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Peso weakens vs dollar as central bank sees faster 2022, 2023 inflation

BW FILE PHOTO

THE PESO retreated versus the greenback on Thursday as the central bank warned of higher inflation this year and amid fresh signals from the US Federal Reserve.

The local unit closed at P51.33 per dollar on Thursday, depreciating by 4.5 centavos from its P51.285 finish on Wednesday, based on Bankers Association of the Philippines data.

The peso opened Thursday’s session at P51.27 against the dollar. Its weakest showing was at P51.36, while its intraday best was at P51.235 versus the greenback.

Dollars exchanged climbed to $824.4 million on Thursday from $596.1 million on Wednesday.

The peso weakened after the central bank said it now expects faster inflation for 2022 and 2023, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

The Bangko Sentral ng Pilipinas (BSP) kept benchmark interest rates steady at its meeting on Thursday to continue supporting the economy’s recovery, but signaled it is preparing an exit strategy to respond to inflation risks.

The BSP now expects a faster inflation rate of 3.7% for 2022 from its previous 3.4% estimate, still within the 2-4% target and slower than the 4.5% in 2021. The forecast for 2023 was likewise raised to 3.3% from 3.2% in the previous review.

“The higher inflation path in 2022 is attributed primarily to higher world non-oil prices, as well as global crude oil prices, that could affect domestic inflation,” BSP Department of Economic Research Managing Director Zeno Ronald R. Abenoja said.

Meanwhile, a trader in an e-mail said the market also factored in statements from the Fed on its planned rate hikes in the minutes of its latest meeting.

Fed officials last month agreed that, with inflation tightening its grip on the economy and employment strong, it was time to raise interest rates, but also that any decisions would depend on a meeting-by-meeting analysis of inflation and other data, according to the minutes of the Jan. 25-26 policy meeting, Reuters reported.

The account of the two-day session showed the US central bank readying for a fight against the fastest pace of price increases since the 1980s, with officials saying that while they still expected inflation to ease through the year, they would be ready to hike rates fast if it does not.

“Most participants noted that, if inflation does not move down as they expect, it would be appropriate for the (Federal Open Market) Committee to remove policy accommodation at a faster pace than they currently anticipate,” the minutes stated.

As it stood, Fed officials said the strength of the economy and the high current pace of inflation would warrant raising rates quicker than the once-per-quarter pace seen during the tightening cycle that began in 2015 — a statement some analysts said perhaps points to rate hikes at every meeting this year.

For Friday, Mr. Ricafort gave a forecast range of P51.20 to P51.35 per dollar, while the trader expects the local unit to move within P51.25 to P51.50. — LWTN with Reuters

PSE index inches lower ahead of BSP decision

BW FILE PHOTO

SHARES went down on Thursday as investors pocketed their gains ahead of the Philippine central bank’s policy decision.

The Philippine Stock Exchange index (PSEi) dropped 13.89 points or 0.18% to end at 7,438.93. Meanwhile, the broader all shares index inched up 3.77 points or 0.09% to close at 3,934.31.

First Metro Investment Corp. Head of Research Cristina S. Ulang said investors were in a wait-and-see mood ahead of the Bangko Sentral ng Pilipinas’ (BSP) latest policy decision.

“While policy rates are anticipated to remain unchanged, investors are watching out for clues on the BSP’s policy direction this year in light of the expected continuation of our economic recovery and the hawkish outlook of the Federal Reserve,” Philstocks Financial, Inc. Senior Research Analyst Japhet O. Tantiangco said in a Viber message.

Hours after the market closed, the BSP announced it is keeping benchmark interest rates steady to support the economy’s recovery.

Fed officials last month agreed that, with inflation tightening its grip on the economy and employment strong, it was time to raise interest rates, but also that any decisions would depend on a meeting-by-meeting analysis of inflation and other data, according to the minutes of the Jan. 25-26 policy meeting, Reuters reported.

The account of the two-day session showed the US central bank readying for a fight against the fastest pace of price increases since the 1980s, with officials saying that while they still expected inflation to ease through the year, they would be ready to hike rates fast if it does not.

Meanwhile, AAA Southeast Equities, Inc. William M. Cabangon said Metro Pacific Investments Corp. (MPIC), which rose 5.15%, was as big gainer following the company’s announcement that it will initiate a P5-billion share buyback program.

Sectoral indices were mixed on Thursday. Property went down 21.66 points or 0.62% to 3,463.32; holding firms dropped 10.46 points or 0.14% to 7,090.84; and financials slipped 0.81 point or 0.04% to 1,737.05.

