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Tourism slump threatens conservation of endangered sharks

Albert Kok/CC BY-SA 3.0/Wikimedia Commons

Grey reef sharks, six-foot long on average and officially endangered, are an ordinary sight in Tubbataha Reef, a protected national marine park in Palawan. The existence of these sharks and their brethren are threatened by water pollution, shark fishing, and — more recently — by the sudden halt of marine wildlife tourism due to the pandemic. 

Shark conservation efforts that depend on tourism income continue to struggle in 2021.

“Even though Tubbataha Reef is efficiently managed, sharks still can’t escape their threats,” said Anna R. Oposa, Executive Director of Save Philippine Seas (SPS), who shared that surveyors found a reef shark suffocated by a plastic bag this year. “If we can’t completely protect them here, what chance do they have in places that aren’t protected at all?” 

Shark-based tourism is vital to the local economy and sharks themselves are essential to keeping marine ecosystems robust. Of the 1,000 shark species around the world, 200 can be found in the Philippines. Of these, only 25 are protected.

A shark study conducted in Tubbataha this year saw grey reef sharks, whitetips, and tiger sharks (including a three-meter specimen lingering in shallow water). “It shows Tubbataha is still doing very well,” said Maria Retchie C. Pagliawan, Tubbataha Reef National Park (TRNP) research officer, who shared the findings from their scientific trip at a virtual event organized by Marine Wildlife Watch of the Philippines (MWWP) and Save Philippine Seas (SPS). 

“A Virtual Dive with Sharks” took viewers on a virtual underwater tour of Sulu Sea’s Tubbataha Reef and Negros Occidental’s Danjugan Island during Shark Awareness Week.  

MWWP and SPS are both members of the Save Sharks Network, a coalition petitioning for the Philippine Shark Conservation Bill, introduced by Senator Risa N. Hontiveros-Baraquel in 2017, to be made into a law. 

MARINE PROTECTED AREAS
In Negros Occidental, support for locally managed protected areas has been an issue, according to Kaila Ledesma-Trebol, a marine biologist and trustee of the Philippine Reef and Rainforest Conservation Foundation, Inc. (PRRCFI). The province is home to Danjugan Island, a marine sanctuary with lagoons, bat caves, limestone and mangrove forests, seagrass beds, and fringing coral reefs. 

“We haven’t caught anyone here with sharks again like in the early 1990s, so that’s a good thing,” Ms. Ledesma-Trebol said, referring to dwindling cases of unsustainable shark fishing due to the practice being banned. “But in nearby Sipalay and other local markets in the mainland [of Negros], sharks still show up, and we know not all species are protected.” 

Bought by PRRCFI in 1994 for conservation efforts, Danjugan Island is a marine haven in a region where ecological threats are rampant, boasting seven viable ecosystems that span limestone forests, caves, white-sand beaches, lagoons with mangroves, and coral reefs. Aside from conservation, Ms. Ledesma-Trebol and her team also hold marine wildlife camps that help connect people with nature (although these efforts are on hold due to the pandemic). 

RETURN OF MARINE WILDLIFE TOURISM
While limited mobility prevents people from experiencing marine wonders firsthand, virtual trips and webinars on safe practices must do for now, according to Maria Rica C. Bueno, Department of Tourism (DoT) assistant secretary, who also spoke at the virtual dive event. 

Quoting Tourism Secretary Bernadette Romulo-Puyat’s speech for World Environment Month in June, Ms. Bueno said: “Respecting the ocean and its inhabitants must be the top priority of every tourist who wants to connect with marine wildlife. Learning how to properly engage with these species is a small but crucial step in protecting and sustaining our marine biodiversity.” 

The Joint Memorandum Circular No. 2020-01 (JMC) issued in 2020 establishes rules and regulations governing the conduct of marine wildlife tourism interaction in the Philippines. These include responsible behavior around marine animals while underwater, which they hope will be practiced when tourists return. 

In Danjugan Island, “silent, patient, and undisruptive campers” have spotted as many as 80 blacktip reef shark pups while snorkeling in shallow reefs, said Ms. Ledesma-Trebol.

“If allowed, we will open camps again once the pandemic is over, but we will probably be doing private groups and not mix groups together,” she added, expressing hope for the return of marine wildlife tourism next year. “Of course, we have to do all the proper testing [for coronavirus disease 2019 (COVID-19)].” — Brontë H. Lacsamana

UK PM Johnson reverses plan to skip quarantine after COVID exposure

British Prime Minister Boris Johnson via Chatham House/Flickr

LONDON — British Prime Minister Boris Johnson and finance minister Rishi Sunak will both self-isolate in line with national guidance, abandoning heavily criticized plans to take part in a pilot scheme that would have allowed them to continue working. 

