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BSP caps interest rate and finance charges on credit card receivables

In the past year following the declaration of a state of calamity due to COVID-19, the Philippines has redefined its tax and regulatory landscape. In exercising its supervisory authority over banks and credit card issuers under the Philippine Credit Card Industry Regulation Law, the Bangko Sentral ng Pilipinas (BSP), in particular, issued Memorandum Circular No. 1098, which lays down the maximum interest and finance charges that banks and other non-bank financial institutions (NBFIs) can impose on credit card receivables.

It might surprise one to know that prior to the issuance of the Memorandum Circular, the BSP followed a market-oriented interest rate policy so there was no ceiling on the interest and finance charges that banks and NBFIs can impose on credit card receivables. This is probably the reason why based on the BSP’s assessment, the credit card interest and finance charges in the Philippines are relatively high compared to other countries in the ASEAN region. In fact, during the pandemic, several banks have been observed to further increase their interest and finance charges to as high as 32.8% per annum as of June 30, 2020. Hence, in the spirit of promoting responsible lending and considering prevailing economic conditions, the BSP decided to set a ceiling on the cost of lending through credit card transactions to ease the financial burden on consumers, particularly micro-, small-, and medium-sized business enterprises during the COVID-19 pandemic.

Under the Memorandum Circular, the BSP has set a ceiling rate of 24% per annum on the interest or finance charge that can be imposed on all credit card transactions, except credit card installment loans, starting Nov. 3, 2020.

Meanwhile, credit card installment loans (pertaining to those payable under an installment arrangement) shall be subject to a maximum monthly add-on rate of 1%.  This monthly add-on rate is different from the monthly interest rate or finance charge imposed on a cardholder’s unpaid credit card balance, and is used in computing the interest component of the monthly amortizations of the installment loan.

In an illustrative example, the BSP clarified that the 1% ceiling applies to installment loans availed of on or after Nov. 3, 2020. Hence, if a cardholder has an outstanding installment loan as of Nov. 3, 2020 which was earlier availed of on Sept. 3, 2020, the credit card issuer is not required to adjust the monthly add-on rate to 1%, even if there are amortization payments to be made on or after Nov. 3, 2020.

However, if a cardholder is unable to pay the monthly amortization due on an installment loan, such unpaid amortization is to be included in the computation of the cardholder’s outstanding credit balance subject to the 2% interest per month (effectively the 24% per annum) ceiling. Nevertheless, even with the cap in place, the cardholder is still not precluded from requesting a repricing or restructuring of his credit card installment loan.

Meanwhile, for cardholders whose credit cards have a cash advance feature, which enables cash withdrawal through Automatic Teller Machines (ATMs), the BSP has also capped the upfront processing fees of credit card cash advances to P200 for each transaction availed on or after Nov. 3, 2020. As mandated, no other upfront fees may be imposed or collected upon availing of credit card cash advances apart from the processing fee.

The interest rate ceiling and the ₱200 cap on the processing fees provided under the Memorandum Circular also apply to foreign transactions. Hence, credit card purchases made abroad, and cash advances withdrawn from ATMs abroad, are also subject to the same thresholds. The BSP also clarified that credit cardholders who availed of the 60-day grace period under the Bayanihan II (applicable to all existing, current, and outstanding loans as of Sept. 15, 2020) may also benefit from the interest ceiling.

Note that under normal circumstances, BSP rules require credit card issuers to notify the cardholder within 90 days prior to a change in any computation of the outstanding balance and fees to be imposed. In Board Resolution No. 1185, however, the BSP waived such notice requirement, since the imposition of a cap on interest and other finance charges is favorable to cardholders anyway.

The BSP has also committed to reviewing the prescribed ceilings on the credit card interest rates, finance charges, and processing fee, every six months.  In line with this commitment, the BSP announced in an official statement released in April that it will retain the prescribed ceilings to help ease the financial burden on consumers.

When used responsibly, credit cards can result in increased purchasing power that may be used on emergency expenses.  In a pandemic where many consumers are facing a liquidity crisis, the use of credit cards to tide them over is a sensible option to cushion negative income shocks. For its initiative in protecting the interests of consumers, I laud the BSP for advocating responsible lending practices. The cap in place is especially advantageous for our countrymen who may have no choice but to swap cash for credit during these challenging times.

The views or opinions expressed in this article are solely those of the author and do not necessarily represent those of Isla Lipana & Co. The content is for general information purposes only, and should not be used as a substitute for specific advice.

 

Elyse O. Lui is a senior consultant at the Tax Services Department of Isla Lipana & Co., the Philippine member firm of the PwC network.

elyse.o.lui@pwc.com

Total COVID-19 cases and vaccines administered regional breakdown

Total COVID-19 cases and vaccines administered regional breakdown

The Western European microfinance movement: An evolution of purpose

JCOMP/FREEPIK

(Part 2 of 4)

I continue sharing some findings of a research project I supervised for my student in Paris, wondering: What happened to Microfinance? It seemed to have become increasingly like a mini-traditional bank in the developing world and curiously started emerging in developed countries, which obviously have strong financial institutions and would not have needed such things. We asked ourselves the question why and how would Microfinance emerge in Western Europe? and conducted an exploratory, qualitative study in 2017 using 16 personal interviews of relevant persons from member organizations of the Microfinance European Network from seven countries. We found that while Microfinance in the developing world was conceptualized as a tool to fight against financial exclusion, in Europe, being excluded professionally is what first and foremost creates financial exclusion, which eventually creates social exclusion. We found that there were three characteristics of Microfinance in Europe which allowed it to re-integrate people into society: 1) a focus on entrepreneurial and inclusion loans; 2) entrepreneurship training; and, 3) for-profit status with non-profit funding. Today we continue this series, explaining our findings on the second characteristic.

