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DoLE tallies more than 15,000 Metro Manila workers displaced by new lockdown

PHILSTAR

THE LABOR department said Monday that it recorded over 15,000 displaced workers in Metro Manila since March 22, including those who were retrenched during the reimposition of the strictest lockdown settings in the weeks leading up to April 11.

According to the Jobs Displacement Monitoring report issued Monday, the Department of Labor and Employment (DoLE) said 15,246 workers from the capital region were displaced between March 22 and April 11.

Over 700 were displaced because of retrenchment or reduction of workers while 69 were laid off due to permanent closures.

Due to the surge of coronavirus disease 2019 (COVID-19) cases, a week-long enhanced community quarantine was reimposed in Metro Manila, Bulacan, Cavite, Laguna, and Rizal beginning March 29 until April 4, which was extended to April 11. A modified enhanced community quarantine is currently in effect in these areas.

The Metro Manila total accounts for the bulk of the 26,114 workers displaced between March 22 and April 11, representing 1,567 establishments.

Around 89% of these workers were retrenched because of manpower reduction by their employers while the remaining 11% or over 3,000 lost their jobs because of companies closing shop.

Region III (Central Luzon) logged 2,947 worker displacements followed by Region VII (Central Visayas) with 1,905 and Region IV-A (Calabarzon) with 1,880.

Cavite, Laguna, and Rizal are located in Calabarzon while Bulacan is in Central Luzon.

Last week, DoLE said around 8,000 workers were displaced during the first few days of the ECQ, between March 29 and 31. — Gillian M. Cortez

Tax treaty application: What’s new and what has not been retained?

On March 31, 2021, the Bureau of Internal Revenue (BIR) issued Revenue Memorandum Order (RMO) 14-2021 which outlines the new procedures for availing of relief from double taxation under relevant tax treaties on all items of income derived by nonresident taxpayers from Philippine sources.

Under the RMO, these revised guidelines take effect immediately and will supersede guidelines issued in 2017 (RMO 8-2017), 2010 (RMO 72-2010), and 2002 (RMO 20-2001).

WHAT’S NEW?
In keeping with the government’s goal of improving efficiency and service to taxpayers, RMO 14-2021 provides that the withholding agent may rely on the submitted BIR Form No. 0901, the Tax Residency Certificate (TRC), and the relevant provisions of the applicable treaty to assess whether to apply a reduced rate or an exemption from withholding taxes. Therefore, it is important for nonresident taxpayers intending to avail of tax treaty benefits to submit the documents to each withholding agent prior to payment of income for the first time.

Failure of the taxpayer to provide the documents when requested may lead to withholding of taxes using the regular rates prescribed under the Tax Code, as amended, and not treaty rates for nonresident foreign corporations or nonresident aliens not engaged in trade or business, as the case may be.

WHAT TO FILE?
The withholding agent shall file a request for confirmation when it applies the treaty rates on the income earned by the nonresident taxpayer. On the other hand, the taxpayer shall file a Tax Treaty Relief Application or TTRA when the regular rates have been imposed by the withholding agent.

The RMO prescribes the revised general and specific documentary requirements for each type of income. All documents executed in a foreign country, to be acceptable in the Philippines, must either be authenticated by the Philippine Embassy there or apostilled if the foreign country is a signatory to the Convention Abolishing the Requirement of Legalisation for Foreign Public Documents.

Generally, one TTRA or request for confirmation must be filed for each transaction except for long-term contracts (e.g., contracts for services or loan agreements, license agreements, etc.) i.e., those which are effective for more than a year, where an annual updating must be made until the termination of the contract.

To ensure that the proper rate is applied until the end of the contract, the nonresident taxpayer must file an updated Application Form, a new TRC (if the validity period of the previously submitted TRC has already lapsed), and other relevant documents not later than the last day of the fourth month following the close of each taxable year.

WHERE TO FILE?
Each request for confirmation and TTRA is to be filed with the International Tax Affairs Division (ITAD) and supported by documentary requirements. Submission to any other BIR Office is considered improperly filed.

WHAT HAS BEEN RETAINED?
The submission of Certificate of Residence Treaty Relief (CORTT) form that is applicable to dividends, interest, and royalties is discontinued. However, previously submitted CORTT Forms must still be forwarded to the Revenue District Office (RDO) for compliance checking.

WHEN TO FILE?
The request for confirmation is to be filed by the withholding agent at any time after the payment of withholding tax but not later than the last day of the four-month period following the close of each taxable year.

Failure to file a request for confirmation within the prescribed period risks penalties while failure to supply correct and accurate information is punishable with the crime of perjury and with other appropriate crimes or offenses as may be warranted, in addition to the payment of deficiency taxes.

On the other hand, the filing of TTRA may be filed by the nonresident at any time after receipt of income to prove its entitlement to treaty benefits.

MANNER OF GRANTING AND DENYING TREATY BENEFITS
New TTRAs must be processed within four months from the submission of complete documents or as soon as practicable provided that the ITAD has addressed all its backlogs.

If the BIR determines that the withholding tax rate applied is lower than the rate that should have been applied on an item of income pursuant to tax treaties or that the nonresident taxpayer is not entitled to tax treaty benefits, the BIR will issue a ruling denying the request for confirmation or TTRA. Consequently, the withholding agent is to pay the deficiency tax plus penalties.

All adverse rulings, however, can be appealed to the Department of Finance (DoF) within 30 days from receipt.

On the contrary, if the withholding tax rate applied is proper or higher than the rate that should have been applied, the BIR will issue a certificate duly signed by the Assistant Commissioner for Legal Service confirming the nonresident income recipient’s entitlement to treaty benefits. In the case of higher rate, the taxpayer may apply for a refund of excess withholding tax within the two-year prescriptive period.

