A brave face

June 24, 2021 | 8:14 pm

There was some convergence between market expectations of steady monetary policy on the part of the Bangko Sentral ng Pilipinas (BSP) and its two recent pronouncements.

Before the weekend, BSP Governor Ben Diokno was quoted saying “the BSP will continue to focus on keeping its monetary policy stance supportive of the government’s initiatives to address the effects of the pandemic, for as long as necessary, until the economic recovery gets underway.” This is a fair comment considering that the US Federal Reserve Board issued some forward guidance that it could accommodate its current policy settings until 2023. This will also help the BSP keep domestic liquidity in dizzying quantity amounting to P2.2 trillion or 12% of GDP.

Two days ago, the BSP was again reported declaring that “the Fed rate hikes are seven quarters away. The Philippine government should continue with its game-changing Build, Build, Build program and its structural reforms pending in Congress.” The monetary authorities discount the possible threat of an early monetary normalization in the US.

The BSP therefore believes that the required interest rate adjustment could wait. After all, the Philippine macroeconomy has sound fundamentals and a “Fed rate hike in 2023 is less of a threat to the Philippine economy compared to other developing and emerging economies.”

The BSP could not have put on a braver face.

Market analysts, being generally backward-looking, took the hint and 14 out of 16 analysts polled projected the BSP would keep its policy rate steady. One outlier indicated a possible easing by 25 basis points even as the current policy rate is already below the 4.4% actual average inflation rate for the first five months.

The other outlier expected tightening by 25 basis points. As if a rebuke, one among the herd issued an incredible warning that “a calibration of rate settings at this point would derail the very fragile recovery and only delay the economy’s bounce back.” He must have an incurable faith in the signaling effect of a thin slice of a rate adjustment.

But some research outfits would rather place the year of normalization in the US as early as next year. Fitch Solutions Country Risk and Industry Research, for instance, expects the Monetary Board to be more preemptive by jacking up interest rate by as much as 50 basis points next year. Fitch believes in the possible recovery of the Philippine economy next year and unless some compensatory increases in its policy rate are done, the BSP might see some insipient depreciation pressures against the peso. But it is also seeing signs of pandemic resurgence due to the sluggish rollout of the vaccines. From a forecasting standpoint, it makes sense to be more conservative and assume that risks would appear earlier than would normally be expected.

If we are to give credence to the latest pronouncement of US Fed Chairman Jerome Powell, his hint of a future monetary policy stance is actually ambiguous. Bloomberg reported him saying, “the price increases seen in the economy recently are bigger than expected but reiterated that they will likely wane.”

The large size should call for a more progressive and preemptive move, but the short duration calls for a steady hand.

Local market analysts should be more careful in appreciating Powell. He covered his tracks by acknowledging the uncertainty around the view that the price pressure accompanying economic recovery could be short-lived. The Fed Chairman was also quick to say “they may turn out to be more persistent than we expected.” This means those large inflationary pressures might not be transitory. The flip side is that the US, after successfully overcoming the pandemic challenge, could already open up international travel and the macroeconomy. US economic recovery could be stronger than originally believed.

What seems to be the emerging view on the timing of policy rate normalization?

Fed officials seem to be divided.

US Fed quarterly projections show 13 of 18 officials were in favor of at least one rate increase by end-2023 versus seven in March. This is exactly the inclination of the BSP and most market analysts. However, some 11 officials place the tightening twice before the end of 2023. But one should not dismiss the view of seven members seeing some normalization as early as next year. But the prospective US Fed action is only one of the balls in the air.

President Biden’s decisive approach to pandemic management might just be the tipping point. The American Rescue Plan allocated $1.844 trillion or 8.8% of GDP, focused on providing public health response and time-bound assistance to families, communities and businesses. Unemployment benefits have been extended, direct aid supported local governments and funded school reopening. Various facilities were also introduced to support credit flow to key business sectors.

With confidence in the US economy seemingly restored, and the vaccines rolled out in a big way, the recovery in the world’s biggest economy should be forthcoming.

We believe this is the upside risk to inflation pressure both in size and duration. This could also be the US Fed’s uncertainty surrounding their forecasts.

The wild card is China. CNBC recently reported that authorities in the southern Chinese province of Guangdong launched massive testing and tracing for those possibly infected with the latest Delta COVID-19 variant. Guangdong is the most populous province of China.

Chinese authorities immediately locked down certain parts of the provincial capital of Guangzhou, 24-hour checkpoints were set up. In 10 days from the last week of May, 16 million tests were completed and the needs of the areas quarantined were reportedly served by China’s driverless cars under various umbrellas like WeRide and Pony.ai.

China is a wild card of sort because the imposition of a lockdown could affect industrial production and global transport. While the cases pale in comparison against past records in China and in the world, Guangzhou is an industrial city. In Shenzhen, they host one of China’s busiest container ports, the Yantian International Container Terminal. On top of that, the Shenzhen International Airport was closed and a large number of flights were cancelled. Normalization is expected only by the end of June.

While China faced 2021 from a position of strength, as shown in the last Article IV consultation with China, the challenge of uneven and imbalanced growth process could not be ignored. Private demand is yet to fully recover as the economy has been reliant mainly on public support.

If both the US and China steam ahead, and Japan continues to be driven by fiscal stimulus at home and abroad, the stage is set for a stronger global economic recovery. Europe itself appears on the way to stronger growth. The European Commission issued its spring forecast for a 4.2% expansion this year and 4.4% next year.

These writings on the walls are supported by the ability to manage the health pandemic by sustained observance of health protocols and massive administration of vaccines across age groups and localities.

