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Thailand risks first double-dip recession since 1998 crisis

REUTERS

THAILAND will likely be the worst economic performer in Southeast Asia this year, with economists continuing to slash the country’s growth forecast amid surging COVID-19 infections, mounting political tensions and fading hopes for a tourism revival.

Gross domestic product (GDP) is expected to grow 1.8% this year, according to the latest weighted average of 36 economists surveyed by Bloomberg. That’s particularly weak considering it’s a comparison to last year, when the Thai economy contracted 6.1%, the most in more than two decades.

In the latest sign of pessimism, the Ministry of Finance on Thursday cut its 2021 GDP growth forecast to 1.3% from 2.3% in April. With new COVID infections and deaths continually breaking records since the latest surge began in April, some economists are flagging the possibility of a technical recession in the second half of the year — or even a second straight annual contraction, something the country hasn’t suffered since the Asian Financial Crisis more than two decades ago.

“We see Thailand as a laggard in the region, penciling in the lowest GDP growth forecasts in Asean for both 2021 and 2022,” said Charnon Boonnuch, an economist at Nomura Holdings, Inc. in Singapore. “Our forecast implies economic output will not return to pre-Covid levels before the third quarter of 2022, the slowest in Asean, partly reflecting the high dependence on foreign tourists.”

Bangkok and 12 other provinces, which account for more than half of Thailand’s economy, have been under lockdown and curfew since last week as the delta variant threatens to overwhelm the country’s public health system. The Bank of Thailand has said the outbreak could shave as much as two percentage points off GDP this year if current measures fail to quell it and the pandemic endures for the rest of the year.

The Thai baht has weakened 8.9% year to date, the worst performer among Asian currencies tracked by Bloomberg. The local currency was little changed at 32.871 to the dollar as of 11:25 a.m. local time, after the finance ministry released its economic outlooks, including forecasting the baht to average 31.48 per dollar this year

Thailand reported 17,669 new infections and 165 deaths on Thursday, both are highest single-day increase since the pandemic began. The nation’s cumulative cases jumped to 561,030, of which 95% have come since the latest wave began in April, official data show. The Health Ministry says the current wave should begin easing by October.

Thailand has administered about 16 million vaccine doses, enough to cover about 11% of the population, according to the Bloomberg Covid-19 Vaccine Tracker. The central bank, which previously expected herd immunity to be achieved in the first half of next year, now says that milestone won’t be reached until after 2022.

WORST WAVE
“There’s now increasing chatter that the Thai economy will contract again this year,” said Maria Lapiz, managing director of Maybank Kim Eng Securities Thailand. “There’s no reason for optimism.”

The economic and health crises coincide with a rise in political unrest. The pro-democracy movement has returned to the streets in Bangkok after a six-month lull, with near-daily gatherings organized by different groups since June 24.

“We are in a severe crisis and our health system is on the brink of collapse,” said Burin Adulwattana, chief economist at Bangkok Bank Pcl. “The compensation program is inadequate. More and more people are losing faith with the government, which led some of them to take to the streets. This can undermine the government’s stability and further damage confidence.”

Prime Minister Prayuth Chan-Ocha aims to allow more foreign arrivals from October, but infections are already rising in Phuket, a resort island that began a quarantine-free program for vaccinated tourists in July. That could threaten the goal of rescuing the tourism industry, which contributed one-fifth of Thailand’s economy before the pandemic and employed about 20% of its workforce.

The government planned a 1 trillion baht ($30.4 billion) borrowing program last year to combat the pandemic and added another 500 billion baht this year amid the recent wave of infections. The Cabinet approved a further budget of as much as 30 billion baht in mid-July to compensate businesses and workers affected by the latest restrictions.

The economy’s two remaining engines — government spending and exports — also face uncertainties. June exports rose 43.8% from the same period last year, the fastest pace in 11 years, in line with recovering global demand. Yet this growth driver may also be at risk if vaccination remains slow, an industry group warned.

“It’s hard to hang on to the hope that the country will re-open in October,” Maybank’s Lapiz said, “or whether this re-opening — if it does happen — will make a big difference.” — Bloomberg

Australia’s Sydney posts record daily rise in COVID-19 cases, seeks military help

SYDNEY, July 29 (Reuters) – Australia’s biggest city Sydney posted a record one-day rise in local COVID-19 cases on Thursday and warned the outbreak would get worse, as authorities sought military help to enforce a lockdown of 6 million people poised to enter its sixth week.

Australia has struggled to contain an outbreak of the highly infectious Delta variant in and around Sydney in recent weeks, which threatens to push the country’s A$2 trillion ($1.5 trillion) economy into its second recession in as many years.

Despite an extended lockdown of Sydney, the state capital, New South Wales recorded 239 locally acquired cases in the past 24 hours, the biggest daily rise since the pandemic begun.

“We can only assume that things are likely to get worse before they get better given the quantity of people infectious in the community,” New South Wales Premier Gladys Berejiklian told reporters in Sydney.

Ms. Berejiklian said one more person had died from COVID-19, taking the death toll from the current outbreak to 13 and the overall national total to 921.

With little sign that recent restrictions are reducing case numbers, Ms. Berejiklian said new curbs would be imposed on the southwestern and western areas of Sydney where the majority of COVID-19 cases are being found.

More than two million residents in eight Sydney hotspots will now be forced to wear masks outdoors and must stay within 5 km (3 miles) of their homes.

