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CHR seeks full access to police records via Justice dep’t 

THE COMMISSION on Human Rights (CHR) is keeping its fingers crossed on getting full access to police records on cases that might have involved extra-judicial killings (EJK), including police anti-drug operations, through its work with the Justice department.   

CHR Spokesperson Jacqueline Ann C. de Guia told reporters on Thursday that they are currently helping in the Department of Justice (DoJ) review by providing access to the victims “so that ultimately in the end, we can file charges through the cooperation of the victims.”

The Philippine National Police (PNP) chief has said that they are ready to open all case files to the DoJ.

As for sharing it with CHR, Ms. Guia said the “PNP still has some reservations about sharing the data to us.”

“It would have been more ideal if say, for example, we would have to be granted full access to the report, but at this point, we will welcome any steps right now, any gesture of cooperation, (because) we are optimistic that this is just but the beginning of trigger and deeper engagement (of the CHR) with the DoJ review panel,” she said.   

Ms. De Guia also said that during their meeting with the DoJ on Wednesday, the two parties explored various areas of cooperation, such as how they can “strengthen the education component on human right(s), particularly on prosecution.” — Bianca Angelica D. Añago

DoJ, Supreme Court strengthen coordination vs human trafficking 

PHILSTAR

THE JUSTICE department and the Supreme Court on Wednesday signed an agreement for the implementation of the Justice Systems Coordination Mechanism (JSCM) Project, which aims to strengthen the measures against human trafficking.   

The project is designed to help members of the Association of Southeast Asian Nations (ASEAN) combat trafficking in compliance with obligations under the ASEAN Convention Against Trafficking in Persons, Especially Women and Children, Justice Undersecretary Emmeline Aglipay-Villar told reporters on Thursday.

The agreement was signed by the Department of Justice-Inter-Agency Council Against Trafficking and the Supreme Court’s Office of the Court Administrator.

Ms. Villar explained that the JSCM Project includes increasing awareness  among judges, court personnel, and prosecutors on multiple areas such as the importance of sensitive handling of human trafficking victims. — Bianca Angelica D. Añago

Davao City private hospitals reopen COVID-19 units as government-run SPMC’s capacity at critical level

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AT LEAST two private hospitals in Davao City have reopened their coronavirus units as the state-run Southern Philippines Medical Center (SPMC) reached critical level in terms of bed capacity.

SPMC Infection Control and Prevention Unit chair Marie Yvette C. Barez reported last week that the hospital’s 35 intensive care unit beds dedicated to coronavirus disease 2019 (COVID-19) patients were occupied. The isolation units and COVID-19 ward beds, meanwhile, were 70% occupied.

The city government recently asked all private hospitals to again reopen as back-up COVID-19 referral hospitals, but Ms. Barez said most medical institutions currently do not have enough manpower to do so.

SPMC, one of the biggest government-owned hospitals in the country, has been designated as the sole COVID-19 hospital in the city since the start of the pandemic in March 2020. Private hospitals were only tapped from November to March this year when cases were high.

City Health Office acting head Ashley G. Lopez said on Wednesday that most of the transmissions can be traced to private offices and public service work places.

“A number of cases we also noticed due to mass and social gatherings,” he said in a text message.

As of May 26, Health department data show the city had 1,191 active cases, a more than 300% increase from 278 cases as of April 30. It had 16,256 total cases, with 14,324 recoveries and 741 deaths.

The Department of Health (DOH) Region 11 COVID-19 case bulletin as of 6 p.m. of May 25 reported that Davao City logged 173 new actives from the total of 16,101 cases since March 2020. The city also had a total of 14,251 recoveries and 739 deaths.

“If you notice, the past week saw about 90 to 100 plus (daily) cases, our cases are really rising. Based on our COVID-19 growth rate, there is already a surge not just in Davao City but also in the whole of Mindanao,” Mr. Lopez said over the local government-run radio.

On Thursday, Mayor Sara Duterte-Carpio announced an extension of the curfew and liquor ban until July 31. — Maya M. Padillo

Duterte signs laws on cacao capital, division of Maguindanao

PRESIDENT Rodrigo R. Dutere has signed several laws relating to different localities, including the declaration of his hometown Davao City as the chocolate capital of the country and Davao Region as cacao capital.

Mr. Duterte has also signed into law a measure dividing the province of Maguindanao in the southern Philippines into two provinces, according to the presidential palace.

Presidential spokesman Herminio L. Roque, Jr., confirmed this in a text message to reporters on Thursday, but a copy of the signed decree has yet to be released.   

Meanwhile, Mr. Roque said Mr. Duterte is aware that there are concerns on the proposal extending the term of the Bangsamoro Transition Authority by another three years.

The President “listens to everyone,” he told a televised news briefing.

The President also signed a law reapportioning the province of Bulacan in Central Luzon into six legislative districts.   

Mr. Duterte also approved the reapportioning of Caloocan City in the capital region into two legislative districts. — Kyle Aristophere T. Atienza

Saving and borrowing for the future?