This prospect is also consistent with the latest forecasts of the IMF’s World Economic Outlook for the global economy. For 2021 and 2022, growth forecasts are 6% and 4.4%, respectively, which are both marginally higher than the previous forecasts in October 2020.

Unfortunately, the IMF downgraded the Philippines real GDP projection from 6.9% to only 5.4%, lower than the official target of 6-7% in 2021.

It should not be difficult for the Monetary Board to decide. It has been capable of abstracting from all possible scenarios in hundreds of pages of facts. Like Powell, the Monetary Board could always say there are substantial uncertainties surrounding the forecasts, the global economy continues to recover from both the pandemic and the deep recession, price pressures are mounting but the duration is yet to be ascertained.

All up, it is best to wait for more data and with lower growth prospect, keep the policy rate steady. But saying the US Fed rate hike is not a threat to the Philippines is really putting on a brave face. Sooner or later, it will push the monetary lever at home, to the direction of normalization.

Time will find us out.

Diwa C. Guinigundo is the former Deputy Governor for the Monetary and Economics Sector, the Bangko Sentral ng Pilipinas (BSP). He served the BSP for 41 years. In 2001-2003, he was Alternate Executive Director at the International Monetary Fund in Washington, DC. He is the senior pastor of the Fullness of Christ International Ministries in Mandaluyong.

Intimations of accountability

June 24, 2021 | 8:14 pm

The thousands of wives widowed and the children orphaned by the extrajudicial killings (EJKs) the Duterte police unleashed in the course of the regime’s war on the poor in the guise of a “war on drugs” have long awaited the decision of International Criminal Court (ICC) Prosecutor Fatou Bensouda to request the ICC’s Pretrial Chamber (PTC) to authorize her “to proceed with an investigation” into the killings. But it is only one more stage in a process that could take years to complete. Bensouda’s preliminary investigation into “the [human rights] situation in the Philippines” itself took more than two years to conclude.

Nothing can compensate for the loss of a husband, a father, and in some instances even a wife, a mother, and a child — or for that matter, for the years of want and deprivation inflicted by the sudden demise of a family breadwinner. Mostly unremarked except in studies by such institutions as the University of the Philippines is the humanitarian crisis that afflicts those left behind by the heads of families who, alleged to be either drug addicts or drug pushers, were systematically gunned down on the strength of what the police understood to be the orders of President Rodrigo Duterte to “kill, kill, kill.”

Some of the victims’ families have nevertheless expressed the hope that justice may eventually be served their departed ones, many of whom were killed in their homes, while asleep, or begging for their lives to be spared. In at least one case, a 17-year-old boy was made to run after being beaten by the police and was then shot to death.

Coming as the Bensouda decision did on practically the eve of the 2022 elections, neither the Duterte regime nor the pro-democracy opposition groups can afford to ignore its possible impact on the results of that exercise. Hence the call from the latter for the regime to cooperate with the ICC if it indeed has nothing to hide, and Mr. Duterte and company are not guilty of crimes against humanity.

For the Duterte camp, however, winning next year’s elections has become even more urgent. It would give them at least six more years in power, during which they could ride out whatever will be the results of the ICC investigation and their possible prosecution. Mr. Duterte and his police and other enforcers could then, they hope, live their remaining years uncaged rather than behind bars.

As expected, the Duterte regime has belittled the Bensouda announcement as of no particular concern, declared that it will not cooperate with any PTC investigation, and even claimed that the preliminary investigation was based on hearsay. Reiterating his earlier argument two years ago, Mr. Duterte’s spokesperson, who brought the libel conviction of broadcaster Alex Adonis to the United Nations Human Rights Committee in 2011 on the justification that the justice system is broken, claimed that no international body has to intervene in the Philippines because that system is working.

As if to prove that rather specious claim true, in anticipation of the Bensouda announcement, and despite the Palace declaration of non-cooperation, Philippine National Police (PNP) Chief Guillermo Eleazar had earlier announced that the PNP would open “drug war” files to the scrutiny of the Department of Justice’s (DoJ) ongoing investigation. But because of Palace “concerns,” the PNP has limited what it will make available to the DoJ only 61 case records in which the PNP itself found some police officers liable for prosecution.

Sixty-one is a mere drop in the bucket of thousands of EJK cases (some estimates put the number at over 30,000), but their being made available at all suggests that, despite the regime’s bombast, it cannot entirely ignore the ICC decision and the growing pressure from international human rights and libertarian groups. Those responsible must surely be, at the very least, somewhat concerned that sooner or later they will be held to account for their role in the killings for which they could be indicted and tried for crimes against humanity.

It is crucial that that happens, though neither for revenge nor for the exquisite pleasure of seeing some of the most brazenly inhuman creatures to ever walk the corridors of power in this country get their comeuppance. It is for the sake of ending the use of deadly force as the “solution” to every problem or issue that has not only taken deep roots in Philippine officialdom over the last five years. As the regime trolls and its media hirelings applaud its use against those who dare disapprove of what government is doing, it has also further enshrined violence in Philippine society as a legitimate option in addressing such minor squabbles as domestic spats and traffic disputes.

The use of unaccountable State violence has always been at issue in these isles of fear. But never has it been as widespread and as openly sanctioned than today. During past administrations except that of Ferdinand Marcos’, there was at least enough lip service paid to respect for human rights and the rule of law for the police and military to think twice before killing a crime suspect — or a political activist, a human rights defender, or regime critic. Although abuses did happen even then, they were often condemned even by government spokespersons. No President ever disparaged human rights and its defenders either.

Unlike those times, the past five years have spread a more lethal contagion than COVID-19: the unbridled and officially sanctioned police and military violence that is poisoning daily life itself. The killings during police anti-drug operations have waned, though still continuing. But the demonstrable effect of Mr. Duterte’s assuring the police of impunity and their quite literally getting away with murder have implanted in the pygmy brains of their dull-witted members the conviction that they can escape prosecution even if they kill for the flimsiest of reasons.

