LESS THAN 40% of local government units (LGUs) have so far automated their business permit systems with smaller municipalities falling behind, the Department of Trade and Industry said.
Citing an April 14 compliance report from the Department of the Interior and Local Government, Trade Secretary Ramon M. Lopez said only 39% of 1,516 LGUs have automated their business permit and licensing systems.
Some 91% of the 33 highly-urbanized cities have automated their systems, compared to 52% of first-class municipalities, 41% of second-class municipalities, and 30% of third to sixth-class municipalities.
The third to sixth class municipalities represent 884 of the country’s LGUs. The classifications of municipalities are based on their income, with sixth-class municipalities representing the smallest average annual income of less than five million pesos.
“The cities in NCR (National Capital Region) have set up their own online registration systems and payment systems. Outside of Metro Manila, we also have cities like San Fernando, Cagayan de Oro, and Mandaue City that have end-to-end systems just like Valenzuela and Parañaque in NCR,” Mr. Lopez said at the Sulong Pilipinas 2021 economic forum on Monday.
Smaller municipalities, he said, are being assisted by various government agencies to shift their processing online.
“We expect these numbers to increase by June 2021,” Mr. Lopez said.
All LGUs are required to move their entire business permit application processes online by mid-June, according to a joint memorandum circular from the Anti-Red Tape Authority and other agencies.
Local governments that have fully put up an online business registration service must cut the number of steps to one. Those transitioning to a fully-automated system must have a maximum of four steps under a hybrid manual and digital process.
Business registration must be processed within three business days, while the number of signatories on permits must be reduced to three people. — Jenina P. Ibañez
OUTSTANDING LOANS made to the agriculture sector totaled P229.70 billion at the end of March, the Land Bank of the Philippines (LANDBANK) said.
LANDBANK said in a statement Monday that small, medium and large agribusiness enterprises accounted for P143.11 billion of the total; followed by agri-aqua related projects of local government units and government-owned and-controlled corporations at P50.32 billion; loans to small farmers and fishers, cooperatives, and rural financial institutions amounted to P36.27 billion.
Relative to the overall banking industry, LANDBANK cited a Bangko Sentral ng Pilipinas estimate that total loans extended by universal and commercial banks to agriculture, forestry, and fishing borrowers fell 6.1% year on year in February, LANDBANK said.
“LANDBANK has assisted cumulatively 2.70 million farmers and fishers nationwide as of end-March, recording increases of 14,147 beneficiaries from February and 25,990 for the first three months of the year,” it added.
Recently, LANDBANK increased its loan facility to hog raisers and feed millers to P30 billion, from P15 billion previously. The funds will be used to boost hog repopulation initiatives and address the impact of the African Swine Fever outbreak.
The loans will be available to commercial hog raisers registered as cooperatives or farmer associations, small and medium enterprises, and large enterprises or corporations.
LANDBANK President and Chief Executive Officer Cecilia C. Borromeo told stakeholders during a consultation session on April 22 that the bank will continue to address credit-access issues faced by its clients during the pandemic. — Revin Mikhael D. Ochave
THE Philippine Chamber of Commerce and Industry (PCCI) is putting together an education task force to draft policy recommendations to the government to address gaps in the education system that were exposed during the pandemic.
The country’s largest business group said in a statement Monday that the task force will hold its first meeting this week to review the state of the education sector.
The task force’s policy paper will describe the state of education and will make recommendations on qualifications, curricula, teacher competency, and institutional reform.
Task force members will include 12 “recognized experts,” PCCI said, along with the industry group’s representatives. Members include representatives from universities and education groups like the Association of Local Colleges and Universities, Coordinating Council of Private Educational Associations, and the Association of Universities of Asia and the Pacific.
“The COVID-19 pandemic has exposed the challenges, gaps, and deficiencies of our educational system.Now is the best time that we sit down and seriously discuss these gaps and provide solutions that would make the system at par with other countries,” PCCI President Benedicto V. Yujuico said.
The Philippines last year inched up one spot to 48th out of 63 economies in the IMD World Competitiveness Center’s World Talent Ranking 2020 report, an annual league table seeking to gauge countries’ ability to attract and retain a skilled workforce.
The Program for International Students Assessment report released in 2019 showed the Philippines ranked last in reading comprehension and second-lowest in science and mathematics among 79 countries. — Jenina P. Ibañez
THE Transportation department said Monday that the LRT-2 (Light Rail Transit Line 2) East Extension Project is set to be inaugurated by June, while the Common Station project will begin partial operations by the end of the year.
