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Price controls, food imports, and roadmaps

Several decades ago, when Cory Aquino was our President, the price of galunggong (mackerel scad) was the barometer of how better or worse off the people were. Then-President Cory viewed galunggong as the poor man’s viand. High galunggong prices meant hardship for the low-waged factory worker and his family. If I remember correctly, a spike in its price would trigger calls for price control.

These days, the calls resound to impose a price control or price ceiling not for galunggong but for pork and chicken. A friend rues the situation that while the price of galunggong has been liberated from controls, pork and chicken have become the new targets. Well, his lamentation is understandable, for he comes from a family of poultry producers.

But the prices of galunggong, pork, and chicken are all affected by supply and demand.  From what I have heard, fish catch is affected not just by the season but also by the brightness the moon casts over the fishing grounds.

But there is no denying that the spike in the prices of pork and poultry is a result of a supply shortfall. Everybody is aware of the African Swine Fever (ASF) that has plagued Luzon swine producers, resulting in the culling of thousands and thousands of pigs. It is a no brainer that the ASF is the primary culprit for the price spike.

And while we are somehow spared by the bird flu, thank God, the demand for chicken has increased as people have shifted consumption from the scarce pork to chicken.  The rise in demand for poultry as a result of substitution, without a corresponding increase in supply, has naturally triggered an increase in its price as well.

Price controls to tame the prices of pork and chicken will not work. As a saying goes, one cannot legislate the law of supply and demand. Further, a price control creates a black market. Sellers hide their stocks, further pushing prices upwards.

If there is a price ceiling, producers would rather withdraw from the market altogether.  Why would they sell at a price below their cost of production?

But some believe in conspiracies and blame “colluding traders and cartels” for the higher prices!  The evidence does not exist though.

Attorney Bong Inciong of the United Broiler Raisers Association (UBRA) acknowledges the supply problem. He said: “The present crisis is not about price manipulation and cartels. It is a supply problem caused by the absence of a genuine quarantine system, especially at the customs border, to interdict and contain diseases like ASF.” He also said: “The challenge is how to help consumers without killing your producers. You follow the design of the WTO.” That got me a bit amused as Mr. Inciong staunchly and consistently opposes World Trade Organization (WTO) policies.

Allowing imports to address supply problems will alleviate the “meat crisis” and the inflationary pressure. Industry leaders are in fact open to allowing imports to come in but are opposed to the lowering of tariffs. Taking off from the experience of the Rice Tariffication Law, they want to use the revenues derived from the tariffs earned from imports to provide support to the specifically affected industry.

What now governs the utilization of revenues derived from agriculture imports other than rice is the so-called Agriculture Competitiveness Enhancement Fund (ACEF).  When ACEF was legislated in March 1996 as RA 8178, the tariff revenues earned from agricultural imports became a de facto pork barrel of legislators. Section 8 of said law reads, “The entire proceeds shall be set aside and earmarked by Congress for irrigation, farm-to-market roads, post-harvest equipment and facilities, credit, research and development, other marketing infrastructure, provision of market information, retraining, extension services, and other forms of assistance and support to the agricultural sector.”

A 2014 assessment of the Congressional Policy and Budget Research Department of the House of Representatives pointed out, among others, the disparity in the provision of the amount of ACEF assistance. It ranges from “P150,000 to P3 million” for micro projects; “above P3 million to P15 million” for small projects; “above P15 million to P100 million” for medium-size projects; and, “above P1 million pesos” for large enterprises. This assistance normally requires the endorsement of the Department of Agriculture’s (DA) Regional Directors who in turn receive endorsements from the Congressmen and Senators.   

The ACEF law, twice amended to provide for its extension, is set to again expire in 2022. During the course of its amendment, the utilization of the funds was somehow changed — earmarked for credit, grants and scholarships but it was never directed to specific sectors from where the tariff revenues were derived. But it must be stressed that funding is not the principal problem.

The call of DA Secretary William Dar for a Food Summit should immediately put on the agenda how ACEF can be amended and once more extended to support specific industries. But such support should not be confined to subsidies.

Whereas irrigation and farm to market roads were the immediate needs of the agriculture sector then, new challenges at present have emerged like climate change and the outbreak of so many farm diseases. The name of the game is agility in strategic planning, which of course will still include fund utilization.