On the other hand, services rose 5.97 points or 0.30% to 1,956.35; industrials advanced 26.51 points or 0.25% to 10,615.16; and mining and oil increased 24.14 points or 0.21% to 11,383.43.

Value turnover fell to P6.82 billion with 911.04 million issues traded on Thursday from the P9.53 billion with 1.16 billion shares switching hands on Wednesday.

Advancers beat decliners, 107 versus 77, while 56 names closed unchanged.

Foreigners turned sellers with P279.27 million net outflows recorded on Thursday versus the P893.43 million in net purchases on Wednesday.

MPIC is one of three key Philippine units of First Pacific, the others being Philex Mining Corp. and PLDT, Inc.

Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a majority stake in BusinessWorld through the Philippine Star Group, which it controls. — MCL with Reuters

UK pledges $34M to enhance security in Indo-Pacific

UK PRIME MINISTER Boris Johnson. — Reuters

SYDNEY — Britain committed 25 million pounds ($34 million) to strengthen security in the Indo-Pacific as part of a pact with Australia, and leaders of both countries expressed “grave concerns” about China’s policies in its far western region of Xinjiang. 

In a video call on Thursday, British Prime Minister Boris Johnson and his Australian counterpart Scott Morrison also called for peace and stability across the Taiwan Strait and warned Russia against invading Ukraine. 

“They agreed the need for de-escalation and underscored that any further Russian incursion in Ukraine would be a massive strategic mistake and have a stark humanitarian cost,” the leaders said in a joint statement after their meeting. 

The funds pledged to the Indo-Pacific security agreement would strengthen regional resilience in areas including cyberspace, state threats, and maritime security, Messrs. Morrison and Johnson said. 

The bilateral talks come just a week after the so-called Quad group of Australia, the United States, Japan, and India pledged to deepen cooperation to ensure the Indo-Pacific region was free from “coercion”, a thinly veiled swipe at China’s economic and military expansion. 

Messrs. Johnson and Morrison expressed “grave concerns about credible reports of human rights violations in Xinjiang, and called on China to protect the rights, freedoms and high degree of autonomy for Hong Kong.” 

The United States accuses China of genocide in its treatment of minority Muslim Uyghurs in Xinjiang and abuse including forced and prison labour. China denies the accusations. 

China imposed a sweeping national security law on Hong Kong in 2020, a move critics said undercut the greater freedoms promised under the “one country, two systems” framework agreed when the former British colony returned to Chinese rule in 1997. 

Messrs. Morrison and Johnson also stressed “the importance of peace and stability across the Taiwan Strait, and expressed support for Taiwan’s meaningful participation in international organizations.” 

China claims Taiwan as its own territory. Taiwan has complained about frequent incursions by China’s air force into its air defense zone, part of what Taipei says is a pattern of harassment by Beijing. 

Taiwan’s Foreign Ministry expressed its thanks for the support, saying they would continue to deepen cooperation with fellow democracies like Britain and Australia. 

The British and Australian leaders also stressed the importance of maritime rights and freedoms in the South China Sea, saying they were strongly opposed “to any unilateral actions that could escalate tensions and undermine regional stability and the international rules-based order, including militarization, coercion, and intimidation.” — Reuters

US sanctions on Russian banks are the West’s most potent economic threat

US PRESIDENT Joseph R. Biden and Russia’s President Vladimir Putin — REUTERS

LONDON — For NATO members, the most powerful measure against Russia were it to invade Ukraine would be US sanctions cutting off Russian state banks from the dollar according to Russian executives, bankers, and former senior US sanctions officials. 

The United States has warned that Russia could invade as early as this week. Moscow denies it has such plans but says the West needs to take its concerns about NATO expansion seriously. 

Washington, and its allies in Europe, are finalizing an extensive package of sanctions if Russia were to launch an invasion according to US and European officials. 

The US package would expand a technology export ban to include any goods made with US components or software, as well as proposed sanctions against specific Russian billionaires. But sanctions experts say more than any other measure, aggressive action against Russia’s state banks would hit its economy the hardest. 

“Banking sanctions are the most impactful measure the US can carry out in the short term,” said Brian O’Toole, a former senior advisor to the director of the Office of Foreign Assets Control or OFAC in the US Treasury Department, which designs and manages the implementation of sanctions. 