With even tighter restrictions set to begin on Friday, New South Wales Police said it had asked for 300 military personnel to help enforce lockdown orders.

“With an increase in enforcement activity over the coming week, I have now made a formal request to the prime minister for (Australian Defence Force) personnel to assist with that operation,” New South Wales Police Commissioner Mick Fuller said in an emailed statement.

It was not clear what the military personnel would be doing if deployed, but neighbouring Victoria state used a similar number of troops to assist with running testing centres and checking to see whether people under strict stay at home orders were abiding by the requests.

Representatives for Australia’s Prime Minister Scott Morrison and Minister for Defence Peter Dutton did not immediately respond to requests for comment.

Ms. Berejiklian on Wednesday extended the Sydney lockdown by another month, but allowed the majority of construction projects to resume as long as workers do not come into contact with residents.

The restrictions are likely to take a heavy economic toll, with New South Wales accounting for more than a third of Australia’s economy.

Federal Treasurer Josh Frydenberg said he expected the national economy to shrink in the September quarter but the ability to avoid a technical recession would depend on whether New South Wales can avoid a longer lockdown.

“With respect to the December quarter, that does depend to a large extent how successful New South Wales, our largest state economy, is in getting on top of this virus,” Frydenberg told the Australian Broadcasting Corp.

Ms. Berejiklian has said restrictions need to remain as too few people in Sydney are vaccinated amid tight supplies of Pfizer vaccines, which Canberra had hoped to inoculate everyone under 60 years old.

All adults in Sydney have now been urged to seek an AstraZeneca vaccine. But citing rare blood clots, many are reluctant and would prefer to wait several months when Australia is expected to receive additional Pfizer supplies.

Only about 17% of people above 16 years fully vaccinated in New South Wales.

More than 2,800 cases have been detected so far, with 182 people hospitalised. Fifty-four are in intensive care, 22 of whom require ventilation. Two new deaths were recorded, taking the total number of deaths in the latest outbreak to 13.

The outbreak in Sydney leaves many with little to do but watch the Olympics, and Australian athletes said they hoped they could provide a little bit of joy with their performances.

“Just extremely grateful and happy that we maybe sparked some joy in some people’s living rooms or something for people to celebrate in the time of lockdown,” Spencer Turrin, Australian Rower and Gold Medallist in the Men’s Four at the Tokyo 2020 Olympics told reporters in Tokyo. – Reuters

Pentagon chief in Vietnam to advance ties but rights concerns linger

HANOI – U.S. Defense Secretary Lloyd Austin sought on Thursday to nudge forward security ties with Vietnam that have been slowly deepening as both countries watch China’s activities in the South China Sea with growing alarm.

Despite closer military relations, more than four decades after the Vietnam War ended in 1975, President Joe Biden’s administration has said there are limits to the relationship until Hanoi makes progress on human rights.

Vietnam has emerged as the most vocal opponent of China’s territorial claims in the South China Sea and has received U.S. military hardware, including coastguard cutters.

Before a meeting with his Vietnamese counterpart in Hanoi, Mr. Austin said the United States did not ask Vietnam to choose between countries.

“One of our central goals is ensuring that our allies and partners have the freedom and the space to chart their own futures,” Mr. Austin said.

He did not mention China but there is a perception in Asia that China is making countries chose between it and the United States, as tension rises between those two big powers.

On Wednesday, a U.S. Navy warship carried out a transit through the Taiwan Strait. While such operations are routine, they usually anger Beijing.

“(Vietnam) wants to know that the U.S. is going to remain engaged militarily, it’s going to continue its presence in the South China Sea,” said Greg Poling, with the Center for Strategic and International Studies.

The two sides signed a “memorandum of understanding” for Harvard and Texas Tech University to create a database that would help Vietnamese search for those missing from the war.

 

LIMITS

On Sunday, the United States shipped 3 million doses of the Moderna COVID-19 vaccine to Vietnam, raising the amount given by the United States, via the global COVAX vaccine scheme, to 5 million doses.

Poling said there was a limit to how fast and far the Vietnamese were comfortable with deepening ties.

Experts say there are lingering concerns in Vietnam about Biden’s predecessor, Donald Trump, withdrawing from the Trans Pacific Partnership trade pact in 2017.

There are also limits to how far the United States is willing to deepen relations before Vietnam improves its human rights record.

Vietnam has undergone sweeping economic reforms and social change in recent decades, but the ruling Communist Party retains a tight grip over media and tolerates little dissent.

In Singapore on Tuesday, Mr. Austin said the United States would always lead with its values.

“We will discuss those values with our friends and allies everywhere we go and we don’t make any bones about that,” Mr. Austin said.

This month, Marc Knapper, Biden’s nominee to be the next U.S. ambassador to Vietnam vowed to boost security ties but said they could only reach their full potential if Hanoi made significant progress on human rights.

In a meeting with Mr. Austin on Thursday morning, Vietnamese President Nguyen Xuan Phuc said he was looking forward to an upcoming visit to Vietnam by U.S. Vice President Kamala Harris.

Harris could travel to Vietnam and Singapore in August, a source familiar with the matter told Reuters on Monday. – Reuters

Say goodbye to falling in line as GCash expands to 600 billers nationwide

The time to be rushing to fall in line and waiting to be able to pay your bill is now behind us. GCash, the country’s leading mobile wallet, has made it possible for its users to easily pay online in just a few taps through their mobile devices.