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In our column two weeks ago, “Imminent existential threat, or outright fiscal meltdown?” (BusinessWorld, May 14, 2021) we indicated that unless the military and uniformed personnel pension system is overhauled, the sponsor of the bill, Albay Rep. Joey Salceda underestimated its outcome. It’s not just an existential threat, but rather an outright fiscal meltdown.

There is another fiscal downside risk and the National Government’s (NG) response could be game changing.

Starting next year, we might be seeing the initial implementation of the Supreme Court decision on the Mandanas-Garcia case. The ruling affirmed the increase in the share of the local government units (LGUs) in the NG’s revenues or the Internal Revenue Allotment (IRA).

How much will this cost the NG?

Last year, Philippine Institute for Development Studies (PIDS) senior research fellow Rosario G. Manasan in a Webinar quoted a Development Budget Coordination Committee (DBCC) estimate that it would raise the aggregate LGUs’ IRA allocation from P847.4 billion this year to P1.1 trillion in 2022. This could be on the low side considering the share of tariff duties in the overall public revenues.

For what the Supreme Court affirmed was that the calculation should be changed from 40% of national internal revenue taxes collected by the Bureau of Internal Revenue (BIR) to 40% of “all” national taxes including those coming from import duties and other taxes collected by Customs on top of the BIR collections.

This is a big chunk that will have to be carved out of the usual budgetary items.

Unless the implementation of the court ruling is accompanied by an appropriate devolution of NG functions to the LGUs —agriculture, education, healthcare, and infrastructure — the resulting higher budget deficit will definitely involve a general breakdown of national economic and social services.

In the book, there are different ways of meeting this new demand on the national budget.

One way is to increase taxes but this first option is a dead duck. We remain in a deep recession, unemployment continues to be elevated. Most important, next year is an election year and we doubt whether the Palace is prepared to lose the contest. The sad experience of Senator Ralph Recto with the value-added tax, a great fiscal reform measure, is just too fresh to be forgotten.

Another way is to jack up deficit spending. This means the additional expense will be absorbed so that the shortfall in revenues relative to the higher expense will have to be funded by borrowing. The danger here is the ballooning of the budget deficit funded by more and more borrowing. Finance Secretary Sonny Dominguez’ pronouncement that “we will begin to return to the normal fiscal deficit of about 3.5 to 4% (of GDP)” is most reassuring except that the Duterte Administration is winding up June next year. This would also require an enormous reduction from this year’s expected deficit to GDP ratio of 9.4% from 2020’s 8.9%. Finally, timing is very crucial. This proposed pivot to a more modest fiscal stance may not be consistent with the current goal of restoring business activities soonest.

Of course, the literature disproves the Ricardian Equivalence in taxation and deficit. The reason is that a higher deficit may result in slightly bigger household savings but much less compared to what is required to match the increase in the deficit. Similarly, private savings does not fully offset public borrowing.

All up, what we are seeing is that stepping on the fiscal brake at this time may not hold water. It is boldly anchored on, one, the health authorities’ ability to shepherd us out of this pandemic that has devastated jobs and income through fast and effective vaccination program; and, two, that economic recovery would be very much entrenched by next year. It is always good to be conservative and risk-conscious. The end of the tunnel is still some distance away.

The demand components of economic growth are hardly robust.

Private consumption, for one, is expected to “remain muted this year,” as UK-based Oxford Economics described what is obvious. In the first quarter 2021, consumption, which accounts for more than 70% of GDP, actually declined by 4.8%. With the re-imposition of a strict lockdown, it would be challenging to reverse a sustained decline.

Capital formation, which accounts for nearly 20% of GDP, also contracted in the first quarter by more than 18%. With the continuing uncertainty of the duration and intensity of the COVID-19 pandemic, investment may require extremely strong signals of more normal health and growth environment in the last three quarters of the year. Both foreign direct and portfolio investments remained weak as well. BSP’s recent statement that the non-performing loan ratio is expected to reach 6% by the end of 2021 from 4.21% at end-March 2021 is not a good signal for the credit market. While systemic effects may not be forthcoming, sustaining credit flow to the corporates may be a difficult proposition. This is a downside risk to investment and growth.

Merchandise trade has remained weak because global demand has barely bounced back. With weak imports, domestic production and consumption may be assumed weak in the short term.

While public spending contributes in a limited way to output growth, it has important multiplier effects, especially the portion directed to infrastructure. But based on its performance in the first four months this year, it looks like public spending hardly moved at over P1.3 trillion. April 2021 expenditure alone showed a big decline.

The DBCC must be caught between the goal of helping grow the economy and keeping fiscal sustainability. The Mandanas-Garcia ruling threw big rocks at the wheels.