Proposed sanctions against Russian banks would bar them from making any transactions in US dollars, essentially freezing any dollar-denominated assets or liabilities held by the banks at home and abroad. 

Russian Finance Minister Anton Siluanov on Wednesday said sanctions against Russian banks would be “unpleasant” and lead to a spike in volatility, but said the state would make sure that all deposits with banks and all transactions, including in foreign currencies, were secured. Russia’s abundant hard currency reserves — now at $635 billion — would help shield against the potential blow, he said. 

When asked about possible sanctions on Russian state banks, Kremlin spokesman Dmitry Peskov told Reuters that Russia was “preparing for unpredictable actions” from the United States “by hedging against any risks.” 

He said: “We could get the impression that all this information noise and all these claims that Russia is about to attack Ukraine are being made to further contain Russia and to create a reason to impose further sanctions — and so they are speaking about these hellish sanctions.” 

Elina Ribakova, deputy chief economist at the Institute of International Finance in Washington said even though Russia has enough reserves, the potential measures “could cause a run on deposits. It will definitely have a strong impact on the domestic financial system. It will raise the risk of financial instability including a widening of spreads and a sell-off of the rouble.” 

US sanctions far outweigh the power of any other jurisdiction because the White House can potentially impose secondary sanctions on any foreign banks continuing to deal with these institutions, said Mr. O’Toole and Tom Keatinge, finance and security expert at the Royal United Services Institute, a London-based think tank. The White House did not answer requests for comment about secondary sanctions. 

Shares in banking giant Sberbank and smaller rival VTB have both fallen in the past week on the prospect of sanctions, although recovered some losses after Russia said on Tuesday that some troops stationed near borders with Ukraine were returning to base after completing drills 

Sberbank holds nearly half of Russia’s 21 trillion roubles in deposits and together with state lenders VTB, Gazprombank, and Rosselkhozbank accounts for nearly 60% of the nation’s banking assets. 

GOING IN HEAVY
Sberbank, VTB and the Russian Central Bank declined to comment. Gazprombank and Rosselkhozbank did not respond to requests for comment. 

“Taking out Sberbank would have massive ramifications,” Mr. O’Toole added. 

The nature of the sanctions would likely hinge on the scale of a Russian invasion. 

A Russian invasion limited to an incursion into the rebel-held Donbass region of east Ukraine for example, might mean the United States staggered its targeting of the Russian state banks in order to maintain further deterrence, potentially keeping Sberbank until last, said Daniel Fried, a former State Department coordinator for sanctions policy in the Obama administration. 

But “if the Kremlin goes in big, so could we, and we might go in heavy in any case,” Mr. Fried said. 

Sanctions on banks would be partly aimed at forcing Russia’s central bank to dig into its hard currency reserves in order to bail out the banks and keep them afloat, Messrs. O’Toole and Fried both said. The central bank declined to comment on hard currency reserves and sanctions. 

Russia has some defenses to withstand a US-led attack on its financial stability. The hard currency reserves, high oil prices and a low debt to GDP ratio of 18% in 2021 place it in a good position to weather a further tightening of existing sanctions, said Chris Weafer, director of MacroAdvisory, a Moscow-based consultancy. 

In addition, Russian state banks curtailed their exposure to Western markets when the United States and EU imposed limited sanctions on VTB and Sberbank in retaliation for Russia’s 2014 annexation of Crimea, which restricted their ability to raise debt. 

Today, the proposed state bank sanctions would include a system of waivers, licenses, and wind-down periods to ensure payments for dollar-denominated commodity contracts and debt payments could be made, the sanctions experts said. 

Russian officials have largely focused on threats to cut off Russia from the SWIFT financial messaging system in case of war. 

But US and European officials said last week this measure was now off the table due to concerns from European lenders that it could mean billions of dollars in outstanding loans they have in Russia would not be repaid. 

DOLLARS THE KEY
Sberbank chief executive German Gref has previously brushed off reports that US sanctions could prevent Moscow from converting roubles into dollars on the grounds that he believed it was “impossible to execute.” 

Two senior Russian bankers interviewed by Reuters said they expected any targeted bank to escape the worst of the impact by converting their dollar holdings into euros. 

Former senior US sanctions officials, however, said this confidence was misplaced as the dollars would still have to ultimately go through a US clearing bank in order to convert them. 

“Anything that is denominated in dollars has to clear through the US and once you do that it’s stuck,” said Mr. O’Toole. 

