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‘Ticket to work’: Indian state brings vaccines to migrant workers’ doorstep

Sumita Roy Dutta/CC BY-SA 4.0/Wikimedia Commons

MUMBAI — As the health worker swabbed the skin on his arm with an alcohol wipe and prepared the syringe, Kartik Biswas felt an overwhelming sense of relief.  

He was finally about to receive his first dose of the coronavirus disease 2019 (COVID-19) vaccine, as part of a drive by the southern Indian state of Kerala to inoculate some of the country’s most marginalized people — migrant workers.  

It is rare for migrant workers, who make up one-fifth of India’s 100 million workforce, to be specifically targeted for state help.  

Yet in recent weeks, officials in the southern coastal state have been taking jabs to work sites, setting up vaccination camps and putting up public health posters in local languages, urging migrant workers to get protected against the virus.  

“I was home for a year during the lockdown and I got my job back with great difficulty. If my health suffers now, who will take care of my family? I was determined to get vaccinated,” said Mr. Biswas, 44, a supervisor at a construction site.  

Repeated lockdowns shuttered industries, leading to millions of job losses, while a brutal second wave in May overwhelmed the health care system in India, the second-worst affected country globally after the United States.  

Mr. Biswas, who moved to Kerala from Kolkata four years ago, was among 500 workers vaccinated at a three-day camp held at his work site last week by the labor department amid rising cases in Kerala.  

The state has given some 34,000 workers a first dose and about 1,000 a second dose, out of 300,000 on official records.  

“I feel relieved. Five of my six flatmates contracted COVID-19 at the peak of the second wave. I had started trying to get vaccinated ever since but could not,” Mr. Biswas told the Thomson Reuters Foundation by telephone.  

“Vaccination is critical for us to protect our lives and our future.”  

India aims to vaccinate all willing and eligible citizens by the end of the year, but the vaccination drive has been hit by shortages, hesitancy, and a digital divide.  

MIGRANTS RETURN TO SEEK WORK  

Migrant workers were among the worst hit by the pandemic. As many as 11.4 million returned to their home states during lockdown, government data shows, as jobs dried up.  

However, most economic activities have resumed as state governments eased restrictions with declining infections. Unemployment rates are gradually dropping, data from an independent think-tank shows.  

States like Kerala, a migrant magnet for the past decade, have seen migrants from across India returning to look for jobs in hospitality, factories and at construction sites.  

“We have a huge population of migrant workers and they should all be vaccinated. We have been getting limited doses but we are dividing what we get and holding separate vaccination camps for migrant workers,” said S. Chithra, Kerala’s labor commissioner.  

“We are trying to bring about awareness that vaccines are harmless. We have posters in Assamese, Bengali, Hindi and Odia languages that we are putting out on social media,” she told the Thomson Reuters Foundation.  

About 12% of India’s 940 million adults are fully vaccinated, and more than 40% have received a first dose, federal health ministry data shows.  

Vaccination is seen as key to unlocking more jobs and easier movement between states, several of which require people to take a COVID-19 test that can cost 800 rupees ($10.78) — a couple of days’ wages for many — or proof of double vaccination to enter.  

On the other side of India, in northeastern Assam state’s Tarinipur village, Tahir Hussain Talukdar said he had looked for the vaccine in local healthcare facilities three times but had no luck.  

Mr. Talukdar, 25, who lost his housekeeping job at a multiplex in southeastern Andhra Pradesh, said he had survived on aid over the past year.  

“There is no work in my village. The labor contractor I have been calling tells me to get vaccinated before I come. I need the vaccine because that’s the only way I can get work,” Mr. Talukdar said.  

MOST VULNERABLE  

India has redoubled its efforts amid fears of a third wave.  

Several construction firms and major businesses have arranged for their staff — both on payroll and informal workers — to get vaccinated.  

State health workers are climbing hills and sailing through rivers and lakes to reach the vast country’s remotest parts. But the pace of vaccination remains slow and many are still falling through the cracks, campaigners and migration experts warn.  

Migrants often remain invisible, even though their skills are desperately needed in manufacturing, construction and the hospitality industry.  

“People seeking daily wage work are being asked if they are vaccinated,” said Benoy Peter, head of the Centre for Migration and Inclusive Development, which runs a mobile vaccination unit for migrants in Kerala in partnership with the state.  

Mr. Peter said Kerala’s vaccination drive must be “sensitive to the challenges of migrants” and suggested more camps on Sundays and in the evenings to reach workers likely to be overlooked, such as day laborers, scrap collectors and women.  

Most migrant workers are in the informal sector. With no steady employer, they cannot afford to take time off for the jab and are less likely to be invited to a vaccination camp, campaigners said.  

“This section is most vulnerable in the challenges they face in accessing the vaccine,” said Sanjay Awasthi, head of the International Organization for Migration’s office in India. “It is imperative their coverage is factored in.”  

Migrants in Kerala who received the shot hope to return to their pre-pandemic lives.  

Samir Kuanar, 37, who lost his plumber’s job in Kuwait when the pandemic struck last year, managed to land an interview in July with a Qatar-based agency that supplies domestic labor.  

“They gave me an offer letter but I hit a roadblock — I wasn’t vaccinated,” Mr. Kuanar said.  

As luck would have it, he received his first dose last week.  

“I hope to fly soon. Vaccination is my ticket to work,” he said. — Roli Srivastava/Thomson Reuters Foundation 

Asian Institute of Management and Manila Water to roll out AI models for better water supply management

The Asian Institute of Management (AIM), through its Analytics, Computing, and Complex Systems Laboratory (ACCeSs@AIM), has deployed and operationalized its joint project with the Department of Science and Technology (DoST) and the Manila Water Co., Inc. (MWCI).