But as the government tries to address supply problems in the short term by allowing imports, serious effort must really be done to put in place industry roadmaps, especially for agricultural products that are integrated. Corn, for instance, is strongly linked with the feeds industry which is, in turn, linked to the poultry and swine sector. It thus follows that availability of inputs for the poultry and swine sector must be ensured and prices of such inputs must be lowered. A Broiler Board and a Corn Board may be established to make plans and determine the apt interventions including the utilization of ACEF.

We have to think long term. Oh, this reminds me that even the Rice Industry Roadmap is yet to be released and is long overdue. So there.

 

Jessica Reyes-Cantos is the president of Action for Economic Reform.

Slow crawl out of the trenches

 

Gross domestic product (GDP) contracted 9.5% last year, with the 15% fall in consumption and investments only partly offset by government spending and a significant narrowing of the trade deficit, itself a reflection of the demand collapse. Quarterly data show that as lockdown measures were gradually relaxed and mobility increased, there was a rebound in activity in Q3, in part reflecting pent-up demand, that softened in Q4. The gains notwithstanding, the level of Q4 2020 output was still 8% lower than Q4 2019. Expectations now of sustaining growth hinge on keeping infections down even as quarantine restrictions are progressively loosened.

Consensus forecast shows expectations of a sharp rebound in 2021 economic growth that is close to the upper end of the government’s 6.5-7.5% GDP growth target. Multilateral agencies on the other hand projects economic growth nearer the lower end of the range, with the World Bank forecasting it to fall slightly below 6%. Our outlook is still less upbeat, with GDP growing 5.5% this year. This is slightly up from the 5% projection in our report in early December, due mainly to expectations of stronger global economic recovery following the roll-out of several vaccines. This is positive news for the export sector, particularly with the forecast upturn in the electronics cycle, as well as for BPOs, a job creating sector.

Nevertheless, the overall outlook for domestic demand is still a grim one, reflecting both institutional/governance issues as well as the pandemic’s uneven impact on sectors and income groups that will weigh on recovery prospects. More specifically:

1. Government’s vaccine procurement program has encountered one problem after another such that following the current schedule that already reflects private sector assistance, major deliveries of vaccines (30-50 million doses) will only happen in Q3 and Q4. A serious vaccination effort could thus only start thereafter which will be a slow process considering logistical challenges in distribution and the high proportion of Filipinos who, surveys say, are not willing to get vaccinated. Even without considering the latter, experts tell us that herd immunity, i.e., 50 million adults getting the jab, will happen only by Q4 of 2022.

2.  Given the above, capacity restrictions due to physical distancing requirements as well as mobility restrictions to protect the vulnerable will remain in place. Although economic managers appear to be doing their utmost to persuade decision makers to balance risks from COVID-19 (coronavirus disease 2019) against those from hunger, poverty, unemployment, and income losses, they not only face opposition from their counterparts in the health sector but also state security forces and, more so lately, risk-averse local government officials. Google mobility data so far this year are reflective of restrictions in place, with activities still well below pre-pandemic levels, especially for public transport that has a 50% capacity limit. The President’s reluctance to shift to a more relaxed quarantine level without a mass vaccination program in place necessarily caps near term growth potential, something that economic managers recognize as well.

3.  Apart from general restrictions, a more specific problem has to do with the fragmented COVID-19 guidelines issued by local governments that makes inter-provincial/city travel difficult and costly. The problem affects both movement of workers and recovery of domestic tourism, seen as an important interim solution for closing some of the demand gap. The tourism industry not only has high linkages with the rest of the economy (the sector’s direct and indirect contribution to output is estimated at 12.7% of GDP in 2019) and employment potential (13.5% of total in 2019), but benefits significantly from domestic travelers (85% of total gross value added), a prospective growth area considering pent up demand from higher income groups for leisure activities. Aviation sector experts report that Philippine passenger volumes by late last year were only around 20% of pre-pandemic levels, lagging behind neighboring economies where the gaps have closed more significantly.