The U-turn comes a day after health minister Sajid Javid said he had tested positive for coronavirus disease 2019 (COVID-19) and at a time when the government’s coronavirus response is under intense scrutiny. 

Almost all remaining restrictions in England will be lifted on Monday despite a surge in infections as ministers put their faith in the advanced vaccine program. 

Cases are rising by more than 50,000 a day and hundreds of thousands of Britons are being asked to self isolate for 10 days, causing havoc for employers and parents, prompting train cancellations and forcing some businesses to close their doors. 

The government announced at 0700 GMT that Messrs. Johnson and Sunak had been exposed to a person with COVID-19 and would take part in a trial scheme that allowed them to keep working instead of self-isolating. 

But less than three hours later that decision had been reversed after a flurry of criticism from voters, political opponents and business owners. 

“We did look briefly at the idea of us taking part in the pilot scheme… but I think it’s far more important that everybody sticks to the same rules,” Mr. Johnson said in a video message from his country residence, where he will isolate until July 26. 

The Telegraph reported late on Sunday that ministers were urging Mr. Johnson to ditch the requirement for fully vaccinated people to self-isolate entirely. 

Opposition politicians had said it was hypocritical for Messrs. Johnson and Sunak to have tried to exempt themselves from some of the rules. 

“Boris Johnson and Rishi Sunak have been busted yet again for thinking the rules that we are all following don’t apply to them,” said Labour Party leader Keir Starmer. 

Mr. Sunak also acknowledged the backlash over their initial decision. 

“I recognise that even the sense that the rules aren’t the same for everyone is wrong,” he said on Twitter. 

The government’s handling of the pandemic has been dogged with episodes that have damaged public trust — most recently when then-health minister Matt Hancock was pictured kissing an adviser, in breach of social distancing regulations. He later resigned. 

Housing minister Robert Jenrick confirmed that the government would go ahead with its “freedom day” plan on Monday, removing the requirement to wear face masks, lifting limits on social gatherings, and allowing high-risk businesses to reopen. 

Mr. Johnson used his video message to plead with the public to take a cautious approach to the change of rules. 

“Please, please, please, be cautious,” he said. 

“Go forward tomorrow into the next step with all the right prudence and respect for other people, for the risks that the disease continues to present and, above all, please, please, please when you’re asked to get that second jab … please come forward and do it.” 

Ministers argue that the vaccination program, under which 87.8% of the adult population has had one vaccine dose and 67.8% have been double vaccinated, has largely broken the link between cases and mortality. 

“The last time we had cases at the level we do today, the number of people dying from the virus was 30 times the number it is today,” Mr. Jenrick told the BBC. — William James/Reuters

‘It’s terrifying’: Merkel shaken as flood deaths rise to 188 in Europe

Image of flooding in Miesenheim, Germany, via Andreas Janke/Flickr/CC BY-SA

BERCHTESGADEN/BISCHOFSWIESEN, Germany — German Chancellor Angela Merkel described the flooding that has devastated parts of Europe as “terrifying” on Sunday after the death toll across the region rose to 188 and a district of Bavaria was battered by the extreme weather.

Ms. Merkel promised swift financial aid after visiting one of the areas worst affected by the record rainfall and floods that have killed at least 157 in Germany alone in recent days, in the country’s worst natural disaster in almost six decades.

She also said governments would have to get better and faster in their efforts to tackle the impact of climate change only days after Europe outlined a package of steps towards “net zero” emissions by the middle of the century.

“It is terrifying,” she told residents of the small town of Adenau in the state of Rhineland-Palatinate. “The German language can barely describe the devastation that’s taken place.”

As efforts continued to track down missing people, the devastation continued on Sunday when a district of Bavaria, southern Germany, was hit by flash floods that killed at least one person.

Roads were turned into rivers, some vehicles were swept away and swathes of land buried under thick mud in Berchtesgadener Land. Hundreds of rescue workers were searching for survivors in the district, which borders Austria.

“We were not prepared for this,” said Berchtesgadener Land district administrator Bernhard Kern, adding that the situation had deteriorated “drastically” late on Saturday, leaving little time for emergency services to act.

About 110 people have been killed in the worst-hit Ahrweiler district south of Cologne. More bodies are expected to be found there as the flood waters recede, police say.

The European floods, which began on Wednesday, have mainly hit the German states of Rhineland Palatinate, North Rhine-Westphalia as well as parts of Belgium. Entire communities have been cut off, without power or communications.

In North Rhine-Westphalia at least 46 people have died. The death toll in Belgium climbed to 31 on Sunday.

AID UP, POWER DOWN

The scale of the floods mean they could shake up Germany’s general election in September next year.