The collaborative endeavor aims to enhance the distribution of water supply in the East Zone of Metro Manila and will be utilized to forecast dam levels in Angat, La Mesa, and Ipo to cater to the needs of households, businesses, and other industries.

The Artificial Intelligence (AI)-powered software developed by ACCeSs@AIM employs historical water levels, volume of rainfall, and indicators of El Niño or La Niña to predict dam levels.

“Thanks to this collaboration with AIM and support from DoST, we can now develop and advocate for data-driven policies towards effective allocation and management of our water supply. Coupled with the continued good cooperation with key government agencies, this will help mitigate the risks associated with water supply fluctuations brought about by climate change,” said Mark Orbos, MWCI’s director for Corporate Strategy & Investor Relations.

This project was made possible with support from the DoST’s Collaborative Research and Development to Leverage Philippine Economy (CRADLE) Program, and monitoring efforts from the DoST-Philippine Council for Industry, Energy and Emerging Technology Research and Development (PCIEERD).

“With much data that is already out there, it is high time that we maximize the power of emerging technologies like AI and machine learning to improve and affect the daily lives of Filipinos. AIM’s forecast modeling fulfills this by seamlessly providing apt agencies with helpful data as basis for decision and policy making on water supply to avoid shortages. Partnering with institutions like AIM and MWCI allows us to leverage on our combined resources and expertise to fulfill a common objective — to support the growth of the Philippine Innovation ecosystem,” said DoST-PCIEERD Executive Director Dr. Enrico C. Paringit.

ACCeSs@AIM actively engages the private and public sector to innovate through research and development projects in advanced analytics. It is AIM’s first corporate laboratory and the first of its kind in the Philippines.

“The impact of AI and Data Science projects like these goes beyond just solving the immediate needs of consumers,” said Prof. Christopher Monterola, PhD, project lead and ACCeSs@AIM executive managing director. “At ACCeSs@AIM, our goal is to bridge the gap between theory and practice by creating effective and practical solutions to real-world problems through data-driven support tools. We have a multidisciplinary team of experienced and highly trained data scientists with access to AIM’s world-class resources and facilities, including a 1.2 petaflop supercomputer — the fastest in the Philippines — enabling us to collaborate and operationalize solutions with different industries, government agencies and various organizations, and help innovate through R&D initiatives.”

To date, ACCeSs@AIM has completed 4 industry projects and mentored 35 MSc Data Science Capstone Projects from 25 companies and agencies.

To know more about ACCeSs@AIM, visit asite.aim.edu/access-lab/.

Cascadeo, Globe’s cloud company, named in Gartner Magic Quadrant

Cascadeo achieved an impressive milestone by landing in the Gartner Magic Quadrant for Public Cloud IT Transformation Services, Global 2021. Cascadeo, Globe’s Cloud Professional and Managed Services delivery arm,  joined an exclusive roster of world-class ICT leaders, reinforcing the company’s expertise in Cloud strategies, platform integrations, and Cloud customization.

Renowned research and advisory company, Gartner, recognized Cascadeo as a niche player in Public Cloud IT Transformation Services for its extensive competencies; innovative solutions to maximize Cloud platforms; consultative approach to Cloud transformation, and data analytics-based recommendations to customers. A Premier level partner of Amazon Web Services, Cascadeo is one of the very first AWS-certified Managed Service Providers globally. The company boasts of a growing number of Google Cloud Platform certifications and rapidly expanding Azure competencies. This shows Cascadeo’s commitment to improving multi-cloud and Cloud-agnostic platform capabilities.

“Public Cloud deployments are vastly accelerating, with enterprises planning to maintain or increase their IT investments in the years to come,” shared Peter Maquera, CEO of Cascadeo and Senior Vice President of Globe Business, Enterprise Group. “This historic win with Gartner reminds us that we’re on the right track towards digitally transforming our customers. Globe and Cascadeo continuously work together to expand our base of Cloud engineering skills, products, and services to help businesses achieve agility and resiliency through the Cloud.”

“As Cascadeo grows through our Globe partnership, we expand our workforce of skilled Cloud engineers, architects, security experts, and operators in the Philippines. Being part of the Magic Quadrant validates our decades of experience as a Premier-tier services provider centered around data-driven business transformation”, says Jared Reimer, President, and Founder of Cascadeo.

Gartner detailed Cascadeo’s strengths on Cloud consultancy, managed services and Cloud-native skills; modernization of traditional applications; emphasis on strategic Cloud transformation, and DevOps expertise. Cascadeo invests heavily in data analytics through its AIops-enabled cascadeo.io platform. The Cloud management platform for cloud infrastructure analytics is one of the company’s key competitive differentiators, with its capabilities in multi-cloud monitoring; automatic system alerts; cost-optimization features; and dashboard integrations.

With Cascadeo’s achievement, Globe has officially become the first Philippine telco to have a subsidiary enter into the Gartner Magic Quadrant.

Power up your business transformation with Cloud. Learn more about Cascadeo and the rest of Globe Cloud Solutions by visiting our website or getting in touch with your Globe Business Account Manager.

 

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Apple’s child protection features spark concern within its own ranks — sources

PIXABAY

SAN FRANCISCO — A backlash over Apple’s move to scan US customer phones and computers for child sex abuse images has grown to include employees speaking out internally, a notable turn in a company famed for its secretive culture, as well as provoking intensified protests from leading technology policy groups.  

Apple employees have flooded an Apple internal Slack channel with more than 800 messages on the plan announced a week ago, workers who asked not to be identified told Reuters. Many expressed worries that the feature could be exploited by repressive governments looking to find other material for censorship or arrests, according to workers who saw the days-long thread.  