We found something very specific: European microfinance institutions (MFIs) offer an array of entrepreneurship-related non-financial services to their beneficiaries. These services are usually free of charge for the beneficiaries and provide him or her with the necessary tools to turn the loan into a business success, and it was this that truly set MFIs apart from commercial banks. They acted as a sort of consulting firm and educational institute rather than a bank. In doing so, they created a relationship of trust between the MFI and the micro-entrepreneur unique in the industry which ultimately provided avenues for monitoring. Interestingly, although the broader objective was to help people out of poverty, the utilitarian objective was simple: “We want to be paid back.” This was the simple explanation of one of our interviewees when asked why they would spend so many resources on training.

One of the most interesting forms of training was that even before granting a loan, MFIs would help the entrepreneurs with their project idea, and give them the tools to write and think of a relevant business plan. Many partner NGOs help in this process, acting as an intermediary between the beneficiary and the bank. Some MFIs also offer mentoring services which range from providing them with a business network or an experienced micro-entrepreneur mentor who guides them in each step and follows-up on their progress. Economic viability was a keyword for them, and another facet was to make the Microentrepreneur feel “less alone” in the journey. But they did not limit themselves to the usual tools like accounting, finance, marketing and sales, and instead branched out into soft skills like communication and crisis management, which empowered the beneficiaries.

What is noteworthy here is that beginning with the social mission of helping the poorest of the poor in developing countries, Microfinance hit a wall in lacking financial sustainability unless they turned to market-driven models which compromised their mission. In opening their doors to as many people they could help with as many microloans they could offer, many MFIs in developing nations found it difficult to sustain the high costs of monitoring and funding became scarce. Because of the loopholes in the financial systems in which such institutions were embedded, it became easier to manipulate the system by disguising exorbitant interest rates and abusive lending practices as carrying a social mission. To maintain legitimacy, MFIs began becoming more and more stringent and naturally institutionalized to differentiate themselves from the players who had misused the social mission. And while the former are indeed creating avenues for financial inclusion, the initial Yunus model has been all but lost, and the rural banks, traditional retail banks, and fintechs have stepped in to commercialize and render more accessible the concept of borrowing with a lack of collateral as well as the concept of making savings grow (a form of investment) even for the economically marginalized.

In Europe, Microfinance was birthed from a different need; that of finding employment to be socially integrated and accepted. There was a focus on financial sustainability of the model from the get-go, with more stringent rules in lending, larger amounts, and personal qualifications required, but notably: the guidance of the MFIs. Not only were they extremely strict with the users and usage of funds but also assisted the grantees in being ready to take out a loan even before they applied, paving way for an approach that ultimately centered on Social Welfare. To wit: in creating standards, in being more selective, in adhering to quality over quantity — things that intuitively sound exclusive — they ended up creating and fostering inclusion. Does the market-driven model, the cream-of-the-crop, the only-those-who-deserve-it model — if applied correctly — then lead to better social gain? Or does this approach only work in an environment with strong regulation that strengthens institutions? n

Notes: This article is based on a co-authored working paper originating from the Master Thesis of Hélène Laherre under the supervision of the author at the IÉSEG School of Management (Catholic University of Lille) in Paris, France. References are available upon request.

 

Daniela “Danie” Luz Laurel is a business journalist and anchor-producer of BusinessWorld Live on One News, formerly Bloomberg TV Philippines. Prior to this, she was a permanent professor of Finance at IÉSEG School of Management in Paris and maintains teaching affiliations at IÉSEG and the Ateneo School of Government. She has also worked as an investment banker in The Netherlands. Ms. Laurel holds a Ph.D. in Management Engineering with concentrations in Finance and Accounting from the Politecnico di Milano in Italy and an MBA from the Universidad Carlos III de Madrid.

Mining, time to do it right

BRGFX/FREEPIK

President Duterte issued Executive Order No. 130 on April 14 to lift the nine-year moratorium on new mining contracts. He opted not to wait for new legislation that was supposed to set the terms for taxes and royalties, among others, for the mining industry.

I reckon this to be a step in the right direction. The economy is in trouble, and in dire need of new investments.

In this line, and with the CREATE (Corporate Recovery and Tax Incentives for Enterprises) law setting the direction for investor incentives, I presume that mining and related activities, including mineral processing, may yet be included in the list of economic activities entitled to incentives in the future. I just hope that the requirements for new mining contracts will be stringent, but not restrictive.

New mining projects are now being evaluated, according to the Department of Environment and Natural Resources (DENR), which has been tasked to draft new mineral agreements that would “maximize government revenues and share from production, including the possibility of declaring these areas as mineral reservations to obtain appropriate royalties.” The government may also renegotiate active mining agreements.

Among the conditions mentioned by Environment Secretary Roy A. Cimatu was that only mineral reserves that would allow at least 10 years of commercial extraction for metallic minerals, and seven years for non-metallic, would be considered. In my opinion, the government should also ban the export of raw ore, and require local processing prior to sale of minerals abroad.

High electricity cost is said to discourage mineral processing, and perhaps incentives should be considered in this line. “Processing is the future of the industry … [but] one of the important considerations is creating an environment that will make it competitive,” Dante Bravo, president of the Philippine Nickel Industry Association and CEO of Ferronickel Holdings, Inc., was quoted as saying in a news report.