North Rhine-Westphalia state premier Armin Laschet, the CDU party’s candidate to replace Ms. Merkel, apologised for laughing in the background while German President Frank-Walter Steinmeier spoke to media after visiting the devastated town of Erftstadt.

The German government will be readying more than 300 million euros ($354 million) in immediate relief and billions of euros to fix collapsed houses, streets and bridges, Finance Minister Olaf Scholz told weekly newspaper Bild am Sonntag.

“There is huge damage and that much is clear: those who lost their businesses, their houses, cannot stem the losses alone.”

There could also be a 10,000 euro short-term payment for businesses affected by the impact of the floods as well as the coronavirus disease 2019 (COVID-19) pandemic, Economy Minister Peter Altmaier told the paper.

Scientists, who have long said that climate change will lead to heavier downpours, said it would still take several weeks to determine its role in these relentless rainfalls.

Belgian Prime Minister Alexander De Croo said the link with climate change was clear.

In Belgium, which will hold a national day of mourning on Tuesday, 163 people are still missing or unreachable. The crisis centre said water levels were falling and a huge clean-up operation was underway. The military was sent into the eastern town of Pepinster, where a dozen buildings have collapsed, to search for any further victims.

About 37,0000 households were without electricity and Belgian authorities said the supply of clean drinking water was also a major concern.

BRIDGES BATTERED

Emergency services officials in the Netherlands said the situation had somewhat stabilized in the southern part of Limburg province, where tens of thousands were evacuated in recent days, although the northern part was still on high alert.

“In the north they are tensely monitoring the dykes and whether they will hold,” Jos Teeuwen of the regional water authority told a press conference on Sunday.

In southern Limburg, authorities are still concerned about the safety of traffic infrastructure such as roads and bridges battered by the high water.

The Netherlands has so far only reported property damage from the flooding and no dead or missing people.

In Hallein, an Austrian town near Salzburg, powerful flood waters tore through the town centre on Saturday evening as the Kothbach river burst its banks, but no injuries were reported.

Many areas of Salzburg province and neighbouring provinces remain on alert, with rains set to continue on Sunday. Western Tyrol province reported that water levels in some areas were at highs not seen for more than 30 years.

Parts of Switzerland remained on flood alert, though the threat posed by some of the most at-risk bodies of water like Lake Lucerne and Bern’s Aare river has eased. — Ralph Brock and Romana Fuessel/Reuters

[B-SIDE Podcast] Data protection while working from anywhere

Follow us on Spotify BusinessWorld B-Side

With the Delta variant of the coronavirus spreading, remote work looks like it will continue throughout 2021. Data privacy and data protection are big concerns since hackers have become more aggressive, prompting stricter regulations around the world.

“A lot of companies are still in infancy stages of implementing their data protection management programs,” said Edwin A. Concepcion, Straits Interactive country manager for the Philippines, who made the same observation in a previous conversation with B-Side.  

In this B-Side episode, Mr. Concepcion tells BusinessWorld reporter Bianca Angelica D. Añago the outlook of data privacy and protection in the Philippines during the pandemic. 

TAKEAWAYS 

Organizations have to put a premium on protecting personal data.

“[Companies] still have to come up with a lot of policies, processes, and standard operating procedures to govern their management of personal information,” Mr. Concepcion said. 

While the responsibility of data protection falls on both companies and employees, companies do have to guide their remote workforce. 

“It’s high time for organizations to put a premium on protecting the personal data of individuals like us,” Mr. Concepcion said, adding that on top of workshops, there is a wealth of free information and materials on data protection on the National Privacy Commission’s website and on the websites of relevant offices worldwide. 

“This is the time to be data aware. Individuals must be aware that their personal information are being collected by various organizations, including the government, and they have to be aware on how they can control these data and decide which information they want to share and to keep,” he said. 

Processing private information has repercussions. 

Guidelines on the minimum amount of personal data that organizations can collect from their contact tracing efforts have been issued by the Inter-Agency Task Force for the Management of Emerging Infectious Diseases, Department of Health, and Department of Trade and Industry.

The organizations collecting information using contact tracing forms must be aware of these guidelines, specifically of their obligations as they are accountable for anything that happens to the personal data that people give them. 

Mr. Concepcion reminded, however, that “the Data Privacy Act is not about restrictions, it’s about protection of the data being processed.” 

Privacy will soon become very important before collecting personal information. 

“With digital transformation, privacy will become front and center of the processing of personal information,” Mr. Concepcion said. 

As such, organizations must do everything they can to ensure that they can protect personal data. 

Organizations can only maintain and acquire the trust of their consumers and of the general public in terms of ensuring the protection of personal data given to them. 

“In two to three years, the ‘privacy first’ concept will become synonymous to the processing of personal information,” he added. 

