Sheena Belarmino, Jeremy Glinoga, and Angela Ken. Lyric and Beat premieres in 2022.

The shows will be streamed exclusively on the iQiyi app and www.iQ.com. — Michelle Anne P. Soliman