And as I have declared in previous columns, I am pro-environment, though I am not anti-mining. I cannot declare myself 100% anti-mining and yet continue to live on the products of the industry like cement, sand, iron and steel, glass, semiconductors, electronics, as well as coal, oil, and gas — all products of extraction, including mining. I support sustainable development and finding a balance between environmental and economic interests.

Mining, if the state permits it, should always be responsible, and should be less a business and more a livelihood. Key is balance, but with a leaning towards saving the environment and improving lives. In short, mining becomes just a consequence of the pursuit of economic and social upliftment. But, if the industry does more harm than good, then shut it down.

However, in determining who is responsible and who is not, there should be clarity in rules. Regulation should not be unilateral and arbitrary. And, more important, there should always be due process. In this regard, “standards” should not be parameters set only by the DENR and its leadership. Standards should have strong legal, moral, economic, social, environmental, and ethical bases, among others.

Since 2017, I have been pushing for IRMA or the Initiative for Responsible Mining Assurance. With the country again opening up to new mining investments, I believe that this should be considered. While it is private sector-led, IRMA is a multi-stakeholder, consultative initiative that advocates responsible mining worldwide. It favors a “multi-stakeholder and independently verifiable responsible mining assurance system that improves social and environmental performance.”

On its website, IRMA explains that it was founded in 2006 by a coalition of non-government organizations, businesses purchasing minerals and metals for resale in other products, affected communities, mining companies, and trade unions. Miners are part of the initiative, but with equal voice are the pro-environment groups.

This coalition developed “standards for environmental and social issues related to mining, including labor rights, human rights, indigenous peoples and cultural heritage, conflict response, pollution control and site closure.” The standards are practically universal, encompassing all facets of mining and its impact on society, and the initiative involves groups from all over the globe.

To date, IRMA offers third-party certification of industrial-scale mine sites for “all mined materials that is governed equitably by the private sector, local communities, civil society, and workers.” In a way, it goes a step above ISO certifications. And, with IRMA, “it is the mine site, not the company, that gets certified,” using a “step-by-step approach, not a pass/fail certification system,” using global “best practices” as standard.

Another effort that requires greater local support is EITI or the Extractive Industries Transparency Initiative. EITI is another global standard, but this time to promote the open and accountable management of natural resources. On its website, EITA claims to address the key governance issues of the oil, gas, and mining sectors.

“The EITI Standard covers themes or key issues from the extraction of the resource from the ground to how it affects the citizens of the country. This includes how licenses and contracts are allocated and registered, who are the beneficial owners of those operations, what are the fiscal and legal arrangements, how much is produced, how much is paid, where are those revenues allocated, and what is the contribution to the economy, including employment,” the EITI website notes.

By taking part in EITI, the private sector, particularly extractive industries like oil and gas as well as mineral mining, become more transparent in their dealing with government. At the same time, they can be held more accountable for their actions and what they pay — or not pay — to the government. At the same time, the government becomes more accountable as to how it spends what it earns from extractive industries like mineral mining.

The Philippines is very much involved in EITI now, but IRMA support appears limited. As I had noted way back in 2017, if local miners are certified by IRMA as compliant with the most recent and best global, multi-stakeholder standards, then what more will the government want? IRMA can be the end-all and be-all of mining standards. DENR, aside from ensuring that miners meet all local regulatory requirements, will monitor miners strictly for compliance, as well as ensure that miners’ IRMA certifications are updated.

Using IRMA standards and third-party certification can help minimize arbitrariness and the unilateral exercise of discretion in the DENR regulatory processes, and promote greater accountability on the part of regulators and the mining industry. It can also mitigate corruption in the regulation, audit, and monitoring processes, and can help ensure that only those fit to explore and operate mines are allowed to do so.

 

Marvin Tort is a former managing editor of BusinessWorld, and a former chairman of the Philippines Press Council

matort@yahoo.com

Medical oxygen is key to COVID fight. It used to be feared.

JCOMP/FREEPIK

THE DESPERATE SCENES playing out in India may foreshadow a dangerous new phase of the pandemic where people die in droves, not of the disease so much as a lack of proper medical care. The situation could get a lot worse thanks to a sudden shortage of medical oxygen in the country.

Oxygen is one of most straightforward and proactive ways of treating the disease, which causes hypoxia. When patients begin gasping for air, a steady supply of concentrated oxygen does wonders.

It may seem like an obvious treatment in hindsight, yet it took nearly two centuries to overcome strange theories, outright quackery, and trench warfare in the medical community and beyond.

Oxygen’s history in medicine begins in the 1770s, when the Swedish pharmacist Karl Scheele and the British scientist Joseph Priestly independently isolated oxygen gas. Priestly unfairly received the lion’s share of the credit.

To make matters worse, Priestly was a believer in phlogiston, an invisible substance allegedly released during combustion. What we call “oxygen,” he called “dephlogisticated air.” When he breathed it, his chest felt “peculiarly light and easy for some time afterward.” Priestley subsequently bragged in a scientific tract that “only two mice and myself have had the privilege of breathing” the miracle gas.

Since the new substance seemed to make candles burn brighter, Priestley speculated that it might be “peculiarly salutary to the lungs in certain morbid cases, when the common air would not be sufficient to carry off the putrid effluvium.” Yet he remained wedded to his phlogiston theory, warning that breathing pure oxygen might also carry dangers — that it might be the equivalent of burning the candle at both ends.