“This year, we will finally be witnessing the completion and the start of operations of two big-ticket projects. First, the LRT-2 East Extension Project, with two additional stations in Marikina and Antipolo, is set for inauguration in June,” Transportation Secretary Arthur P. Tugade said at the virtual Pre-State of the Nation Address Economic Development and Infrastructure Clusters Forum Monday.
He added: “The second one is the Common Station… After nine years of delay, the construction for the Common Station is now ongoing, and will be partially operable in December 2021.”
The East Extension Project adds four kilometers to the 13.8-kilometer LRT-2 train line, connecting it to Antipolo City.
It aims to reduce the travel time between Manila and Antipolo from three hours to 40 minutes.
The East Extension is expected to add 80,000 passengers to the current 240,000 daily ridership of the LRT-2, which currently connects Recto Avenue in Manila to Santolan station in Marikina.
Meanwhile, the Common Station Project features a 3,700-square meter concourse area, which will interconnect LRT-1, Metro Rail Transit (MRT) Line 3, MRT-7, and Metro Manila Subway.
The Common Station, once operational, is expected to serve about 478,000 commuters daily.
“Please note that the investment poured by this administration in the railways sector under the Build, Build, Build Program is significantly larger than the total railway investments in the last 50 years combined,” Mr. Tugade said. — Arjay L. Balinbin
LEGISLATORS on Monday said the excise tax regime on sweetened drinks needs to be properly enforced, after it found revenue shortfalls and the non-implementation of programs for sugar farmers.
In a hearing, Nueva Ecija Rep. Estrellita B. Suansing said there is a “significant deficit” in actual performance against targets for sweetened beverages because enterprises began using high-fructose corn syrup, a shift that was not easily verified and may be subject to misdeclaration.
During the first year of the excise tax’s implementation in 2018, the targets were P52.03 billion for the Bureau of Internal Revenue and P2.45 billion for the Bureau of Custom. Actual collections were P39.77 billion and P2.82 billion respectively.
“In total there is a shortfall of P12.26 billion which is equivalent to 37% of the total target,” she said.
House Committee on Ways and Means Chairman Jose Ma. Clemente S. Salceda said part of the panel’s recommendations is for the Food and Drug Administration to improve its product testing and post-market surveillance.
“Now, the Food and Drug Administration is procuring new machines to verify sugar content in response to our Committee’s pressure,” he said.
Ms. Suansing said because the excise taxes on sweetened beverages discourage sugar consumption, part of the law provides that the taxes collected should fund programs to help sugarcane farmers via the Sugarcane Industry Development Act.
She added that the Department of Budget and Management cited the low absorptive capacity of the Sugar Regulatory Administration (SRA) in receiving the revenue from the excise taxes.
“We encourage SRA to increase their absorptive capacity, because this was one of the reasons why (the farmers) are not benefitting from the revenue of the excise tax on sugared/sweetened drinks and beverages,” she said. — Gillian M. Cortez
THE House Committee on Ways and Means approved on Monday a bill calling for the establishment of a bureau and special fund focused on procuring medical supplies.
In a hearing Monday, the committee approved House Bill 6995 or the proposed Health Procurement and Stockpiling Act subject to amendments. If passed, the measure will create a Health and Procurement and Stockpiling Bureau (HPSB), to be managed by the Department of Health (DoH). The HPSB will absorb the DoH’s Procurement Service.
Quezon Rep. Angelina D.L. Tan, the bill’s principal author, said at the hearing that the bureau is necessary in times of public health crises. It will be tasked with identifying critical medicines and supplies that need to be stockpiled.
“It shall serve as the principal agency mandated to undertake a transparent, fair, proactive, and innovative procurement service of the DoH and stockpile, conserve and facilitate the release of adequate amounts of potentially life-saving pharmaceuticals, vaccines, devices, and materials during public health emergencies,” she said at the hearing.
Ms. Tan said the bill also aims to address issues that hinder access to critical drugs and other medical equipment during crises.
The bill also calls for the creation of the Medical Stockpiling Fund which will “support the national drug and device security program.” The fund will be handled by the DoH. The DoH may solicit and receive donations in cash or in kind, subject to exemption from donor’s tax and other charges.
However, the Department of Finance said during the hearing that it proposed that the Bureau of the Treasury should manage the fund.
“This is consistent with the existing policy and treatment of grants and donations of a special account in the general fund,” Finance Director Valery Joy A. Brion said at the hearing. — Gillian M. Cortez
It’s been more than a year since the onset of the COVID-19 pandemic. This global health crisis, which has claimed millions of lives and continues to change the ways businesses operate, has spanned two tax seasons in the Philippines.