Only two weeks ago a police sergeant shot and killed a woman he was having an argument with, justifying it later by saying she had disrespected him. Another policeman last December also killed a woman and her son during a verbal altercation for the same reason. Both apparently think themselves the masters rather than the servants of the people and are prepared to kill anyone who doesn’t acknowledge it.

Another policeman also killed an autistic 18-year-old boy during a raid on a cockfighting venue. Seven police officers are the suspects in the March 8 ambush and killing of Calbayog City Mayor Ronaldo Aquino. Some have been implicated in the killing of other local officials.

Subjecting policemen to psychological tests or making them wear body cameras as PNP Chief Eleazar has proposed will not be enough to end this orgy of murder and mayhem. What will stop the abuses is the police’s being made to understand that they are not above the law and that they will be penalized for every wrongdoing they commit.

That can happen only if those responsible for encouraging the killings and abetting police impunity are themselves held accountable; and it is through the ICC rather than the broken justice system that that hope could be realized. Only then can the semblance of civilized behavior in government and the rest of Philippine society to which past administrations have claimed allegiance be somewhat restored.

Things have so regressed from bad to worse since 2016 that only such modest expectations of State and society seem likely of realization. But the next few months and the years after may surprise us yet, thanks to the ICC.

Luis V. Teodoro is on Facebook and Twitter (@luisteodoro).

www.luisteodoro.com

The pandemic’s end is as messy as the start

June 24, 2021 | 8:13 pm

CHINA has now delivered more than 1 billion vaccine doses, hitting that COVID-19 milestone the same weekend that Brazil passed one of its own: more than 500,000 deaths. Daily case numbers remain worryingly high, and those hospitalized and dying include larger numbers of young people. India, meanwhile, is at risk of a third wave of infections sooner than predicted, after a devastating second.

The end of the pandemic is almost here. But the tail is long and — thanks to short-sighted global and national policies — this phase is no more of a “great equalizer” than the start was. Blame uneven access to immunization made worse by vaccine nationalism as rich governments focus on domestic needs. Insufficient state capacity, poor logistics, and distrust and misinformation, often fueled by populist leaders, have left millions behind and widened existing gaps in the global economy. Then there are insular policies in places like Australia or Hong Kong that focus on zero cases, making them reluctant to open up, discouraging vaccination and prolonging the endgame.

We know from past pandemics that the finale was never going to be swift or clear-cut. It’s easy to track the start of the Spanish Flu pandemic in 1918, but far less simple to pinpoint the end, probably after the winter of 1920. Other mass vaccination efforts to combat infectious diseases, say polio, have also taken years — and aren’t yet over. But we don’t have to repeat all the same mistakes.

Granted, the world has come far. Vanquishing COVID-19 is no longer a vague possibility; it’s visible in the distance. Researchers cracked the vaccine puzzle earlier than expected and shots have been distributed in record time, proving effective against even troublesome variants. As my Bloomberg News colleague Todd Gillespie reported this week, some epidemiologists are beginning to consider using hospitalizations, not case numbers, as the primary measure of virus risk.

Yet 18 months on, COVID-19 continues to devastate. The developing world doesn’t have enough shots, too many existing inequities have grown worse, and there’s excess bureaucracy. It’s not just a problem for the poorest: Japan has underperformed in large part because of conservative regulation around new medicines that slowed the vaccine rollout, while restrictions on who can give injections led to a chronic staff shortage. With an aging population and the Olympics now weeks away, the country has fully vaccinated only 7% of residents.

For some nations, vaccines created an opportunity to earn back some much-needed political capital after botching earlier stages of the pandemic. Britain managed, as did the United States thanks to Operation Warp Speed, and most remarkably Israel, helped by a data-rich health system that encouraged Pfizer, Inc. and BioNTech SE to assure supplies — plus deep pockets that allowed the country to pay a premium. That didn’t keep Benjamin Netanyahu in the prime minister’s seat, but it has resulted in getting 57% of the population fully vaccinated.

Others, after handling the pandemic well with effective controls, hung back in the inoculation race but are now sprinting to catch up as new variants threaten. Singapore has become the first Southeast Asian nation to distribute at least one shot to more than half its population. China has fully vaccinated 80% of adults in Beijing and distributed more than 1 billion doses overall, more than a third of the global total, leaning on a tried-and-tested top-down approach with the July 1 centenary of the Communist Party on the horizon.

The trouble is that state capacity, urgency, and ready cash aren’t the norm. That ability to efficiently deliver policies, correct course, and hold the population’s trust has been a big predictor of pandemic-management success, far more than democracy, autocracy, or other measures, as David Skilling of the economic advisory firm Landfall Strategy Group points out. It’s a rare commodity.

Strongmen leaders have been among the worst, too inflexible to bow to science and fact, and loathe to deliver bad news. Russia is one such mess. Despite a pioneering COVID-19 shot, deep-rooted vaccine hesitancy has gotten worse with time, not better. Rather than prioritizing inoculations, officials including President Vladimir Putin — never seen in a mask — signaled all was well. It left the country vulnerable to the Delta variant-fueled third wave now tearing through Moscow, which was forced last week to mandate jabs for service-sector workers. India, too complacent after its first wave ebbed, has paid an even higher price.

The reality of the late stage of this pandemic is, first, that there’s no end to the cycle of surges and lockdowns without vaccinations. There must be a concerted push to get vaccines to the developing world soon — and not by backloading donations, as the Group of Seven nations appeared to do earlier this month. At-risk, jab-hesitant weak spots in the West will need to be tackled. And investment is critically needed in logistics and healthcare structures that can, in everyone’s interest, continue monitoring once the pandemic fades from headlines.