The initial response of the NG starting this year is the President’s Administrative Order 41 issued this May directing the DBM to instruct government agencies through Circular 586 to identify potential savings. These would be taken from the funds authorized under the 2020 continuing budget for this year but which remain unobligated as of May 15. Unobligated funds are intended for contracts to implement scheduled programs, activities, and projects that continue to be unawarded. Money earmarked for these purposes is therefore unspent and may be considered savings. Will this be continued next year?

We see some potential problem here. Savings realized from this exercise could be used to fund, one, anti-pandemic measures including vaccines; two, provisions for emergency subsidies to low-income households and disadvantaged or displaced workers due to the pandemic. Realignment can always be vague and general and the possibility of diverting these savings to populist causes is quite big.

If we did not fail to procure a sufficient number of vaccines to promptly arrest the spread of the virus and its variants, we would not have to incur more expense to provide additional emergency subsidies.

Budget Secretary Wendel Avisado admitted that we have a “very limited fiscal space available” for the so-called tier two obligations: new high-priority programs, activities, and projects. Agencies will have to rethink which are strategic and which are not. If both demands on the budget are accommodated, the contingency funding and priority items, whatever savings can be raised may not be enough. Only by increasing the borrowings can these two be financed.

In doing so, it would be absolutely difficult for anyone to argue that such debt does not matter because we owe it to ourselves. Debt affects investment and future output, impinges on future generations because they have to pay for it, and requires higher taxes that may introduce distortions into the economy.

The next government will have its hands full for the next six years sorting out the legacy problem of, among others, excessive indebtedness.

 

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.

Educating the electorate

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House of Representatives Deputy Speaker Bienvenido Abante has urged the Department of Education (DepEd) to include voter education in the secondary school curriculum in addition to its urging the qualified — those 18 years old and above by Election Day — to vote. He was thinking of 2022.

But educating voters should not be a priority just because the national and local elections on May 9 next year are approaching. The Philippine experience with elections should have taught everyone by now that voter education — not only for the sake of the electorate’s making the right choices in the next elections, but also for the sake of its being capable of doing so every election time — is crucial to the present and future of this country.

As important as voter education is to the election of capable and honest leaders, over time and as voters become more informed, it will hopefully help eliminate those other factors that make the realization of that ideal problematic: the vote-buying, the violence and the voter intimidation that regularly afflict Philippine elections.

Those elections are held every three years. The latest were in 2019 for members of the House of Representatives and the Senate, party-list formations, governors, vice-governors, mayors, vice-mayors, and other local officials with three-year terms. Barely a year from now, the country will again go to the polls to elect its next president and vice-president, senators to replace those whose six-year terms are expiring, congressmen, party-list groups, and provincial and local officials.

But as frequent as Philippine elections are, they have hardly advanced either the democratization process or the country’s social and national development.

On the contrary: at least two elections achieved the opposite. In the 1960s, the election of Ferdinand Marcos to two presidential terms led to the destruction by the dictatorship he erected on the ruins of the Republic of the already limited, elite democracy that then obtained in this “show window of democracy in Asia.” More recently, by transforming a provincial despotism into a national autocracy, the 2016 presidential elections resulted in the erosion of the rights to life, due process, free expression and press freedom that the Constitution guarantees every citizen.

The economic and social problems that have long haunted millions of Filipinos meanwhile continue to defy solution and have even worsened, with the number of the poor and hungry multiplying, social services such as access to education and medical care deteriorating, unemployment rising, and inequality growing.

Understanding why requires neither brain surgery skills nor rocket science wisdom. The fundamental reason for the Philippines’ dismal state is the failure of the leaderships it has had since the United States’ recognition of its independence in 1946 to realize the promises of self-rule and democracy.

Despite the central role that governance plays in the fate of nations and the lives of their peoples, the Philippine electorate has continued to elect the clowns, the incompetents and the corrupt dynasts and their surrogates and clones that have been driving the country into the ground for decades. The same self-aggrandizing monsters have turned the Philippines from a country with the second highest standard of living in the 1950s into the basket case of Asia as its once poorer, less developed neighbors prospered under the rule of competent leaders.

Uninformed as well as unaware of the local and national consequences of governance, the mass of the electorate has limited itself to mostly asking candidates how their being elected will materially benefit them and their families. But they also base their decisions on who to vote for on name recall (voting for those whose names they’re most familiar with), and the capacity of candidates to entertain them by telling crude jokes, singing, dancing, and looking pretty on stage, smearing their rivals with accusations of committing the most evil crimes, and even dwelling on their personal flaws and shortcomings.

The most glaringly absent criteria for choosing who to vote for are: 1.) what the candidates intend to do once elected — their platforms of governance, if any; and 2.), their track records as public officials, or as private sector professionals, businessmen, workers, employees, or whatever else.

It has been obvious since the 1960s even to some politicians themselves that what could change the situation is the electorate’s basing its choices for government officials on the platforms of candidates — and therefore their requiring them, in the first place, to have coherent, integrated platforms rather than single-issue advocacies that pander to the blood lust and worst instincts of the ignorant such as restoring the death penalty and killing 100,000 alleged drug pushers and addicts.