Past security changes at Apple have also prompted concern among employees, but the volume and duration of the new debate is surprising, the workers said. Some posters worried that Apple is damaging its leading reputation for protecting privacy.  

Though coming mainly from employees outside of lead security and privacy roles, the pushback marks a shift for a company where a strict code of secrecy around new products colors other aspects of the corporate culture.  

Slack rolled out a few years ago and has been more widely adopted by teams at Apple during the pandemic, two employees said. As workers used the app to maintain social ties during the work-from-home era by sharing recipes and other light-hearted content, more serious discussions have also taken root.  

In the Slack thread devoted to the photo-scanning feature, some employees have pushed back against criticism, while others said Slack wasn’t the proper forum for such discussions.  

Core security employees did not appear to be major complainants in the posts, and some of them said that they thought Apple’s solution was a reasonable response to pressure to crack down on illegal material.  

Other employees said they hoped that the scanning is a step toward fully encrypting iCloud for customers who want it, which would reverse Apple’s direction on the issue a second time.  

PROTEST  

Last week’s announcement is drawing heavier criticism from past outside supporters who say Apple is rejecting a history of well-marketed privacy fights.  

They say that while the US government can’t legally scan wide swaths of household equipment for contraband or make others do so, Apple is doing it voluntarily, with potentially dire consequences.  

People familiar with the matter said a coalition of policy groups are finalizing a letter of protest to send to Apple within days demanding a suspension of the plan. Two groups, the Electronic Frontier Foundation (EFF) and Center for Democracy and Technology (CDT) both released newly detailed objections to Apple’s plan in the past 24 hours.  

“What Apple is showing with their announcement last week is that there are technical weaknesses that they are willing to build in,” CDT project director Emma Llanso said in an interview. “It seems so out of step from everything that they had previously been saying and doing.”  

Apple declined to comment for this story. It has said it will refuse requests from governments to use the system to check phones for anything other than illegal child sexual abuse material.  

Outsiders and employees pointed to Apple’s stand against the FBI in 2016, when it successfully fought a court order to develop a new tool to crack into a terrorism suspect’s iPhone. Back then, the company said that such a tool would inevitably be used to break into other devices for other reasons.  

But Apple was surprised its stance then was not more popular, and the global tide since then has been toward more monitoring of private communication.  

With less publicity, Apple has made other technical decisions that help authorities, including dropping a plan to encrypt widely used iCloud backups and agreeing to store Chinese user data in that country.  

A fundamental problem with Apple’s new plan on scanning child abuse images, critics said, is that the company is making cautious policy decisions that it can be forced to change, now that the capability is there, in exactly the same way it warned would happen if it broke into the terrorism suspect’s phone.  

Apple says it will scan only in the United States and other countries to be added one by one, only when images are set to be uploaded to iCloud, and only for images that have been identified by the National Center for Exploited and Missing Children and a small number of other groups.  

But any country’s legislature or courts could demand that any one of those elements be expanded, and some of those nations, such as China, represent enormous and hard to refuse markets, critics said.  

Police and other agencies will cite recent laws requiring “technical assistance” in investigating crimes, including in the United Kingdom and Australia, to press Apple to expand this new capablity, the EFF said.  

“The infrastructure needed to roll out Apple’s proposed changes makes it harder to say that additional surveillance is not technically feasible,” wrote EFF General Counsel Kurt Opsahl.  

Lawmakers will build on it as well, said Neil Brown, a UK tech lawyer at decoded.legal: “If Apple demonstrates that, even in just one market, it can carry out on-device content filtering, I would expect regulators/lawmakers to consider it appropriate to demand its use in their own markets, and potentially for an expanded scope of things.” — Joseph Menn and Julia Love/Reuters 

Migrants’ unpaid hospital bills a barrier to birth certificates in UAE 

Norlando Pobre/CC BY 2.0/Flickr

DUBAI — Philippine national Maya and her husband lost their low-paying jobs in the United Arab Emirates early in the coronavirus pandemic, and with it their work visas and health insurance.  

Now they say they face a mounting bill of daily immigration fines because their one-year-old child remains undocumented, as the hospital where it was born withholds the birth notification required to get a certificate until the couple settles a 14,000 dirham ($3,800) bill.  

Dozens of women have told the Do Bold non-profit organization, which promotes migrant workers’ rights, that they had not obtained birth certificates in the UAE as of late 2020.  

The group said the issue came to light when it was approached by migrant workers who had lost jobs in the pandemic or could not travel home to give birth.  

Without the documentation, children in the UAE are unable to get passports, visas or Emirates identification, or to access healthcare and education.  

Do Bold said 166 women who filled out a survey did not have birth certificates at the end of last year, of which 63 cited unpaid hospital bills as the cause. Other reasons included being unable to provide valid marriage certificates or visas.  

“We want hospitals to provide birth certificates regardless of immigration status, regardless of civil status, and regardless of economic status — whether they can or cannot afford to pay a hospital bill,” said the head of Do Bold, Ekaterina Porras Sivolobova.  

The UAE health ministry, which oversees health in the federation of seven emirates, did not respond to requests for comment on the issue.  

Immediate birth registration is a fundamental human right recognised in the Convention on the Rights of the Child and in a 2016 UAE law.  

Each emirate also imposes its own regulations on health and other sectors.  

Abu Dhabi was the only emirate that responded to a request for comment. Its health ministry said a 2018 regulation prohibits licensed obstetrics facilities from refusing to provide a stamped birth notification and certificate “for any reason”.  

‘NO ONE HAS MONEY’  

Maya, who declined to give her full name because of the sensitivity of her situation, said she was discharged by a government hospital in Ras Al Khaimah emirate after paying 1,800 dirhams of the 14,000-dirham bill.  