These sanctions, he said, could also lead to freezes on dollar accounts held abroad by the Russian state banks in correspondent accounts, set up to handle funds on behalf of another bank. 

Igor Yurgens, vice president of the Russian Union of Industrialists and Entrepreneurs, a powerful lobby group for Russian business, told Reuters the Russian central bank had been working on a programme for correspondent accounts with China through which to convert cash that might help mitigate the impact of sanctions. 

“Everything would be difficult, but it won’t collapse,” he said. The Russian authorities “have conducted technological stress tests and consider they will muddle through for a while.” 

Sergey Aleksashenko, a former deputy Russian central bank chairman now living in exile in the United States, said he believed the West’s sanctions threats were no more than an escalating virtual, or information, war between Russia and the West. 

In this standoff, “Putin’s weapon is (the movement of) tanks and the West’s is talk of sanctions. All of this is part of a great game,” he said. 

But one of Russia’s top 50 billionaires interviewed by Reuters warned that the political maneuvering between Moscow and Washington could end up in conflict and economic reprisals. “Everyone has been playing a virtual game…But then all these virtual events can become facts in life.” 

“Sanctions will lead to serious economic consequences,” he said. — Catherine Belton/Reuters

US retail sales race to record high; economy shows strength ahead of rate hikes

Ford Motor Company

WASHINGTON — US retail sales increased by the most in 10 months in January, lifting the level of sales to a record high amid a surge in purchases of motor vehicles and other goods, but higher prices could limit the boost to economic growth this quarter. 

The report from the Commerce Department on Wednesday showed underlying strength in the economy ahead of anticipated interest rate increases from the Federal Reserve starting in March, although retail sales in December were much weaker than initially estimated. 

“The strong rebound in January retail sales, though partly in response to last year’s weak finish and inflated by higher prices, suggests consumers still have plenty in the tank to propel the expansion forward this year,” said Sal Guatieri, a senior economist at BMO Capital Markets in Toronto. “Rate hikes won’t cool their jets for a while, making the Fed’s job of driving down inflation that much harder.” 

Retail sales surged 3.8% last month, the largest rise since last March. That raised sales to their highest level since the government started tracking the series in 1992. 

Data for December was revised down to show sales declining 2.5% instead of 1.9% as previously reported. Economists polled by Reuters had forecast retail sales would rise 2.0%, with estimates ranging from as low as 0.7% to as high as 4.4%. 

Retail sales increased despite consumer sentiment sagging to a decade low in recent months. Spending is being supported by massive savings, high household wealth and a tightening labor market, though inflation is eroding wage gains. 

The broad increase in sales was led by motor vehicles. 

Auto sales typically fall in January after the holiday promotional season. Given the ongoing scarcity of motor vehicles because of a global shortage of semiconductors, the drop last month was probably smaller than had been expected by the seasonal factors, the model used by the government to iron out seasonal fluctuations in data. 

That likely resulted in the seasonal factors being more generous than in previous years. Unadjusted auto sales were the highest for the month of January going back to 1992. 

Economists expect this boost to fade in March. Auto sales could also fall, with a separate report from the Fed on Wednesday showing motor vehicle production declined in January for a second straight month. That curbed overall growth in manufacturing output to 0.2% last month. 

“Despite some caveats to the retail sales report, at least we can be assured that consumers are not pulling back their crucial support for the economy even though they are experiencing a marked decline in confidence if not being downright depressed about what the future holds,” said Christopher Rupkey, chief economist at FWDBONDS in New York. 

Stocks on Wall Street fell as investors worried the strong retail sales could give the US central bank ammunition to aggressively tighten monetary policy. 

Financial markets are pricing in nearly even odds of a 50-basis-point interest rate increase next month. Economists expect as many as seven rate hikes this year. 

Minutes of the Fed’s Jan. 25–26 meeting published on Wednesday showed decisions to raise rates would depend on a meeting-by-meeting analysis of data. 

The dollar slipped against a basket of currencies while US Treasury prices were mixed. 

BROAD GAINS
Retail sales last month were also lifted by higher prices because of shortages amid strained supply chains. They are mostly made up of goods and are not adjusted for inflation. 

Economists estimated that retail sales rose about 2.8% in January when adjusted for inflation, which put them back in line with their pre-pandemic trend. 

Receipts at auto dealerships snapped back 5.7% after dropping 1.6% in December. Sales at electronics and appliance stores increased 1.9%. Building materials stores sales surged 4.1%. There were also gains in receipts at food and beverage stores as well as clothing retailers. 