HOW TO FILE A CLAIM FOR REFUND?
The nonresident taxpayer claiming refund must accomplish and file BIR Form 1913 together with a letter-request. The claim can be filed independently or simultaneously with the TTRA. For an independently filed claim, the office where it was filed is to coordinate with and refer to ITAD the resolution of the nonresident’s entitlement to treaty benefits. However, for claims simultaneously filed with the TTRA, it is the responsibility of the ITAD to endorse such claims for refund to the proper office handling tax refunds. Nonetheless, all claims for refund must be filed within the two-year prescriptive period.

STATUS OF EXISTING TTRAS
Taxpayers with pending TTRAs for income earned in 2020 and prior years, including those with Notice of Archiving, are given three months from the receipt of a Final Notice to Submit Additional Documents (Final Notice), or from the effectivity of the Order, whichever is later, to submit needed documents. Taxpayers who were issued a Notice of Archiving will no longer receive a Final Notice. Failure to submit the requested documents will result in the automatic denial of the TTRA.

CLINCHER
Notwithstanding efforts of the BIR to streamline processes, taxpayers may still find the documentation requirements for tax treaty relief application tedious. While the BIR has acknowledged the slow disposition of TTRAs because of the volume of backlogs, the limited number of personnel who are responsible for evaluating and processing TTRAs, and the need for a thorough study and evaluation of facts, taxpayers and foreign investors are hopeful that the revised guidelines will, in the long term, help promote ease of doing business in the Philippines.

Let’s Talk Tax is a weekly newspaper column of P&A Grant Thornton that aims to keep the public informed of various developments in taxation. This article is not intended to be a substitute for competent professional advice.

 

Grace L. Turqueza is an associate from the Tax Advisory & Compliance division of P&A Grant Thornton, the Philippine member firm of Grant Thornton International Ltd.

pagrantthornton@ph.gt.com

Owning up to policy failure: Why does it matter?

MINDANDI-FREEPIK

The Philippines, on Easter Sunday, reported an additional 11,028 new COVID-19 infections, and a high positivity rate of more than 20%. This, after a year of being under various forms of “lockdown,” one of the longest sustained community quarantines in the world. It is not surprising therefore, that dissatisfaction over how the government has handled the pandemic is growing. In fact, many have claimed that the policy of handling the pandemic in the country has failed.

What do we mean by failure?

Understanding policy failure is not as straightforward as one might think. Public policies are complex and so are the factors that affect their implementation — which serve as lampposts to whether it is considered a success or failure. In the classic book Why policies succeed or fail, written by Ingam and Mann in 1980, they cite several reasons why a policy is considered a failure — such as the incompleteness of information at the time a decision was made, the changing circumstances across the time in which the policy is implemented, and the inability to think of the interconnectedness of policies (and therefore, designing something that is narrow and short-sighted).

And then there are failures that are brought about by factors that are structural — such as when the causal theory (i.e., what causes “Y”) upon which policies are based is not sound, and when political institutions break down.

The former refers to the extent upon which policymakers consider and use accurate and reliable evidence to inform their decisions. The latter, on the other hand, is the magnitude by which political power has taken hostage the way policies are made. In both situations, policy failures are not just the result of the limitation of information, technology, or even cognition; but it is a product of our ailing political institutions and systems which affect our political processes including policymaking.

FAILURE IN A TIME OF CRISIS
Another important dimension in understanding policy failure is the notion of policymaking in a time of crisis. In a comparative case study of policy making, Grindle and Thomas wrote in 1991 that during such situations, policy decisions of governments in a less stable political environment are often swayed by external pressures. Particularly, decisions are based on how it can maintain regime legitimacy and, at the same time, continue accessing much needed international support such as loans. These are deemed more essential than technical and bureaucratic considerations of the policy.

If we extend this analysis to our current situation, it makes sense that our policies concerning the containment of the pandemic were those that tend to increase the symbolic representation of government being in control as well as favoring certain international relations in the hope of gaining much needed vaccines. When policy goals are muddled with political ones, it is therefore expected that the policy chain become weak and disorganized, making street-level bureaucrats — the frontliners among policy implementers — either more confused because the goals are not clear, or more “powerful” because unclear goals have inadvertently given them the discretion to take matters into their own hands.

FAILURE AS A LEARNING OPPORTUNITY
The profound impact of policy failures on the lives of ordinary Filipinos cannot be encapsulated in statistics and numbers. Behind every survivor and victim of the COVID-19 virus is a complex and often heartbreaking narrative. Not to mention the unintended consequences of the pandemic such as the impact the lockdown will have on an entire generation of children whose education has been altered significantly.

There is no policy that is perfect; therefore, they do indeed fail. But for failure to matter, it should be seen as a learning opportunity. All policy failures should induce policy change through a learning process — we often call this “reform.” Chris Agyris’ work on Organizational Learning is useful at this point.

Like human beings, an organization can learn, too and it does so in two ways.

First, in knowing what does not work, it is able to make the necessary adjustments and improve the policy tool (i.e., single loop learning). An example of this would be the development of a real-time unified data system that can direct patients of the nearest vacant COVID-19 facility that can care for them based on their current condition or symptoms. This kind of learning aims to address the failures brought about by the current decentralized and disconnected network of information about the holding capacities of our health facilities — something very important to patients to have access to at the onset of sickness.

Second, an organization can also learn from failure by rethinking the fundamental assumptions and values that support the logic of the policy (i.e., double loop learning). The policy of hard lockdown, for example, is hinged on the assumption that preventing people from moving too much can control the spread of infection. But this ignores new evidence that suggests infection within households has not been properly accounted — something that should’ve been done at the onset of the pandemic. Therefore the rise in infection cases a year after lockdown should have been expected given that we have not focused on how many are infected and where exactly do these infections occur. Hence, mass testing seems to be the more logical way moving forward, which is a more public health and epidemiological approach, rather than the deployment of heavily armed military men at the boundary of the NCR+ bubble.