Then, even amid the excitement of reopening, there needs to be a recognition that at home and on a global scale, the pandemic has left the most vulnerable further behind. COVID-19 has accelerated some de-globalization trends, hampering the human mobility that so many states rely upon, and, with lengthy school closures, hurt human capital. It’s fueling a multi-speed global economy, Landfall’s Skilling says, and making it harder to close gaps.

After a pandemic that has touched all corners of the world and killed nearly 4 million people, investing in vaccinations, future generations, and healthcare capacity to ensure we do better next time is a worthy memorial.

BLOOMBERG OPINION

Private equity funds: Why resilience matters

June 24, 2021 | 8:13 pm

THE COVID-19 pandemic battered Southeast Asia’s economies in 2020 and sent private equity investors running for cover. Deal value fell 26% year over year and contracted 16% vs. the previous five-year average. In the Philippines, deal value fell 52% year over year and was down 50% over the five-year average. By contrast, private equity investors pushed deal value across the Asia-Pacific region to a record $185 billion, up 19% over 2019, buoyed especially by activity in China — the only country in the Asia-Pacific region to avoid a drop in 2020 GDP.

COVID-19 disruptions and the economic crisis of 2020 sounded a wake-up call for investors. Many general partners discovered in the midst of the pandemic that their portfolios weren’t sufficiently prepared to withstand and recover from sudden shocks. Adding to the dilemma, a decades-long fixation on efficiency has steadily increased risk. And around the world, trade wars, plunging oil prices, and financial crises have hit many companies harder than executives imagined possible.

As decades of relative global stability give way to a new, more turbulent era, leading funds are reviewing their exposure to a range of risks and investing to increase the resilience of their portfolio companies. Bain & Company research shows more than 60% of general partners investing in the Asia-Pacific region say they’re willing to invest at least 5% of a portfolio company’s short-term profit to build long-term resilience.

A few leading companies that were ahead of the trend highlight what a difference resilience can make in coping with external shocks. Indonesia’s PT BFI Finance, one of the country’s largest independent consumer credit companies, weathered the COVID-19 lockdowns better than many of its peers. The reason: A year earlier, the company’s management, backed by investors TPG Capital and Northstar, had embarked on a plan to strengthen the company’s strategic and organizational resilience.

One particularly effective measure improved loan collection by using a call-center collection agency to supplement field collectors’ efforts. These “telecollectors” helped the finance group reach out early to creditors who risked defaulting and, in some cases, avoid nonperforming loans. During the pandemic lockdowns, the remote-collection strategy offered a safe and vital alternative to in-person collection, allowing the company to minimize defaults. Despite widespread economic disruption caused by lockdowns, the group’s nonperforming loans declined during the pandemic. In September 2020, nonperforming loans declined to 2.7% for total financial assets, down from 3.7% in June — and significantly lower than the market average of 5.2%.

Many companies, however, were caught off guard by COVID-19. The majority of general partners we surveyed (58%) say their portfolios proved to be only somewhat resilient or not really resilient during the COVID-19 shock. One-third say they lack the specific tools to assess the resilience of a target. Close to one-third say their portfolio companies are still in the experimental or even earlier stages of building resilience capabilities into their strategy and operations.

By their nature, risks are moving targets, so building resilience requires a long-term effort and focus. But the benefits are significant: Improving a company’s resilience can almost double its chances of survival and improve cost-effectiveness over time. Many business leaders make the mistake of assuming that resilience is all about shoring up the balance sheet. They focus on the risks associated with leverage and liquidity, but ignore other potential sources of fragility.

Successful leadership teams take a holistic view of resilience. That means identifying every kind of external event that can affect the business. They also consider simultaneous events across multiple channels that could compound the extent of a shock. A broader, more encompassing view of both risk and resilience allows leadership teams to make smarter choices about where to invest limited resources to protect the company from future shocks.

In fact, resilience spans five dimensions: strategic, financial, operational, technological, and organizational. Strategic resilience, for example, includes revenue and profit diversification, relative market share, and demand elasticity. Operational resilience includes supplier concentration and redundancy.

Companies may be able to address some risk factors quickly and inexpensively, but an effective approach to building resilience usually requires investment and opportunity cost. The key is striking the right balance between managing risk and value creation. Leaders begin by analyzing their exposure. They determine how much stress the company can absorb and the fund’s willingness to trade off short-term profitability for long-term resilience.

Asia-Pacific general partners cite three areas of portfolio risk that they worry about most: competitive position, balance-sheet risk, and organizational agility. Addressing these risks may require more investment. General partners rate other categories of risk such as portfolio concentration, operational leverage, and cybersecurity as less difficult to tackle.

Resilience is a strategic issue. Investors and senior managers need to be involved, because decisions to build resilience involve difficult choices. Baring Private Equity Asia helped HCP Packaging Group, a global leader in the design and manufacture of cosmetics and skincare, build resilience by backing a plan to add new production sites and diversify its customer base. Those moves made a big difference when the US–China trade war hit global supply chains and when COVID-19 struck.

HCP started investing in 2018 to expand its international manufacturing footprint beyond China and North America, with production acquisitions in France and Germany. When the China–US trade war broke out, HCP quickly shifted part of its China production to other countries. Similarly, as COVID-19 lockdowns began, HCP was able to make the most of its expanded manufacturing footprint and supply chain flexibility, outmaneuvering the competition.

Leading fund managers and executive teams seeking to strengthen resilience make sure they tackle the no-regrets actions first — those with minimal impact on profitability. But they also understand that significantly reducing risk entails investment and opportunity cost. Developing the right level and type of resilience for a portfolio company demands a combination of short-term actions and long-term vision and alignment with the executive team.