But sales at sporting goods, hobby, musical instrument, and book stores fell 3.0%, suggesting consumers were cutting back on discretionary spending likely because of inflation. Sales at service stations fell 1.3% amid lower gasoline prices. 

Receipts at restaurants and bars dropped 0.9% as COVID-19 infections, driven by the Omicron variant, reduced mobility. Restaurants and bars are the only services category in the retail sales report. Online retail store sales surged 14.5%. 

Excluding automobiles, gasoline, building materials and food services, retail sales soared 4.8% in January. Data for December was revised lower to show these so-called core retail sales falling 4.0% instead of 3.1% as previously reported. 

Core retail sales correspond most closely with the consumer spending component of gross domestic product. 

Economists estimated that inflation-adjusted core retail sales rose 2.7% last month. The so-called real core retail sales are what matter in the measurement of consumer spending growth. 

January’s solid real core retail sales suggested that consumer spending this quarter would probably not be as weak as economists had expected. Real consumer spending declined 1.0% in December, which had set consumption on a slower growth path. 

“The recent volatility in the data makes it hard to detect the underlying trend, but the recent momentum for consumer spending now looks stronger than we were anticipating,” said Daniel Silver, an economist at JPMorgan in New York. 

Growth estimates for consumer spending are mostly below a 2.0% annualized rate. Consumer spending, which accounts for more than two-thirds of US economic activity, increased at a 3.3% pace in the fourth quarter. 

Economists at Goldman Sachs raised their first-quarter GDP growth estimate by 1.5 percentage points to a 2.0% rate. The economy grew at a 6.9% pace in the fourth quarter. Growth in 2021 was the strongest since 1984. — Lucia Mutikani/Reuters

Sports and lifestyle brand PUMA opens online store to PH market

Global Sports Brand PUMA has expanded its presence in South East Asia and opened its online store PUMA.com for customers in the Philippines.

By opening PUMA.com in the Philippines, the sports company offers all of its products to online shopping fans in the Southeast Asian market.

“eCommerce is simply the easiest way to connect with PUMA fans all around the world. With the launch of this site, PUMA can finally offer interactive online shopping experiences in SEA too. We are very excited about the launch, and we look forward to introducing more exciting concepts and offerings in the Philippines market,” says Sanjay Roy, General Manager of PUMA SEA.

The products are locally picked, packed and shipped directly to customers. Another bonus is that the logistics in this area will open in Spring 2022 and will create hundreds of direct and indirect employments. From cart to checkout to enjoying PUMA products at home is now only a click away in the Philippines.

“Filipinos are such proud, big fans of sports, especially basketball, we even play in slippers on the street! Sport means a lot to our people. Knowing that everyone can order their favorite PUMA products at any time and anywhere soon is pure joy,” said PUMA Philippines Country Manager, Paolo Misa.

To launch PUMA.com, PUMA brought its brand ambassador, LaMelo Ball, to the Philippines fans. Featured at the Tenement Court is LaMelo’s mural, handpicked by LaMelo himself from a mural design competition held in the Philippines. This artwork submitted by winner, William Pototoy, takes inspirations from LaMelo’s “Not from Here” concept.

Stay tuned on ph.PUMA.com for more exclusive seasonal drops featuring key products from highly anticipated collaborations and collections.

 


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‘This isKwela’ for all: Globe launches online education community page

In line with its goal to help bring inclusive, accessible and safe learning solutions for Filipinos, Globe has launched a new online education community that aims to spark meaningful and inspiring conversations to elevate learning across digital platforms.

Globe is encouraging people of all ages to be part of its “This isKwela” Facebook Community, a hub that supports learning across different life stages and provides a new online space for members to meet new friends, learn new information, sharpen skills, and share knowledge.

The community is beneficial to many, from students wanting to supplement formal schooling to professionals seeking information for work. It also helps those in need of upskilling, even the elderly who want to learn more about digital technology and applications.

Experts on key subjects are available to assist community members. They are Angelo Sicat, a teacher and creator of practical and easy-to-digest English language learning topics on TikTok; Immanuel Maglasang, the man behind online channel Science Kwela; Cipriano Romeral, Jr., a math expert who has conducted lectures for the Licensure Examination for Teachers (LET); and Teacher Maureen Madiano, a licensed teacher and content creator who teaches basic English and Filipino lessons on different social media platforms.