Data protection will surely become an integral part of international trade and business. 

“More than 160 countries have come up with various forms of data protection regulation around the world,” Mr. Concepcion said. 

Other countries already have various laws that penalize organizations for failure to protect their clients’ data, such as the European Union’s General Data Protection Regulation which penalizes organizations for as much as 4% of their global revenue if they fail to protect private information. 

As companies from these countries transact with businesses in the Philippines, Mr. Concepcion said they will definitely require local companies to comply with their respective privacy and data protection regulations. 

As such, “privacy and data protection would definitely become an integral part of negotiating for international trade and business,” Mr. Concepcion said. 

This episode was recorded remotely on July 2. Produced by Paolo L. Lopez and Sam L. Marcelo.

Follow us on Spotify BusinessWorld B-Side

Synergy Grid & Development Phils., Inc. announces schedule of stockholders’ meeting

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Anflo Industrial Estate: Boosting agro-industry in and beyond Mindanao

The Philippines’ agro-industry is starting to thrive at the Anflo Industrial Estate (AIE), the premier hub of its kind in the country.

Tapping what it sees as the huge opportunity to advance the country’s agro-business sector and its inception, AIE is positioned and designed to further develop the vast potential of the agro-industry of the Davao Region and Mindanao by providing a ready market for the region’s agri-produce and efficiently exported to the rest of the world.

The 63-hectare AIE, strategically located between Davao City and Tagum City, is a self-sustaining ecozone with complete facilities for manufacturing, cottage industries, warehousing, and agro-industrial operations.

AIE has ready-built standard factory buildings for lease to locators who are looking to immediately start their businesses. Other facilities, which allow for a conducive environment for the operation of industries, include a wide road network; a drainage system; sufficient water and power supply from trusted providers; and sewage collection, treatment, and disposal systems.

AIE also offers a cold storage facility for lease, which is ideal for food processing companies and distributors of finished products. AIE shared in an e-mail that they saw the need of having such a facility due to the lack of cold storage facilities within the region and even in the Philippines, especially given the need to store vaccines.

Furthermore, AIE is registered under the Philippine Economic Zone Authority (PEZA), allowing its locators to avail of attractive PEZA incentives such as tax holidays and other exemptions. This, ultimately, helps the hub further promote investments in the country and ensure a smoother and easier process of doing business in the country.

AIE is in close proximity to Davao International Container Terminal, Mindanao’s premier container terminal for the efficient import and export of mainly agricultural products.

AIE is also a key access point to different cities within Mindanao, in the Philippines, the Brunei Darussalam–Indonesia–Malaysia–Philippines East ASEAN Growth Area (BIMP-EAGA), and Southeast Asia in general.

Not limiting itself to locators engaged in the actual processing of agri-produce, AIE has 18 locators to date, represented by five different nationalities and coming from food processing, plastics, packaging, and warehousing and storage industries.

In spite of the ongoing pandemic, AIE showed resilience through job creation and added locators. As of last January, AIE reported that workers in the park doubled to 686, from 289 in January 2020. Four locators were able to start their operations last year, while a Japanese company engaged in the premium packaging of products is also set to start its operations within the park this month. Moreover, AIE is the first winner of the Best Industrial Development award at the 8th PropertyGuru Philippine Property Awards last November.

AIE looks forward to expansion in the near future, starting with launching its commercial phase this year to provide for the needs of employees within the park. In the next two years, AIE will roll out two additional industrial phases, which will be available for lease or sale starting at 4,000 square meters per industrial lot. AIE also opens its doors to locators who need cold storage facilities and those within the logistics sector.

For more information, visit anfloindustrialestate.com.

Hubs helping the agri sector thrive

By Bjorn Biel M. Beltran, Special Features Writer

For years, the Philippines’ story was about growth and development. Dubbed as Asia’s next rising tiger, the country’s economic narrative had been breaking expectations with its rapid and continued expansion. Then the pandemic struck. Moving forward, the question on everyone’s minds is how to return to such a state of growth and restart the journey to recovery. According to the World Bank, agriculture could be the key.

“Modernizing the country’s agricultural sector is a very important agenda for the Philippines,” Ndiame Diop, World Bank country director for Brunei, Malaysia, Thailand, and the Philippines, said in a September 2020 report titled “Transforming Philippine Agriculture During COVID-19 and Beyond.”

“With the exception of a few small natural resource-rich countries, no country has successfully transitioned from middle to high-income status without having achieved an effective transformation of their agri-food systems. Transforming agriculture and food systems is always challenging. But the country’s new vision for agriculture, it’s current thrust for diversification and use of modern technologies, and its effective management of food supply during this pandemic clearly indicate that the country is well-equipped to overcome the challenge,” he added.