The voter education programs of some non-government organizations such as the Parish Pastoral Council for Responsible Voting (PPCRV) have therefore included the need for the electorate to decide whom to vote for on that basis, among others. But nowhere in Abante’s suggestion to include voter education in the high school curriculum is there anything about voters’ being taught to decide whom to vote for on the basis of candidates’ platforms. He instead suggested that any voter education component in the secondary level curriculum should inculcate in future voters the need to decide on the basis of a candidate’s possessing the “three Cs” of “competence, character, and credibility.”

Abante did not specify what can decide whether a candidate meets his criteria or not. But “competence” can more or less be established through voter awareness of a candidate’s track record — his or her stand on public issues, how he or she voted on certain bills if he or she was previously in Congress, as well as the number of bills he or she filed or co-sponsored.

By “character,” Abante was presumably referring to whether the candidate has been involved in corrupt practices and other wrong-doing, or even if his or her personal shortcomings could have an impact on his or her performance as a public official. That, of course, can also be established by the candidate’s track record.

“Credibility” is equally linked to track record: has what the candidate done as a public official or as a private individual make him or her trustworthy enough to be re-elected or elected to public office?

None of Abante’s “three Cs,” however, could lead to voters’ being enlightened on what the candidate will do once in office despite its decisive role in governance. The fundamental imperatives in any voter education program are therefore instilling in the public mind the need to demand that candidates have coherent platforms, and that they make public their track records either as public officials or as responsible private sector actors.

But the process should not end there. The mass of voters should be reminded that they should not sell their votes and must resist all attempts to intimidate them into surrendering their right to choose their officials to the warlords and petty tyrants that in many regions compel the powerless to vote for them or their own choices.

Over the long term, that realization can spread enough among voters for them to combat the efforts of the anti-democracy forces in power in some of this country’s regions and provinces to thwart the people’s free expression of their will. An informed electorate aware of its rights, and of the importance of choosing the right leaders, can stop the vote-buying and intimidation that still make democratic choice so problematic in a number of Philippine communities. Voter education is the key that could unlock the gateway to good government.

 

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

www.luisteodoro.com

We need to close the vaccination gap

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BY THE END of May 2021, only 2.1% of Africans have received at least one dose of a COVID-19 vaccine. We need to close the vaccination gap between advanced economies and developing countries to avoid what Tedros Ghebreyesus, head of the World Health Organization (WHO), has called “vaccination apartheid.” Doing so is both morally right and in everyone’s interest.

Therefore, we need global multilateral action to increase the production of vaccines and accelerate the roll out worldwide. Since the beginning of the pandemic, this is the path chosen by the European Union (EU). It is now also the path defined by the G20 leaders at the Global Health Summit in Rome on May 21.

The pandemic is still killing thousands of people every day and at the current pace, the whole world will not be vaccinated before 2023. Yet, a widely vaccinated world population is the only way to end the pandemic; otherwise, the multiplication of variants is likely to undermine the effectiveness of existing vaccines.

Vaccination is also a prerequisite for lifting the restrictions that are holding back our economies and freedoms. These restrictions penalize the whole world, but they weigh even more heavily on developing countries. Advanced countries can rely more on social mechanisms and economic policy levers to limit the impact of the pandemic on their citizens.

If the vaccination gap persists, it risks reversing the trend in recent decades of declining poverty and global inequalities. Such a negative dynamic would hold back economic activity and increase geopolitical tensions. The cost of inaction would for sure be much higher for advanced economies than what we collectively would have to spend to help vaccinate the whole world. Therefore, the EU welcomes the $50-billion plan proposed by the International Monetary Fund in order to be able to vaccinate 40% of the world population in 2021 and 60% by mid-2022.

To achieve this goal, we need closely coordinated multilateral action. We must resist the threats posed by “vaccine diplomacy,” linking the provision of vaccines to political goals, and “vaccine nationalism,” reserving vaccines for oneself. In contrast to others, the EU has rejected both since the beginning of the pandemic. Until now, we have been the only global actor that is vaccinating its own population; exporting large volumes of vaccines; and contributing substantially to the vaccines’ rollout in low-income countries. Europeans can be proud of this record.

In 2020, the EU supported the research and development of vaccines on a large scale and contributed significantly to the new generation of mRNA vaccines. The EU then became a major producer of COVID-19 vaccines with, according to the WHO, around 40% of the doses used globally so far. The EU has also exported 240 million doses to 90 countries, which is about as much as we have used within the EU.

The EU with its member states and financial institutions — what we call “Team Europe” — is also donating vaccines to neighbors in need, particularly in the Western Balkans. It aims to donate at least 100 million more doses to low- and middle-income countries before the end of 2021, as agreed at the last European Council. With €2.8 billion, Team Europe has also been the main contributor to the COVAX facility, which enables poorer countries to access vaccines; around one-third of all COVAX doses delivered so far have been financed by the EU. However, this effort is still far from sufficient to prevent the vaccination gap from widening.