Eager to test the effects of the new substance on patients, Priestley and other engineers and scientists, including James Watt, founded the Pneumatic Institution in Birmingham. Though they made no promises of a cure, they offered to treat a range of maladies — including “obstinate venereal complaints” — with dephlogisticated air.

They weren’t very successful, but there was an upside. As one medical historian has noted, this unlikely crew managed to invent most of the oxygen-delivery apparatus still in use today, from mouthpieces to corrugated, non-crushable breathing tubes to methods for mass-producing the gas.

The Pneumatic Institution went defunct, but oxygen lived on as a quack remedy. Most of these treatments didn’t actually use concentrated oxygen, dispensing nothing more than mixtures of gases not so different from ordinary air, typically a few gulps’ worth and nothing more.

But that didn’t stop purveyors of these panaceas from making ludicrous claims for their products. Makers of the so-called “Oxygen Treatment,” a typical remedy from 1884, sent patients one bottle of “Oxygen” and one bottle of “Oxygen Tonic.” This was supposed to treat everything from dyspepsia to arthritis for two full months.

By the late 19th century, oxygen therapy was synonymous with quackery. In 1890, though, a physician named Dr. Alfred Blodgett had a patient with pneumonia whom he deemed “irrevocably doomed.” In the hopes of merely easing her final moments, he hooked her up to an oxygen canister, turned on the gas — and left it running.

This may have been the first continuous application of oxygen to a patient in history. To Blodgett’s astonishment, the woman stabilized, her breathing becoming regular. He published his results, arguing that oxygen could save lives. “Many cases will be found in which the period of greatest danger may be safely tided over which would otherwise unquestionably be lost,” he wrote.

And yet this was just the very beginning of oxygen’s resurrection. After Blodgett’s article, other researchers tried administering oxygen, but not via the lungs. They pumped it under the skin, up the urethra and into the stomach. Most bizarre of all was the idea of an oxygen enema, which came courtesy of corn-flake promoter Dr. J. H. Kellogg, who also gained fame for popularizing medical treatments of questionable value.

It took a Scottish doctor named John Scott Haldane to cut through this nonsense and do the research necessary to show that breathing oxygen would be best — and that it had to be continuous and at high enough concentrations to have the desired effect. In 1917, he published his landmark paper, “The Therapeutic Administration of Oxygen.”

His timing was perfect. In World War I, both sides used poison gas. Haldane developed equipment that dispensed oxygen to soldiers hit in a gas attack. After much trial and error, the British managed to develop mobile equipment that could be used to treat survivors, giving them steady supplies of oxygen for extended periods of time.

All of this should have opened the medical profession’s eyes to the value of administering continuous oxygen. But it would take another 50 years to win over many doctors, who insisted on administering oxygen in intervals in order to avoid harming patients.

Haldane criticized intermittent oxygen therapy, comparing it to “bringing a drowning man to the surface of the water — occasionally.” But it would take until 1962 before medical researchers conclusively backed him up. Intermittent oxygen therapy, they found, actually hurt patients more than if they had never been given oxygen at all.

Over time, a growing number of doctors embraced the idea of continuous oxygen therapy. In the US, Dr. Thomas Petty took the lead in using it to treat patients with advanced pulmonary diseases. In 1970, a study of patients with advanced pulmonary disease showed that while 28% of patients treated with continuous oxygen died, 62% of untreated patients did. This finally settled the question, paving the way for more research on oxygen’s many benefits over the past 50 years.

The breakthrough seems to have a big impact on victims of COVID-19. Preliminary research of how different nations administered oxygen in the early months of the pandemic suggests that supplemental oxygen makes the difference between life and death for many patients. Other studies have shown that oxygen can keep patients off ventilators and save lives, particularly if the oxygen is administered early.

This simplest of treatments has been around for ages. It can be deployed in a range of settings, from the trenches of war to the parking lot of a hospital. Luckily, the US is “working around the clock” to gather oxygen supplies for India, and the UK is sending nearly 500 devices to administer it. It’s a good start, though far more may be needed.

BLOOMBERG OPINION

In and out of public view

KING RODRIGUEZ/PCOO.GOV.PH
PRESIDENT Rodrigo Roa Duterte walks past old photos of past presidents as he arrives for the meeting with the Inter-Agency Task Force on Emerging Infectious Diseases on April 15. — KING RODRIGUEZ/PCOO.GOV.PH

WITH the new normal of working from home, bad work habits like disappearing acts or long lunches are impossible to track. After all, there’s hardly anyone physically at the office. So, who’s to call anyone out for unexplained absences? (Out with a client? Yeah, right.)

So, why is the leader’s occasional, or getting pretty regular, vanishing act inviting all sorts of speculations, mostly to do with secret medical ministrations, often in a foreign country? Maybe, he’s just working from home in his boxer shorts and not in any mood to dress up for a TV appearance.

True, political leaders are different from corporate executives. The former performs more ceremonial functions like inaugurating a new skyway or announcing the latest lockdown status (just stay in your room and don’t venture out to the dining area).

So, why does every week-long absence from public view trigger off speculations on the status of health when everyone prays for either his recovery or continued absence? There are other possibilities for not attending televised meetings and giving state-of-the-immunization reports.

Here are some other possibilities.

He understands that a high-pressure job requires some time for meditation. (Yes, at least a week.) Maybe he goes for stillness and reads Marcus Aurelius, who was, after all, the head of the Roman Empire at its peak. He can learn a few lessons — “Death smiles at us all, but all a man can do is smile back.” (Yes, he really said that — Marcus with a “u”.)