For the birth certificate, she said, it asked her to sign an agreement to pay the full amount within three months.  

She refused. “If I am not able to pay the full balance they can make a legal case against us,” said the 33-year-old, whose monthly salary working at an office had been less than 3,500 dirhams.  

Outstanding debt and bounced cheques can lead to jail, fines and travel bans in the UAE.  

Ras Al Khaimah’s media office did not respond to a request for comment.  

Maya’s was one of three families Reuters spoke to who said they could not certify births because of outstanding hospital fees.  

A private birth document services agency in the UAE said it was common for hospitals, especially private ones, not to release birth notifications — required to get a certificate — if bills were not paid.  

In June, Imram, a Sri Lankan national, got his wife discharged from a private Dubai hospital by leaving her passport there. He said he was told they would receive the birth notification once he paid the 11,600 dirham bill.  

Having lost his hospitality job and health insurance a year ago, Imram paid only a small amount. “I am trying to get money, but in this pandemic no one has money, none of my friends either,” he said.  

Dubai’s media office did not respond to a request for comment.  

Health insurance is mandatory in Dubai and Abu Dhabi but insurance quality varies and can end soon after an employment visa terminates.  

The other five emirates do not require employers to provide health insurance, according to websites of the UAE government and private insurance companies.  

The UAE last year repealed criminalization of premarital sex, but barriers remain for unmarried women in accessing health insurance for pregnancies and obtaining birth certificates, which requires a court process. — Lisa Barrington/Reuters 

Debt in a warm climate: coronavirus and carbon set scene for default 

Brody Hessin/CC BY 4.0/Wikimedia Commons

LONDON — Where coronavirus disease 2019 (COVID-19) has precipitated unprecedented debts, climate change could trigger defaults across a planet which a United Nations (UN) panel says is dangerously close to runaway warming.  

To avert disaster, countries are committing to carbon cutting steps. But these will be costly and likely to add to a global debt pile which asset manager Janus Henderson estimates ballooned to $62.5 trillion by the end of last year.  

With floods and wildfires devastating the world, estimates vary on how much damage warming will inflict on its economy.  

But a report earlier this year by Bank of America (BofA) put it at $54–69 trillion by 2100, which compares to a valuation of the entire global economy of around $80 trillion.  

The financial repercussions could manifest themselves in under a decade, a study by index provider FTSE Russell warns.  

The first climate-linked credit rating downgrades are set to hit countries soon, the report’s co-author and FTSE Russell’s senior sustainable investment manager, Julien Moussavi, added.  

In a worst-case “hot house world” scenario developing countries including Malaysia, South Africa, Mexico and even wealthier economies such as Italy may default on debt by 2050.  

In another, where governments are initially slow to react, states including Australia, Poland, Japan, and Israel will be at risk of default and ratings downgrades too, the study concluded.  

While developing countries are inherently more vulnerable to rising sea levels and drought, richer ones will not escape the climate change fallout, such studies show.  

“You can talk about climate change and its impact and it won’t be long before someone talks about Barbados, Fiji, or the Maldives,” Moritz Kraemer, chief economist at Countryrisk.io and former head of sovereign ratings at S&P Global.  

“What was a surprise to me is the impact on higher-rated, richer countries,” Mr. Kraemer added.  

Another study by a group of universities including Cambridge concluded that 63 countries — roughly half the number rated by S&P Global, Moody’s and Fitch — could see credit ratings cut by 2030 because of climate change.  

China, Chile, Malaysia, and Mexico would be the hardest hit with six notches of downgrades by the end of the century, it said, while the United States, Germany, Canada, Australia, India, and Peru could see around four.  

The corresponding increase in borrowing costs would add $137–$205 billion to countries’ combined annual debt service payments by 2100, this study estimated.  

Ratings downgrades typically raise borrowing costs, especially if they cause countries to be ejected from bond indexes tracked by funds managing trillions of dollars.  

WARNING LIGHT  

Developed countries are ramping up spending to temper climate damage, with Germany creating a 30 billion euro recovery fund after recent floods, while Singapore is budgeting the equivalent of $72 billion to protect against rising sea levels in the next century.  

For emerging economies, already scarred by COVID-19, the climate crisis will heap on more pressure.  

The International Monetary Fund (IMF) warns that a 10 percentage-point rise in climate change vulnerability, as measured by the Notre Dame Global Adaptation Initiative index, is associated with an increase of over 150 basis points in long-term government bond spreads for developing nations.  

The average rise across all countries was 30 bps.  

The UN environment program estimates that in developing countries, annual adaptation costs will be as much as $300 billion in 2030, rising to $500 billion in 2050.  

As a percentage of gross domestic product, sovereign debt is still about 60% in emerging economies, data from the Institute of International Finance (IIF) shows, versus 100% or so in the United States and Britain, and 200% in Japan.  

The rise from pre-pandemic levels of around 52% is a particular concern. European, US and Japanese central banks are essentially underwriting state borrowing, but this is not possible in poor countries, who must ultimately repay debt.  

“How do you enable the sort of funding that is required given the high debt levels and the importance of the ratings frameworks?” Sonja Gibbs, director for global capital markets at the IIF said. — Dhara Ranasinghe and Karin Strohecker/Reuters

Diokno warns lockdown poses risk to recovery: BSP keeps key rate at a record low

PHILIPPINE STAR/ MICHAEL VARCAS

By Luz Wendy T. Noble, Reporter

THE Bangko Sentral ng Pilipinas (BSP) left its key policy rate at a record low for a sixth consecutive meeting on Thursday, even as BSP Governor Benjamin E. Diokno warned the renewed lockdown poses a risk to economic recovery.