In 2020, when the pandemic was declared and lockdowns were imposed, the April 15 deadline for filing and payment of annual income tax returns (AITR) was extended for two months. This year, the government did not heed the taxpayers’ call for an extension in filing and payment of annual income tax for tax year 2020. Instead, the following measures were implemented to alleviate hardship in meeting the deadline during these challenging times:
• Amendments to the 2020 annual income tax return have been allowed without penalty until May 15, 2021;
• Out-of-district filing and payment of tax returns falling due on March 22, 2021 to April 30, 2021 has been allowed;
• Use of electronic signatures on 2020 annual ITRs, attachments, and documents has been allowed; and
• Taxpayers may opt to submit copies of electronically-filed AITRs and attachments via the eAFS Facility of the Bureau of Internal Revenue (BIR). Attachments to electronically filed AITRs are due on April 30, 2021 or 15 days from electronic filing, whichever comes later.
Indeed, the above measures have eased the burden of filing and paying taxes under stricter quarantine guidelines implemented by the government. However, the measures were announced by the government less than three weeks from the filing deadline. Hence, the following reforms on tax filing and payment in line with the aforementioned circumstances and other administrative tax compliance requirements, some of which are also embodied under the proposed House Bill No. 8942 or the “Ease of Paying Taxes Act,” may be considered by the government:
ENHANCE THE PORTABILITY OF TAX TRANSACTIONS BY REMOVING VENUE RESTRICTIONS IN FILING AND PAYMENT OF TAXES Under the Tax Code, except in cases which the Commissioner otherwise permits, tax returns are required to be filed with an authorized agent bank, Revenue District Officer, or Collection Agent in the Revenue District Office (RDO) where the taxpayer is registered.
To address the influx of taxpayers filing and paying their annual income tax returns close to the April 15 deadline, the BIR normally issues memorandum circulars allowing out-of-district filing and payment for tax returns due during the tax season. Unless the BIR issues a circular which normally covers only specific tax returns, taxpayers are obligated to file and pay their taxes in the RDO where they are registered, regardless of where they are during the time of filing. Failure to file and pay at the correct venue is subject to penalty. This creates an additional burden and inconvenience to taxpayers due to safety and travel restrictions during the pandemic.
In this regard, the file-and-pay-anywhere system must be institutionalized to relieve taxpayers of the extra burden of awaiting for a memorandum circular allowing them to file and pay out of district. Since this will be more convenient for taxpayers, this measure could result in higher tax collections.
Penalties for filing and paying in the wrong venue should accordingly be abolished, too.
INSTITUTIONALIZE THE ACCEPTANCE OF E-SIGNATURE ON ALL TAX RETURNS AND DOCUMENTS REQUIRED BY THE BIR Currently, except for certificates of withholding taxes (BIR Form 2304, 2306, 2307 and 2316) and the 2020 AITR and attachments, the BIR still requires wet signatures in tax returns, forms, and documents due to be submitted to the BIR. Also, a number of tax returns and submissions relating to tax assessments still require manual submission.
With the ongoing pandemic and initiatives to comply with the Ease of Doing Business and Efficient Government Service Delivery Act of 2018, the BIR should allow the use of electronic signatures and electronic submission of documents/letters to the BIR. This will not just be more convenient for taxpayers, but it will also save the BIR storage costs and time spent looking for lost dockets.
REMOVE THE DISTINCTION BETWEEN VALUE-ADDED TAX (VAT) SALES INVOICE AND VAT OFFICIAL RECEIPTS For the sale of goods or property, sellers are required to declare and remit VAT based on gross sales during the period. On the other hand, for sales of services or lease of goods or property, sellers are required to declare and remit based on gross receipts during the period. A VAT sales invoice must be issued for the sale of goods or property. A VAT official receipt must be issued for the sale of services or lease of goods or property.
This distinction often causes confusion among taxpayers, especially businessmen who are not tax practitioners and foreign investors who are not savvy about our tax intricacies. This distinction also raises issues regarding differences in timing of reporting and claiming of input VAT by sellers and purchasers, resulting in significant discrepancies in case of third-party matching of information by the BIR.
All things considered, legislators should indeed look at removing the distinction between sale of goods and services for VAT purposes. For easy monitoring and compliance, VAT should be based on gross sales/selling price, regardless of whether it is a sale of goods or services. In both instances, a VAT sales invoice should be issued upon sale and a non-VAT official receipt must be issued upon collection.
REMOVE UNNECESSARY DOCUMENTARY REQUIREMENTS FOR PAYING TAXES SUCH AS SPECIAL POWER OF ATTORNEY Taxpayers should be allowed to pay taxes without unnecessary documentary requirements. The act of paying taxes should be the easiest part of tax compliance. While in other stages of tax compliance, proof that the representative is authorized by the taxpayer may be needed, there should be no further proof required for payment of taxes. Paying taxes on behalf of another taxpayer will not in any way disadvantage the government. Hence, unauthorized payment of taxes should not be an issue for the tax bureau.