What about learning a new language? Something Asian, but not Bahasa. How do you say: “this way to the palace, Sir?” All those complicated tones that can change the meaning of the words can be tricky. Instead of ushering guests in, one may end up asking the intruders to brush their teeth after taking off their face masks.

Maybe speech therapy sessions in his native tongue take up time. He may need to continue practicing how best to handle impertinent questions about his whereabouts. The urge to let loose invectives needs to be restrained. The therapy requires pausing to take a drink of water and slowly swallowing this before answering — I was just feeling tired.

One excuse (or explanation) for sudden disappearances hasn’t been tried? What if he is running a brainstorming session on a three-year economic recovery plan? Sure, this goes beyond his term. Is that too fanciful as an explanation? Well. At least it will be unexpected.

Why are all sorts of speculations triggered by a long absence? Hasn’t physical presence been replaced by virtual participation, sometimes with the video off? Disappearing from public view is not unusual in these times of face masks, social distancing, and working from home. Being greeted with a remark like “haven’t seen you in a while” is not strange at all. The rejoinder is readily accepted — I’ve been staying home.

Still, the visibility of a leader, especially in times of crisis, is more than symbolic. It communicates taking charge, having a plan, and sticking to some time-based targets. It’s not the time for withdrawing from the limelight and staring at one’s navel.

The critical need for visible leadership is the subject of Kurosawa’s classic 1980 film, Kagemusha (Shadow Warrior). A petty thief is trained to be the stand-in of a fallen warlord to buy time to consolidate the feuding factions. The impersonator is trotted out to rally the troops. Even when challenged to comment on plans in a meeting with the generals, the usually silent impostor offers a vague comment — the mountain does not move.

In real life this idea of a double for a disappearing leader is almost impossible to pull off with close-up shots and a sometimes prickly media. Skin tones alone are hard to replicate. Maybe, a double can perform security functions as a decoy for the real leader who is in some other location, levitating some parts of his body. This is only possible with distant views. The double can wave to a small crowd — was that him? Who can tell with a face mask?

Just being present at enough meetings requires some passion for the job. Anyway, if one is known to skip formal dinners in international fora, what’s the big deal with somebody else making Q-status announcements?

Unexplained absences have become too commonplace. Maybe we’re getting too used to it by now.

 

Tony Samson is Chairman and CEO, TOUCH xda

ar.samson@yahoo.com

Vaccine hoarding may backfire on rich nations as India reels

REUTERS

FOR MONTHS, developed economies have hoarded COVID-19 vaccines and the raw materials needed to make them. Now, they’re being forced to act as an explosive outbreak in India raises the risk of new virus mutations that could threaten the wider world.

Under mounting criticism for dominating vaccine resources, the US said this week that it will help India by sending items needed to manufacture vaccines as part of an aid package. European countries are also pledging help as new cases in the South Asian country smash world records. President Joseph R. Biden’s administration is separately vowing to share its stockpile of AstraZeneca Plc vaccines — which the US hasn’t even approved for use — and meeting with drug companies about boosting supply and waiving intellectual property protections on Covid-19 shots, a shift India and South Africa have been pushing for.

The moves show a growing realization that the vaccine nationalism many wealthy nations have embraced has the potential to backfire, prolonging the global pandemic. While those countries have been cornering supplies of the first vaccines for their world-leading rollouts, places like India have run short, allowing the virus to run wild. Some scientists have linked the nation of 1.3 billion people’s second wave to a more virulent strain, with the out-of-control outbreak providing a petri dish for further mutations to evolve that could challenge the vaccines now being distributed from the UK to Israel.

“There is certainly potential for new variants to emerge in a country the size of India that could pose a threat elsewhere,” said Ramanan Laxminarayan, founder of the New Delhi and Washington-based Center for Disease Dynamics, Economics & Policy. “It is in the world’s interest to ensure that India exits the pandemic at the earliest, and vaccination is the only way.”

The pink countries are trying to prevent the yellow countries from making vaccines that would save thousands of thousands, possibly millions from unnecessary deaths.

While viruses undergo changes all the time, not all are significant. But some new strains in other parts of the world have ignited concerns because they could be more contagious. Earlier this year, data showed that AstraZeneca’s vaccine was less effective against one variant that emerged in South Africa.

India’s variant — a strain named B.1.617 — is already raising alarms. It has two critical mutations that make it more likely to transmit and escape prior immunity that has been built up, Anurag Agrawal, the director of India’s Council of Scientific and Industrial Research’s genomics institute, told Bloomberg last week.

Rakesh Mishra, the director of the Centre for Cellular and Molecular Biology in Hyderabad, one of the labs working to sequence virus samples in India, said this variant appears to be more infectious, but it isn’t likely to cause more deaths.

Also, the AstraZeneca vaccine and another from India’s Bharat Biotech International Ltd. have been shown to be effective against it in preliminary data, he said. India’s health ministry hasn’t confirmed if this variant is more transmissible, and a spokesperson for the federal health ministry could not be immediately reached.

And at the rate infections are occurring in India, B.1.617 won’t be the only or last variant of concern out of India’s second wave.

“I fear there may be more trouble coming,” said William Haseltine, a former Harvard Medical School professor and HIV researcher who now chairs think tank Access Health International. “There are already second and possibly third generation variant of the B.1.617 circulating in India. These may be more dangerous than is the B.1.617 variant itself.”