The overnight reverse repurchase facility was left unchanged at 2%, as expected by all 18 analysts in a BusinessWorld poll last week.

The central bank has also retained the overnight deposit and lending rates at 1.5% and 2.5%, respectively.

“The Monetary Board observed that the reimposition of quarantine measures to arrest the recent wave of COVID-19 (coronavirus disease 2019) infections could pose a risk to the ongoing economic recovery,” Mr. Diokno said at a briefing on Thursday afternoon.

“To this end, targeted fiscal and health interventions, especially the acceleration of the government’s vaccination program, will be crucial in safeguarding public health and preventing deeper negative effects on the Philippine economy.”

High-risk areas including Metro Manila and some provinces that are experiencing a surge in COVID-19 infections are under a two-week lockdown until Aug. 20.

Despite the strict lockdown, the number of daily COVID-19 cases continues to rise. On Thursday, the Health department reported 12,439 new COVID-19 cases, bringing the total number of active cases at 87,663.

An additional 177 Delta variant cases were also reported on Thursday. Total Delta variant cases now stand at 627.

“The Monetary Board remains keen on sustaining monetary policy support for as long as necessary in order for the momentum of economic recovery to gain more traction as well as to help boost domestic demand and market confidence, especially as risk aversion continues to temper credit activity,” Mr. Diokno said.

He said the BSP is ready to adjust policy settings as needed, adding that the risks to inflation appeared balanced.

“Going forward, the BSP will remain vigilant against any emerging risks to the outlook for inflation and growth,” Mr. Diokno said.

The Philippines exited recession in the second quarter, as gross domestic product (GDP) grew by 11.8%. This brought first-half GDP growth to 3.7%, still below the 6-7% full-year government target.

However, recovery momentum was dented after second-quarter GDP declined by a seasonally adjusted 1.3% on a quarter-on-quarter basis, following a 0.7% growth in the first quarter.

Banks also continued to be risk-averse, with bank lending declining for a seventh straight month in June.

BEYOND TARGET
Meanwhile, the central bank upwardly revised the inflation outlook for the year to 4.1% from 4%, BSP Deputy Governor Francisco G. Dakila, Jr. said.

The new estimate exceeds the central bank’s 2-4% target range.

For 2022 and 2023, the BSP expects inflation to average 3.1%, also slightly higher than its previous 3% estimate for both years.

“Factors that led to the revision include higher global crude and non-oil prices, weakening of the peso, as well as concerns about the speed of arrival of imported pork. This is also taking into account the latest inflation outturn, specifically in June and July that came after the previous policy meeting,” Mr. Dakila said.

The peso has been trading at the P50 per dollar level in recent weeks. It closed at P50.39-a-dollar on Thursday, 4.9% weaker than its P48.023 close on the last trading day of 2020.

Mr. Dakila said the weaker peso is consistent with the “broad dollar strength” against other currencies as investors fled to safe havens amid worries over the Delta variant. He said this risk-off sentiment was also caused by the perceived shift of the US Federal Reserve to a more hawkish tone.

At the same time, the consumer price index (CPI) in July rose by 4%, marking the first time that headline inflation was within the BSP’s 2-4% target since December 2020. July inflation eased from the 4.1% in June mainly due to slower increase in the transport index. However, inflation in the first seven months of the year still exceeded the target range at 4.4%.

Mr. Dakila said the expectation for a faster CPI increase is mainly caused by supply issues as “demand conditions are not really driving inflation.”

“When we look at the distribution of the CPI items, in terms of how fast the prices of these items are increasing, more than half or 53.2% of the total items are actually having inflation rates below 2%, below the lower bound of inflation target. So again, that’s an indication that demand conditions are at the moment muted,” he said.

The BSP’s higher inflation outlook for 2021 and the succeeding two years kills any chance of a surprise rate cut, Pantheon Macroeconomics Senior Economist Miguel Chanco said in a note.

“We maintain that a reacceleration in inflation in the remainder of this year is on the cards, as the country continues to import high amid rising global food inflation, and as the lagged impact of the recovery in global oil prices filters through to utility and transport costs,” he said, noting the peso’s weakness will also strengthen the case for the BSP to retain the policy rates at record lows.

Meanwhile, Alex Holmes, Asia economist at Capital Economics, expect more rate cuts ahead as it sees the central bank supporting recovery that is hindered by a slow-paced vaccination.

Data from the Johns Hopkins University showed only 10.74% or 11.614 million of the population have been fully vaccinated. The government aims to vaccinate 70 million adult Filipinos by yearend to achieve herd immunity that could be the key to safely reopen the economy.

“The virus is set to remain a major headwind to the economy for some time and the unemployment rate — which the central bank has indicated it is keeping a close eye on — is likely to shoot up once again,” Mr. Holmes said in a note, adding a rate cut may be on the table in the next policy review.

The Monetary Board has three more policy meetings this year. The next one is set on Sept. 23.

Philippines faces sluggish recovery as Delta threat rises

Church-mass-vaccination
PHILIPPINE STAR/ MICHAEL VARCAS
Church-mass-vaccination
People wait to get their COVID-19 vaccines at a church along Kamuning Road, Quezon City, Aug. 9. — PHILIPPINE STAR/ MICHAEL VARCAS

THE growing number of Delta variant infections in the country, coupled with the hard lockdowns, will likely slow down the Philippine economy’s recovery for the rest of the year, the ASEAN+3 Macroeconomic Research Office (AMRO) said.

AMRO’s economist for the Philippines Zhiwen Jiao said the economy’s 11.8% growth in the second quarter signaled signs of recovery but the momentum may have slowed due to the resurgence in coronavirus cases and renewed lockdowns.