The above suggestions are just some of the reforms which our legislators and the BIR may consider. As these measures will indeed help ease tax compliance, and accordingly, improve compliance levels of businesses in the Philippines, I do hope that these reforms could materialize soon as they can help raise taxes that would add to the government’s capacity to mitigate the effects of the pandemic.
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.
Ma. Lourdes Politado-Aclan is a director from the Tax Advisory & Compliance division of P&A Grant Thornton, the Philippine member firm of Grant Thornton International Ltd.
The year 2020 may very well be the longest any of us has ever experienced. Filipinos of all walks of life were faced with new adversities, many of which remain unresolved as we approach 2021’s halfway point. Nevertheless, changes brought about by the COVID-19 pandemic also brought about new forms of creativity, accountability, and connectivity, with many Filipinos embracing the new aspects of our circumstances. With scientists working on medical solutions, we have a responsibility to create solutions in our respective industries for our respective stakeholders.
In order to create these solutions, a comprehensive understanding of how drastically society has been changed is critical. To learn how Filipinos feel about a rollercoaster year, EON conducted a nationwide survey, “Filipinos in the New Reality: Life After a Year of Quarantine.” This survey asked 6,000 Filipinos across the country about what has changed for the better and for the worse since the first set of lockdowns in March last year, interrogating respondents on what new systems have benefited their lifestyles as well as which gaps have endured or even widened. A summary of the findings of this research follows, which we hope will inform the decisions of those in positions of power toward making a “better normal” as sustainable as possible.
We begin with the obvious — the country has emerged from a year of quarantine consumed with feelings of sadness, fear, and regret over the state of affairs. While respondents note a vast number of changes to their routine since March 2020, the majority cite the inability to leave the house as a key difference, with many Filipinos frustrated at how physical restrictions have impacted their ability to attend mass or hang out in shopping malls. Still, Filipinos demonstrate their ability to make the best out of unpredictable situations, with many sharing the tremendous role which family support has played from both psychosocial and financial angles. Though Filipinos lament their newly limited mobility, their fears center over the health and protection of their family, with more respondents afraid their loved ones will catch COVID-19 than afraid of the pandemic’s impact on their work and livelihood.
This is not to say that Filipinos are not feeling the impact of COVID-19 on their finances. On the contrary: a clear majority note that expenses have risen due to the pandemic and that frugal living has been essential. Of the Filipinos surveyed who confirmed their debt, a majority express the desire to work harder, but many also indicate they are simply unable to pay lenders back and are out of options. Potential solutions to financial issues manifest in social media, with many confirming that financial constraints owing to the pandemic have inspired a new interest in setting up online businesses. Still, while we can’t say for sure if COVID-19 is the only cause of our financial distress, we can definitely state that it did not help anyone’s situation.
In sifting through the data, the Filipino people have provided us, we see that issues are just as comprehensive as the efforts our people utilize to solve them. When asked how to move forward, Filipinos reveal that they are anything but single-issue thinkers. Respondent sentiments run a considerable gamut, with Filipinos calling on the government to do away with corruption, calling on the business community to create more jobs, and calling on one another to be vigilant about one another’s safety. It is clear to the people that fixing one crack in our broken system is not enough: respondents stress the importance of financial literacy, thorough research on political candidates, and proper hygiene. The diversity of issues and solutions raised by those who engaged in our research sends a powerful message: Filipinos are keenly aware of the world around them, and are not shy at all to share what they believe it takes to make 2021 more prosperous than the year which preceded it.
With so many dimensions to the pandemic, the question is what is to be done. I would argue first that the average Juan dela Cruz is already doing all they can. Our research shows that Filipinos have utilized a variety of coping mechanisms for each of the issues brought about by this pandemic, whether it’s immersion in social media to pass the time confined at home or whether it’s exploring online business opportunities to make up for economic shortfalls. It is also quite clear from what respondents have said that Filipinos comply as diligently as possible with safety protocols and urge their countrymen to maintain the same standard. I would thus hesitate to continue messaging which attributes our issues to a lack of discipline. The people work with what they are given, and for many it has only been enough to survive.
For those of us privileged enough to worry more about quarterly financial projections rather than when barangay assistance will arrive, I implore you all to demonstrate empathy to your employees like never before. Too many business leaders have used COVID-19 as an opportunity to showcase their ability to pivot in the face of crisis; too few have indicated efforts to connect to the deep emotional and physical wounds afflicting their staff. The data make the overwhelming hopelessness washing over our countrymen quite clear, and while many commit to working even harder to make a living, this resilience should not come at the cost of mental and spiritual stability. If we cannot be there for the people who make our businesses operate on a daily basis, we cannot call ourselves successful business leaders.