Even better, GCash has now expanded its network to more than 600 partner billers nationwide, giving users easy access to more utilities, government, loan payments, insurance, real estate, and even school payment transactions. The e-wallet leader shared that it continues to establish partnerships and expand its network to deliver convenience to its users while supporting MSMEs and companies in their businesses during these challenging times.

“With the expansion of our biller network, we are enabling more Filipinos to have access to convenient financial services such as paying for their essentials, utilities, credit cards, insurance telecoms, transportation, and a lot more. Our goal is to continuously add to the pool of billers, and be able to cover more needs of our users,” said Martha Sazon, GCash President and Chief Executive Officer.

Currently, GCash is in partnership with a number of key billers that many Filipinos are availing of their services such as Meralco, Meralco Kuryente Load, Maynilad, and Manila Water. GCash also covers electronic payments for telecommunications billers, such as Globe Postpaid, and government billers namely Pag-IBIG, BIR, NBI and SSS-PRN.

With the growing demand, the app has now added to their list of billers for different categories. For loans specifically, GCash includes AppendPay, Billease, Unionbank Quickloans, City Savings Bank, and Malayan Bank. Paying for insurance is also hassle-free with these billers: Singlife, Generali and Standard Insurance. The biller network also includes schools, such as International School Manila, STI Education Services Group, Inc, Manuel L. Quezon University and PHINMA University. While for real estate, SMDC is now part of the roster of billers — not missing to grab any opportunity to tap partners that are beneficial for the needs of GCash users.

More than just billers in the greater metro, GCash has also expanded with new regional billers in its network. For utilities, these include TEI, TARELCO1, Calbayog Water, South Luzon Water, Calumpit Water, Metro Cotabato Water, Bicol One Broadband Services, SAMELCO, Metro Iloilo Water, Metro Roxas Water District. The app also tapped several education sectors, namely Bataan State University, Bulacan State University, Malayan Colleges Mindanao, University of Mindanao, and Unibersidad de Zamboanga. Cooperatives in the regions are easily accessible on GCash too with Benguet Cooperative, Sorosoro Ibaba Development Cooperative, Holy Cross Savings and Credit Cooperative, San Jose Del Monte Savings and Credit Cooperative, CEBU CFI COOP now included on the list. Furthermore, some local government units have also joined GCash’s biller network including the Province of Bataan, Paranaque City, Manila City, Cauayan City, Lapu-Lapu City, Balanga City, Batangas City.

Customers can easily pay their bills digitally through GCash by simply downloading the GCash app from Google Play or App Store on your mobile phone. Register your phone number and set-up a 4-digit PIN. From the dashboard, click the “Pay Bill” option. Pick from the list of bill categories you need to pay for, such as cable/internet bills, and proceed with payment.

With GCash’s 600 billers nationwide, more GCash users and businesses can have secure and seamless transactions. For more information, visit www.gcash.com.

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Biden to ask federal workers to get vaccinated or face testing – source

WASHINGTON – U.S. President Joe Biden is expected to announce on Thursday that all civilian federal workers will need to be vaccinated against the coronavirus or face regular testing, social distancing, mask requirements and travel limits, a source familiar with the matter said.

Mr. Biden, who will deliver remarks on COVID-19 at the White House at 4 p.m. (2000 GMT) on Thursday, will not mandate vaccines for federal employees and those who decide against getting a vaccine will not be at risk of being fired, the source said.

The United States has about 2.18 million civilian employees and another 570,000 people work for the U.S. Postal Service (USPS), according to 2020 data. It is not clear if Biden plans to apply the requirement to the postal service or to contractors who work for the federal government.

CNN first reported Mr. Biden’s plan late on Tuesday.

Some states and New York City have announced similar requirements, said the source, who declined to be identified.

For example, New York Governor Andrew Cuomo said on Wednesday that state employees will be required to be vaccinated or get tested weekly.

The U.S. Department of Veterans Affairs on Monday mandated that its doctors and other medical staff get COVID-19 vaccines, becoming the first federal agency to impose such a requirement.

The VA comprises the largest U.S. healthcare system, employing more than 367,200 full-time healthcare professionals and support staff at 1,293 facilities, according to its website.

On Tuesday, Mr. Biden said his administration was considering the requirement for federal employees.

Numerous U.S. agencies on Wednesday mandated masks at federal buildings in COVID-19 hot spots in line with instructions issued by the White House Office of Management and Budget (OMB), according to an OMB email seen by Reuters.

The Defense Department said late Wednesday that the masking requirements would apply to the Pentagon.

The White House also said masks are required indoors in federal buildings for all employees and visitors, whether or not they are vaccinated, in those areas experiencing sharp increases in infections.

On Wednesday, the Centers for Disease Control and Prevention (CDC) said nearly 67% of U.S. counties were at substantial or high transmission rates, up from 63.4% on Tuesday.

The federal government is racing to contain the pandemic in the hope of avoiding nationwide shutdowns, as the virulent Delta variant of the coronavirus blazes through parts of the United States and immunizations lag.

AFL-CIO President Richard Trumka told C-SPAN that the union supports vaccine mandates.

“If you come back in and you are not vaccinated, everybody in that workplace is jeopardized,” Mr. Trumka said Tuesday.

The American Postal Workers Union (APWU) said it opposes a vaccine mandate for federal employees and expressed concern about Mr. Biden’s expected announcement.