WHY ADMITTING TO FAILURE IS IMPORTANT
Perhaps the hesitancy in admitting that policies fail is because of the fact that in doing so, leadership must take the blame. Indeed, when the regime’s legitimacy has always been challenged, the most rational decision will be one that is politically feasible rather than what is scientifically sound.

In schools, we teach our students to embrace failure as this is the greatest of teachers. In life, leadership is not about being right all the time, but it is about learning from one’s mistakes. The point is that unless policymakers acknowledge that there is indeed policy failure, learning cannot take place.

And the soonest they do this, the better. It takes both courage and humility to accept failure, most especially if one’s reputation as a politician and policymaker is at stake.

In the end, a crisis brings out the best and worse in both people and government. The quality of decisions being made are narratives of the ailments of our political institutions and processes. It is, therefore, part of our collective duty as citizens in a democracy to speak about policy failure. Because it is only through the storytelling of failure can the learning process of people, organizations, and institutions begin.

 

Anne Lan K. Candelaria, Ph.D. is the Associate Dean for Graduate Programs of Ateneo de Manila University’s Loyola Schools. She is also an Assistant Professor at the Department of Political Science.

Ill or inutile?

PCOO.GOV.PH

President Rodrigo Duterte did not hold his regular “Talk to the People” address last week.

His spokesperson Harry Roque said last Wednesday that the President’s address was re-scheduled “in light of the rising number of active COVID-19 cases.”

“The physical safety of the President remains our utmost concern. In addition, the preparation for the ‘Talk to the People’ address entails a number of staff complement and we also take due consideration of their well-being,” Roque explained.

In a separate statement, Senator Bong Go said the President’s engagement last week was postponed because several members of the Presidential Security Group (PSG) caught the coronavirus. PSG Head Brig. Gen. Jesus Durante III admitted in a radio interview that there were 45 active COVID-19 cases among his men.

The explanations offered by spokesman Roque and Senator/Personal Aide Go for the President’s failure to address the people last week raised several questions. How can the rising number of active COVID-19 cases threaten the physical safety of the President and of the staff complement that sets up the regular “Talk to the People” address when they are a safe distance from the people the President addresses?

And so what if 45 PSG men caught the coronavirus? As Gen. Durante clarified, most of the infected PSG personnel were those who manned Malacañang gates, not the President’s close-in security detail.

It should also be recalled that in a public address in late December, President Duterte said, “Almost all soldiers have been inoculated. The reason why is that they have to be in good health all the time because they are responsible for the law and order of this country.” Is the vaccine, which the President said was donated by China, administered to the PSG personnel not that efficacious that as many as 45 of them tested positive for COVID-19?

The apparent irrelevance of the explanations offered for the President’s absence from public view by his loyal deputies gave rise to the rumors that he is seriously ill. He was last seen by the public on March 29, when he met with the Inter-Agency Task Force for the Management of Emerging Infectious Diseases (IATF). Among those who attended the meeting was Defense Secretary Delfin Lorenzana, who revealed on April 6 that he tested positive for COVID-19.

People speculate that Secretary Lorenzana could have transmitted the virus to the President. The speculation gained strength when the President’s daughter Sara flew to Singapore, supposedly for personal health management. Management of her own health or management of her father’s medical treatment, people ask? It should be noted that former Senator Bongbong Marcos sought medical care in Singapore when he contracted COVID-19.

But last Thursday, Mr. Roque assured the public that the President remains “fit and healthy” and he continues to discharge his functions as head of the government. Gen. Durante asserted that the President is free from any flu-like symptoms and is in Malacañang working. Mr. Go shared photos of the President seated at a table cluttered with files of documents and newspapers of that day as proof of life. He said, “To those wishing ill of the President, don’t celebrate yet. He is here, inundated with work.” However, netizens immediately reacted by demonstrating on social media how easy it is with the available technology to superimpose elements on a photo without the alteration being discernible.

Granting that the photo presented by Mr. Go as proof of life is authentic, people ask: why is the President alone with Mr. Go when he is supposed to be continuing to discharge his function as head of government? The government is confronted with two crises: the pandemic and the growing aggression of China.

If he is working out a solution to the pandemic, should he not be working with the IATF? If he is addressing the problem of Chinese aggression, should he not be formulating strategy with Foreign Secretary Teddy Boy Locsin, Defense Secretary Lorenzana, and National Security Adviser Hermogenes Esperon, Jr. at least, if not with Armed Forces Chief-of-Staff Cirilito Sobejana, and Chief of the Navy Giovanni Bacordo?

Or, as former Senator Antonio Trillanes IV claimed, the President is not sick, he is just lazy. Last Saturday, Mr. Go, who seems to have also taken the role of Presidential Photographer, posted a video showing the President jogging at night, apparently in Malacañang Park, as proof that the president is fit and not sick.

Some people think that the President has finally come to the realization that he is inutile when it comes to the two issues — the pandemic and foreign policy — and decided to leave the resolution of the issues to his subordinates while he enjoys to the hilt the perks of the presidency.

 

Oscar P. Lagman, Jr. is a retired corporate executive, business consultant, and management professor. He has been a politicized citizen since his college days in the late 1950s.