India’s second wave is certainly more destructive. Hospitals and crematoriums are cracking under pressure, while Indians are begging on social media for everything from oxygen cylinders to drugs. Almost 3,000 people are dying every day, with experts saying that figure likely underplays the real toll. The daily death rate is almost double what it was at the height of the first wave, stoking speculation the new variant, or other mutations, are to blame. Brazil, another developing country that has struggled to ramp up vaccines, suffered from a virus strain that’s said to be responsible for a much higher Covid death rate.

“We are fighting a virus that is not standing still,” Stéphane Bancel, the chief executive officer of Moderna, Inc., told reporters at a briefing held on Friday by a number of vaccine makers and industry bodies. “If you think about the variants that are emerging, the UK, Brazil, South Africa and now we are hearing about the double mutant variant in India, there are more appearing everywhere. I’m worried deeply about the next six months.”

Public health experts now see a ramped up vaccination effort as key to quelling outbreaks like the one in India.

But despite being home to the world’s largest vaccine industry, India’s immunization drive has slowed in recent weeks and many states are warning that their supplies have almost dried up.

The shortages have partly been blamed on bottlenecks related to a few key items, with Adar Poonawalla — the chief executive officer of the Serum Institute of India Ltd., the country’s biggest vaccine producer and AstraZeneca’s manufacturing partner — increasingly pointing to the US.

Mr. Poonawalla has repeatedly called on the US to release shipments of critical raw materials, saying the US invoking the Defense Production Act to curb exports of some ingredients and bolster its own industry is one of the main reasons behind the slowdown in shots.

“It’s the shortage of critical input materials that is becoming a real bottleneck,” Rajinder Suri, chief executive officer of the Developing Countries Vaccine Manufacturers’ Network, said at Friday’s briefing. “If anyone of the components is missing, the entire chain comes to a grinding halt. The problem is that most of these materials are coming from the US.”

The items that many vaccine makers have been struggling to get hold of include glass vials, single-use filters and bioreactor bags, according to the majority of 15 suppliers, developers and contract manufacturers surveyed ahead of a Chatham House summit last month. However, the scale of the problem, even within industry groups, has been hard to quantify due to a lack of data.

As the scale of India’s virus emergency rose to global prominence this week, the offers of aid and doses started to come. Besides the US’s commitments, the UK, France and Germany have also pledged aid and much needed oxygen tanks for India.

Mr. Biden said Tuesday that in a call with Indian Prime Minister Narendra Modi, he discussed “when we’ll be able to send actual vaccines to India, which would be my intention to do.” In the meantime, the US is providing other aid, Mr. Biden said. The US government has said it plans to send about 60 million doses of the AstraZeneca vaccine overseas.

Still, a more marked shift in the way developed countries view vaccines will likely be needed. Even if the US did send all of its AstraZeneca doses to India, it would have a limited impact on a population of its size. There are also other parts of the vast developing world that are yet to see shots, or consistent supplies.

“Many parts of the world still remain deeply at risk,” Jennifer Nuzzo, a senior scholar at the Johns Hopkins Center for Health Security, said in a Bloomberg TV interview last week. “I worry about these headlines continuing for a year or more unless international partners get together and help share some of the vaccines that are there.” — Bloomberg

Heading back to the office? Ask for air filters, not bleach

REUTERS
OFFICE WORKERS wearing protective masks work at a building in Tokyo, Japan, Nov. 27, 2020. — REUTERS

As VACCINATIONS speed up and companies look to reopen their offices, workers want something in return: confidence that it’s safe to be there, elbow to elbow with colleagues they’ve encountered only on screens for months.

Employers are touting measures to curtail the risk of infection with coronavirus disease 2019 (COVID-19), but not every action is equally effective, according to experts. Some of the most widely adopted steps may not help much at all.

More than a year into the pandemic, scientists are increasingly focusing on airborne transmission as the biggest culprit. For the office-bound, that raises the importance of better ventilation and air filtration, and undercuts the rationale for the ceaseless scrubbing of surfaces with disinfectants that many employers have adopted.

“I don’t want to hear about your surface cleaning procedures, because that is a waste of time and money,” said Linsey Marr, a professor of civil and environmental engineering at Virginia Tech who studies the interaction of viruses with the atmosphere. “But tell me about your ventilation. How often is the air changing out in the space? And tell me about your filtration.”

While flexible working arrangements may outlast the pandemic, many people will soon be commuting again. In the UK, where vaccinations are outpacing most of the world, employees last week returned to offices in numbers not seen since last March. JPMorgan Chase & Co. this week became the first major US bank to mandate a return for its entire US workforce, on a rotational basis, as soon as July.

After all these months, it may seem surprising that there’s still a debate over how the coronavirus spreads, and how best to stop it. That’s partly because of an overemphasis on the risk of so-called “fomite” transmission, which involves picking up the virus from a contaminated surface like a doorknob or elevator button, according to Ms. Marr and other scientists.

Earlier this month, the US Centers for Disease Control and Prevention (CDC) issued guidelines downplaying that threat. Each contact with a contaminated surface may have less than a one-in-10,000 chance of causing Covid-19, the agency said.

“There is little scientific support for routine use of disinfectants in community settings, whether indoor or outdoor,” the agency concluded.

For airborne transmission, the threat isn’t from large, virus-laden droplets that quickly fall to the ground, but from small particles that can linger in the air for hours, building up in poorly ventilated indoor spaces, while quickly dispersing outdoors.

Confusion over that has exacerbated the pandemic, creating policies that often punish people for meeting outside and increasing the likelihood of them gathering in homes and offices that are breeding grounds for Covid, according to Germany’s Association for Aerosol Research.