“While the APWU leadership continues to encourage postal workers to voluntarily get vaccinated, it is not the role of the federal government to mandate vaccinations for the employees we represent,” the group said in a statement.

Fiscal stimulus, vaccines likely fueled U.S. economic growth in the second quarter

WASHINGTON – The U.S. economy likely gained steam in the second quarter, with the pace of growth probably the second fastest in 38 years, as massive government aid and vaccinations against COVID-19 fueled spending on travel-related services.

The anticipated acceleration in gross domestic product last quarter would lift the level of GDP above its peak in the fourth quarter of 2019. Even with the second quarter likely marking the peak in growth this cycle, the economic expansion was expected to remain solid for the remainder of this year.

A resurgence in COVID-19 infections, driven by the Delta variant of the coronavirus, however, poses a risk to the outlook. Higher inflation, if sustained, as well as ongoing supply chain disruptions could also slow the economy. The Commerce Department will publish its snapshot of second-quarter GDP growth on Thursday at 8:30 a.m EDT (1230 GMT).

“Consumers have plenty of income and wealth ammunition to support consumer spending, while business inventories remain lean and restocking efforts are poised to support business investment and overall GDP growth substantially in the second half of the year,” said Sam Bullard, a senior economist at Wells Fargo in Charlotte, North Carolina.

The Federal Reserve on Wednesday kept its overnight benchmark interest rate near zero and left its bond-buying program unchanged. Fed Chair Jerome Powell told reporters that the pandemic’s economic effects continued to diminish, but risks to the outlook remain.

The economy likely grew at an 8.5% annualized rate last quarter, according to a Reuters survey of economists. That would be the second-fastest GDP growth pace since the second quarter of 1983. The economy grew at a 6.4% rate in the first quarter, but that is subject to revision.

With the second-quarter estimate, the government will publish revisions to GDP data. Given that this is not a comprehensive benchmark revision, economists expect only modest changes to previously published estimates.

The National Bureau of Economic Research, the arbiter of U.S. recessions, declared last week that the pandemic downturn, which started in February 2020, ended in April 2020.

Economists expect growth of around 7% this year, which would be the strongest performance since 1984. The International Monetary Fund on Tuesday boosted its growth forecasts for the United States to 7.0% in 2021 and 4.9% in 2022, up 0.6 and 1.4 percentage points respectively, from its forecasts in April.

President Joe Biden’s administration provided $1.9 trillion in pandemic relief in March, sending one-time $1,400 checks to qualified households and extending a $300 unemployment subsidy through early September. That brought the amount of government aid to nearly $6 trillion since the pandemic started in the United States in March 2020.

 

STRONG CONSUMER SPENDING

Nearly half of the population has been vaccinated against COVID-19, allowing Americans to travel, frequent restaurants, attend sporting events and engage in other services-related activities that were curbed early in the pandemic.

The pick-up in services likely boosted consumer spending in the second quarter, with double-digit growth anticipated in the segment that accounts for more than two-thirds of the U.S. economy. While spending on goods remained strong, the pace likely slowed from earlier in the pandemic, when Americans were cooped up at home.

Some of the slowdown in goods spending reflects shortages of motor vehicles and other appliances, whose production has been hampered by tight supplies of semiconductors across the globe. Higher prices, with inflation above the Fed’s 2% target, could also be causing some to postpone purchases.

Though the fiscal boost is fading and COVID-19 cases are rising in states with lower vaccination rates, consumer spending will likely continue to grow.

“Those states also tend to be the ones most resistant to public health measures to combat the pandemic, such as mask mandates and limits on indoor activities,” said Gus Faucher, chief economist at PNC Financial in Pittsburgh, Pennsylvania.

“Thus, the types of widespread restrictions on economic activity seen earlier in the pandemic, and then again in late 2020 and early 2021, are unlikely to be widely reimposed, which will greatly limit the economic fallout from the Delta variant and increasing coronavirus cases.”

Households accumulated at least $2 trillion in excess savings during the pandemic. Record high stock market prices and accelerating home prices are boosting household wealth. Wages are also rising as companies compete for scarce workers.

A separate report from the Labor Department on Thursday is likely to show the labor market recovery gaining traction. According to a Reuters survey, 380,000 people likely filed new claims for unemployment benefits last week.

Initial claims rose to a two-month high in the week ended July 17, but economists blamed the jump on difficulties stripping out seasonal fluctuations from the data.

“The likely temporary rise in initial claims could partly be related to seasonal adjustment issues or a larger reduction in employment in the auto sector around the usual break in summer auto production given supply issues facing the industry,” said Veronica Clark, an economist at Citigroup in New York.

The economy likely received a further boost from business investment, especially on equipment, as companies ramp up production, though spending on nonresidential structures such as mining exploration, shafts and wells probably declined for a seventh straight quarter.

Trade was likely a drag on GDP growth for a fourth straight quarter as strong demand sucked in imports. Expensive building materials and soaring house prices likely weighed on the housing market in the second quarter.

Inventories, which were sharply drawn down in the first quarter, are a wild card. Supply constraints have made it difficult for businesses to replenish stocks. An improvement is, however, expected in the second half as spending shifts further to services from goods. – Reuters

WHO donates nicotine patches to Lung Center

PIXABAY

The World Health Organization (WHO) donated 315,000 nicotine patches to the Lung Center of the Philippines (LCP), making the Philippines the first country in Southeast Asia to receive nicotine replacement therapy (NRT) as part of WHO’s Access Initiative for Quitting Tobacco (AIQT).  