“Given that the Philippines is a service-oriented economy, with a large share of economic activities concentrated in Manila, the latest tight pandemic restrictions in the capital will inevitably slow the country’s economic recovery,” Mr. Jiao said in an e-mailed response on Thursday.

AMRO will consider these developments in reassessing the gross domestic product (GDP) growth forecast for the Philippines, he said.

The regional macroeconomic surveillance organization slashed its 2021 growth projection for the Philippines to 6.4% in June from the previous 6.9% forecast in March.

Metro Manila and other parts of the country are again under the strictest form of lockdown until Aug. 20 to curb the spread of the highly contagious Delta variant of coronavirus disease 2019 (COVID-19).

The Health department reported 12,439 new COVID-19 infections on Thursday, bringing the total number of active cases at 87,663.

An additional 177 Delta variant cases were also reported on Thursday, of which 90 were in the National Capital Region. Total Delta variant cases now stand at 627.

“As for the second half of this year in particular, the biggest threat to growth is still COVID-19 infection rates. The country urgently needs faster vaccinations to reach herd immunity so that the economy can open up safely, and businesses can operate with a degree of normalcy.”

IHS Markit Asia Pacific Chief Economist Rajiv Biswas also warned that the tighter restrictions and a lack of adequate vaccine supplies will slow down the Philippines’ recovery momentum over the near term.

The government has administered 24.45 million doses of COVID-19 vaccines as of Aug. 8, with 11.4 million fully vaccinated against COVID-19.  This is still far from the government’s target to vaccinate 70 million or the entire adult population by end of this year to achieve herd immunity.

Mr. Biswas said the economy will likely grow by around 5-6%, barely hitting the government’s GDP growth target of 6-7% for the year.

The Department of Finance (DoF) likewise acknowledged the impact of the Delta variant outbreak on the economy, especially on the labor market.

“The subsequent re-imposition of stricter quarantine measures in August will have consequences on the nascent green shoots. Such measures are nevertheless precautionary in nature to prevent the much greater evil of spikes in daily cases,” the DoF said.

The unemployment rate stood at 7.7% in June, with 359,000 jobs created.

For 2022, AMRO and IHS Markit both see a brighter outlook for the Philippines, on expectations that the pandemic will be contained.

“GDP growth should prove robust in 2022, even if growth is dampened by the lockdowns this year, because the outbreak will likely be better controlled next year. We also anticipate that the government will provide stronger policy support,” Mr. Jiao said.

Mr. Biswas said the latest Philippine manufacturing PMI survey indicated improving output expectations for the industry in the next 12 months.

“The gradual progress of the COVID-19 vaccination program has underpinned hopes of a return to normality over the next 12 months. Stronger GDP growth of around 7.7% year on year is expected in 2022, as the pandemic is gradually restrained by widening vaccine rollout in the Philippines, resulting in more normal economic conditions,” he added.

The government is targeting a 7-9% economic rebound next year. — Beatrice M. Laforga

Filinvest’s REIT makes market debut; Megaworld REIT gets go signal

BW FILE PHOTO
Filinvest REIT Corp. manages a portfolio of 17 office buildings, of which 16 are located in Northgate Cyberzone, Filinvest Corporate City in Muntinlupa. — COMPANY HANDOUT

By Keren Concepcion G. Valmonte, Reporter

SHARES in the real estate investment trust (REIT) sponsored by Filinvest Land, Inc. (FLI) rose less than a percent higher in its market debut on Thursday, amid the strict lockdown in the capital region and the threat of the Delta variant of the coronavirus disease 2019 (COVID-19).

At the same time, Megaworld Corp.’s REIT unit secured approval from the Philippine Stock Exchange (PSE).

Filinvest REIT Corp.’s (FILREIT) shares closed at P7.02 each on Thursday, 0.29% or two centavos higher than its P7 offer price, while the PSE index fell 1.65% (Related story). Its shares opened at P6.97, and reached an intraday low of P6.96.

“FILRT’s (the company’s ticker symbol) market debut started on a positive note, reaching as high as P7.14 and eventually traded sideways above the P7.02 area,” Timson Securities, Inc. trader Darren Blaine T. Pangan said in a Viber message. 

“The stock ended slightly higher despite the index inching lower amid the weak sentiment looming over the broader market,” he added.

FILREIT raised P12.6 billion from its initial public offering (IPO). It manages a portfolio of 17 office buildings with over 300,000 square meters. Sixteen of these buildings are located in Northgate Cyberzone, Filinvest Corporate City in Muntinlupa.

“It is a vote of confidence not only in our company and this new asset class but also in our country and in what has proven to be a most resilient industry in our economy — the BPO (business process outsourcing) sector,” FLI President Josephine Gotianun-Yap said in a statement.

The Gotianun-led company remains optimistic about the growing demand for office spaces in its buildings, despite the strict lockdowns. 

“Work from home is not really for everyone and based on the industry research and reports, there’s a lot of issues [on] working from home,” FILREIT President and Chief Executive Officer Maricel Brion-Lirio said during a media briefing. 

“Our outlook for the office sector as a whole is optimistic and positive,” she added.

During the listing ceremony on Thursday, Finance Secretary Carlos G. Dominguez III urged the Filinvest group to further expand its property developments, particularly outside of Metro Manila.

“REIT has proven to be the ideal tool for raising the billions required to power property development in the country. This will propel the growth of the property sector beyond the pandemic… Filinvest’s REIT listing underscores the confidence that the Philippine economy is on track to a solid recovery from the difficulties brought about by the pandemic,” Mr. Dominguez said.

Ms. Gotianun-Yap said the Filinvest group will continue to further expand its existing businesses.