“With more people joining and participating in online communities, Globe aims to build an inclusive social hub that serves as an alternative learning community for anyone who wants to do lifelong learning,” said Yoly Crisanto, Globe’s Chief Sustainability Officer and SVP for Corporate Communications.

Globe believes that This isKwela is timely as more people are embracing “new normal” learning via digital platforms, such as online classes, e-libraries and webinars, among others.

This isKwela is part of GoLearn, a unified initiative aimed at helping the country achieve 21st century learning. GoLearn aims to open doors to a brighter future by promoting continuous learning and further bridging digital gaps in the Philippine education landscape via access to connectivity, learning platforms, and other solutions. Those interested to learn more can join the online community by visiting https://www.facebook.com/groups/thisiskwela/?ref=share .

Globe strongly supports the United Nations Sustainable Development Goals, particularly UN SDG No. 4, which ensures inclusive and equitable quality education and promotes lifelong learning opportunities for all. The company is committed to upholding the United Nations Global Compact principles and 10 UN SDGs.

To learn more about Globe, visit www.globe.com.ph.

 


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Lower testing rates likely reason for falling COVID-19 case reports — WHO

UNSPLASH

A drop in coronavirus disease 2019 (COVID-19) testing rates is likely contributing to a decline in reported cases even as deaths are rising, the World Health Organization’s (WHO) technical lead on COVID-19 Maria Van Kerkhove said on Wednesday. 

“The bigger concern right now, I think, is the still increasing number of deaths,” Ms. Van Kerkhove said during a virtual panel discussion livestreamed on Twitter, Facebook, and YouTube. 

“In the last week alone, almost 75,000 people died reported to us and we know that that is an underestimate,” she said. 

The countries claiming that their transmission has dropped from two to six weeks ago have likely seen a drop in testing rates, said WHO’s emergencies chief Mike Ryan. 

The WHO earlier this week urged governments to improve vaccination rates and rapid testing as infections have risen from the Omicron variant of the coronavirus, especially in east Europe. 

Several countries have announced plans to relax COVID-19 restrictions in coming weeks if daily infection numbers kept falling. 

Now is not the time for countries to change isolation requirements for people who test positive in rapid antigen or PCR tests, Mr. Ryan added. — Reuters

Taal Volcano emits 900-meter plumes

TAAL VOLCANO generated six volcanic earthquakes in the past 24 hours, including four volcanic tremors lasting one to four minutes, according to the Philippine Institute of Volcanology and Seismology (Phivolcs) on Thursday morning.

“Activity at the Main Crater was dominated by upwelling of hot volcanic fluids in its lake which generated plumes 900 meters tall that drifted southwest,” Phivolcs said in a bulletin posted on its website on Thursday.

The institute’s daily summary of volcanic activity described the plumes to be moderate, compared to the weak emissions the day before.

Taal’s alert status remains at level 2 of a five-step system, which means probable activity, including “sudden steam- or gas-driven explosions, volcanic earthquakes, minor ashfall, and lethal accumulations or expulsions of volcanic gas.”

Entry into the island is prohibited, especially around the main crater, the agency said.

Seismologists advised local government to continuously assess and strengthen the preparedness of previously evacuated barangays around Taal Lake in case of unrest.

Meanwhile, civil aviation authorities must advise pilots to avoid flying close to the volcano as airborne ash and ballistic fragments from sudden explosions and wind-remobilized ash may pose hazards to aircraft.

Phivolcs said it was closely monitoring Taal Volcano’s activity. — Brontë H. Lacsamana

Short AstraZeneca shelf life complicates COVID vaccine rollout to world’s poorest

BRUSSELS/LONDON — The relatively short shelf life of AstraZeneca Plc’s coronavirus disease 2019 (COVID-19) vaccine is complicating the rollout to the world’s poorest nations, according to officials and internal World Health Organization (WHO) documents reviewed by Reuters.

It is the latest headache to plague the COVAX vaccine-sharing project, co-led by the WHO and aimed at getting shots to the world’s neediest people.

Initially, poorer countries and COVAX lagged richer countries in securing vaccine supplies, as wealthier nations used their financial might to acquire the first available doses.

As vaccine production ramped up and richer states began donating excess doses, some countries — particularly in Africa —  are now struggling to administer the big shipments.

The need to turn down vaccines with short shelf lives, along with the initial inequality, hesitancy, and other barriers, has contributed to a much lower vaccination rate in Africa where only around 10% of people have been immunized, compared with more than 70% in richer nations.