The report, which was prepared as part of World Bank’s support to the Department of Agriculture’s “new thinking” in agricultural development, goes on to explain how transforming Philippine agriculture into a dynamic, high-growth sector is essential for the country to speed up recovery, poverty reduction and inclusive growth. Modernizing the industry could further lead towards improving the overall resilience, competitiveness, and sustainability of the rural sector.

Agro-industrial zones already exist around the country to take advantage of this opportunity. These zones are accredited by the Philippine Economic Zone Authority (PEZA), and are created to support the agricultural sector and continuously create ways to develop communities through different programs for farmers and crop growers. PEZA awards accreditation to developers of agro-industrial parks and through this, provides several incentives to its locators, such as tax holidays and other exemptions.

Agro-industrial parks are industrial estates that process, warehouse, and manufacture agricultural products for both food and non-food output, with the main function of an enterprise hub for the agricultural industry in a specific location. It stimulates the development of the agricultural industry through the manufacturing of agronomic production to food processing.

Moreover, an agro-industrial park is an excellent opportunity for investors to implement projects on its site using its infrastructure and services.

“Agro-industrial hubs provide several opportunities for the country’s economic and inclusive growth from farmers to businesses. They leverage on the country’s abundance of natural resources, rich land, and raw materials which can differ in several parts of the Philippines. These are primary sources of livelihood for Filipinos,” Ricardo F. Lagdameo, president of Damosa Land, Inc. and Anflo Industrial Estate, said in an e-mail.

“Agro-industrial parks that can provide complete facilities including even a cold storage facility and direct access to a world-class container terminal have the potential to fill in supply chain gaps in the industry. We aim to spur rapid development and economic growth in the countryside through developments such as this,” he added.

Mr. Lagdameo said that modern industrial parks are excellent catalysts for economic development and attract businesses to meet the requirements and demands of several industries, a boon for rural communities that rely on agriculture as their economic output.

For instance, Anflo Industrial Estate provides opportunities for businesses and investors to locate in the heart of the Davao region with ample tools, support facilities and services required for processing and agro-based manufacturing.

Mindanao, it bears noting, is dubbed as the “Food Basket of the Philippines,” largely producing 40% of the country’s food needs and 30% of the national food trade. Agricultural produce from Davao are exported to countries like China, Japan, the Netherlands, and the United States. Locators at the park export products such as banana, coconut, cacao, and rubber and have given vast opportunities for farmers to market their produce.

“The agro-industry is considered one of the top 10 priorities of the Davao Region. Its vast cropland is conducive for various investments in agribusiness and addresses matters on food security in the country while safeguarding sustainable development by providing employment and income generation for its community. Its integration with industrial real estate means opportunities for the local farmer to companies of different industries,” Mr. Lagdameo said.

Agro-industrial hubs’ potential for rural development will further support the government’s push to decentralize Metro Manila and direct investors to the provinces, contributing to the financial inclusion.

 

Economic team may rethink stimulus

A MAN gets incoulated with pfizer at Caloocan City sports complex last June 28. — PHILIPPINE STAR/ MICHAEL VARCAS

By Luz Wendy T. Noble, Reporter

ECONOMIC MANAGERS now appear to be open to considering a third stimulus package that could help improve the Philippines’ recovery prospects, after Fitch Ratings gave a “negative” outlook on its credit rating.

“The Development Budget Coordination Committee (DBCC) will be meeting [this Monday]. We’ll see what’s going to shape up,” Budget Secretary Wendel A. Avisado said in a Viber message to BusinessWorld.

Mr. Avisado said discussions on Bayanihan III could be a part of the DBCC’s agenda.

The House of Representatives has already approved a third stimulus package worth P401 billion. House Bill 9411 or the Bayanihan to Arise as One Act (Bayanihan III) could be the largest of the Bayanihan series of stimulus packages if passed by Congress.

However, its counterpart measure remains pending at the Senate committee level.

Socioeconomic Planning Secretary Karl Kendrick T. Chua said there are some provisions under Bayanihan III that may be considered if there are extra funds available.

“There are some items [from the measure] that we can pursue if we have savings or additional revenues,” Mr. Chua said in a Viber message.

For Marikina Rep. Stella Luz A. Quimbo, the passage of a third stimulus measure may convince credit raters that the Philippines could weather the impact of the pandemic through “well-targeted spending” that will help businesses and individuals.

“High impact government spending will be key to boosting our economy’s trajectory of growth and improving our long-term prospects. Bayanihan III lays out a spending plan to help ensure that public funds are well-targeted and used productively,” Ms. Quimbo, one of the main proponents of Bayanihan III, said in a Viber message.