The donation will provide 4,500 high-risk smokers with an eight-week supply of Nicorette InvisiPatch, which prevents cigarette cravings. To be eligible, smokers must meet the following criteria: 20–50 years old; ready to quit; with co-morbidities (except if there are absolute contraindications for use); and/or members of the 4P program, or the conditional cash transfer program of the Department of Social Welfare and Development.  

Eight weeks may be enough time for a smoker to curb the habit, but the period needed to quit will also depend on the number of cigarettes used per day, said Karlo S. Patron, marketing manager of global healthcare company Johnson & Johnson Philippines, Inc., which facilitated the donation.   

“Individuals will have different quit journeys,” Mr. Patron told BusinessWorld in an e-mail interview. “As they go through the weeks of their quit journey, it is important that they get the support they need through counseling and, with the help of NRT, to manage their nicotine withdrawal symptoms.”  

At an event organized by Johnson & Johnson this June, Dr. Joel M. Santiaguel, a pulmonologist and fellow from the Philippine College of Chest Physicians, said that quitting is a multi-modality treatment and is not just about medicines or patches.  

To this end, the donation of the patches will be complemented with support from smoking cessation experts from the recipient hospitals to help manage their physical, social, and mental challenges of quitting smoking.  

 Smokers will be seen by a physician for initial assessment and counseling, LCP’s executive director Dr. Vincent M. Balanag, Jr. said, with follow-up checkups to be customized based on need. In some local government units, barangay health workers or midwives will be requested to do home visitations to validate a smoker’s quit status, and to help identify potential issues.    

 NRT patches will be distributed to other health facilities, including Baguio General Hospital Medical Center, Bataan General Hospital, National Center for Mental Health, and Vicente Sotto Memorial Medical Center in Cebu City.   

 The AIQT aims to help the world’s 1.3 billion smokers with the tools and support they need to quit the habit for good. It is supported by the private sector and led by the WHO, together with the United Nations Interagency Task Force on Non-Communicable Diseases, PATH (formerly known as the Program for Appropriate Technology in Health), and the Coalition for Access to NCD Medicines and Products.  

According to the Global Adult Tobacco Survey 2015, there are 16.5 million smokers in the Philippines. Over three-fourths (or 77%) of them plan on quitting, but only 4% are successful in doing so. This poses a large concern for WHO and the Department of Health, especially with the threat of the coronavirus still affecting the country. Evidence reveals that smokers are more likely than non-smokers to have severe outcomes from COVID-19.  

“Smoking has always been known as a significant risk factor for serious diseases, but its impact has become an even greater worry for us now with the continuing transmission of COVID-19,” said Dr. Rabindra Abeyasinghe, WHO Representative to the Philippines, in a statement. “The NRT patches can boost the existing tools that we have as we support smokers to commit to quit.”  

The Nicorette InvisiPatch cannot be purchased over-the-counter in the Philippines. Its special use was granted by the Philippine Food and Drug Administration following review and approval on the occasion of this donation. — Patricia B. Mirasol 

Cambodia to impose COVID-19 lockdowns in areas bordering Thailand

PHNOM PENH – Cambodia is set to launch a lockdown in eight provinces bordering Thailand from midnight on Thursday, in a bid to prevent the spread of the Delta variant of the coronavirus in the Southeast Asian country.

Prime Minister Hun Sen signed an order late on Wednesday for the lockdown, which bans people from leaving their homes, gathering in groups and conducting business, except for those involved in operating airlines.

“The temporary lockdown… aims to prevent community-based transmission of the new COVID Delta variant,” Hun Sen said in the order posted on Facebook.

Border checkpoints with Thailand will also be closed except to allow for the transport of goods and in emergencies, Hun Sen said, adding the lockdown was due to run until Aug. 12.

The provinces affected are Koh Kong, Pursat, Battambang, Pailin, Banteay Meanchey, Oddar Meanchey, Preah Vihear and Siem Reap.

Cambodia managed to largely contain the virus for most of last year, but an outbreak first detected in late February has driven up total cases to 75,152, with 1,339 deaths.

Neighbouring Thailand has also faced a stubborn outbreak driven by the Delta variant, which was first detected in India, and has repeatedly reported record numbers of daily infections in recent weeks. – Reuters

Pfizer says 2021 COVID-19 vaccine sales to top $33.5 bln, sees need for boosters

Pfizer Inc on Wednesday raised its 2021 sales forecast for its COVID-19 vaccine by 29% to $33.5 billion, and said it believes people will need a third dose of the shot developed with German partner BioNTech to keep protection against the virus high.

The company said it could apply for an emergency use authorization (EUA) for a booster dose as early as August.

Data showed that a third dose generated virus-neutralizing antibodies more than 5 times higher in younger people and more than 11 times higher in older people than from two doses against the more easily transmissible Delta variant of the virus.

“All in all, I think a third dose would strongly improve protection against infection, mild moderate disease, and reduce the spread of the virus,” Chief Scientific Officer Mikael Dolsten said on a call to discuss quarterly results.

Mr. Dolsten added that the data suggested levels of antibodies could be boosted up to 100-fold when compared to levels before the third dose.

The company also posted a non-peer reviewed study on Wednesday suggesting the vaccine’s efficacy declines over time, and had dropped to around 84% effectiveness from a peak of 96% four months after participants received their second dose.

Pfizer shares were up 3.5% at $43.57.