4. Aside from the above government-related constraints, the recovery will be marked by unevenness in spending where recoveries in discretionary spending of those who have managed to preserve jobs and incomes and accumulate savings under lockdown are dragged by expenditure cutbacks and scrimping on the part of those who have suffered job loss and wage cuts. Unfortunately, job and wage cuts are continuing per the labor department’s January report, even as survey data last quarter already showed worrying signs of discouraged job seekers and reduced work quality, i.e., more of the employed working less hours, and in less formal, lower skilled/wage occupations. Elevated food inflation lately is expected to lead to more scrimping.

5. At the firm level, recovery prospects are also highly uneven as may be seen in Q4 production accounts where outputs of 43 out of 60 non-agricultural sectors were still below pre-pandemic levels. With excess capacities running from industrial (manufacturing and construction) to services (real estate, close contact sectors) and firms grappling not just with profitability issues but with the timing of cash inflows to cover fixed overhead costs, including interest payments on debts, business expansions will be limited especially given the runup in the private sector’s capital expenditures pre-pandemic. These lagging sectors will drag expected expansions in sectors that went through the pandemic relatively unscathed, especially telecommunications where continuing large capital expenditures are required to meet rising demand. Although there would be similar motivations for investments in utilities, e.g., water, power, toll roads, we expect more restraint given the approaching elections and increased regulatory risks.

6. The damage to households’ and firms’ balance sheets will in turn hurt the financial sector’s asset quality and dampen their lending appetites, a drag to monetary policy effectiveness. The extent of the damage will only play out over time as moratoria imposed by law and regulatory forbearance measures are lifted. Current expectations are that non-performing loans (NPLs) of the big banks will double from the end-2020 ratio of 3.1% of total loans, with consumer loan portfolios expected to register larger credit losses. Small and mid-sized banks with larger credit exposure to households and small and medium enterprises can also expect more significant increases in their NPLs. Systemic risks are, however, low considering the dominance of well-capitalized universal and commercial banks (17% capital adequacy ratio as of Sept. 20).

7. Given expected weak demand, the main burden of jumpstarting economic growth still falls on the government. With the stimulative impact of low interest rates running into banks’ risk aversion and the need lately to anchor inflation expectations, fiscal policy will need to do the heavy lifting hereon. Despite relatively moderate new budget resources for 2021, the economy could still prospectively benefit from an additional 1% of GDP of spending authority carried over from last year’s regular and supplemental budgets. However, the worry is still execution risk and government again underspending at a time when it needs to spend as much as it has on hand. The hope now is that early implementation of infrastructure projects to take advantage of the dry season could help to crowd in earlier any associated private investments. Considering, too, political pressure as the election nears that may overcome fiscal authorities’ resistance, another fiscal stimulus package may be passed later in the year, a potential upside to our forecast.

Our 2022 GDP outlook, tentatively at 5%, is clouded by the uncertainties surrounding this year’s forecast, particularly progress in vaccination efforts and effectiveness in disease control that affect confidence all around. The outlook also depends on the electoral process and election outcomes, vaccine efficacy vs. virus mutations, and the impact on global economic recoveries, as well as timing of any withdrawal of accommodative macroeconomic policies globally and locally.

Excerpted from a 20-page report dated Feb. 25, of the same title written by Christine G. Tang and the columnist, Romeo L. Bernardo, for GlobalSource Partners (globalsourcepartners.com) where they are the Philippine Advisors/Partners. GlobalSource Partners is a New York-based network of independent analysts in emerging markets serving mostly fund managers and global banks.

 

Romeo L. Bernardo was finance undersecretary during the Cory Aquino and Fidel Ramos administrations.

romeo.lopez.bernardo@gmail.com

NAIA upgrade and the recovery of the aviation industry

Last week, my good friend and Manila International Airport Authority (MIAA) General Manager, Eddie Monreal, invited me to the inauguration of the upgraded runway of the Ninoy Aquino International Airport (NAIA). As a certified aviation geek, I accepted the invitation, if only for the opportunity to stand in the middle of the runway and observe aircraft movements. Like I said, I am an aviation geek.

The upgrades done included the repair and cement overlay of Runway 13/31 and the construction of an additional holding area for Runway 13. Although the improvements may seem minor, their effect on runway capacity is significant. With this, runway capacity will increase from 40 to 50 movements per hour or a total of 240 commercial flight movements per day.