To fill this gap, countries with the required knowledge and means should increase their production capacities, so that they can both vaccinate their own populations and export more vaccines, as the EU is doing. In cooperation with vaccine manufacturers, we are working to increase the EU vaccine production capacities to more than 3 billion doses a year by the end of 2021. Our European industrial partners have committed to deliver 1.3 billion doses of vaccines before the end of 2021 to low-income countries at no profit and to middle-income countries at lower prices. They have also committed themselves to further deliver over 1.3 billion doses for 2022 — many of which will be delivered through COVAX.

All countries must avoid restrictive measures that affect vaccine supply chains. We also need to facilitate the transfer of knowledge and technology, so that more countries can produce vaccines. For our part, we are strongly encouraging European producers to do so, especially in Africa. I participated at the Paris summit on financial support for Africa on May 18, where the continent’s leaders stressed that Africa imports 99% of its vaccines. This has to change. Team Europe is launching an initiative to this end — backed by €1 billion in funding from the EU budget and European development financial institutions — with African partners to boost manufacturing capacity in Africa for vaccines, medicines, and health technologies.

Voluntary licensing is the privileged way to ensure such transfer of technology and know-how. If it turns out to be insufficient, the existing TRIPS Agreement and the 2001 Doha Declaration already foresee the possibility of compulsory licensing. According to some countries, these flexibilities are however too difficult and too slow to use. To speed up these technology transfers, the EU will come forward with a new proposal in the World Trade Organization framework by early June.

The COVID-19 pandemic has reminded us that health is a global public good. Our common global COVID-19 vaccine action to close the vaccination gap must be the first step toward genuine global health cooperation, as foreseen by the Rome Declaration recently adopted at the Global Health Summit.

 

Josep Borrell is the EU High Representative for Foreign Affairs and Security Policy, and Vice-President of the European Commission.

Longer supply shortage seen as China’s factories squeezed

REUTERS

ERIC LI’s factory making glass lampshades for companies including Home Depot, Inc. is being stretched to its limits with sales doubling their pre-pandemic level.

But like many Chinese manufacturers, he doesn’t plan to expand operations — a reticence that could slow the pace of China’s economic growth this year and prolong a shortage of goods being felt around the world as demand picks up.

Surging prices of raw materials means “margins are compressed,” explains Mr. Li, owner of Huizhou Baizhan Glass Co. Ltd., in the southern Chinese province of Guangdong, which makes about $30 million in annual revenue. With the global economic recovery still uneven, “the future is very unclear, so there is not much push to expand capacity,” he adds.

The combination of higher input prices, uncertainty about export prospects and a weak recovery in domestic consumer demand meant Chinese manufacturing investment from January to April was 0.4% below the same period in 2019, according to official statistics (comparing to 2019 strips out the distortion of last year’s pandemic data).

Due to the vast size of China’s manufacturing sector, that poses a risk both to the nation’s growth — which is currently predicted to reach 8.5% in 2021, according to a Bloomberg tally of economists’ estimates — and to a global economy that’s grappling with supply shortages and rising prices.

FALLING PROFITS
Weaker-than-expected investment could have a “sizable” impact on GDP (gross domestic product) growth this year, said Citigroup, Inc.’s China economist, Li-gang Liu. Lower investment may dent imports of capital goods and equipment from developed economies like Japan and Germany, “which in turn could drag their economic recovery and rebound as well,” he added.

AnHui HERO Electronic Sci & Tec Co. Ltd. is one of those companies feeling the squeeze. Based in the eastern province of Anhui, the company manufactures capacitors used to make electronic circuits, with sales mainly in the domestic market. Jing Yuan, the founder, says orders are up as much as 30% year-on-year, but profits are down 50% due to increasing materials costs that are not easily passed onto clients.

The company is under “huge cash pressure” as it needs to pay half a month in advance of delivery in order to secure copper and other metals, which they previously paid for months after receiving, he said. “The commodity issue has to be addressed by the government,” he added.

Input shortages mean some manufacturers aren’t able to make use of their existing facilities, so expansion would be of little use. Chinese electric vehicle maker Nio, Inc. suspended production at one of its factories last month, due to a shortage of microchips.

Modern Casting Ltd., which makes iron and steel products in Guangdong, issued a note to clients this month saying it would not be able to meet its current orders due to high raw material costs. A member of staff who answered the phone at the company’s office confirmed the note, but declined to give further details.

TRANSITION
On top of the higher input costs, Chinese companies face a bumpy transition toward domestic consumer spending to sustain its post-pandemic recovery.

Exports, China’s strong-suit last year, may begin to slow as vaccine roll-outs cause consumers in wealthy countries to shift spending back to services. Meanwhile, the growth rate of Chinese consumer spending has yet to fully recover.

Investment sentiment among Chinese small and medium-sized enterprises is below levels seen even in 2018-9 when uncertainties from the US-China trade war were a brake on expansion plans, according to a regular survey of more than 500 Chinese companies by Standard Chartered Plc.