Usman Akhtar and Alessandro Cannarsi are partners with Bain & Company. They are both based in Singapore.

New troubles for Thai leader amid virus surge, fresh protests

June 24, 2021 | 7:34 pm

Thailand Prime Minister Prayuth Chan-ocha attends an event in Bangkok, Thailand Nov. 27, 2020. — REUTERS/CHALINEE THIRASUPA/POOL/FILE PHOTO

BANGKOK — A year after the start of student-led protests against Thailand’s military-backed government, Prime Minister Prayuth Chan-ocha is facing growing anger amid a mounting wave of coronavirus infections and a dismal economy.

This time, some of those calling for Mr. Prayuth to step down are his one-time allies.

On Thursday, three separate groups of protesters marched to demand the resignation of Mr. Prayuth, who first came to power in 2014 when, as army chief, he led a military coup against an elected government.

Several political parties in parliament — including two in Prayuth’s ruling coalition — are preparing to try to change the military-drafted constitution that helped keep him in office through elections in 2019, by allowing a junta-appointed Senate to vote for the prime minister.

Assuming the continued support of the military and Thailand’s powerful king, it is likely that the new push to change the political power structures will come to nothing again.

Still, frustration with Mr. Prayuth in particular has grown from last year, when it was mainly students calling for him to go.

“People have to come out now to clean up the dirt in our system,” said political activist Nittitorn Lamlua, who will lead a group of protesters in Bangkok on Thursday.

Mr. Nittitorn, 56, is a veteran of the “Yellow Shirt” movement of mostly royalist conservatives who protested against a succession of elected populist governments, the last of which was ousted when Mr. Prayuth seized power.

Mr. Nittitorn shares few views with the youthful student protesters of last year. In fact, he led a counterprotest to defend the king and the monarchy — seen as sacred institution by many conservative Thais — against the students’ call for curbing the king’s powers.

But Mr. Nittitorn ticks off a list of the prime minister’s faults: mismanagement of the coronavirus and the economy, inadequately defending the monarchy from calls for reform, plus failure to restore true democracy with the 2019 elections.

“My goals are all for nation, religion, monarchy and people and democracy, and it is this government that has pushed me to come out again, through their failures and their mismanagement,” Mr. Nittitorn said.

Government spokesman Anucha Burapachaisri said the government was willing to listen to criticism but the prime minister still had an obligation to run the country during the COVID-19 crisis and would only act in the best interests of the public.

“The government is trying not to be an opponent to any particular groups,” he said.

‘PRAYUTH IS THE PROBLEM’
On the opposite side of Thailand’s political divide to Mr. Nittitorn is Jatuporn Prompan, a former leader of the 2009-2010 populist “Red Shirt” movement supporting exiled former leader Thaksin Shinawatra, who Mr. Nittitorn protested against and who was ousted in a 2006 military coup.

“We see that Prayuth is the problem for the country, and he has to be removed,” Mr. Jatuporn said.

Thailand’s ongoing third wave of coronavirus — which has seen the most cases and deaths, reaching a record 51 deaths on Wednesday — has only fuelled anger.

“The public pressure is palpable, mounting and people want answers,” said Thitinan Pongsudhirak, political scientist at Chulalongkorn University and director of the Institute of Security and International Studies.

Still, he said, with the military and palace still behind Mr. Prayuth, it’s difficult to see how he could be removed.

The 2017 military-written constitution stipulates that the Senate, appointed by Mr. Prayuth’s former junta, votes for prime minister along with the elected House of Representatives, making it nearly impossible to remove him.

This week, parliament is debating amendments to that constitution.

Along with opposition parties, even two members of Mr. Prayuth’s ruling coalition — the Bhumjaithai and Democrat parties — favor changes that would remove the Senate’s right to vote for prime minister. The next general election is due by 2023.

But changes to the constitution also require the Senate’s approval — and there is little chance the appointed body would vote to decrease its own power.

Support for Mr. Prayuth from his pro-army Palang Pracharat Party and the powerful military appeared to be unshaken despite the increasing pressure from elsewhere.

Another sign of trouble for Mr. Prayuth might be if King Maha Vajiralongkorn were to express disapproval of his leadership, though Thitinan says rumors of that have proven untrue.

“There are no signs for me at this time that the palace backing has been withdrawn,” Thitinan said.

“We are kind of stuck with Prayuth indefinitely, until the next election.” — Reuters

FDA to add warning about rare heart inflammation to Pfizer, Moderna vaccines

June 24, 2021 | 7:33 pm

THE US Food and Drug Administration (FDA) said on Wednesday it plans to move quickly to add a warning about rare cases of heart inflammation in adolescents and young adults to fact sheets for the Pfizer/BioNTech and Moderna COVID-19 vaccines.

US Centers for Disease Control and Prevention (CDC) advisory groups, meeting to discuss reported cases of the heart condition after vaccination, found the inflammation in adolescents and young adults is likely linked to the vaccines, but that the benefits of the shots appeared to clearly outweigh the risk.

Moderna shares closed down 4.2%, while Pfizer fell 1.4%.

Health regulators in several countries have been investigating whether the Pfizer/BioNTech and Moderna shots using new mRNA technology present a risk and, if so, how serious.

The CDC said that patients with heart inflammation following vaccination generally recover from the symptoms and do well.

The US Department of Health And Human Services, joined by leading US doctors groups and public health officials, put out a statement underscoring that the vaccines are safe and effective and that the heart side effect is “extremely rare.”

“We strongly encourage everyone age 12 and older who are eligible to receive the vaccine under Emergency Use Authorization to get vaccinated,” it said.