Lastly, truth in messaging is non-negotiable, whether leading a company, organization, or political movement. Innovations brought about by the pandemic have afforded the public greater accessibility to their leaders, with social media tearing away the walls separating decision-makers from their constituents. The importance of meaning what you say — and doing it soon after you say it — cannot be overstated at a time where so many of us are losing loved ones at a rapid pace. Tensions have never been this high and the consequences of this “better normal” have been chillingly real for too many of our kababayan. We owe it to ourselves as leaders to advocate for truth, guide those who follow us on the right path, and strive in all that we do to empower and safeguard the Filipino from misinformation. I hope readers will rise to this call-to-action and look forward to the collaborations which will strengthen our country in the days to come.
This article reflects the personal opinion of the author and does not reflect the official stand of the Management Association of the Philippines or MAP.
Junie S. Del Mundo is Chair of the MAP Health Committee, Vice-Chair of the MAP CEO Conference Committee, and Chair and CEO of The EON Group.
ANA PATRICIA NON helps a vendor pack vegetables from her community pantry along Maginhawa St., Quezon City on April 15. — PHILIPPINE STAR/ MICHAEL VARCAS
On April 14, Ana Patricia Non brought out of her house on Maginhawa St., Quezon City a cart filled with fresh vegetables, canned goods, eggs, and non-food items. On the cart was a piece of cardboard oh which was written “Maginhawa Community Pantry. Magbigay ayon sa kakayahan, kumuha batay sa pangangailangan” (Give what you can, take what you need).
That day, several passersby, attracted by the food cart and the message on the piece of cardboard, stopped by. Urged by Patricia, they picked up a few items and walked on. Word got around the neighborhood such that in the days following, hundreds came to take from the “pantry,” which was starting to look more and more like a neighborhood market as it expanded from a cart to a long row of makeshift stands behind which were Patricia’s growing number of volunteer helpers.
The Maginhawa Community Pantry inspired other communities to put up their own pantries. Community pantries mushroomed all over Metro Manila. There are now community pantries in the Visayas and Mindanao and even in faraway Timor Leste.
The word “epidemic” is generally taken to mean the rapid spread of disease to a large number of people in a community or region within a period of time. The word originally meant something affecting a disproportionately large number of individuals within a population, community, or region at the same time. So it is right to say that the rapid replication of the Maginhawa Community Pantry is an epidemic.
Like the coronavirus, the Maginhawa virus has also mutated. There is now the Bugallon, Pangasinan variant — a combination pantry/medicine cabinet on a bicycle. There is the Iligan City variant, halal pantry.
Malcolm Gladwell wrote in his book The Tipping Point that the confluence of three factors starts the epidemic of an idea: the personality of the person who came up with the idea, the novelty of the idea, and the relevance of the idea to the general population.
Patricia may not be in the same class as other well-known civic leaders. She does not have the stature of Dr. Vicky Belo whose name is synonymous with aesthetic surgery. Dr. Belo, whose patients are mostly showbiz celebrities and ritzy matrons, renders her service for free to poor individuals with cleft lips and palates. She recently volunteered her services to the government’s
vaccination program.
Patricia is far from being as popular as the actress Angel Locsin, an acknowledged philanthropist and a known human rights advocate. But she is notable enough in her community. She is known to be sincere, capable, and dedicated to whatever endeavor she undertakes. The 26-year-old UP College of Fine Arts graduate has given free art workshops to poor young people and to political prisoners.
The community pantry idea is a translation into action of the bayanihan spirit, which is a trait of the Filipino to help others in need without expecting any reward. That spirit has been translated in many ways many times in many parts of the country. In the olden times, when houses in the countryside were made of light materials, bayanihan meant helping the homeowner relocate his house. In contemporary times, bayanihan is demonstrated many times when private individuals supply health workers with personal protective equipment and send them food.
Still, the community pantry is a novel translation of that spirit. Patricia could have simply distributed food packs, or she could have written on the cardboard on her food cart, “Libreng gulay, de lata, at iba pa” (Free vegetables, canned goods, and other items).
But one whoever avails herself of the free items leaves feeling she left behind her dignity. The “community pantry” somewhat mitigates that feeling. One who takes something from the community pantry is presumed to place something else. Also, the shareholder of the pantry is free to choose what food she will provide her family instead of getting a ready-to-eat meal in a box from a fast-food chain. That is the novelty of the Maginhawa Community Pantry, that is why the idea spread like the coronavirus.