Many vaccines are arriving with only a few months, and sometimes weeks, before their use-by date, adding to the scramble to get shots in arms. Some countries have had to destroy expired doses, including Nigeria which dumped up to 1 million AstraZeneca vaccines in November.

The problem with a short shelf life largely concerns AstraZeneca, according to COVAX data and officials.

An internal WHO document reviewed by Reuters detailing vaccine stocks in several central and west African countries for the week ending Feb. 6 highlighted the problem.

Most of the 19 listed African nations had expired AstraZeneca doses, compared to a handful of countries with expired doses from other manufacturers. Of the total expired doses declared by those countries in the week, about 1.3 million were AstraZeneca, 280,000 Johnson & Johnson, 15,000 Moderna, and 13,000 Russia’s Sputnik, the document shows.

Many more vaccines are expected to be rejected as African nations and COVAX said that from January they would not accept vaccines with less than two-and-a-half months’ shelf life.

Yet Benin received 80,400 AstraZeneca doses from COVAX on Jan. 30, set to expire on Feb. 28. It also got 100,000 doses of the Sputnik Light vaccine from Russia, with the same expiry date — but outside the COVAX initiative. Vaccines from other manufacturers had a much longer shelf life, according to the document.

“Since January 2022, COVAX is shipping vaccines to countries on demand, ensuring that countries get the right volume at the right time,” said Phiona Atuhebwe, a vaccine expert at WHO Africa.

Asked about the internal document, seen by Reuters, she said: “WHO is fully cognizant of the pressure that short shelf life doses put on delivery strategies and systems amid weak infrastructure and low demand.”

Two and a half months of shelf life is the minimum duration African countries reckon they need to administer the shots.

AstraZeneca, COVAX’s second-biggest supplier after Pfizer, said that since the start of the global rollout, more than 250 million of its shots left factories with less than two-and-a-half months before expiry.

Short shelf life is not generally a problem for a wealthy country with expertise and infrastructure. But without systems in place, it can be insurmountable.

A spokesperson for Anglo-Swedish AstraZeneca said vaccines had to undergo scrupulous quality checks and pointed to the fact that the company was a major player in supporting vaccination drives in poorer nations. With donations from rich countries included, more AstraZeneca vaccines have been distributed by COVAX than any other shot.

“AstraZeneca has supplied 2.6 billion vaccine doses globally, approximately two thirds of which have gone to low and lower middle-income countries,” the spokesperson said.

“Almost nine out of 10 doses released from our manufacturing sites ready for donation have a shelf life of at least two and a half months which is consistent with the rest of our supply chains,” the spokesperson added.

CLOCK TICKING 

The volumes of delivered vaccines vastly outnumber wasted doses, but the losses have been substantial thanks in part to the time pressures. This has led to AstraZeneca shots being turned down even before being shipped.

Taking into account only donated doses, which represent nearly half the billion vaccines distributed by COVAX, about 30 million AstraZeneca shots were rejected or deferred last year by poor nations, said Gavi, the nonprofit that co-runs COVAX alongside the WHO. That amounts to a quarter of AstraZeneca’s donated shots via COVAX.

Many were later reassigned to other countries, Gavi added, noting that more than 95% of them were AstraZeneca. It did not say where to.

Millions of additional AstraZeneca doses shared by the EU, COVAX’s biggest donor, have not been distributed yet, according to an EU internal document reviewed by Reuters.

The main problem is the vaccine’s shelf life of just six months from the date of bottling, the shortest among COVAX’s top suppliers, several COVAX and EU officials told Reuters.

In addition, the company’s quality checks can themselves sometimes take months.

COVAX’s complex system to assign doses to countries, and donors’ requests to deliver them to selected nations, often further eat into the vaccine’s short life, leaving sometimes only a few weeks before they expire.

Quality checks are conducted by all vaccine makers, but the time constraints are less of an issue for COVAX’s other top suppliers. Johnson & Johnson’s vaccines last two years when frozen, Pfizer’s last nine months and Moderna’s seven months, according to storage instructions approved by the WHO.

Millions of Moderna and Pfizer vaccines could also go wasted, some African countries warned in the WHO document, with the problem being linked usually to low vaccine uptake and insufficient cold-chain equipment to distribute these shots in remote regions.

EXTENDING SHELF LIFE 

Gavi said it has encouraged AstraZeneca to apply to the WHO for an extension of the expiration date, but talks have not led yet to a formal application. AstraZeneca said the process is complex due to its vast global network of companies manufacturing its vaccine.