Doctors and hospitals have been warned by the CDC to watch for symptoms of myocarditis or pericarditis, and the FDA warning will further raise awareness.

Concerns about the more highly transmissible Delta coronavirus variant taking hold in the United States, and its impact on younger people, have added to the urgency to increase vaccinations even as the inoculation effort here has slowed considerably.

The number of Americans receiving their first dose of COVID-19 vaccine is down about 85% since peaking in mid-April, and will likely fail to meet President Joseoh R. Biden’s goal to have delivered at least one shot to 70% of adults by July 4.

WARNING WARRANTED
“Based on the available data, a warning statement in the factsheets for both healthcare providers and vaccine recipients and caregivers would be warranted,” FDA official Doran Fink said at the advisory committee meeting. Mr. Fink, deputy director of the agency’s vaccines division, said the FDA expects to move quickly to add the warning after the meeting concludes.

The cases of heart inflammation appear to be notably higher in the week after the second vaccine dose and in males. The CDC identified 309 hospitalizations from the heart inflammation in persons under the age of 30, of which 295 have been discharged.

Dr. Tom Shimabukuro, deputy director of the CDC’s Immunization Safety Office, said in a presentation that data from one of the agency’s safety monitoring systems — Vaccine Safety Datalink (VSD) — suggests a rate of 12.6 cases per million in the three weeks after the second shot in 12- to 39-year-olds.

“We’re observing this in the younger age groups, mainly in people in the teens and early 20s, and observing it more in males, compared to females,” Mr. Shimabukuro said. “This effect largely kind of disappears once you get into these older age groups — individuals 50 and over.”

The CDC has been investigating heart inflammation cases mainly in young men for several months. The Israeli health ministry earlier this month said it saw a possible link between such cases and Pfizer’s COVID-19 vaccine.

The CDC said it was still assessing the risk from the condition and did not specifically confirm a causal relationship between the vaccines and the heart issue.

It did, however, say that a much-higher-than expected number of young men between the ages of 12 and 24 have experienced heart inflammation after their second vaccine dose.

According to data from the US Vaccine Adverse Event Reporting System (VAERS), there were 347 observed cases of heart inflammation in the week after the second vaccine dose in males aged 12 to 24. That compares with expectations of 12 or fewer cases for males in that age range based on US population background incidence rates, the CDC said.

Pfizer, whose vaccine has been authorized for use in Americans as young as 12, previously said it had not observed a higher rate of heart inflammation than would normally be expected in the general population.

Moderna said it is aware of reports of heart inflammation cases following administration of mRNA vaccines. It said it is working with public health and regulatory authorities to assess the issue.

Over 138 million Americans have so far been fully vaccinated with one of the two mRNA vaccines, according to CDC data as of Monday. — Reuters

Apple Daily to live on in blockchain, free of censors

June 24, 2021 | 7:31 pm

HONG KONG — Hong Kong cyber activists are backing up articles by pro-democracy tabloid Apple Daily on censorship-proof blockchain platforms after the newspaper was forced to shut down as it became embroiled in a national security law crackdown.

The latest drive to preserve the paper’s content comes after activists rushed to upload documentaries by local broadcaster RTHK investigating people in power after the media outlet said it would remove materials older than one year from its social media platforms.

Under the national security law, the Hong Kong government can request the blocking or removal of content it deems subversive or secessionist, raising fears over internet freedom in the global financial hub.

The Hong Kong government says use of the internet will not be affected as long as its use is within the law.

“Law enforcement actions taken by Hong Kong law enforcement agencies are based on evidence, strictly according to the laws of Hong Kong, and for the acts of the person(s) or entity(ies) concerned,” a spokesman for the Security Bureau said.

This year, the company that approves internet domains in Hong Kong said it would reject any sites that could incite “illegal acts.” Internet service provider Hong Kong Broadband Network (HKBN) said it had blocked access to HKChronicles, a website offering information about anti-government protests.

Fearing the security law could bring elements of China’s great firewall to Hong Kong, limiting access to dissenting views, 21-year-old Mr. Ho — who works in tech and did not give his first name because of the sensitivity of the matter — began this week to upload Apple Daily articles on decentralized file storage platform ARWeave.

After midnight, as the printers ran one final time, Apple Daily shut off its website and erased all its social media platforms after authorities froze company-related assets as part of a national security probe.

“I’m not doing this because I love Apple Daily, it’s what needs to be done,” Mr. Ho said. “I never thought that Apple Daily would disappear so quickly.”

Police froze assets of companies linked to Apple Daily and arrested five executives last week, moves that led to the newspaper printing its final edition on Thursday.

Authorities have said dozens of Apple Daily articles may have violated the security law, but there was no suggestion that Apple Daily content would be blocked or censored.

Similar to BitTorrent, ARWeave breaks down a file into bits of information distributed over an open network of anonymous computers around the world. On its website, it describes itself as a “collectively owned hard drive that never forgets.”

As of Thursday, more than 4,000 Apple Daily articles had been uploaded on ARWeave. Hundreds of RTHK programs dating back to 2012 are also available.

Another programmer, Kin Ko, 47, has been building a decentralized registry called LikeCoin. The blockchain platform helps internet users identify the metadata — creator, date, time, location, version — of the content through a unique number called an International Standard Content Number (ISCN), akin to a book’s distinctive International Standard Book Number.

Any changes made to the content would be known and tracked through changes to its digital fingerprint.

The digital repository is still in its beta phase and months away from launching officially. But online pro-democracy outlet Citizen News told Reuters it has already used LikeCoin to catalogue its images.