It will be recalled that NAIA’s runways, taxiways, holding areas, and aprons were infamous for having potholes and surface depressions. The poor quality of the surface compelled aircrafts to slow down when passing over them, causing delays in turn-arounds during take offs and landings. These potholes could potentially damage the landing gear of aircraft too. The concrete now used in Runway 13 is of the highest quality and is expected to last between 15 to 20 years.

The recent improvements to NAIA’s runway are part of an ongoing program of modifications to improve NAIA. In the pipeline are the construction of additional rapid exits and taxiway expansion which is estimated to be completed by next year. When finished, runway capacity is seen to reach 60 movement per hour.

Although the privatization and rehabilitation of NAIA was cancelled for reasons that remain unclear, the tandem of Department of Transportation (DoTr) Secretary Art Tugade and MIAA’s Monreal have made sure that a stream of improvements are still carried-out in the country’s principal gateway. Apart from the recently completed runway improvements, the check-in and baggage claim areas of Terminal 2 have also been expanded to allow more space for passengers.

We hope the tandem will consider renovating the waiting area for arriving passengers in Terminal 1. At present, it is decrepit, cramped, and inefficient — it does not do justice to the NAIA experience. We hope this will be made a priority soon.

The runway upgrade marks the 121st airport improvement project completed under the watch of Sec. Tugade. Well under way are 114 more projects, with 75 more waiting to break ground. For the sheer amount of work delivered, I reckon Sec. Tugade is, bar none, the most productive cabinet member of the Duterte administration.

RECOVERY OF THE AVIATION INDUSTRY
The respective Chief Operating Officers of Philippine Airlines (PAL) and Cebu Pacific, Michael Shau and Gilbert Santa Maria, were present during the runway inauguration. Between photo ops, we talked about the prospects of recovery of the airline industry. Both COOs agree that passenger volume will only approximate 2019 levels by 2024.

Although many believe that the vaccination program presently being rolled out everywhere (except the Philippines) will cause the airline industry to bounce back sharply, the International Air Transport Association (IATA) forecasts that demand for air travel will not reach pre-crisis levels until 2024.  IATA confirms the prognosis of both PAL and Cebu Pacific.

That said, we must give credit to the owners and employees of both PAL and Cebu Pacific for managing to keep their respective airlines afloat despite the challenging circumstances. As of today, some 43 airlines have already filed for bankruptcy including major legacy carriers like Avianca, LATAM, and Virgin Atlantic. The fact that PAL and Cebu Pac are still flying is testament to their owner’s commitment to nation building (and public service) and the savvy of their management. I have nothing but respect for them.

The commercial aviation industry has been through hell and their troubles seem to be unrelenting. From soaring revenues of $838 billion in 2019, sales plunged to just $328 billion in 2020. Carriers were forced to roll-out massive cost-cutting programs to stay afloat. Operating expenses of airlines worldwide were slashed from to $795 billion in 2019 to $430 billion in 2020. The 46% slash represents millions of employees put on furlough or retired. Were it not for some $173 billion in financial support granted by various governments to their national airlines, we would have seen more bankruptcies filed.

Passenger volume dropped to some 1.8 billion last year, pushing the industry back to 2003 levels. This is a far cry from 4.5 billion passengers who traveled in 2019.

The good news is that cargo operations showed better performance in 2020 compared to 2019. IATA data shows that despite a 45% drop in passenger demand, cargo revenues increased to $117.7 billion in 2020 versus $102.4 billion in 2019.  Still, it was not enough to keep airlines in the black.

Although data is still incomplete, IATA expects the accumulated losses of airlines to amount to $118.5 billion for fiscal year 2020. It is expected to shrink to just $38 billion this year. With losses mounting, only airlines with access to additional capital will survive.

People will start flying again only if borders reopen and the two-week quarantine period is relieved, said Chris Goater, the Assistant Director for Corporate Communications at IATA. On the assumption that borders open by mid-2021, the airline organization expects that overall revenues should grow to $459 billion this year. It would be a significant improvement from last year, but still 45% less than 2019 levels.

In terms of passenger volume, IATA expects passenger numbers to grow to 2.8 billion this year, a billion passengers more than last year but 1.7 billion less than 2019.

IATA noted a shifting preference towards domestic or short-haul travel since it is perceived to be safer. This indicates that domestic travel is expected to perform better than international service, at least in the next few years.