Pfizer’s decision earlier this month to seek authorization for a third dose drew criticism from U.S. health regulators, who said there was not yet enough data to show booster shots are needed. Scientists from U.S. health agencies have since discussed additional doses for people with compromised immune systems.

Meanwhile, billions of people in other countries are still waiting for a first COVID-19 shot.

Even without boosters, the company’s 2021 sales forecast is expected to move higher as it only accounts for 2.1 billion doses that it has committed to countries out of 3 billion it plans to make this year.

Pfizer said it has shipped over 1 billion doses of the vaccine since December. The U.S. drugmaker records most of the combined sales from the vaccine, and splits expenses and profit 50-50 with its German partner.

Pfizer, whose shot was authorized in the United States, Europe and other regions around the world in December of 2020, has won new orders as rivals such as AstraZeneca Plc and Johnson & Johnson have faced manufacturing and safety hurdles.

Pfizer also competes with U.S. mRNA vaccine maker Moderna Inc, which has not been able to scale up production as quickly as its much larger rival.

J&J last week estimated full-year COVID-19 vaccine sales of $2.5 billion, while Moderna has forecast $19.2 billion.

Pfizer and BioNTech plan next month to test a version of the vaccine specifically designed to take on the fast-spreading Delta variant, with the first batch already manufactured, Pfizer said. The variant now accounts for more than 80% of new U.S. COVID-19 cases and has also become dominant in many other countries.

The U.S. Food and Drug Administration recently asked Moderna to expand the size of its pediatric trial.

Pfizer Chief Executive Albert Bourla said the company expects to be able to stick to its timeline to apply for an EUA for the vaccine in children under 12 in September, despite also having been approached by the FDA about new study requirements.

“We are not changing right now our expectations,” Mr. Bourla said. “If we need to do more in less time, we will try to accommodate that.”

Pfizer also raised its estimates for overall full-year profit, with strong sales of blood thinner Eliquis, which it shares with Bristol Myers Squibb, and cancer drug Ibrance.

The vaccine is helping drive a large part of the company’s forecast, but Pfizer’s base business is also growing, said Mizuho analyst Vamil Divan.

Pfizer now expects full-year adjusted profit of $3.95 to $4.05 per share, up from its prior forecast of $3.55 to $3.65. – Reuters

Globe’s ESG efforts recognized by FTSE4Good Index for 6th consecutive year

Globe marked another milestone with its inclusion in the distinguished FTSE4Good Index Series for the sixth consecutive year. This proved the telco’s unwavering commitment to environmental, social, and governance (ESG) practices aligned with global benchmarks.

Administered by the Financial Times Stock Exchange-Russell Group (FTSE), the index measures the performance of businesses around the world that demonstrate strong ESG practices.

Investors and market participants utilize the index to create and assess responsible investment funds and other products, and identify environmentally and socially sustainable companies. It is also used as a transparent and evolving global ESG standard against which companies can assess their progress and achievement, and as a benchmark index to track the performance of sustainable investment portfolios.

Globe’s continued inclusion in the FTSE4Good Index results from its dedication to “walk the talk” when it comes to its ESG targets.

“We are committed to continue improving our sustainability practice even as we grow our business.  Aside from hitting our ESG targets, our ambition is to create a positive impact on our communities and uplift the lives of our customers. Being a part of the FTSE4Good Index tells us we have chosen the right path and will strive to do even better,” said Yoly Crisanto, Globe Chief Sustainability Officer and SVP for Corporate Communications.

Sustainability at Globe is anchored on its purpose of “treating people right to do a Globe of Good” as it aims to contribute to 10 United Nations Sustainable Development Goals guided by the UN Global Compact Principles. By combining innovation with the power of collaboration among stakeholders, Globe hopes to deliver impactful, inclusive, and sustainable development for all.

This year, the company integrated sustainability principles in its corporate balance scorecard to help guide its different business units. Globe has four key sustainability pillars: Care for the Environment, Care for People, Digital Nation, and Positive Societal Impact.

Stepping up its advocacy on the environment, Globe recently became the first and only Philippine company listed by the Science-Based Targets initiative (SBTi) that committed to emission reductions in its operations as part of its climate action. It has joined the UN-backed #RaceToZero campaign to deliver a healthier, fairer zero-carbon world by 2050. Globe aims to reduce carbon emissions by 30% by 2030 and reach net-zero emissions in 2050.

Since 2019, the company has shifted to buying energy directly from power sources producing renewable energy and today, its headquarters and six offices and facilities are powered through it. Globe has also adopted green network solutions at its cell sites and has deployed over 7,400 of these solutions since 2014.

Through its Globe University, employees are provided access to sustainability-related training, resulting in a high-performing workforce aligned with the company’s vision. Globe adheres to international Occupational Health and Safety standards (ISO 45001) to ensure the well-being of its workforce.

For more information about Globe’s sustainability practices, visit https://www.globe.com.ph/about-us/sustainability.html#gref.

Two-week hard lockdown pushed

PHILIPPINE STAR/ MICHAEL VARCAS
People walk inside the Marikina Public Market, July 28. — PHILIPPINE STAR/ MICHAEL VARCAS

By Kyle Aristophere T. Atienza and Jenina P. Ibañez, Reporters

BUSINESS LEADERS are supporting a two-week lockdown to prevent the spread of the more contagious Delta coronavirus  variant, but requested for more time to prepare before restrictions are tightened.