Primacy of the board of directors in corporate governance

RAWPIXEL.COM-FREEPIK

(Part 5)

Although Section 23 of the old Corporation Code provided for the doctrine of centralized management that vested directly in the Board of Directors all corporate powers, all corporate properties, and all corporate business, nonetheless, the practice was more to the effect that the Board was essentially a policy-determining body, and its was primarily with Management, headed by the President/CEO, by which corporate powers were to be exercised, and on Management’s shoulders by which corporate properties and business were to be managed. It was the old mantra that it was not good business practice for the Board to involve itself in “management prerogatives.”

The position of Chairman of the Board did not even have any statutory basis under the old Corporation Code, as, in fact, the default rule under Section 54 was that it shall be the President — who must be a member of the Board — who shall preside at all meetings of directors or trustees, as well as of the shareholders or members, unless the bylaws provide otherwise. Under Section 53, it was the President who had the power to call a special meeting of the Board.

The original Corporate Governance (CG) Code sought to re-instill the primacy of the Board of Directors in the governance of the corporation, and to emphasize the legal truism that Management and all Senior Officers are appointed by the Board essentially as its agents to handle the day-to-day affairs of the corporation. It provided, under the heading “The Board Governance,” that “The Board of Directors (Board) is primarily responsible for the governance of the corporation. It needs to be structured so that it provides an independent check on Management. It is the Board’s responsibility to foster the long-term success of the corporation and secure its sustained competitiveness in a manner consistent with its fiduciary responsibility, which it should exercise in the best interests of the corporation and its shareholders. …”

The original CG Code also provided, under the heading “Accountability and Audit,” the proper designation of the fiduciary duty of governance to be with the Board of Directors, thus: … The Board is primarily accountable to the shareholders and Management is primarily accountable to the Board. The Board should provide the shareholders with a balanced and understandable assessment of the corporation’s performance, position and prospects on a quarterly basis. The Management should provide all members of the Board with a balanced and understandable account of the corporation’s performance, position and prospects on a monthly basis. …

The same policy framework has been preserved in the CG Code for PLCs, albeit with less dramatic language than that contained in the original CG Code. Thus, under heading of “Establishing a Competent Board,” Principle 1 reads:

The company should be headed by a competent, working Board to foster the long-term success of the corporation, and to sustain its competitiveness and profitability in a manner consistent with its corporate objectives and the long-term best interests of its shareholders and other stakeholders.

Under the heading “Establishing Clear Roles and Responsibilities of the Board,” Principle 2 reads:

The fiduciary roles, responsibilities and accountabilities of the Board as provided under the law, the company’s articles and by-laws, and other legal pronouncements and guidelines should be clearly made known to all directors as well as to shareholders and other stakeholders.

Recommendation 2.2 embodies the primacy of the Board of Directors when it provides that “The Board should oversee the development of and approve the company’s business objectives and strategy, and monitor their implementation, in order to sustain the company’s long-term viability.”

In turn, Recommendation 2.3 provides that “The Board should be headed by a competent and qualified Chairperson.” The Explanation provides for the roles and responsibilities of the Chairperson as the quarterback for the Board in pursuing its primary role in corporate affairs, thus:

a. Makes certain that the meeting agenda focuses on strategic matters, including the overall risk appetite of the corporation, considering the developments in the business and regulatory environments, key governance concerns, and contentious issues that will significantly affect operations;

b. Guarantees that the Board receives accurate, timely, relevant, insightful, concise, and clear information to enable it to make sound decisions;

c. Facilitates discussions on key issues by fostering an environment conducive for constructive debate and leveraging on the skills and expertise of individual directors;

d. Ensures that the Board sufficiently challenges and inquires on reports submitted and representations made by Management;

e. Assures the availability of proper orientation for first-time directors and continuing training opportunities for all directors; and,

f. Makes sure that performance of the Board is evaluated at least once a year and discussed/followed up on.

The Revised Corporation Code (of the Philippines, RCCP) retains under Section 22 the same forceful language of the attribute of centralized management governing the corporate set-up, i.e., that unless otherwise provided in the RCCP, all corporate powers, all corporate properties, and all corporate business are vested directly with the Board of Directors. In turn, Section 23 of the RCCP has introduced a new paragraph to install formally the primacy role of the Board of Directors in pursuing corporate governance in the corporate set-up, thus: “The directors or trustees elected shall perform their duties as prescribed by law, rules of good CG, and bylaws of the corporation.”

The Revised Corporation Code has retained under Section 24 the legal structure that all corporate officers, including the President, are agents of the Board, by maintaining the provision that immediately after their election, the Board must organize itself and elect the President, the Corporate Secretary, the Treasurer, and such other officers as may be provided in the bylaws. The primary CG reform introduced under Section 24 of the RCCP is the amendment of its last paragraph to place into statutory language the duty of obedience that officers owed to both the corporation and its Board of Directors, thus: “The officers shall manage the corporation and perform such duties as may be provided in the bylaws and/or as resolved by the board of directors.”

More importantly, the Revised Corporation Code has, under Section 53, formally recognized the Chairman of the Board as a statutory officer, and placed in such office the prerogatives that were with the President under the old Corporation Code, thus: “The chairman or, in his absence, the president, shall preside at all meetings of the directors or trustees as well as of stockholders of members, unless the bylaws provide otherwise.”

Unfortunately, the RCCP has not pursued the reforms so to the extent of expressly providing that the positions of Chairman and President should not be occupied by the same individual. In addition, there has been a lapse in updating the other provisions of the old Corporation Code that recognized the President as having prerogative in calling special meetings, namely:

SECTION 27: The stockholders’ meeting to be held to remove a member of the Board must still be called by the Corporate Secretary on order of the President;

SECTION 52: Special meetings of the Board may be held at any time upon the call of the President.