“Demand is still mainly underpinned by exports, so domestic companies are aware that this is not sustainable,” said Standard Chartered’s China economist, Lan Shen.

While some export-oriented sectors have been pushed to their limits, large amounts of slack remain for manufacturers targeting Chinese consumers due to subdued domestic demand.

Retail sales growth was 4.3% in April on a two-year average basis, which strips out base effects from the pandemic, less than half pre-pandemic growth rates. Overall capacity use at China’s manufacturers fell to 77.6% in the first quarter from 78.4% in the previous three months, with the automotive sector hit hardest by overcapacity following three years of declining sales volumes.

Even for electric vehicles whose sales are surging, most companies have already built their capacity and will now focus on incremental upgrades. “The majority of the investment has been done,” said Jochen Siebert of JSC Automotive Consulting.

China ordered state-owned companies to expand last year, with their investment growth of 5.3% in 2020 from the prior year easily outstripping the 1% increase in private investment. But for a sustainable pick-up in investment, the market, not the state, needs to feel confident.

Carsten Holz, an expert on Chinese investment statistics at the Hong Kong University of Science and Technology, estimates that privately-owned companies have accounted for 87% of manufacturing investment in 2015, the most recent year of available data. They are more sensitive to input costs.

“There is a pandemic plus insecurity about future trade given a new US administration, neither of which is conducive to investment that relies on long-term growth prospects,” Mr. Holz said.

MIXED POLICIES
Transport bottlenecks are also a challenge for export-oriented manufacturers. Gordon Gao, who exports gardening products from China, said that he has had to reject 80% of orders this year due to port delays. In one case, an order placed before mid-February could only be shipped three months later when a client finally secured a container.

Beijing has tried to improve conditions for private companies by ordering a crackdown on speculation to curb commodity prices and easing access to bank loans.

Yet the government continues to gradually withdraw fiscal and monetary stimulus measures introduced amid the pandemic last year. It set a relatively unambitious target of “above 6%” growth for this year, and the Communist Party’s Politburo signaled last month it would prioritize reforms to control house prices and debt growth.

“The policy stance has definitely shifted away from supporting growth and back toward de-risking the financial sector,” said Adam Wolfe, an economist at London-based Absolute Strategy Research. “The risks for economic growth seem tilted to the downside, especially for capital-intensive, construction-linked sectors.”

For manufacturers such as Mr. Li, a longer period of domestic growth and control over input prices will be needed before capacity expansion is on the cards. While his company of 200 workers took on new permanent staff before the pandemic, for now he’d rather pass the risks of investment on to others.

“I wouldn’t do that now, I would rather hire some temporary workers and outsource the rest,” he said. — Bloomberg

Rising global temperatures ‘inexorably closer’ to climate tipping point — United Nations

REUTERS

THERE is now a 40% chance that global temperatures will temporarily reach 1.5 degrees Celsius above pre-industrial levels in the next five years — and these odds are rising, a U.N. report said on Wednesday.

This does not yet mean that the world would already be crossing the long-term warming 1.5-degree threshold set by the Paris Climate Accord, which scientists warn is the ceiling to avoid the most catastrophic effects of climate change. The Paris Accord target looks at temperature over a 30-year average, rather than a single year.

But it does underscore that “we are getting measurably and inexorably closer” to that threshold, said U.N. World Meteorological Organization (WMO) Secretary-General Petteri Taalas in a statement. Taalas described the study as “yet another wakeup call” to slash greenhouse gas emissions.

Every year from 2021 through 2025 is likely to be at least 1 degree Celsius warmer, according to the study.

The report also predicts a 90% chance that at least one of those years will become the warmest year on record, topping 2016 temperatures.

In 2020 — one of the three warmest years on record — the global average temperature was 1.2 degrees Celsius above the pre-industrial baseline, according to an April WMO report.

“There’s a little bit of up and down in the annual temperatures,” said Gavin Schmidt, director of NASA’s Goddard Institute for Space Studies in New York City. “But these long term-trends are unrelenting.”

“It seems inevitable that we’re going to cross these boundaries,” Mr. Schmidt said, “and that’s because there are delays in the system, there is inertia in the system, and we haven’t really made a big cut to global emissions as yet.”

Almost all regions are likely to be warmer in the next five years than in the recent past, the WMO said.

The WMO uses temperature data from multiple sources including NASA and the National Oceanic and Atmospheric Administration (NOAA).

Weather that was once unusual is now becoming typical. Earlier this month, for example, NOAA released its updated “climate normals, “ which provide baseline data on temperature and other climate measures across the United States. The new normals — updated every 10 years — showed that baseline temperatures across the United States are overwhelmingly higher compared with the past decade.

Temperature shifts are occurring both on average and in temperature extremes, said Russell Vose, chief of the climatic analysis and synthesis branch at NOAA’s National Centers for Environmental Information. Over the next five years, these extremes are “more likely what people will notice and remember,” he said.