The group recently published an open letter to Chancellor Angela Merkel, saying politicians need to stop worrying about parks and beer gardens and focus on getting schools, nursing homes and workplaces to install air cleaners and filters.

Still, not all scientists are convinced that airborne transmission is the most important path, with some pointing to a lack of data. Yet others respond that hasn’t stopped public health officials from concluding in the past that diseases, including measles and tuberculosis, are primarily spread by particles in the air.

“The airborne route is likely to be dominant,” wrote a collection of experts, led by Trisha Greenhalgh, a professor of primary care health sciences at the University of Oxford, in a recent commentary in The Lancet.

One of the 10 reasons they cited to support that view was that many infections are touched off by people who have no symptoms. Because they aren’t coughing or sneezing, they primarily emit the virus while talking. And talking produces mostly tiny particles that spread by air, rather than projectiles that quickly fall to surfaces.

‘HYGIENE THEATER’
Ultimately, the risk of infection boils down to the intensity, duration and frequency of exposure to the virus, according to Joseph G. Allen, an associate professor at Harvard and director of the university’s healthy buildings program. He has worked with companies and groups on re-opening plans, from big finance and technology firms to Broadway theaters and prisons.

He sympathizes with organizations that have resorted to deep cleaning in recent months, despite the fact that he considers it “hygiene theater.” It’s highly visible, and reassuring to people returning after months away.

With the CDC’s pivot toward the threat of airborne transmission, the agency rolled out detailed guidelines on matters like ventilation and filtration. Employees worried about coming back to the office should ask employers whether they’re meeting those standards, which are tougher than most building codes, Mr. Allen said.

Another increasingly popular precaution is the installation of plastic dividers between desks in open-plan offices. For Mr. Allen, the plexiglass barriers are of questionable benefit in most cases, and could impede the air flow needed for proper ventilation. He cited an instance at a school office in Massachusetts where investigators, using a smoke test after a number of infections, found that the dividers had contributed to a buildup of coronavirus.

Over time, infections will diminish as more people get vaccinated, and concerns about catching Covid-19 at the office will probably recede, according to Ms. Marr. But the lessons learned in battling the virus could continue to reduce the incidence of colds and flu, she said.

As for elevators, one of the more worrying spaces in large buildings, Mr. Allen said they aren’t necessarily high-risk areas for infection. Lifts often have decent air flow, and people typically don’t ride in them for very long, nor very frequently. The bigger risk? Limiting the number of people in them, leading to crowds waiting in a building’s entryway. 

“I recommend putting a sign in there that says, ‘Space as much as you can. Wear a mask. Don’t talk,’” Allen said. “People will probably appreciate that anyway.” — Bloomberg

Taiwan says China waging economic warfare against tech sector

WINSTON CHEN/UNSPLASH

TAIPEI — Taiwan’s government on Wednesday accused China of waging economic warfare against the Chinese-claimed island’s tech sector by stealing technology and enticing away engineers, as parliament considers strengthening legislation to prevent this.

Taiwan is home to a thriving and world-leading semiconductor industry, used in everything from fighter jets to cars, and the government has long worried about China’s efforts to copy that success, including by industrial espionage and other underhand methods.

Four Taiwanese lawmakers from the ruling Democratic Progressive Party are leading a proposal to amend the commercial secrets law to widen the scope of what is considered a secret and toughen penalties.

In a report to parliament about the proposed amendments, Taiwan’s National Security Bureau blamed China for most cases of industrial espionage by foreign forces discovered in recent years.

“The Chinese Communists’ orchestrated theft of technology from other countries poses a major threat to democracies,” it said.

“The aim of the Chinese Communists’ infiltration into our technology is not only about economic interests, but also has a political intention to make Taiwan poorer and weaker.”

China’s Taiwan Affairs Office did not immediately respond to a request for comment.

Taiwan’s Economy Ministry, in its report, said China was trying to boost its semiconductor industry by “poaching” Taiwanese talent “as well as obtaining our country’s industry’s commercial secrets, to harm the country’s competitiveness.”

The Cabinet has met many times to work out how to address the problem, the ministry added.

Lawmaker Ho Hsin-chun, one of the legislators who has proposed the amendments, said the need was urgent.

“The infiltration of China’s red supply chain is everywhere,” she told a parliament committee meeting.

It is not clear when or if the amendments could be passed into law, and the Justice Ministry in its report suggested further discussion of the wording was needed.

Hu Mu-yuan, deputy head of Taiwan’s National Security Bureau, expressed broad backing for the measure.

“As long as it’s helpful for our country’s security and interests, we support it,” he said. — Reuters

S.Korea to lift mandatory quarantine for residents fully vaccinated against COVID-19

REUTERS

SEOUL — South Korea said on Wednesday it will offer some exemptions to mandatory quarantine measures for people who have been fully inoculated against coronavirus disease 2019 (COVID-19), in an effort to encourage more vaccinations.

South Korea has so far vaccinated 4% of its 52 million strong population, but has set an ambitious target of giving shots to 70% of its people by September and reaching herd immunity by November.

From May 5, residents who have had both coronavirus vaccine shots will not have to undergo the mandatory two-week quarantine for people who have been in contact with a confirmed patient or have returned from overseas travel, ​Yoon Tae-ho, a senior health ministry official, told a briefing.

The exemption will only apply for those with a negative COVID-19 test and who show no related symptoms.

It will not apply to residents arriving from nations such as South Africa and Brazil where coronavirus variants are prevalent and to people who are vaccinated in foreign countries.