There is no doubt that more fine-tuning of the CG provisions of the Revised Corporation Code should be made, which can be expected to happen in jurisprudence as the Supreme Court addresses issues arising from the fiduciary duty of directors and trustees to pursue “good CG,” pursuant to the centerpiece CG principle: “Although the day-to-day management of the corporate business enterprise is with the Management, headed by the President/CEO; nonetheless, Management remains accountable to the Board of Directors, headed by the Chairman, in whom all corporate powers, all corporate properties and all corporate business is directly vested by law, and who are directly accountable to the stockholders and other stakeholders of the corporation.” n

This article reflects the personal opinion of the author and does not reflect the official stand of the Management Association of the Philippines or the MAP.

 

Attorney Cesar L. Villanueva is Chair of MAP Corporate Governance Committee, trustee of the Institute of Corporate Directors, former Chair of Governance Commission for GOCCs (August 2011 to June 2016), Dean of the Ateneo Law School (April 2004 to September 2011), author of the book The Law and Practice in Philippine Corporate Governance and the National Book Board Award-winning Profession, and founding partner of the Villanueva Gabionza & Dy Law Offices.

map@map.org.ph

cvillanueva@vgslaw.com

http://map.org.ph

Aging power plants and economic growth

WHATWOLF-FREEPIK

At the monthly briefing by the Independent Electricity Market Operator of the Philippines (IEMOP) last week, it was shown that while average demand from March 2020 to March 2021 increased by 3.2%, average supply decreased 7.7%, resulting in an increase in average spot electricity prices by 76.4%, P1.80/kwh higher.

The main reason was the series of plant outages, scheduled and unscheduled, in early, middle, and late March. Among the big power plants that experienced outages last March were Sta. Rita (natgas), Ilijan (natgas), GN Power Mariveles (coal), Sual (coal), Pagbilao (coal), Kalayaan (hydro), Magat (hydro), and Makban (geothermal).

One characteristic of the Philippine electricity system is that many big power plants are old, especially hydro, geothermal, and oil plants. Coal plants are generally new except Calaca and it experienced a 10 month shutdown from March 2020 to January 2021.

Also last week, the Department of Energy released the list of existing power plants as of December 2020. It is a long list, so I listed only the big ones, those above 200 MW, in Table 1. Those above 25 years old, which were commissioned in 1996 and earlier, are highlighted in red.

Most power plants using renewable energy sources are new, but they are small. As of 2020, their installed capacity in the Luzon grid are: wind, 283 MW; solar, 312 MW; biomass, 178 MW; small and mini-hydro, 84 MW. They remain marginal electricity producers in the country.

Visayas power is dominated by coal and these plants are mostly new. Geothermal plants in Leyte and Negros are mostly old.

In Mindanao, big hydro still dominates and all the plants are old, more than 30 years old, even 60+ years old like Agus 6. They frequently conked out and Mindanao has experienced frequent “Earth Hours” daily. Things changed from 2016 up to the present with the commissioning of many big coal plants and Mindanao said goodbye to frequent blackouts and experienced having a power surplus, no blackouts and cheap electricity for the first time in many decades (see Table 2).

Coal power continues to be demonized but it is actually the workhorse of the Philippines power infrastructure. In the Luzon-Visayas grids for instance, coal produced 54% of total power generated in February-March 2021, followed by natural gas at 24%, geothermal at 11%, and hydro at 6%. The combined output of biomass, solar, and wind is only 5% of the total. The data comes from IEMOP.

In 2020, the Philippines was the worst performing economy in Asia with a GDP contraction of 9.6%. It was also the third worst performing economy among the top 40 largest economies in the world. To help in fast economic recovery, cheap and stable electricity is needed. The government’s new adverse policies against coal should stop and be reversed, otherwise expensive and unstable power will endanger our aspirations of high and sustained growth.

 

Bienvenido S. Oplas, Jr. is the president of Minimal Government Thinkers

minimalgovernment@gmail.com

Myanmar braces for worst economic crisis

FLOWERS hang during a nationwide flower campaign against the military coup in Yangon, Myanmar, April 2, 2021. — REUTERS

WITH a tea shop right next to key protest zones in Myanmar’s biggest city, Soe is never quite sure whether he should keep the business open.

If protesters enter to evade authorities, the 43-year-old risks getting shot, arrested or having his property destroyed as the military and police hunt them down. But if he turns away fleeing demonstrators, he may face a backlash on Facebook and a boycott of his tea shop, among hundreds in Yangon that have long served as de facto community centers.

“Now we can’t open our shop on a daily basis but we have to pay regular rental fees, municipal fees, labor wages,” said Mr. Soe, using only his first name because of concerns for his personal safety. “Many tea shop owners in Yangon are not sure how long they’ll be able to survive if this crisis continues.”

Small businesses like Mr. Soe’s are on the front lines of an economy now seemingly in free fall after a group of generals seized power on Feb. 1. The junta has killed at least 614 civilians since then, driving away foreign investors as Western nations put on new sanctions. Their opponents in the Civil Disobedience Movement, meanwhile, are pushing to tank the economy to deprive the military of financial resources.

Shipping lines have suspended operations as truck drivers strike, leaving cargo containers trapped at the ports. Restrictions on cash withdrawals have businesses struggling to pay employees. The military has restricted internet access, making it harder to reach customers. And thousands of civil servants aligned with the protesters are refusing to work, leaving areas with limited public services.

Altogether it amounts to a speedy erosion of the economic gains Myanmar reaped after investors rushed in a decade ago following a shift toward democracy. An economy that averaged growth rates of more than 6% over the past 10 years — more than doubling gross domestic product (GDP) — is now projected by the World Bank to shrink 10% in 2021, by far the worst in Asia as countries rebound from a pandemic-induced slump.