Fitch Ratings last week revised the Philippines’ outlook to “negative” from “stable,” saying this reflects “increasing risks to the credit profile from the impact of the pandemic and its aftermath on policy-making as well as on economic and fiscal out-turns.”

While Fitch maintained the Philippines’ “BBB” investment grade sovereign rating, a “negative” outlook is a warning that this rating could be downgraded in the next 12 to 18 months.

“Fitch will monitor the evolution of the fiscal deficit and debt levels, as the balance between fiscal consolidation and ongoing government spending to support economic recovery will be an important consideration for the rating,” the credit rater said.

Bangko Sentral ng Pilipinas Governor Benjamin E. Diokno, however, said he does not believe Bayanihan III can lift the country’s rating outlook.

“I disagree, however, that legislating Bayanihan III will help us to improve our ratings prospects after Fitch downgraded the country’s outlook to ‘negative’ from ‘stable.’ Nevertheless, it should be pointed out that in a sea of ratings downgrade globally last year and this year, Fitch has affirmed the Philippines’ investment grade…That should be seen in a positive light,” he told BusinessWorld in a Viber message.

Mr. Diokno, a former Budget secretary, said what will be crucial is for the government to accelerate the vaccination drive, continue structural reforms, and aggressively pursue infrastructure projects.

“These measures will immensely improve the Philippines’ growth prospects and its ability to attract foreign direct investments,” he said.

“The rationale for Bayanihan III fades with the submission of next year’s President’s Budget with a month or so.”

The Department of Budget and Management earlier said it is proposing a P5-trillion national budget which will focus on vaccination rollout and increased support for local governments, among others.

With the implementation of the Mandanas ruling next year, Mr. Diokno said more fiscal resources will go to local government units (LGUs).

“LGUs may be in a better position to address the needs of their local constituents who are affected by the pandemic. If local officials don’t want to overburden their fiscal position as a result of high incidence of COVID-19 in their community, then they should exert more effort to contain the virus through strict enforcement of health protocol and more aggressive contact tracing. This is what we call ‘incentive compatible,’” he added.

Lawmakers have been pushing for another stimulus package, even before the Bayanihan II expired in June.

“In the past year, the absence of a sufficiently sized economic stimulus package contributed more to the contraction of the economy and reduction in tax collection than prudent management of our debt,” Ms. Quimbo said.

Bank of the Philippine Islands Lead Economist Emilio S. Neri, Jr. said the country “appeared to have sacrificed so much” to maintain its investment grade credit rating through fiscal prudence at the expense of being unable to spend more for economic recovery.

“The decision to choose the austerity path appears to have had a bigger effect on the decline in our nominal GDP (denominator) than the increase in our public debt (numerator) translating to our debt/GDP ratio to exhibit the fastest deterioration in Southeast Asia versus 2019 levels,” Mr. Neri said in a Viber message.

The Philippine debt-to-GDP ratio stood at a record low of 39.6% as of end-2019. Since the pandemic, the ratio has climbed up to 60.4% as of end-March 2021.

Against the backdrop of rising debt level, the economy shrank by a record 9.6% in 2020 which was the worst in Southeast Asia. The Philippines remains in a recession, with GDP shrinking by 4.2% in the first quarter.

Fiscal support coming from Bayanihan I and II was equivalent to 4.4% of the country’s GDP in 2020, based on the International Monetary Fund’s policy tracker as of July 1. Other measures including credit guarantees made up 0.6% of 2020 GDP.

“Sustaining reforms such as plugging leakages in our tax system and lifting bank secrecy rules are also necessary to improve revenues and not have to rely mostly on austerity, debt monetization and negative real policy rates to keep our public sector deficits manageable,” Mr. Neri said.

In May, S&P Global Ratings retained its “BBB+” rating with a “stable” outlook for the Philippines, citing expectations of economic recovery.

Moody’s Investors Service kept its “Baa2” rating with a “stable” outlook for the Philippines in July 2020. In March 2021, Moody’s said the renewed COVID-19 surge was “credit negative” for the country.

BSP seen to keep rates unchanged through 2022

THE BANGKO SENTRAL ng Pilipinas (BSP) will likely be firm in keeping the policy rates at record lows through 2022, as the sluggish recovery in domestic demand may be at risk from another possible surge due to new coronavirus variants.

“Considering the BSP’s firmness in favoring economic growth in the policy equation, we are not expecting any policy rate changes through 2022. This reading is also shaped by our view of weakly recovering domestic demand that is even now threatened by the rapid spread of the Delta variant in neighboring economies,” GlobalSource Partners Country Analyst Romeo L. Bernardo said in a note sent on Saturday.

The Monetary Board kept the key policy rate at a record low of 2% last month, citing the need to support the economy as the coronavirus disease 2019 (COVID-19) remains a threat.