Community pantries serve thousands of hungry jobless individuals. It is estimated that four million Filipinos remain unemployed because of the lockdown imposed to contain the spread of COVID-19. The community pantry was put up as a collective action to alleviate widespread hunger, Patricia said. She added that one of the possible reasons why the project trended online is because a lot of Filipinos could relate to the idea.
Agents of the Duterte Administration have branded community pantries as disguised platforms for communist propaganda. Lt. Gen. Antonio Parlade, spokesman of the National Task Force to End Local Communist Armed Conflict (NTF-ELCAC), which is under the direct command of President Duterte, accused the people behind the Maginhawa Community Pantry as being funded by communists. Former communist cadre Shane Valdez even told the Philippine News Agency that Patricia was a member of a communist terrorist group. She claimed Patricia has a hidden agenda which that is why she didn’t use “Bayanihan” for the name of her pantry. What wild communist logic!
Neither Gen. Parlade nor Shane Valdez presented any evidence to substantiate their allegations. Gen. Parlade, who is chief of the Armed Forces of the Philippines Southern Luzon Command, can send operatives of the Intelligence unit of that Command to Maginhawa to pretend to be volunteers and pantry shareholders to gather evidence that can expose Patricia’s supposed communist financial backers and her hidden agenda. The Maginhawa Community Pantry has been in full operation for almost two weeks now, yet Gen. Parlade has not come up with any evidence that would prove his claim.
That is why civil society groups have been led to believe that Gen. Parlade’s baseless accusation is really a disguised attempt to put an end to the community pantry epidemic because it is causing extreme embarrassment to the Duterte Administration.
Community pantries fill the gaps in the way the Duterte Administration is addressing the problems of unemployment and hunger. Little to no financial assistance has been given to the country’s poor who have been struggling to stay alive all throughout this protracted lockdown. As Senator Francis Pangilinan said, the community project serves as a sad reminder that people can only rely on each other in times of need. Senator Richard Gordon remarked that the government is put to shame because private citizens are doing what it should be doing.
The COVID-19 epidemic has shown the government to be incompetent. The Community Pantry epidemic is showing it to be inutile.
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.
In 2020, the Philippines was the 32nd largest economy in the world, it had the worst performing economy in Asia with its GDP contracting by 9.6%, and was the fourth worst performing economy among the world’s top 50 largest economies, next to Spain with -11%, Argentina with -10%, and the UK with -9.9%.
The prolonged lockdown by many governments around the world forced them to overstretch their spending, leading to high budget deficits (expenditures larger than revenues) in 2020. The high deficits to GDP ratios are expected to continue in 2021 and begin to taper off by 2022 and beyond, assuming there are no new large-scale lockdowns and closures of many businesses for whatever reason/s (see the table).
Many countries in the world are expected to have lower budget deficits in 2021 compared to their 2020 levels except the Philippines and a few other countries. Our -5.5% of GDP in 2020 is expected to rise to -7.4% this year.
10 REASONS TO LIFT THE LOCKDOWN It is possible to lift the lockdown nationwide or at least move to the least restrictive Modified General Community Quarantine (MGCQ) starting May 1, for these reasons.
One, our economic contraction in 2020 was very deep, the deepest since the Philippines government started recording GDP data, and the deepest in Asia.
Two, the National Economic Development Authority (NEDA) estimated that foregone wages of workers come to about P19.6 billion per week under the strict Enhanced Community Quarantine (ECQ) and P14.7 billion per week under the next quarantine level Modified ECQ (MECQ). We cannot continue with this kind of jobs and income losses.
Three, indefinite business closures have soured the Philippines’ investment environment. The Philippine stock market remains the worst performing in Asia Pacific, with a year-to-date (ytd) contraction of -10.7% vs. Indonesia’s 0.6%, Thailand’s 7.2%, Singapore’s 12.3%, as of April 23.
Four, the sprouting of hundreds of community pantries nationwide, with voluntary food donations by private citizens with zero government funding for the poor means many Filipinos now are hungry and become poorer.
Five, there are existing prophylaxis (preventive) and early treatment drugs for homecare, outpatient care to avoid hospitalization. These include ivermectin which has many studies showing high efficacy and safety (see https://ivmmeta.com/), even the old hydroxychloroquine (see https://hcqmeta.com/), proxalutamide (https://c19colchicine.com/) and so on. The Concerned Doctors and Citizens of the Philippines (CDC PH) has medical protocols for prophylaxis, early treatment and late treatment for COVID-19 cases.
Six, the physical health of many people suffers with prolonged inactivity and staying at home with insufficient sunlight. See “Physical inactivity is associated with a higher risk for severe COVID-19 outcomes: a study in 48,440 adult patients,” https://bjsm.bmj.com/content/early/2021/04/07/bjsports-2021-104080.