Warming temperatures also affect regional and global precipitation. As temperatures rise, evaporation rates increase and warmer air can hold more moisture. Climate change also can shift circulation patterns in the atmosphere and ocean.

The WMO report predicts an increased chance of tropical cyclones in the Atlantic Ocean, that Africa’s Sahel and Australia will likely be wetter, and that the southwest of Northern America is likely to be drier.

The projections are part of a recent WMO effort to provide shorter-range forecasts of temperature, rainfall and wind patterns, to help nations keep tabs on how climate change may be disrupting weather patterns.

Looking at marine and land heat waves, ice sheets melting, ocean heat content rising, and species migrating toward colder places, “it’s more than just temperature,” Mr. Vose said. “There are other changes in the atmosphere and in the ocean and in the ice and in the biosphere that all point to a warming world.” — Reuters

Nonito Donaire shoots for WBC bantamweight title on Sunday

NONITO “The Filipino Flash” Donaire challenges French champion Nordine Oubaali for his WBC bantamweight title on Sunday (Manila time). — ALVIN S. GO

By Michael Angelo S. Murillo, Senior Reporter

MULTI-DIVISION boxing champion Nonito “The Filipino Flash” Donaire looks to enhance his legacy by adding the World Boxing Council (WBC) bantamweight title to his list of achievements when he goes up against reigning champ Nordine Oubaali of France on Sunday (Manila time).

The 38-year-old Donaire (40-6, 26 KO) is out to show that he is still a top-class talent even at this late stage of his career in the Showtime title showdown happening at the Dignity Health Sports Park in Carson, California.

Mr. Donaire, a champion fighter in flyweight, bantamweight, super bantamweight and featherweight, will mark his ring return with the Oubaali fight after a year-and-a-half of inaction.

The Bohol native last fought in November 2019, losing the World Boxing Association super bantamweight title to Japanese Naoya Inoue by unanimous decision.

He is now angling to return to the top by seizing the WBC title from Mr. Oubaali (17-0, 12 KO), who has had two successful title defenses since becoming champion in July 2019.

For local boxing analyst Nissi Icasiano, the Oubaali fight is a venture worth taking for Mr. Donaire, and that the Filipino fighter has what it takes to get it done against his younger opponent.

“For Nonito Donaire, it’s no longer a question of how dangerous the fight is. At this point of his career, he knows that every fight that he takes from here on has its own risk, but it’s a risk worth taking,” said Mr. Icasiano in an online interview with BusinessWorld.

“Nonito Donaire is a kind of boxer that you should never count out. He has this uncanny ability to reinvent himself, which is why he is still slugging it out with the best of his division at 38… It just goes to show how brilliant and special Nonito Donaire is as a fighter,” he added.

While Mr. Donaire’s status as a Hall-of-Fame boxer is already secured, Mr. Icasiano believes a win in his latest fight will only add further luster to the career of The Filipino Flash.

“A win here will definitely put Nonito Donaire at a different level in terms of his status as a boxer… Nonito won a title at flyweight in 2007, got a super flyweight belt two years later, got a taste of bantamweight gold against Fernando Montiel, added the super bantamweight and featherweight straps into his collection later, and managed to move down to 118 to win gold again. It’s an amazing feat.”

Mr. Icasiano compared Mr. Donaire to legendary American fighter Henry Armstrong, who won titles in different divisions beginning in 1938.

The analyst went on to say, against French champion Oubaali, Mr. Donaire’s experience should serve him well but he must not let his guard down.

“He (Donaire) still has good power and speed at his age. He’s experienced at picking off his opponents when they move into firing range with enough power, doing some damage in the process. However, he is becoming easier to hit as he gets older,” Mr. Icasiano said.

“Oubaali is underrated. He does everything well but doesn’t really excel at anything. Donaire’s experience will do him favors in this fight.”

Donovan Mitchell returns to spark Jazz vs Grizzlies; Sixers race to 2-0 series lead

UTAH JAZZ guard Donovan Mitchell (45) reacts during the second half against the Memphis Grizzlies in game two. — REUTERS

DONOVAN Mitchell returned to lead a balanced attack that overpowered a career-best, 47-point performance by Ja Morant and allowed the Utah Jazz to even their Western Conference playoff series against the Memphis Grizzlies with a 141-129 victory on Wednesday night in Salt Lake City.

Mitchell, who finished with a team-high 25 points, bombed in five 3-pointers in 10 tries. Teammates Mike Conley and Joe Ingles buried three apiece as the top-seeded Jazz, who led the NBA in the regular season in both most 3-pointers made and fewest allowed, dominated the eighth-seeded Grizzlies from beyond the arc to offset an upset loss in the series opener.

With Mitchell still nursing a sprained right ankle, Memphis shocked the West’s regular-season champs by holding them to 12-for-47 (25.5 percent) accuracy on 3-pointers in Game 1.

But Utah came out firing in the rematch, nailing 10 treys in the first half alone en route to a 74-54 lead at the break.