The Health department on Friday reported 16 additional cases with the more infectious Delta variant, of which 11 were local cases.  As of Sunday, 5,411 new COVID-19 cases were reported, bringing the number of active cases to 47,190.

“The pace of local vaccination so far as well as uncertainties regarding the efficacy of the deployed vaccines against the mutating virus leave us wondering whether any upward price pressures can be sustained by the slack in goods and labor markets,” Mr. Bernardo added.

Data from Johns Hopkins University showed 14.465 million jabs have been administered in the country. So far, only 4.288 million have completed two doses, representing 3.97% of the population.

However, Mr. Bernardo also cited several factors that may spur a policy rate hike earlier than expected, such as a sharper economic rebound and rising inflation.

“This may happen if the country avoids a resurgence in infections with its latest plan to focus vaccination in Metro Manila and other key urban areas that serve as entry points for new variants. In the event, the boost to consumer confidence coupled with potential aggressive election spending could result in a US-style run-up in inflation as pent-up demand is unleashed,” he said.

Mr. Bernardo noted a rising inflation momentum and the need to anchor inflation expectations “may force a preemptive policy rate hike.”

Headline inflation slowed to a six-month low of 4.1% in June on the back of slower increase in the transport index and the stable rise in food prices. However, it still marked the sixth month of inflation beyond the BSP’s 2-4% target.

The BSP this year expects inflation to average 4% before slowing to 3% by 2022.

“Risk-off global financial conditions, possibly triggered by the feared early US monetary tightening (whether by tapering its Treasury purchases or raising interest rate) and/or sentiment changes about the large buildup in emerging market debts, alongside less favorable opinions from credit raters and local political risks, may cause unmanageable capital outflows and lead monetary authorities to choose to tame an overshooting peso in lieu of keeping policy independence,” Mr. Bernardo said.

“In the event, even without a policy rate hike, we expect local market interest rates to take direction from global markets.”

Mr. Diokno has repeatedly said the central bank will keep an accommodative policy stance and will only withdraw support once there are “indisputable” signs of economic recovery.

The BSP has four more policy reviews this year, with the next one set on Aug. 12. — Luz Wendy T. Noble

BIR says on track to hit revenue goal

PHILIPPINE STAR/KRIZ JOHN ROSALES

THE BUREAU of Internal Revenue (BIR) is on track to meet its revenue goal again this year if the economy continues to recover from the coronavirus disease 2019 (COVID-19) pandemic, officials said.

This as the BIR reported its first-half collection breached the P1-trillion mark.

Marissa O. Cabreros, deputy commissioner at the bureau, said on Sunday that the country’s biggest revenue-generating agency is optimistic it will be able to hit its P2.081-trillion target for the entire year, as economic activity picks up.

“We should always target the attainment of the goal since these are set based on the expenditure plan of the government for the year,” she said in a phone call, adding that better economic landscape should help prop up BIR’s collections.

The bureau generated P1.034 trillion from January to June, exceeding its P1.018-trillion target for the period by 1.61%, BIR Commissioner Caesar R. Dulay said in a text message on Friday.

This was also 8.11% higher than the P956.397-billion tax collection in the first half of 2020, when strict lockdowns halted nearly all economic activity.

In the first half of 2021, the economy showed signs of recovery as quarantine restrictions in Metro Manila and surrounding areas have been eased, alongside the rollout of COVID-19 vaccines.

Economic managers set yearly collection goals for the bureau and other revenue-generating offices to fund the government’s spending plan, and borrows the rest to plug the funding gap. For this year, the state has set a P4.5-trillion budget and projected total revenues to hit P2.881 trillion.

To recall, the BIR exceeded its downscaled target last year after generating P1.846 trillion, 12.5% above the P1.642-trillion goal. It accounted for 74% of the government’s total revenues worth P2.5 trillion in 2020.

Meanwhile, the Bureau of Customs also exceeded its P291.833-billion goal for the first half by 3.7%, after collecting P302.74 billion.

This made up 48.83% of the BoC’s P620-billion collection target for the entire year.

The economy is projected to grow by 6-7% this year. — Beatrice M. Laforga

Better payment channels may boost remittance inflows — ADB

AN IMPROVEMENT in the domestic payment channels may help boost remittance inflows to the Philippines as this will help promote financial inclusion and reduce reliance on cash, a study by the Asian Development Bank (ADB) showed.

“In the Philippines, a key lesson is that by improving the domestic payments environment, international remittances can benefit. More broadly, better domestic payment systems can encourage more people to obtain accounts and become ‘financially included,’ removing their need to receive money in cash,” the ADB said in a study: “Harnessing Digitization for Remittances in Asia and the Pacific.”

Better domestic payment systems can also help accelerate the remittance process and reduce costs for overseas Filipinos.