Seven, many people are suffering from mental health issues because of the prolonged closure of schools and offices, the inability to casually communicate and see their officemates, classmates, and friends.
Eight, many of the restrictions imposed by the government have no scientific, no medical and clinical studies saying that they work: the lockdown and closure of many businesses, mandatory use of face shields, curfews, the prohibition of people below 18 years old from entering malls and restaurants, crossing provincial boundaries and checkpoints, and so on.
Nine, the economic burden of new or higher taxes, new or higher regulatory fees, fines and penalties, will be severe on the people. Government’s outstanding debt has increased significantly, from P8.22 trillion in 2019 to P10.25 trillion in 2020, and P10.40 trillion as of February this year.
Ten, the people’s Constitutional freedom of mobility, freedom to be economically productive, continue to be restricted if not outrightly prohibited by the government via these indefinite lockdowns. The people’s freedom cannot be hostaged indefinitely by indefinite lockdowns by the state.
Bienvenido S. Oplas, Jr. is the president of Minimal Government Thinkers
People leave after offering prayers on the first day of the Muslim fasting month of Ramadan, amidst the spread of the coronavirus disease (COVID-19), at Jama Masjid in the old quarters of Delhi, India, April 14, 2021. — REUTERS/DANISH SIDDIQUI
REUTERS
NEW DELHI — India’s new coronavirus infections hit a record peak for a fifth day on Monday as countries including Britain, Germany and the United States pledged to send urgent medical aid to fight the crisis overwhelming its hospitals.
Infections in the past 24 hours rose to 352,991, with overcrowded hospitals in Delhi and elsewhere turning away patients after running out of supplies of medical oxygen and beds.
“Currently the hospital is in beg-and-borrow mode and it is an extreme crisis situation,” said a spokesman of the Sir Ganga Ram Hospital in the capital.
On Sunday, Prime Minister Narendra Modi urged all citizens to get vaccinated and exercise caution, while hospitals and doctors have put out urgent notices saying they were unable to cope with the rush of patients.
In some of the worst-hit cities, including the capital, bodies were being burnt in makeshift facilities offering mass services.
Television channel NDTV broadcast images of three health workers in the eastern state of Bihar pulling a body along the ground on its way to cremation, as stretchers ran short.
“If you’ve never been to a cremation, the smell of death never leaves you,” Vipin Narang, a political science professor at MIT in the United States, said on Twitter.
“My heart breaks for all my friends and family in Delhi and India going through this hell.”
On Sunday, President Joseph R. Biden said the United States would send raw materials for vaccines, medical equipment and protective gear to India. Germany also joined a growing list of countries pledging to send supplies.
India, with a population of 1.3 billion, has a tally of 17.31 million infections and 195,123 deaths, after 2,812 deaths overnight, health ministry data showed.
But health experts say the death count is probably far higher.
Politicians, especially Mr. Modi, have faced criticism for holding rallies attended by thousands of people, packed close together in stadiums and grounds, despite a brutal second wave of infections.
Several cities have ordered curfews, while police have been deployed to enforce social distancing and mask-wearing.
Still, about 8.6 million voters were expected to cast ballots on Monday in the eastern state of West Bengal, in the penultimate part of an eight-phase election that will wrap up this week.
Voting for local elections in other parts of India included the most populous state of Uttar Pradesh, which has been reporting an average of 30,000 infections a day. — Reuters
PEOPLE walk past the Trevi Fountain amid the pandemic in Rome, Italy, April 24. — REUTERS
WITH the resumption of global travel on the horizon, some people are discovering that their choice of vaccine could determine where they’re allowed to go.
Already, the European Union is planning to allow Americans vaccinated with shots approved by their drug agency to enter over the summer, European Commission president Ursula von der Leyen suggested in a New York Times interview Sunday.
This means that those who have shots by Chinese makers like Sinovac Biotech Ltd. and Sinopharm Group Co. Ltd. are likely to be barred from entry for the foreseeable future, with stark consequences for global business activity and the revival of international tourism.
As inoculation efforts ramp up around the world, a patchwork of approvals across countries and regions is laying the groundwork for a global vaccine bifurcation, where the shot you get could determine which countries you can enter and work in.
For Chinese citizens who venture abroad regularly, and western nationals wanting to pursue business opportunities in the world’s second-largest economy, a dilemma is emerging about which shot to opt for. China so far recognizes only Chinese-made shots, and its vaccines are not approved in the US or Western Europe.
Hong Kong citizen Marie Cheung travels to mainland China regularly for her work with an electric vehicle company, a routine that’s been interrupted by lengthy mandated quarantine stays since the pandemic began.