This as a group of health researchers on Wednesday urged the government to reimpose stricter quarantine rules in the Philippine capital region and nearby provinces as early as Aug. 1 to prevent a possible Delta-fueled surge in infections.

Coronavirus disease 2019 (COVID-19) cases in Metro Manila could go as high as 5,000 a day by the latter part of August if a “circuit-breaking” or an early hard lockdown would not be enforced in the capital region for two weeks starting Aug. 1, OCTA Research fellow Fredegusto P. David told a virtual press briefing. Metro Manila averages 1,000 new COVID-19 infections a day.

Mr. David said imposing a stringent lockdown would enable the country to “regain” effective control of the pandemic within a week or two.

“A late circuit breaker on Aug. 16 will result in high case loads above 2,500 per day for the remainder of the month and will likely require a longer lockdown period,” he said.

“Even if cases are not increasing significantly at this time, if we give it an opportunity to spread, it will spread.”

Presidential Adviser for Entrepreneurship Jose Ma. “Joey” Concepcion III said this is the “best time” to impose a lockdown, noting the sluggish customer demand during the rainy season.

The Delta variant has also dampened consumer activity as health safety fears keep people indoors, he said at a separate virtual event.

Philippine Chamber of Commerce and Industry (PCCI) President Emeritus George T. Barcelon said businesses should be allowed to prepare for at least a week before the hard lockdown. The private sector is recommending that a lockdown begin by the second or third week of August.

“It’s important that a preparation period be allowed for business sectors. One of the issues is mobility. You can have the severe lockdown, but again we should be cognizant that the transport of essentials is important,” he said.

Henry Lim Bon Liong, president of the Federation of Filipino Chinese Chambers of Commerce & Industry, Inc., said a two-week hard lockdown could help prevent further lockdowns caused by a Delta-related surge in the last quarter of the year.

All of us are in the boat together. We either sink or swim together so let us just swim together.”

ECONOMIC IMPACT
The stricter lockdown would further dent economic recovery in the third quarter, Mr. Barcelon said, but he hopes that the stricter measures and vaccinations to contain the Delta strain would help the economy recover toward the end of the year.

“This lockdown will have a negative impact in all aspects. Business will be down. The collection of the government will be lessened. There will be more spending by the government for health services,” he said.

Finance Secretary Carlos G. Dominguez III said in a Viber message to reporters the country must sometimes take steps backward to protect the gains achieved in combating the virus, a move that is now prompted by the new coronavirus variant.

“I cannot predict the future with any accuracy, but we can prepare ourselves for any eventuality by protecting our financial capacity to react appropriately to developments,” he said.

Socioeconomic Planning Secretary Karl Kendrick T. Chua, who has advocated for granular lockdowns, said a full analysis was needed before making a recommendation on the type of lockdown needed.

“Our response is to manage the risks by ensuring much faster vaccination rate, and limiting more stringent lockdown in local areas or sectors of highest risk, while allowing the rest of the people, especially those already vaccinated, to earn a living,” he told reporters on Viber. “Our experience last March-April, where we were able to do a better balance can guide our response.”

BUSINESS SECTORS
Electronics exporters during the stricter lockdown last year were hampered by mobility issues at checkpoints. Semiconductor and Electronics Industries in the Philippines, Inc. (SEIPI) President Danilo C. Lachica said a strict lockdown would again be needed to curb the Delta variant.

“We just need to ensure the unimpeded movement of materials and employees for the electronics industry. We hope that we can further accelerate the deployment of vaccines at local government units,” he said in a mobile phone message.

The stricter lockdown could also affect the real estate sector. JLL Philippines Head of Research and Consultancy Janlo de los Reyes at a briefing said the hospitality sector would see a decline in occupancy levels, and noted potential uncertainties in the office market.

“It’s a negative impact on the (property) market with regard to the lockdown as you could see in the previous quarters wherein we had those community quarantines,” he said.

The American Chamber of Commerce of the Philippines (AmCham) said the group could not yet speculate on the effects of potential strict lockdown on investment prospects, but the chamber opposes a sweeping strict lockdown.

“AmCham hopes businesses and public transportation will not be locked down and that restrictions will be targeted on ‘hot spots,’” AmCham Senior Advisor John Forbes said in a text message.

ACT NOW
Meanwhile, OCTA member Ranjit S. Rye urged the National Government not to wait for coronavirus infections “to explode or for our hospitals to fill up before it decides.”

“We will save lives and save livelihoods. We have a window of opportunity to reverse this surge,” he said.

The National Capital Region (NCR) will have 2,000 new cases daily on average by Aug. 10 if the government maintains the status quo,” Mr. Rye said separately. Coronavirus infections may reach up to 3,000 daily by Aug. 17.

Meanwhile, OCTA fellow Nicanor R. Austriaco, Jr. said Metro Manila’s healthcare use rate may be up by 100% as early as Aug. 15 if the government does not tighten quarantine rules in the region.

The Filipino-American molecular biologist, who is also a priest, based his projections on the experiences of the country’s neighbors such as Thailand, Malaysia and Vietnam.

“Once a Delta surge begins, it accelerates in an explosive fashion,” he said at the same briefing.

The Department of Health (DoH) earlier said the capital region’s healthcare capacity might reach a moderate risk level once it experiences a new virus surge.