“We are deeply concerned,” Aaditya Mattoo, the World Bank’s chief economist for Asia, said in an interview. “A 10% contraction in growth for a poor country seems to me a disaster enough already. And when I add to it all the other costs, which have an impact on long term growth, I think we have a pretty dismal scenario.”

Some analysts are expecting things to get even worse: Fitch Solutions is projecting a “conservative” 20% contraction for the 2020-21 fiscal year. It said this month the rising death toll combined with increased social instability means “all areas of GDP by expenditure are set to collapse.”

GRIM TIDINGS
“There is no worst-case scenario in the economy which we can rule out,” Fitch said.

At the moment in Yangon, there’s still no sign of a humanitarian crisis. Supermarkets, convenience stories and small shops still have plenty of food, and prices of rice and other staples are relatively stable. But signs of distress are popping up, like long queues outside banks and ATMs after some banks capped daily withdrawals from ATMs at 200,000 kyat ($135). Demand for gold and US dollars is rising.

“We understand that only 10% of the total number of branches in Myanmar have reopened, and we are aware of the difficulties to withdraw cash at ATMs,” junta spokesman Major General Zaw Min Tun said on Friday at a news briefing.

The junta is vowing to ride out the storm. Aung Naing Oo, the regime’s investment minister, said last month the government expects to see a “slight impact” on foreign investment.

But even business elites in Myanmar aren’t convinced that this is merely a temporary blip.

“No one can predict how long it will take to get back to normal,” said Maung Maung Lay, senior vice president of the Union of Myanmar Federation of Chamber of Commerce and Industry. “Frankly speaking, the future of our economy is now uncertain.”

Western investors have largely shunned Myanmar since allegations surfaced in 2017 of genocide against minority Rohingya Muslims, prompting the government to focus on attracting capital from Asian countries like Singapore and China. But even though China blocked the United Nations Security Council from imposing sanctions after the coup, it remains wary of supporting Myanmar’s generals — particularly after several Chinese-owned factories were torched amid the protests.

“Beijing’s displeasure with the coup and its aftermath, and the attacks on its businesses, mean that neither the Chinese state nor many Chinese companies are likely to rush to invest,” the Brussels-based International Crisis Group said in a report this month.

That doesn’t leave the junta many places to turn to revive growth. Myanmar’s purchasing managers index last month fell further to a record low 27.5, according to IHS Markit data — well below the 48.9 average since the series began in December 2015 for a measure in which 50 is the dividing line between respondents seeing an expansion and contraction in demand.

“The generals had a big miscalculation in going through with the coup,” said Moe Thuzar, a fellow at Singapore’s ISEAS-Yusof Ishak Institute. “They wanted to project a more business-friendly attitude — and thought this is where they could have an edge over the National League for Democracy government — and it backfired big time.”

Now the question is just how bad things might get. The World Bank last month warned of a “sharp increase in poverty,” while the United Nations World Food Programme said the crisis “will severely undermine the ability of the poorest and most vulnerable to put enough food on the family table.”

The situation on the ground is likely to turn into a “withering stalemate” as the army seeks to take control of the streets while the civil disobedience campaign keeps much of the country ungovernable, according to Thant Myint U, author of “The Hidden History of Burma: Race, Capitalism, and the Crisis of Democracy in the 21st Century.”

“The economy will collapse, destroying the lives of millions of people,” he said. “Whatever happens afterward it will be impossible for Myanmar to recover for many years.” — Bloomberg

China considers mixing COVID-19 vaccines to boost protection rate

PHILIPPINE STAR/ MICHAEL VARCAS
CHINA has shipped millions of vaccines by Sinovac Biotech around the world. — PHILIPPINE STAR/ MICHAEL VARCAS

BEIJING — China’s top disease control official has said the country is formally considering mixing COVID-19 vaccines as a way of further boosting vaccine efficacy.

Available data shows Chinese vaccines lag behind others including Pfizer and Moderna in terms of efficacy, but require less stringent temperature controls during storage.

Giving people doses of different vaccines is one way to improve vaccines that “don’t have very high rates of protection,” Gao Fu, the director of the Chinese Centers for Disease Control and Prevention (CDC), said on Saturday, without specifying whether he was referring to foreign or domestic vaccines

“Inoculation using vaccines of different technical lines is being considered,” Mr. Gao told a conference in the Chinese city of Chengdu.

Mr. Gao said that taking steps to “optimize” the vaccine process including changing the number of doses and the length of time between doses was a “definite” solution to efficacy issues.

Two injections of a vaccine developed by China’s Sinovac Biotech, when given shorter than three weeks apart, was 49.1% effective based on data from a Phase III trial in Brazil, below the 50% threshold set by World Health Organization (WHO), according to a paper published by Brazilian researchers on Sunday ahead of peer review.

But data from a small subgroup showed that the efficacy rate increased to 62.3% when the doses were given at intervals of three weeks and longer. The overall efficacy rate for the vaccine was slightly above 50% in the trial.

China has developed four domestic vaccines approved for public use and a fifth for smaller-scale emergency use. An official said on Saturday that the country will likely produce 3 billion doses by the end of the year.

No detailed efficacy data has been released on vaccines made by China’s Sinopharm. It has said two vaccines developed by its units are 79.4% and 72.5% effective respectively, based on interim results.

Both vaccine makers have presented data on their COVID-19 vaccines indicating levels of efficacy in line with those required by WHO, a WHO panel said in March.

China has shipped millions of its vaccines abroad, and officials and state media have fiercely defended the shots while calling into question the safety and logistics capabilities of other vaccines.

“The global vaccine protection rate test data are both high and low,” Mr. Gao told state tabloid Global Times on Sunday.