Mr. Ko’s initial idea was to create a platform that could authenticate any type of content, and did not expect his platform to be embraced so enthusiastically by pro-democracy activists.

But, he said: “History must not be determined by those in power.” — Reuters

Sydney faces ‘scariest period’ in coronavirus pandemic amid Delta outbreak

June 24, 2021 | 7:30 pm

SYDNEY — Australia’s most populous state, New South Wales (NSW), reported a double digit rise in new locally acquired cases of COVID-19 for the third straight day as officials fight to contain an outbreak of the highly contagious Delta variant.

“Since the pandemic has started, this is perhaps the scariest period that New South Wales is going through,” state Premier Gladys Berejiklian told reporters in Sydney.

NSW has imposed tough restrictions in Sydney, Australia’s largest city and home to a fifth of the country’s 25 million population, with health officials saying transmission could be happening even through minimal contact with infected persons.

NSW officials have so far resisted calls for a hard lockdown although Australia has a good record of successfully suppressing past outbreaks through snap lockdowns, tough social distancing rules and swift contact tracing.

Australia has reported just under 30,400 cases and 910 deaths since the pandemic began.

Ms. Berejiklian said despite the virus variant being very infectious, her government was “at this stage comfortable” with the current level of restrictions.

Western Australia state premier Mark McGowan has urged NSW authorities to place the state in a lockdown to “crush and kill” the virus, warning “light touch” curbs could trigger a spike in infections. Western Australia has closed it border to NSW.

NSW authorities have imposed mandatory masks in all indoor locations in Sydney, including offices, restricted residents in seven council areas in Sydney’s east and inner west from leaving the city, and limited home gatherings to five to contain the state’s first outbreak in more than a month.

The state has been effectively isolated from the rest of the country after some states, like Western Australia, slammed their borders shut while others introduced tough border rules.

Eleven new local cases were reported on Thursday, taking the total infections in the latest outbreak to more than 40. Thursday’s data include six cases detected after the 8 p.m. cut-off deadline, which will be included in Friday’s tally.

NSW state parliament on Thursday released a restricted list of politicians allowed into the chamber after state Agriculture Minister Adam Marshall tested positive for coronavirus disease 2019 (COVID-19) and Health Minister Brad Hazzard in isolation after he was deemed to be a possible close contact of a positive case.

Victoria state, which shares its border with NSW, on Thursday reported its first case likely linked to the NSW outbreak after a man in his 60s tested positive after returning home from Sydney. It reported another case earlier in the day linked to an existing cluster.

Queensland state reported three new local cases but officials said the infections pose low risk to the community as they were in isolation when they contracted the virus. — Reuters

Kaya FC-Iloilo advances to AFC Champions League group stage

June 24, 2021 | 7:22 pm

United City begins 2021 ACL campaign

By Michael Angelo S. Murillo, Senior Reporter

KAYA FC-Iloilo created history late Wednesday by barging into the group stage of the 2021 Asian Football Confederation (AFC) Champions League (ACL).

The Philippines Football League (PFL) staple defeated Shanghai Port FC of China, 1-0, in their playoff match at the Pathum Thani Stadium in Bangkok, Thailand, to book its place in the main draw of the prestigious football meet for the first time ever.

It now plays in Group F of the ACL beginning on Saturday, where it will be pitted against champion squads BG Pathum United of host Thailand and Viettel of Vietnam, and defending Champions League titleholder Ulsan Hyundai of Korea.

With Kaya advancing, there will be two Philippine clubs representing the country in the 2021 ACL — the other is reigning PFL champion United City Football Club in Group I.

Kaya was aggressive right from the get-go of its match with Shanghai Port, driven by its desire to make a big impression in its first appearance in the tournament and go deep in the competition.

It did not take long for the team to break through, with Audie Menzi scoring in the 16^th minute off a pass from teammate Daizo Horikoshi for the 1-0 lead.

Jolted by its opponent’s score, Shanghai Port stepped up its play the rest of the way but Kaya’s defense would hold its own en route to preserving the victory and making its way to the ACL group stage.

“Group Stage Bound!!!” the team excitedly wrote on its official Fecebook page.

In the lead-up to its playoff match, Kaya brought in Englishman Graham Harvey as coach and signed new players Jarvey Gayoso, JhanJhan Melliza, Fitch Johnson, Daviz Arboleda, Ryo Fujii and Patrick Asare to join mainstays like Jovin Bedic, Marwin Angeles, Simona Rota and Louie Casas (goalkeeper).

It will be a short turnaround for Kaya though as it plays its first game in the group stage against BG Pathum United on June 26 in Bangkok.

Prior to making it to the AFC Champions League, Kaya played in the AFC Cup three times before and reached the Round of 16 back in 2016.

UNITED CITY BEGINS CAMPAIGN, TOO
Meanwhile, PFL champion United City begins its 2021 ACL campaign, too, on Saturday.

It takes on Beijing FC of China in opening Group I action at the Bunyodkor Stadium in Tashkent, Uzbekistan.

United City played in the preliminaries of the ACL three times previously, then under the banner of Ceres-Negros FC, and this will be the first time that it will be seeing action in the group stage.

The team will be bannered by the likes of Stephan Schröck, Bienvenido Maranon, Mike Ott, Mark Hartmann and Justin Baas.

Also playing in Group I of the ACL are Daegu FC of Korea and Kawasaki Frontale of Japan.

No decision yet on fate of 2021 SEA Games in Vietnam

June 24, 2021 | 7:22 pm

Final decision on whether the 2021 Southeast Asian Games in Vietnam later this year would push through or be postponed was deferred for two weeks on the host country’s request.

In a virtual meeting on Thursday of members of the Southeast Asian (SEA) Games Federation, Vietnam asked for a 14-day extension, or until July 8, to make its decision on the biennial sporting meet’s staging.