Of the two vaccine options available in the city — one from Sinovac and another developed by Pfizer, Inc. and BioNTech SE — Ms. Cheung plans to sign up for Sinovac for easier movement in and out of the mainland. Meanwhile, her British husband will go for the Pfizer-BioNTech shot, she says to boost his chances of visiting family in the UK
“For people who need to work in or return to the mainland, the Chinese vaccine is the only option for them,” Ms. Cheung said. “Westerners will only choose the vaccine recognized by their home country.”
For millions of people worldwide who can’t choose which vaccines they get, the risk of more places becoming selective about which shots they recognize, especially given the vaccines’ varying efficacy rates, creates the possibility that even fully inoculated, people’s travel could still be limited — with consequences for international business activity and the tourism industry.
“A global division of peoples based around vaccine adoption will only exacerbate and continue the economic and political effects of the pandemic,” said Nicholas Thomas, associate professor in health security at the City University of Hong Kong. “It will risk the world being divided into vaccine silos based on vaccine nationalism rather than medical necessity.”
MUTUAL RECOGNITION Many countries have shut their borders amid the pandemic, some allowing entry only to citizens, and even then with weeks-long quarantines after arrival. While vaccines are seen as the way to remove those entry barriers, considerable uncertainty remains over how, or if, nations will differentiate the at least 11 shots available worldwide.
Governments from China to Europe are discussing vaccine passports — easily accessible and verifiable certifications stating that an individual has been inoculated — but it’s unclear if countries will pursue universal recognition of all shots, or be selective on which they choose to recognize, particularly with the rise of virus variants and questions over whether the current crop of vaccines are as effective against them.
China eased visa application requirements for foreigners who had been inoculated with Chinese shots in March, including the ability to skip COVID tests or fill out travel declaration forms. The country’s homegrown vaccines are only available in some countries, like Brazil, Pakistan and Serbia. You can’t get Sinovac or the other Chinese shots in the US.
But in a sign that Beijing may be cognizant of the economic costs of being selective on vaccines, the Chinese embassy in Washington said this week that travelers who had taken certain Western shots could still enter the country if they were departing from Dallas in Texas. State media has indicated that the Pfizer-BioNTech shot is likely to be approved mid-year.
“We do think that it’s important to get a very high percentage of the community vaccinated and the best way to do that is to offer choice,” said Ker Gibbs, president of the American Chamber of Commerce in Shanghai. As a key market and source of business for companies around the world, China’s border restrictions — among the world’s strictest — have “had a major impact on our ability to conduct business,” he said.
“Just speaking with our members, mobility is a high priority for us both in terms of allowing our executives to come in and out of China, but also to have their dependents travel back to China,” Mr. Gibbs said. “That’s been a big problem.”
China isn’t the only place that’s restricting access to people with certain vaccinations. Iceland omitted Chinese and Russian vaccines from the list of those it approves for entry.
The question of vaccine recognition is a key one for tourism-dependent countries, with the $9 trillion global travel industry effectively paralyzed since the pandemic began.
China’s approach to this issue may impact their decision-making, as Chinese tourists have been among the biggest groups of foreign visitors to travel hot spots in Southeast Asia, Australia and New Zealand and capitals as far away as Paris before the pandemic.
STEEP DROP There were 155 million outbound tourists in 2019 spending more than $133 billion abroad, according to the China Tourism Academy, a government think tank and subsidiary of the Ministry of Culture and Tourism. While Indonesia, home to Bali, and Thailand have approved and are administering Chinese shots, New Zealand and Australia — which has seen its relations with China deteriorate the past year over the virus and trade — do not.
“I don’t know how practical it will be for Western countries to recognize Chinese vaccines given the geopolitical environment,” said Ether Yin, a partner at Trivium China, a Beijing-based consultancy. “But there won’t be a true resumption of global travel or economy without the inclusion of China, plus dozens of economies who used Chinese vaccines.”
Katy Niu, a 26-year old Chinese citizen, is a skiing enthusiast and frequent traveler living in Beijing. It’s unclear whether she’ll be returning to international slopes like those in Japan’s Hokkaido anytime soon. Prior to the pandemic, she used to travel internationally at least three times a year, from shopping on Paris’s Champs Elysées to relaxing on a Southeast Asian beach.
Ms. Niu hasn’t gotten a vaccine yet, saying she didn’t feel any urgency since she’s not currently able to travel — and doesn’t see it opening up in the near future.
“If other countries don’t recognize the Chinese vaccine, does that mean vaccination is not going to make a difference?” she said. “We are not offered a Western vaccine anyways — we don’t have a choice.” — Bloomberg