76ERS 120, WIZARDS 95
Ben Simmons had 22 points, nine rebounds and eight assists, Joel Embiid added 22 points and seven rebounds and host Philadelphia took a 2-0 series lead with a victory over Washington.

Tobias Harris contributed 19 points and nine rebounds for the top-seeded Sixers. Furkan Korkmaz added 13 points and Matisse Thybulle registered five blocked shots and four steals off the bench.

Bradley Beal led the eighth-seeded Wizards with 33 points, while Rui Hachimura and Daniel Gafford added 11 each. Early in the fourth quarter, Russell Westbrook (10 points, 11 assists) appeared to injure his right ankle and was helped to the locker room.

KNICKS 101, HAWKS 92
Derrick Rose scored 26 points off the bench to lift host New York to a victory over Atlanta to even the series at 1-1.

Julius Randle recorded 13 of his 15 points in the third quarter and added 12 rebounds for the Knicks, who erased a 15-point deficit to even the best-of-seven series at one win. Game 3 is on Friday in Atlanta.

Trae Young, who scored 20 of his 30 points in the first half for the Hawks, was serenaded with boos every time he touched the ball. The Madison Square Garden faithful’s response was a result of Young putting his fingers to his lips to silence the crowd following Atlanta’s 107-105 victory in the series opener on Sunday. — Reuters

Strict safety protocols in effect for FIBA ‘bubble’ in Clark — BCDA

TEAMS, like those from Korea and Thailand, should expect strict implementation of health and safety protocols to guard against the coronavirus during the FIBA Asia Cup Qualifiers in Clark in June, the BCDA said. — FIBA

EXPECT strict safety protocols to be implemented when the country hosts the third and final window of the FIBA Asia Cup Qualifiers at Clark City in Angeles City, Pampanga, in June.

This was shared by the Bases Conversion and Development Authority (BCDA) as it pushes for the successful staging of the five-day tournament, done in a “bubble” setup to guard against the coronavirus, happening from June 16 to 20 that will see nine teams from different countries and territories in Asia competing.

Along with its subsidiary Clark Development Corp. (CDC), the BCDA said it has been closely coordinating with the Samahang Basketbol ng Pilipinas, national government, and the local governments of Pampanga and Angeles City in readying the areas that will serve as hosts for the qualifiers.

The tournament is expected to receive over 600 local and foreign players, coaches and tournament staff for its duration.

In going about preparing, the BCDA said it is taking cue from its experience of successfully hosting the tournament bubble of the Philippine Basketball Association (PBA) last year, which ran from October to December.

“Hosting the PBA bubble in Clark last year gave BCDA and CDC the experience of mounting sporting events in the face of COVID-19. This time, with the arrival of foreign teams for the FIBA Asia Cup, BCDA and CDC will step up to the challenge and leave no stone unturned. Health and safety measures will be strictly enforced to protect all athletes and staff, and to eliminate the possibility of spreading the virus,” said BCDA President and Chief Executive Officer Vince Dizon in a statement.

The BCDA is also being guided by the directives on physical activities and sports amid the pandemic, which were jointly crafted by the Philippine Sports Commission, Games and Amusements Board, and Department of Health.

For the staging of the FIBA Asia Cup Qualifiers, the BCDA said, the movement of players, coaches and staff will be limited to within the airport, hotels and the Angeles University Foundation Sports and Cultural Center where the tournament will be held. The designated hotels are Quest Hotel & Conference Center in Mimosa and Lohas Hotel in Redwood Villas, both in the Clark Freeport Zone.

The 200 foreign delegates from the eight countries are scheduled to arrive on June 13. They will be quarantined the next day, then practices will be held on June 15. Visiting teams will depart on June 21.

They are required to take RT-PCR tests 12 days, seven days and two days before departure to the Philippines. They must also secure RT-PCR tests on the day of arrival, four days after arrival, and before departure if required by the country of destination.

Members of the Gilas Pilipinas team, which are to compete in Group A of the tournament, are covered by the protocols. And so do FIBA and SBP personnel, hotel, transport and ancillary staff, and other staff from TV5, PLDT and Smart, who are official partners of FIBA.

“This is a team effort. Everyone, including the government, LGUs, organizers, athletes and staff must play their part to ensure the success of the FIBA bubble,” Mr. Dizon said.

The FIBA Asia Cup Qualifiers were originally set to take place in Clark in February until the emergence of new variants of the coronavirus forced their cancelation.

The SBP eventually was able to secure its hosting in June, later boosted by the approval of the Inter-Agency Task Force for the Management of Emerging Infectious Diseases on May 6 for it to proceed.

Playing in the tournament are teams from the Philippines, Korea, Thailand, and Indonesia in Group A, Chinese Taipei, Japan, and China in Group B, and Hong Kong and Guam in Group C.

The FIBA Asia Cup will be held in Jakarta, Indonesia, in August. — Michael Angelo S. Murillo