Asia Pacific airlines are seen to be the first to recover. This is due to relatively successful anti-virus control as well as the high volume of cargo demand in this part of the world. Airlines with large cargo operations have already shown better financial performance compared to those relying on commercial passenger flights only.

Carriers from north America will be the second to recover followed by those from Europe.

Since Middle Eastern airlines generally rely on long haul travel, they will be the fourth group to recover. However, their extensive cargo capacities and vast destination networks should help them stay afloat.

Last to recover are expected to be airlines from Latin America and Africa due to the delayed roll-out of vaccines in these continents, said IATA.

COVID-19 (coronavirus disease 2019) has been the worst crisis on record for the aviation industry. Let’s hope most airlines survive the merciless onslaught, especially our very own PAL and Cebu Pacific.

 

Andrew J. Masigan is an economist

andrew_rs6@yahoo.com

Twitter @aj_masigan

Few PGH workers want CoronaVac injections

By Kyle Aristophere T. Atienza and Vann Marlo M. Villegas, Reporters

ONLY 1 of 10 health workers at the Philippine General Hospital (PGH) want to get inoculated against the coronavirus using vaccines from Chinese drug maker Sinovac Biotech Ltd., according to a hospital spokesman.

Of 2,500 hospital staff who answered a poll, 12% were willing to take the shot, PGH spokesman Jose Jonas D. del Rosario said by telephone at the weekend.

“We are expecting the number to increase to 16% at the maximum,” he added. The government hospital has about 4,000 workers.

Vaccine rollout will start on Monday as the government took delivery of 600,000 CoronaVac doses donated by China on Sunday. President Rodrigo R. Duterte personally accepted the donation, which arrived at Villamor Airbase in Pasay City, according to the presidential palace.

Sinovac’s CoronaVac is one of the frontrunners in the vaccine race, along with shots developed by British drug maker AstraZeneca Plc, Russia’s Gameleya National Center of Epidemiology and Microbiology, and America’s Pfizer, Inc., Moderna, Inc. and Johnson & Johnson.

It is the third coronavirus vaccine approved by the country’s Food and Drug Administration (FDA) for emergency use after the ones from Pfizer and AstraZeneca.

PGH will be among the first COVID-19 referral hospitals in the capital region to get China’s donation of 600,000 vials of CoronaVac. Hospitals in Cebu City and Davao City will also be prioritized for the shots.

Mr. del Rosario said the rollout scheduled for today would proceed despite the hesitancy among their employees to get vaccinated with the Chinese drug. The government was set to take delivery of the vaccines later on Sunday. “PGH asked for 1,000 doses of Sinovac,” he said.

‘FRIEND IN NEED’
In a statement at the weekend, a group of doctors at the state-owned hospital said the Chinese vaccine must undergo an appraisal before it is given to medical workers.

The PGH Physicians’ Association said they were surprised that their staff would be given Sinovac vaccines even if it got a “sweeping disapproval rate” of 95% among the community’s residents and fellows.

“PGH should set an example on how vaccination rollout should be executed in the country,” they said. “PGH should uphold the ideals of ethical and evidence-based medicine, for which it has been a bastion of.”

“Let us not lose sight of critical thinking, especially with matters relating to our own health by monitoring updates and developments in the COVID-19 vaccination,” they added.

Although the Chinese vaccine was approved by the country’s drug regulator, it was not recommended for health workers due to its low efficacy.

President Rodrigo R. Duterte was “perplexed” by the FDA’s initial recommendation not to use the vaccines on health workers, his spokesman Herminio “Harry” L. Roque said last week.

CoronaVac is only 50.2% effective among health workers, based on trials in Turkey. It was 65.3% to 91.2% effective among patients aged 18 to 59 years, based on trials in Indonesia.

An inter-agency task force ruled the Chinese vaccines may be given to health frontliners. Mr. Roque said CoronaVac is safe and would benefit health workers.

Mr. del Rosario said those who decline to get vaccinated with CoronaVac would still be prioritized once another brand of vaccines arrives. “Once AstraZeneca arrives and they want to receive it, they will get it.”

From the military air base, the CoronaVac vaccines would be transferred to at least six 40-footer trucks on the way to cold chain storage facilities at PGH in Manila and the Metropac Logistics in Marikina City, the Presidential Communications Operations Office said in a statement.