“How to improve the protection rate of vaccines is a problem that requires global scientists to consider,” Mr. Gao said, adding that mixing vaccines and adjusting immunization methods are solutions that he had proposed.

Mr. Gao also rejected claims by some media reports that he said Chinese COVID-19 vaccines have a low protection rate, telling Global Times that it was “a complete misunderstanding.” — Reuters

History made in Augusta

MASTERS TOURNAMENT FB PAGE
HIDEKI Matsuyama did just enough to hold on at Augusta, Georgia, becoming the first player from Japan to win a men’s major tournament with a one-shot victory at the Masters. — MASTERS TOURNAMENT FB PAGE

Matsuyama wins Masters, first Japanese to bag men’s major

AFTER riding out a four-hour swirl of emotions to finally secure history last Sunday, Hideki Matsuyama lifted his cap and gave a slight bow.

With the hopes of a nation atop his broad shoulders, Matsuyama did just enough to hold on at Augusta, Georgia, becoming the first player from Japan to win a men’s major tournament with a one-shot victory at the Masters.

After heading into the final round with a four-shot lead, the 29-year old picked up his first victory worldwide in four years with a 1-over-par 73 in the final round at Augusta National to finish a steady four days at 10-under 278.

Will Zalatoris, a 24-year-old who is not even a full-time member on the PGA Tour, finished in second place at 9 under after shooting a 2 under 70 on Sunday. Xander Schauffele (72), who faltered late, finished in a third-place tie with 2015 champion Jordan Spieth (70) at 7 under.

“Hopefully, I will be a pioneer in this and many other Japanese [players] will follow,” Matsuyama said through an interpreter on the CBS broadcast as he was about to receive his green jacket inside Butler Cabin from 2020 champion Dustin Johnson. “I’m glad to be able to open the floodgates, hopefully, and many more will be able to follow me.”

His own path on Sunday was bumpy. Matsuyama saw his large early lead trimmed to one. He pushed it back to a commanding six shots early on the back nine then had to ride out a late charge from Schauffele, while hitting a ball into the water at No. 15, in order to don the most famous blazer in sports.

“My nerves didn’t really start on the second nine [holes], it was right from the start today and right to the very last putt,” Matsuyama said.

His victory came 10 years after he first competed at the prestigious event when he finished as the low amateur. His best previous finish at the Masters was a tie for fifth in 2015, while his best previous finish in a major was a runner-up result at the 2017 US Open.

Matsuyama’s lead first was threatened early in his round on Sunday when he bogeyed the first hole, while Zalatoris had birdies at Nos. 1 and 2 to pull within a stroke. The advantage went back to three when Matsuyama had a birdie at No. 2 and Zalatoris had a bogey at the third.

Matsuyama had birdies and Nos. 8 and 9, essentially looking unbeatable when he had a par at Nos. 10 and 11. With the pressure mounting from Schauffele on the back nine, Matsuyama had bogeys at Nos. 12, 15, and 16.

When Schauffele’s late run ended at 16, the San Diego native bit the steel shaft of his club in frustration.

Suddenly leading by two shots over Zalatoris, Matsuyama had a par at 17, put his drive at 18 in the middle of the fairway and made a bogey from the green-side bunker to grab his first major and his first victory of any kind since the WGC Bridgestone Invitational in August of 2017. He became the first international player to win the Masters since Spain’s Sergio Garcia in 2017. — Reuters

Alex Eala climbs further in WTA singles rankings

RAFAELNADALACADEMY.COM
FILIPINO tennis ace Alex Eala is now 662nd in the WTA rankings.— RAFAELNADALACADEMY.COM

AS EXPECTED, Filipino tennis wunderkind Alex Eala saw her ranking in the Women’s Tennis Association (WTA) climb further following a spirited run in the recent W60 tournament in Bellinzona, Switzerland.

The Rafa Nadal Academy scholar is now in 662nd place in the latest WTA rankings released on Monday, an increase of 53 spots from her previous ranking.

The ascent was boosted by Ms. Eala’s impressive run in Bellinzona where she reached the Round of 16. The event was her first-ever $60,000 tournament.

Ms. Eala, a long-time Globe ambassador, opened her bid in the W60 tournament with a hard-earned, three-set win over Margot Yerolymos of France before dominating Laura-Ioana Paar of Romania in the second.

Her run would come to an end in the third round against hometown bet Simona Waltert, but not after making her opponent sweat for three sets (5-7, 6-3, 2-6), which lasted for more than two hours.

For her efforts, her team at the Rafa Nadal Academy lauded her and expressed its full support for the player moving forward.

Ms. Eala’s showing in Bellinzona, where she was a junior exempt as the world’s number three-ranked juniors player, was a continuation of her solid performance as a professional.

She won her first professional singles title at W15 Manacor in Mallorca, Spain, in January then recorded three consecutive quarterfinal appearances in her next three tournaments.

Ms. Eala began the year at no. 1,190 in the WTA, but continued to rise up rapidly in the professional ranks.

TOP 10 PLAYERS
Meanwhile, the ranking of the top 10 players in the world is practically a steady save for the 10th spot.

Australia’s Ashley Barty remained at number one, followed by Japan’s Naomi Osaka and Simona Halep of Romania.

Rounding out the top five are Sofia Kenin of the United States and Elina Svitolina of Ukraine.

Coming at sixth is Elina Andreescu of Canada, followed by Belarusian Aryna Sabalenka, American Serena Williams, and Czech Karolina Plíšková.

Petra Kvitová (10th) of the Czech Republic entered the top 10, replacing Kiki Bertens of The Netherlands. — Michael Angelo S. Murillo

PSC to be locked down for 10 days over coronavirus

JUDGEFLORO
THE Philippine Sports Commission is set for lockdown for disinfection and cleansing after 63 personnel tested positive for the coronavirus in its latest round of testing, the agency announced on Monday. — JUDGEFLORO

THE Philippine Sports Commission (PSC) is set for lockdown after a considerable number of personnel tested positive in its latest round of testing.