“The Filinvest group has built a very strong foundation for solid growth. Many of our businesses we have not even optimized the capacity, so there’s still a lot of room for growth and that’s what we are working on in addition to going into synergistic businesses,” she said.

FILREIT is the third REIT firm listed on the local stock exchange, which will soon see two more make their market debut.

MREIT GETS GO SIGNAL
Meanwhile, the PSE on Thursday approved the listing of the shares of the REIT unit sponsored by Megaworld.

MREIT will be offering to the public 1,078,000,000 common shares owned by Megaworld for P22 each, with an overallotment option of up to 161,700,000 common shares. 

Its offer period is set from Sept. 14 until Sept. 20, with a tentative listing date scheduled for Sept. 30. It will have the stock symbol “MREIT.”

The company may raise up to P27.3 billion from the IPO, should the overallotment option be exercised. 

MREIT included in its initial portfolio 10 key office assets, which are located in Eastwood City in Quezon City, Mckinley Hill in Bonifacio Global City, and Iloilo Business Park in Mandurriao, Iloilo City. 

Robinsons Land, Inc.’s REIT firm earlier this week received the PSE’s go signal for its IPO. RL Commercial REIT, Inc.’s offer period is expected to run from Aug. 25 to Sept. 3. It aims to list its shares by Sept. 14 under the ticker symbol “RCR.”

These REIT listings all focus on the office spaces in their portfolio, despite muted demand with many companies shifting to work-from-home arrangements due to the continued lockdown restrictions and concerns over COVID-19.

“Lockdowns [caused by the] pandemic since last year could be a drag on office demand and this could be already priced in [or be] reflected in the valuation,” Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a text message.

Analysts said REIT offers would remain attractive considering their dividend yield.

‘For as long as there’s excess system liquidity keeping interest rates low, helped by the BSP’s (Bangko Sentral ng Pilipinas) monetary accommodation, REITs’ yield will be attractively superior versus other asset classes,” First Metro Investment Corp. Head of Research Cristina S. Ulang said in a separate Viber message.

A pickup in the pace of the country’s vaccination program may also boost investor sentiment.

“Increased vaccination would be a catalyst in the coming months especially if population protection and eventually herd immunity is reached in the coming months as this could fundamentally help sustain the economic recovery prospects,” Mr. Ricafort said.

Ayala Corp. reports P5-B second-quarter profit

First-semester results ‘show recovery in business environment’

AYALA Corp. on Tuesday said its reported net income amounted to P5 billion in the second quarter, nearly four times higher than the P1.28 billion earned in the same period last year.

Compared with the first quarter, its second-quarter profit is seven percent lower than the P5.4 billion recorded previously.

Meanwhile, the company said its core net income declined by 15% to P6.1 billion from the first quarter as its banking and energy units posted weak results on top of the losses incurred by AC Industrial Technology Holdings Inc. and AC Ventures Holdings Corp.

The company said these outweighed the better performance of Ayala Land, Inc. and Globe Telecom, Inc.

For the first semester, Ayala said its net income amounted to P10.4 billion, rising by 31% from a low base of P7.94 billion when the country was under tighter lockdown measures brought by the pandemic.

“Our first semester results show recovery in the business environment compared to last year,” Ayala President and Chief Executive Officer Fernando Zobel de Ayala said in a statement on Thursday.

Ayala’s core net income went down by eight percent to P13.3 billion in the first semester, while its revenues grew by 24% to P122 billion.

The conglomerate’s improved first-half results were buoyed by the performance of its diversified business units.

Ayala Land’s net income grew by 34% to P6 billion, while its topline posted a 19% growth to P49 billion year on year.

Property development revenues grew by 37% to P34.1 billion as construction activities continued and as the company recognized higher bookings. Residential sales reservations were up by 26% to P48.2 billion “as local demand remained strong throughout the period.”

Meanwhile, commercial leasing revenues declined by 26% to P9.5 billion as quarantine restrictions affected operations of its malls, hotels, and resorts.

Banking arm Bank of the Philippine Islands saw its net income inch up to P11.8 billion in the first half due to lower loan loss provisions recognized. Meanwhile, total revenues went down by seven percent to P48.1 billion on lower interest income and non-interest income.

Globe generated P13 billion in profits in the six-month period, a 13% improvement as the decline in non-operating charges and upside from the implementation of the Corporate Recovery and Tax Incentives for Enterprises Act, or CREATE Law, fully covered for the increase in depreciation expenses. Its topline rose by four percent to P75.5 billion as data revenues went up due to demand for home broadband.

AC Energy Corp.’s net income grew by five percent to P2.7 billion as its revenues went up by 35% to P13.4 billion. The demand for power reportedly went back to pre-pandemic levels and the company also added renewables capacity.

“However, the strong revenue growth was partially offset by high spot electricity purchases during a thermal outage. The absence of nonrecurring gains during the period also tempered income growth,” the company said.

Manila Water Co., Inc.’s net income saw a 10% growth to P2.7 billion. Meanwhile, AC Industrials narrowed its losses to P592 million from P1.8 billion.

“As a business group operating in diversified industries, we will continue to do our part in helping revitalize the economy through continued investments and supporting the country’s pandemic response and vaccination program,” Mr. Zobel said.

Shares of Ayala declined by 2.42% or P18.00 on Thursday, closing at P727.00 apiece. — Keren Concepcion G. Valmonte

JG Summit swings to profit with P815M on units’ rebound

JG Summit Holdings, Inc. generated P814.51 million in net income attributable to parent in the second quarter, a reversal of the P2.62-billion loss incurred in the same period last year, its regulatory filing on Thursday shows.

This comes as most of its subsidiaries’ revenues went past pre-pandemic levels. The company’s topline grew by 23% to P60.51 billion from P49.17 billion.