“The importance of digitization to addressing many of the challenges with remittances cannot be overstated. When properly deployed they help reduce the price of remittances, increase access for consumers, address gender issues, improve settlement, optimize operations, provide valuable data, and many other benefits,” the multilateral lender said.

The Philippines is the third-largest recipient of remittances in Asia with more than $30 billion inflows received in 2018, trailing behind China and India.

However, cash remains king in the Philippines. A survey showed 70% of local respondents said they still prefer cash transactions, claiming that this gives them greater control over their finances. They also added it is easier to trust a person than a digital device.

Money sent home from Filipinos abroad increased for the fourth straight month in May to $2.382 billion, up 13% year on year. This was the fastest uptick in nearly five years according to central bank data.

To date, cash remittances grew by 6.3% to $12.28 billion.

The ADB noted the country’s efforts to boost payment digitization, with the Bangko Sentral ng Pilipinas (BSP) targeting to increase the share of digital payments to 50% of all payments and expand financial inclusion to 70% by 2023.

As of 2017, only 34% of adult Filipinos have a bank account.

The national ID system and the standardized QR code scheme will also help the BSP achieve its targets much faster.

The BSP started seeing more Filipinos using digital payments last year as the coronavirus disease 2019 (COVID-19) pandemic and the lockdown prompted them to adopt contactless transactions.

“The COVID-19 crisis led to an increase in digital transactions, but cash is still predominant. To increase use of digital remittances, a series of recommendations has been developed that could help move people from cash to digital,” ADB said. — Beatrice M. Laforga

How to shop for furniture without testing the sofa

PRIZMIC & Brill Scaled Photo Kipling Desk

A NEW platform called ITOOH is trying to change how you shop for furniture: all online.

ITOOH founders Jules Veloso, Andrew Bercasio, and Enah Baba told BusinessWorld in a phone call last week how they started. Ms. Veloso, co-founder and CEO, was faced with an empty apartment upon arriving in Los Angeles to pursuing further studies. With physical stores closed at the height of the coronavirus disease 2019 (COVID-19) pandemic, she had no choice but to shop online. “To my delight, I was really pleasantly surprised on how easy it is to shop everything online,” she said — at least in the United States. That served as the germ of the idea to bring online furniture shopping to the Philippines.

Ms. Baba added, “When we started this, it had one mission: to make frictionless shopping for everything, anything home.” The group talked about the frustrations they’d had with furniture shopping: long delivery times and a lack of choice, or mistakes like wrong measurements. With the click of a few fingers, the group plans to eliminate all that. For example: their delivery commitments are between five to seven days, and they have taken to measuring everything (even drawer depths and compartments), and providing context to the dimensions against the height of an average Filipino (5’6”, according to their calculations).

Partner brands they have included in the platform include Prizmic and Brill, Rudd Trading, Thomas & George, Sirius Dan, Jed Yabut, and Neu Muri, among others. Some of the brands on the ITOOH website might be familiar to those who attend furniture trade shows around the country. “Most of them — we’re proud to say — are locally made,” said Mr. Bercasio. “We wanted to be able to represent different aesthetics. Most of the established brands, they kind of have just one style, or one design all throughout. I think people have come to realize that it’s okay to not just be one-note.”

Ms. Baba said, “Our goal is to help the industry digitalize. That’s a big hurdle for mom-and-pop brands. They can’t do social media properly, or create their own website. They don’t have access to bringing on board various payment gateways.”

In addition to that, the platform also offers interior design consultancy with firm Grupo Santamaria. “Our vision is to democratize interior design and make it more accessible to Filipinos,” said Ms. Baba. Packages range from P8,000 to P30,000.

The thing is though: furniture is extremely intimate. It cradles your body, supports your weight, and becomes part of your life. Online dating aside, how does one trust something that will rest next to your body when you see merely a picture of it online? While the site offerings account for taste, how does one account for feeling and touch?

For starters, ITOOH is developing 3D and augmented reality for users, as well as employing an online concierge to handle customer questions. On a more practical note, Mr. Bercasio noted: “We went to all their warehouses, all of the showrooms, and really took every photo to make sure we represent [as] close to real fabric, color, and grain.”

He does acknowledge this issue, and credits progress made to changing attitudes after the pandemic. “I think we share the same discomfort. I’m very old-school like that. I think most Filipinos are, especially pre-pandemic.” However, since the events of 2020, “people embraced buying stuff [online], more than food or booking transport. That’s very similar to our goal to really change the mindset of Filipinos.

“Our hope is to really convince the market that they don’t really have to touch it and feel it. but the entire experience can mimic that.”

The ITOOH website is at https://shopitooh.com/. — Joseph L. Garcia

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