“They [Vietnamese] are hesitant to make a decision,” said Philippine Olympic Committee (POC) President Abraham Tolentino, who attended the meeting which lasted for an hour.  

The idea to postpone the Hanoi Games was broached in a meeting of the SEA Games Federation two weeks ago by Vietnam.

It said it wants to have a postponement because of the new virus outbreak there, which has Hanoi and 11 other locations at the center.

The development, the host said, has hampered considerably its ability to prepare for hosting the best way it can.

During said meeting, the majority of the competing countries voted against the postponement.

They were the Philippines, Brunei, Cambodia, Indonesia, Malaysia, Singapore, Thailand and Timor-Leste.

Vietnam and Myanmar supported the proposal to postpone while Laos abstained.

The countries which wanted to push through, however, recognized that the final decision on the matter was still with the Vietnam government.

“We will respect the decision of Vietnam because we cannot do anything if they say the games are postponed,” Mr. Tolentino said.

The Hanoi Games is set for Nov. 23 to Dec. 2, with the Philippines intending to send 626 athletes who will be competing in 39 sports. – Michael Angelo S. Murillo

Pagunsan all in for Olympic bid

June 24, 2021 | 7:22 pm

Pagunsan-(2) — FILIPINO golfer Juvic Pagunsan is committed to represent the Philippines in the Tokyo Olympics. — NGAP

FILIPINO golfer Juvic Pagunsan is excited to compete in the Olympic Games in Tokyo next month and make the most of the opportunity presented to him.

The 43-year-old Pagunsan officially qualified for the rescheduled Games early this week, becoming one of the currently 15 Filipino athletes who have.

He gained qualification being among the top 60 players in the men’s rankings. Mr. Pagunsan is ranked at 49^th at the moment, built on solid showing in the professional circuit. He recently won the Mizuno Open in Japan.

“I am pretty excited to represent the Philippines. Who knows, we may get lucky in the Olympics,” Mr. Pagunsan wrote on a social media post.

Committed to the Olympics Mr. Pagunsan is, he will skip participating in the British Open set for early July to concentrate on his preparation for the Tokyo Games.

Mr. Pagunsan is one of three golfers the National Golf Association of the Philippines (NGAP) is expecting to see action in the Olympics this year.

The two are US Women’s Open champion Yuka Saso and Asian Games and Southeast Asian Games gold winner Bianca Pagdanganan, who are also in the top 60 in their division. Ms. Saso is at number nine and Ms. Pagdanganan at 42.

Golf will be played for the second straight Olympics in Japan. The Tokyo Olympics golf competitions are scheduled from July 29 to Aug. 7 at the Kasumigaseki Country Club. — Michael Angelo S. Murillo

Diaz, Didal among weightlifters, skateboarders to watch at the Tokyo Olympic Games

June 24, 2021 | 7:21 pm

FIVE weightlifters to watch out for at the Tokyo Olympics:

LAUREL HUBBARD (NEW ZEALAND)

Hubbard is set to become the first transgender athlete to compete at an Olympics. She is ranked No. 7 by the International Weightlifting Federation for Tokyo 2020 and has qualified for the women’s over-87kg category.

LASHA TALAKHADZE (GEORGIA)

Talakhadze won a gold at the 2016 Rio Games, completing a snatch of 215kg and a clean and jack of 258kg in the men’s heaviest bodyweight category with a world record total of 473kg.

SHI ZHIYONG (CHINA)

Shi, who won the men’s 69kg gold medal at Rio, holds the world record in men’s 73kg class in the snatch, clean and jerk and total. He broke the snatch world record at the Asian Weightlifting Championships in April and set the other two records in 2019.

LIDIA VALENTIN PEREZ (SPAIN)

Perez will be competing at her fourth Olympics after winning silver, gold, and bronze from the last three Games. She has spent most of her two-decade career in the 75kg.

HIDILYN DIAZ (PHILIPPINES)

At Rio, Diaz became the nation’s first woman to win an Olympic medal by grabbing silver in the 53kg category. The Tokyo Games will be her fourth and she could become the Philippines’s first gold medalist.

Diaz, who made a public plea for financial support to continue her career in 2019, won a gold medal in the Southeast Asian Games in December of that year. She also won three gold medals at the Weightlifting World Cup event in Rome last year.

SKATEBOARDING

Five skateboarders to watch out for at the Tokyo Olympics:

NYJAH HUSTON (UNITED STATES)

A skateboarding prodigy who made his X Games debut when he was just 11, Huston is one of the most high-profile athletes in the sport with lucrative brand partnerships and more than 4.6 million followers on Instagram.

YUTO HORIGOME (JAPAN)

Yuto Horigome, 22, is ranked second in the world and won three out of four Street League Skateboarding (SLS) contests in 2018. Horigome grew up in Tokyo, but moved to California, the mecca of skateboarding, in 2016.

SKY BROWN (BRITAIN)

Twelve-year-old Sky Brown is expected to compete for Britain after recovering from a life-threatening fall last May.

KOKONA HIRAKI (JAPAN)

At 12, Hiraki is set to become Japan’s youngest athlete to compete in a summer Olympic Games. Hiraki is from Japan’s northernmost prefecture of Hokkaido and began skating with her father when she was just five.

MARGIELYN DIDAL (PHILIPPINES)

Didal, 22, made her debut at the 2018 X Games in Minneapolis and won gold at the Asian Games in the women’s street competition the same year.

Didal’s success has made her a national figure in the Philippines, where she started skating even though she had no access to a skate park or her own board.

Didal was selected as one of Time magazine’s 25 most influential teens for 2018 for her contributions to the sport. — Reuters

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