On Wednesday, Manuel C. Mapue II of the DoH-NCR said Metro Manila has recorded a total of 22 Delta variant cases. Of these, 16 are active cases, he told a televised news briefing. The country has recorded 119 Delta variant cases as of July 24.

The government must consider “the bigger cost to the economy of a spike in infections that could be avoided by doing an earlier or preemptive lockdown measure,” Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort told BusinessWorld in a Viber message. “Options to do preemptive restrictive measures would make the economy better off over the long run.”

Mr. Ricafort noted that other Southeast Asian countries “do lockdowns at an early stage” while cases remain relatively low “to nip the cases at the bud.”

“NCR is the major economic center/convergence point and transit to other parts of the country so it is important to protect its population from the coronavirus as a prudent measure to also indirectly protect the rest of the country,” the economist said

Metro mayors were set to hold an emergency meeting on Wednesday to discuss the coronavirus situation in the capital region and their response to the spread of the Delta variant.

Tax reforms, GUIDE are still priorities even without Duterte’s push

PHILIPPINE STAR/EDD GUMBAN

By Kyle Aristophere T. Atienza and Beatrice M. Laforga, Reporters

THE LAST TWO packages under the comprehensive tax reform program, as well as a bill equipping state-run banks to lend more to distressed businesses are still priority measures, officials said, even if President Rodrigo R. Duterte did not mention these during his last State of the Nation Address (SONA).

In a Viber message on Wednesday, Finance Assistant Secretary Maria Teresa S. Habitan said they would seek an urgent certification on the proposed Passive Income and Financial Intermediary Taxation Act (PIFITA) and the Real Property Valuation and Assessment Reform Act “as soon as they are approved on second reading at the Senate.”

“We are optimistic that the remaining tax bills will be passed, especially property valuation reform and PIFITA. Both bills are already done in the House of Representatives, and they are also in the Senate agenda,” she said.

The two bills are part of the common legislative agenda of Legislative-Executive Development Advisory Council (LEDAC) that are targeted to be passed by yearend.

Both are still pending at the Senate committee level.

The Real Property Valuation and Assessment Reform bill, which is the third package under the tax reform program, aims to establish a single and improved valuation system in assessing properties. The measure will broaden the tax base used for property-related taxes and boost collections, without increasing the rates or slapping new taxes.

The House passed its version on third reading in November 2019.

Meanwhile, the PIFITA bill aims to simplify the tax structure for financial instruments. It was approved by the House in September 2019.

In his final SONA on Monday, Mr. Duterte did not mention the remaining tax reform packages, but cited the need to revisit and update tax laws regularly amid the changing environment.

“Tax laws are not always perfect and that is why every now and then, they have to be revisited to see if they are at pace with the changing times. Let us therefore continue to monitor the relevance and impact of our tax laws on individuals and private institutions to prevent serious damage on their financial health,” Mr. Duterte said on Monday.

GUIDE BILL
Meanwhile, the proposed Government Financial Institutions Unified Initiatives to Distressed Enterprises for Economic Recovery (GUIDE) Act is also still part of Mr. Duterte’s priority legislation because it was “classified as an administration priority bill by the LEDAC,” Palace Spokesperson Herminio L. Roque, Jr. told BusinessWorld in a Viber message.

The bill was already approved by the House of Representatives on third and final reading in February. It is still pending at a Senate committee.

The proposed GUIDE bill gives state lenders Land Bank of the Philippines (LANDBANK) and Development Bank of the Philippines (DBP) more funds to expand their loan programs for micro, small and medium enterprises (MSMEs) heavily affected by the pandemic.

Under the measure, LANDBANK and DBP would be given P7.5 billion and P2.5 billion, respectively, to boost their unified initiatives.

The proposed law creates a state-backed holding firm, which shall be known as Accelerate Recovery to Intensify Solidarity and Equity or ARISE, Inc., allowing both state lenders to enter into joint venture deals with distressed businesses.

Several congressmen who voted against the House bill had opposed to the creation of the special holding company, which will enjoy fee privileges and exemptions from procurement and competition laws as well as tax obligations.

Asked whether Mr. Duterte backs these highly contested provisions, Mr. Roque said: “He does.”

“GUIDE is still under review pending a response from the inter-agency on GUIDE on the several issues we raised,” Senator Grace Poe-Llamanzares said in a Viber message.

In a statement on Monday, Senate President Vicente C. Sotto III named the GUIDE bill, as well as the last two remaining tax reform packages, as priorities for the last regular session.

The National Government missed its first-half spending target by 9.56%, which the Bureau of the Treasury (BTr) partly attributed to the pending enactment of the GUIDE bill.

“The GUIDE bill was supposed to be funded with P10 billion from realigned Bayanihan II funds,” House Ways and Means Chair Jose Maria Clemente S. Salceda said in a Viber message. “Since we did not extend Bayanihan II, if ever we pass GUIDE, we have to draw out of a supplemental appropriation, or realign something from the 2021 budget.”

Mr. Salceda suggested that government financial institutions (GFIs) propose “similar rescue vehicle or investment holding system as far as allowed by their respective charters and have the budgetary requirements proposed in the General Appropriations Act.”

“Whatever spending we infused into the GFIs is not money gone forever. This is an investment, and we expect returns to both the state and the taxpayer,” the Albay solon said.

“While anything towards GUIDE might be counted against short-term deficit spending and on the government’s short-term cash position, in the grand scheme of things, this is not a minus on our fiscal position unless we lose all of it, which is very unlikely,” he added.

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