In an announcement on Monday, the PSC, after getting the approval of Malacanang, said it will go on a 10-day workday lockdown beginning on Tuesday, April 13, as it implements disinfection and cleansing activities.

Affected will be administrative offices at the Rizal Memorial Sports Complex in Manila and the PhilSports Complex in Pasig City where 63 persons tested positive for the coronavirus.

For the time being, the PSC said, operations will shift to work-from-home arrangements on the lockdown dates to ensure that delivery of service remains unhampered.

“We hope to break the transmission during those days, to arrest the spread of COVID-19 among our employees,” said Chief of Staff Marc Velasco, adding that heads of offices have already been given instructions on the work-from-home setup and expectations.

Despite the positive cases, the PSC assured that it is on top of things, ensuring that safety protocols are in place and constantly reviewed, just as it underscored the safety of everyone is primary.

“It is for their and everyone’s safety. We all have a family to protect,” said PSC Executive Director Atty. Guillermo Iroy, Jr.

Before deciding on the lockdown, the PSC made sure to seek the approval of Malacanang, through Executive Secretary Salvador Medialdea, pursuant to Memorandum Circular 85 issued on March 19, requiring government agencies to seek approval from the Office of the President before any lockdown is implemented. — Michael Angelo S. Murillo

Ancajas, Magsayo did well in latest fights, says analyst

MARK Magsayo had it solid in his last fight, a local fight analyst said, and his push forward should benefit from it. — @MARKMAGSAYO_MMM

By Michael Angelo S. Murillo, Senior Reporter

TOP Filipino boxers Jerwin “Pretty Boy” Ancajas and Mark “Magnifico” Magsayo gave the country twin victories in their fights at the weekend; performances that had one local fight analyst going away impressed.

Part of Showtime Boxing’s offering at the Mohegan Sun Arena in Uncasville, Connecticut on Sunday (Manila time), Messrs. Ancajas and Magsayo were dominant in their respective bouts and churned out convincing victories.

Davao del Norte native Ancajas was a unanimous decision winner over Mexican Jonathan Javier Rodriguez and retained his International Boxing Federation (IBF) super flyweight title. Boholano Magsayo, for his part, beat American Pablo Cruz by way of a fourth-round technical knockout.

The wins came after the Filipino fighters worked their way through the limitations and challenges presented by the pandemic, and in the case of IBF champ Ancajas, a long wait that lasted for over a year.

In an interview with BusinessWorld following Sunday’s bouts, fight analyst Nissi Icasiano shared that Messrs. Ancajas and Magsayo had it solid and should see their push forward benefitting from it.

“What surprised me in this particular fight of Jerwin Ancajas was the way he fought. Usually, Jerwin takes a methodical approach, breaking down his opponent brick by brick in every round before fishing for the finish once he sees his opponent is ripe for the picking. In this fight, he stood toe-to-toe and traded hard blows in the pocket,” said Mr. Icasiano of Mr. Ancajas, who recently signed with Al Haymon’s Premier Boxing Champions (PBC) after years of being with Top Rank of Bob Arum.

“In my opinion, he and his team took a different route to make an impression. It’s his first fight under the PBC banner and it’s his first fight in more than a year. Plus, it was aired on Showtime. It’s a big risk, but I am glad it paid dividends in the end. It’s not an approach that I would recommend for Jerwin, but if the intent was to put the entire division on notice and open the doorway to fight the other champions at 115 pounds, he did accomplish that in the fight. On the flipside, PBC saw their ROI (return-on-investment) in Jerwin,” he added.

Presenting the perfect foil for Houston fighter Cruz, Mr. Icasiano said he was not totally surprised that Mr. Magsayo dominated the way he did.

“For Magsayo, I already knew the style of his opponent would favor him in the fight. The result of bout didn’t come as a surprise.”

The analyst went on to underscore that credit should also be given for both fighters’ teams for preparing their wards well amid the prevailing conditions with the pandemic.

After fighting last year, Mr. Magsayo (22-0) stayed in the United States to train under Freddie Roach and Justin Fortune while Mr. Ancajas (32-2) was in the US since last year, training with Olympic-bound Eumir Felix Marcial and Jonas Sultan and under the watch of coach Joven Jimenez.

So what is next for the two fighters?

“For Magsayo, it most likely puts him in a title eliminator next. Magsayo is in the Top 10 of four governing bodies, but he ranks higher in the IBF. I think No. 5 if I am not mistaken. So a battle for a possible title shot in the future may be on the horizon,” said Mr. Icasiano of featherweight Magsayo, who with his latest victory won his second fight under Manny Pacquiao’s MP Promotions with whom he signed with last year.

The case of Mr. Ancajas is trickier, the analyst said, given the limited fighters in his division under the PBC roster. But after winning his fight, the IBF champ should earn consideration for more top-class fights. Mr. Icasiano, too, said moving up in division is not a bad move for the Filipino fighter.

“Jerwin is in a tricky situation. The only two 115-pounders I know on the PBC roster at the moment are Angel Barrientes and Koki Kameda. The division is obviously shallow. If he moves to 118, Jerwin will get more competitive matchups under the PBC banner,” the analyst said.

“Right now, I don’t see Jerwin fighting in a unification title fight against either Chocolatito (Nicaraguan Roman Gonzalez) or [Mexican Juan Francisco] Estrada unless Al Haymon will pull some strings to make it happen. But the most feasible fight to make if they wish to see a champion vs. champion at 115 pounds is against Kazuto Ioka.”

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