One of its production partners, the Serum Institute of India, has been granted WHO approval for a nine-month shelf life, after it was initially authorized only for six. But other batches produced by AstraZeneca in the rest of the world have only six.

“We are currently in discussions with the World Health Organization … but this is a complex task which requires data to be collected from across our global manufacturing network,” a spokesperson for AstraZeneca said.

A WHO spokesperson did not comment on the talks.

On average, African countries have used two-thirds of received doses, but that drops to 11% in Burundi and 15% in Congo, with other large countries, including Madagascar, Zambia, Somalia and Uganda, having used only about one-third, Gavi said, citing figures from late January.

Gavi said the total wastage rate was around 0.3% of doses delivered by mid-December. It declined to share more updated figures, but said the rate was expected to rise. — Francesco Guarascio and Jennifer Rigby/Reuters 

BW Insights: Public-Private Collaboration to Pivot into a Greener World

According to recent data by the Green Finance Platform through its Green Finance Measures Database, there are 684 national and sub-national policy and regulatory measures on green finance in place in 100 developed and developing countries. This represents a 264% increase since 2015.

How does the Philippines fare compared to these countries? With eight years left before the 2030 deadline stated by the Paris Agreement, is the country on track to achieve its environmental goals? How are the country’s policymakers enacting change to facilitate the Philippines’ green transition? How does the private sector contribute to realizing this vision?

Join the second and final leg of BusinessWorld Insights’ two-part series themed “Green Finance for a More Sustainable Future” as experts discuss the topic “Public-Private Collaboration to Pivot into a Greener World.”

This session of #BUSINESSWORLDINSIGHTS is supported by the British Chamber of Commerce of the Philippines, Management Association of the Philippines, Philippine Chamber of Commerce and Industry and The Philippine STAR.

Early home preps for the awaited summertime

It’s time to get your home ready for the hot summer days ahead. It would be best to keep your home cooler and more comfortable to enjoy the season with the whole family. To help you make your home into tip top shape before the summer hits, here are five early summer home preparations you can do with Wilcon Depot. 

Equip your space with efficient cooling product

Ensure that your home is equipped with the right and efficient cooling products that can maintain comfort at your home during the hottest days of the year. You should consider installing an air conditioning unit that can bring cooling comfort to your home this summer. Kaze air conditioners are perfect for a cost-efficient, sleek-looking room. These are energy-saving, economic, and environment-friendly AC units with low sound technology.

Declutter time!

It’s time to clear out the unnecessary things and clean up all the clutter that takes up your space. Decluttering every room in your home will make a huge difference and give your area a new look and vibe. Prepare all the cleaning materials you need like trash bin, broom and dustpan, rugs, mops, gloves, and cleaning solutions. You also need to consider having boxes and organizers to store your things and keep your valuables in one place.

Update interior into summer-ready feels

The warm weather calls you to update your interiors with a bright and beach-themed home. You can quickly transform your home by creatively designing your space with colorful and vibrant home interiors. Update your living room with a new couch, blankets, throw pillows and add some decorations in hues of seaside and nautical summer decor that would surely give your space a lift. Of course, you cannot go wrong with bringing in plants and flowers that will surely provide a summery look to your home.

Make a to-do list of home repairs

As you get ready for summer, inspect every area of your home for possible home maintenance and repairs. Take time to check your exteriors and interiors to know what materials you’ll be needing.  To make this job a less hassle, equip your home with Truper equipment and tools to help you with all the maintenance and repairs.

Plan food business ideas

When you’re thinking of starting a home-based small business this summer season, Filipinos are interested in food. When you’ve got skills in cooking and baking, you can explore and try selling summer food staples from merienda favorites, refreshing drinks, to yummy desserts. With this in mind, you need to equip your kitchen with high-quality and efficient appliances to get your job done quickly. Hamden kitchen appliances will be your partner for your foodie business idea.

Summertime is a perfect opportunity to enjoy so from this day on, start to plan your early summer home preparations with Wilcon Depot. Make your home ready for summer and get everything you need from the wide selection of products that Wilcon offers.

Shop for home improvement and building needs at any of their 73 stores nationwide or shop online at Wilcon Online Store by visiting shop.wilcon.com.ph. 

For more information about Wilcon, you can log on to www.wilcon.com.ph or follow their social media accounts on Facebook and Instagram. Subscribe and connect with them on Viber Community, LinkedIn, and YouTube.

 


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