“Despite the lingering impact of the pandemic, we have successfully kept our food and banking revenues stable while we continue to exhibit strong recovery on businesses that had been more severely affected by the first enhanced community quarantine,” JG Summit President and Chief Executive Officer Lance Y. Gokongwei said in a statement, referring to its real estate and petrochemicals businesses.

For the first six months, JG Summit’s net attributable income stood at P936.69 million, recovering from a P720.25-million loss incurred in the same period in 2020.

The company’s consolidated revenues saw a nine-percent growth to P128.1 billion in the first half from P117.81 billion.

“The topline growth was mainly driven by higher plant utilization rates in JGSPG (JG Summit Petrochemicals Group), Chengdu’s contribution and recognition of lot sales in RLC (Robinsons Land Corp.), recovering passenger flights & higher cargo yields in CEB (Cebu Air, Inc.), as well as higher earnings from our core investments in Meralco (Manila Electric Co.) and PLDT (Inc.),” the company said.

Universal Robina Corp.’s earnings grew by 46% to P8.05 billion in the first half, as revenues inched up by 1.7% to P68.53 billion.

“The continuous recovery in its international markets and the growth in commodities unit outpaced the expected lower performance in Branded Consumer Foods Philippines given the high base from pantry stocking last year,” the company said.

Meanwhile, real estate arm Robinsons Land saw its first semester net income surge by 48% to P5.4 billion, while revenues went up by 55% to P25.6 billion as the company recognized contributions from its Chengdu Ban Bian Jie project in China and its lot sales in Bridgetowne Destination Estate.

Cebu Air, meanwhile, widened its net loss to P13.8 billion from last year’s P9.1 billion. Its revenues declined by 66% to P5.9 billion as pandemic restrictions led to a low number of flights.

JGSPG’s net income stood at P2.2 billion, from a P2.7-billion loss last year. Meanwhile, topline for the unit grew 2.5 times to P18.1 billion as selling prices and sales volumes improved.

Banking arm Robinsons Bank Corp.’s profits climbed 22% year on year to P340 million in the second quarter, to finish the first half with P573 million. Its year-to-date topline stood at P4.6 billion.

The company’s earnings from associated companies and joint ventured rose by 24% in the first half to P4 billion.

“The increase is mainly due to the 48% increase in equity in net earnings of Meralco to P2.8 billion given the stable energy consumption in residential, the demand recovery in its commercial and industrial segments, as well as the absence of last year’s impairment charge on its Pacific Light Power investment,” JG Summit said.

On Thursday, shares of JG Summit at the stock exchange declined by 1.53% or 90 centavos to close at P58.10 each. — Keren Concepcion G. Valmonte

Max’s Group returns to profit with P55M, cites ‘growth surge’

MAX'S RESTAURANT FB PAGE

MAX’S Group, Inc. swung to profitability as it posted a P54.74-million attributable net income in the second quarter on the back of stronger revenues.

The listed company said in a stock exchange disclosure on Thursday that its attributable net income for the quarter is a turnaround from the P431.19-million attributable net loss it had in the same period a year ago.

Max’s Group’s revenues for the quarter rose 67% to P1.78 billion. From the total, restaurant sales accounted for P1.40 billion, followed by commissary sales at P262.34 million, and franchise, royalty, and continuing license fees at P118.99 million.

Second-quarter system-wide sales, consisting of sales generated by company-owned and franchised stores, went up 82% to P2.91 billion, while cost of sales also increased 16% to P1.22 billion.

Operating income for the quarter rose 140% to P186 million while earnings before interest, taxes, depreciation, and amortization (EBITDA) reached P405 million.

For the first half, Max’s Group posted a P390.72-million attributable net income, a reversal of the P599.70-million net loss it had in the similar period last year.

Robert Ramon F. Trota, Max’s Group president and chief executive officer, said the company’s portfolio showed resilience amid headwinds.

“Despite ongoing challenges both locally and internationally, including heightened restrictions in the front-end of the second quarter, we take pride in the growth surge we achieved, particularly with our renewed focus on our ‘core of core’ brands of Max’s Restaurant, Pancake House, Yellow Cab Pizza Co., and Krispy Kreme,” Mr. Trota said.

“In fact, our total first-half sales via our delivery channel nearly doubled pre-pandemic levels, even as the government allowed customers to return to dine-in throughout much of these first six months. This proves the strongly-entrenched demand for the brands we operate,” he added.

Revenues during the January-to-June period fell 4% to P3.62 billion. Of the total, restaurant sales contributed P2.82 billion, followed by commissary sales at P566.65 million, and franchise, royalty, and continuing license fees at P230.84 million.

First-half systemwide sales improved 3% to P5.75 billion while cost of sales dropped 21% to P2.58 billion.

Six-month operating income reached P332 million while EBITDA amounted to P1 billion.

Meanwhile, Max’s Group’s store network as of end-June covered 14 territories with 597 Philippine sites and 60 stores situated across areas in North America, the Middle East, and Asia. From the total, 95% or 625 stores were operational.

Max’s Group Chief Operating Officer Ariel P. Fermin said the company had been able to improve its profitability despite the volatility and uncertainty of the market.

“We committed to our stakeholders that [Max’s Group] would continue to represent financial viability and strong shareholder value as we accelerated three years of strategy into three quarters of execution,” Mr. Fermin said.

“Strategic management of our total supply chain, continued strong alliances with our lessor partners, margin management in our menus to combat raw material inflation, and efficiencies in our restaurant systems have all combined to create a business model that clearly works even with the tempered revenues in a pandemic,” he added.

On Thursday, shares of Max’s Group at the stock exchange fell 1.48% or nine centavos to end at P6 apiece. — Revin Mikhael D. Ochave