South Korea has procured a total 192 million doses of COVID-19 vaccines, enough to administer close to twice its population, including those from Pfizer, AstraZeneca Plc , Moderna, Inc, Johnson & Johnson and Novavax.

It has inoculated around 2.68 million people so far with AstraZeneca or Pfizer vaccines and aims to vaccinate 12 million people by June, although there has been growing vaccine hesitancy due to concerns over reports of blood clotting disorders.

South Korea reported 775 new COVID-19 cases on Tuesday, bringing the total number of confirmed cases to 120,673, with 1,821 deaths. — Reuters

Saudi crown prince says kingdom has no plans to introduce income tax

REUTERS

DUBAI — Saudi Arabia’s Crown Prince Mohammed bin Salman said in televised remarks on Tuesday that the kingdom had no plans to introduce income tax and a decision last July to triple value-added tax to 15% was temporary.

The kingdom had tripled VAT to offset the impact of lower oil revenue on state finances in a move that had shocked citizens and businesses expecting more support from the government during the coronavirus pandemic.

“Raising VAT was a painful measure and I hate to hurt any Saudi citizen, but it is my duty to build Saudis a long-term sustainable future,” the prince said in an interview aired on Saudi TV to mark the fifth anniversary of Vision 2030.

“Raising VAT to 15% is a temporary decision that will last one to five years and then it will go down to between 5% to 10%,” he said.

Prince Mohammed also said the kingdom aims to reduce unemployment to 11% this year. Unemployment among Saudi citizens fell to 12.6% in the fourth quarter of 2020 from 14.9% in the third quarter.

The government has been pushing through economic reforms since 2016 to create millions of jobs and reduce unemployment to 7% by 2030.

The plans were disrupted by the coronavirus crisis that sent oil prices plummeting last year. — Reuters

Gilas Pilipinas 3×3 team begins OQT bid on May 26 in Austria

RICHARD ESGUERRA
CJ PEREZ (#17) and the rest of the Gilas Pilipinas 3×3 team will begin their FIBA Olympic Qualifying Tournament in Austria on May 26. — RICHARD ESGUERRA

By Michael Angelo S. Murillo, Senior Reporter

THE Philippine 3×3 national team will begin its bid in the FIBA Olympic Qualifying Tournament (OQT) in Graz, Austria, on opening day on May 26 in Pool C.

Composed of young Philippine Basketball Association (PBA) veterans CJ Perez and Mo Tautuaa of San Miguel and incoming rookies Joshua Munzon (Terrafirma) and Alvin Pasaol (Meralco), Gilas Pilipinas 3×3 will try to notch one of the three tickets up for grabs in the qualifiers for the Tokyo Games, where the sport is making its debut.

The nationals play in the tough Pool C, which also has Slovenia (Europe Cup 2016 winner), France (second at Europe Cup 2019), Qatar (2014 World Champ), and the Dominican Republic.

OQT format calls for each team playing the other four in their respective pools. The top two teams from each pool qualify for the crossover quarterfinals and then play knockout games all the way to the semifinals.

The semifinals and the third-place games will be known in the FIBA 3×3 OQT as the Olympic Ticket games.

Gilas Pilipinas 3×3 will first play Qatar on May 26 at 8 p.m. (Manila time) to be followed by the game against Slovenia at 9:45 p.m.

It will take a break the following day before resuming its campaign on May 28 against the Dominican Republic at 6 p.m. and France at 8 p.m.

The Philippine team is set to start its “bubble” training at the Inspire Sports Academy in Calamba, Laguna, in the first week of May. They will stay there before flying to Graz for the OQT.

Messrs. Perez and Tautuaa were members of the gold medal-winning 3×3 team in the 30th Southeast Asian Games held here in 2019.

The duo is looking at building on that success notwithstanding the long break they had in the sport because of the pandemic.

“The last time we played 3×3 was before lockdown and that was last year, so it’s been a while. We are not able to play, that’s the hard thing for us,” Mr. Perez admitted in an interview with the official International Basketball Federation (FIBA) website.

“We are doing our best to be in shape. Our coaches never stopped working for the program for us and they keep pushing every day,” he added.

Messrs. Munzon and Pasaol, meanwhile, are the top 3×3 players in the country and played a big role in the Philippines securing a spot in the OQT, being part of teams which saw action and gained qualifying points in various FIBA tournaments.

They have decided to take their talent to the PBA by applying for the rookie draft early this year where they were selected in the first round, but expressed their commitment for the country’s 3×3 cause in the OQT.

The Samahang Basketbol ng Pilipinas (SBP) and the PBA have vowed full support for the team, which also includes Rain or Shine rookie Santi Santillan and free-agent Karl Dehesa.

The FIBA 3×3 OQT happens from May 26 to 30.

GILAS TEAM IN PHILIPPINE CUP
Meanwhile, if plans push through, the Gilas Pilipinas national team will be featured in the PBA Philippine Cup.

League commissioner Willie Marcial shared the news during the online Philippine Sportswriters Association Forum on Tuesday.

He said it is the PBA’s way of helping Gilas train for its international competitions, namely, the FIBA Olympic Qualifying Tournament in Serbia in June and FIBA Asia Cup in Indonesia in August, in light of the many restrictions currently in place because of the pandemic.

The league chief said they will be coordinating with the SBP in accommodating Gilas, which he sees could play eight to 10 games at least in the Philippine Cup as part of its preparation.

The PBA is looking to begin its delayed Season 46 hopefully in late May or in June.

League officials were to meet government officials on Wednesday to discuss the staging of its new season.