“It is a fine tradition between China and the Philippines to help each other in trying times,” Ambassador Huang Xilian said at turnover ceremonies on Sunday.

“Our two governments and peoples have helped each other and joined hands to fight the pandemic since the outbreak of the virus, forging a closer China-Philippines partnership. A friend in need is a friend indeed,” he added.

CoronaVac, an inactivated vaccine, can be stored in a standard refrigerator at 2-8 degrees Celsius.

Of the first batch, 100,000 vials will be donated to the Philippine military. The rest will be used on health workers in coronavirus referral hospitals in the National Capital Region, Cebu City and Davao City.

“Inoculating as many people as possible at the soonest possible time will significantly boost consumer confidence and accelerate economic recovery,” Financial Executives of the Philippines President Francisco Ed Lim said in a statement.

The Department of Health (DoH) reported 2,113 coronavirus infections on Sunday, bringing the total to 576,352. The death toll rose by 29 to 12,318, while recoveries increased by 9,418 to 534,271, it said in a bulletin.

There were 29,763 active cases, 88.7% of which were mild, 5.3% did not show symptoms, 2.6% were critical, 2.5% were severe and 0.93% were moderate.

The agency said eight duplicates had been removed from the tally, while 10 recovered cases were reclassified as deaths. One laboratory failed to submit its data on Feb. 27.

More than 8.2 million Filipinos have been tested for the coronavirus as of Feb. 26, according to DoH’s tracker website.

Opposition may need charismatic leader to win in 2022 elections

By Kyle Aristophere T. Atienza, Reporter

THE POLITICAL opposition does not stand a chance against President Rodrigo R. Duterte’s anointed presidential candidate unless it finds a unifying and inspirational leader who can rally popular support, according to analysts.

The absence of such a type of leader would be a big challenge given Mr. Duterte’s popularity, lawyer and Ateneo de Manila University Policy Center research fellow Michael Henry Ll. Yusingco said in a Facebook Messenger chat.

The tough-talking leader has remained popular in the five years he has been in office, getting a 91% approval rating in the third quarter despite criticisms of mishandling a coronavirus pandemic, according to Pulse Asia Research, Inc.

Mr. Duterte’s six-year term ends in 2022. He is barred by the Constitution from seeking a reelection.

Mr. Yusingco said the political landscape remains a “barren lot.” “Both the administration and opposition sides are filled with dynastic politicians.”

Vice President Maria Leonor G. Robredo has said she might run for President next year, but the Liberal Party (LP) she heads barely has the resources and machinery.

Presidential daughter and Davao City Mayor Sara Z. Duterte-Carpio was the top choice for both President and vice president in the 2022 elections, according to a poll commissioned by OCTA Research.

Ms. Carpio got an average of 22%, with the highest support coming from Mindanao at 48% and socioeconomic class E at 24%.

She was followed by Senators Mary Grace S. Poe-Llamanzares and Emmanuel D. Pacquiao, former senator Ferdinand E. Marcos, Jr. and Manila Mayor Francisco M. Domagoso.

Ms. Robredo was behind Senator Christopher Lawrence T. Go and ahead of Senate President Vicente C. Sotto III.

Ms. Duterte has rejected calls for her to run for President, saying continuity should not be based on kinship. Her father had also rejected calls to run in 2016 despite being on top of opinion polls.

“The next few months will be a testing period for those planning to contest the presidency,” Mr. Yusingco said. “The Liberal Party may be weak now but it is one of the few older parties with members and some programs,” University of the Philippines political science professor Maria Ela L. Atienza said in an e-mail.

The party could still recover from vilification campaigns against government critics, she said. “Damage in politics, especially Philippine politics is short-lived.”

“The challenge for the broader opposition groups composed of both traditional and progressive sectors is how they can cooperate, unite and campaign for a candidate that can win,” Ms. Atienza said. “They failed to do that during the past senatorial elections.”

She added that the challenge is to replicate progressive campaigns from the local to the national level. “Otherwise, people will only gravitate toward populist politicians who do not deliver on their promises.”

The opposition would probably struggle to gain mass support until it finds a fresh face who can defeat Mr. Duterte’s hold on the popular imagination, De La Salle University political science professor Antonio Contreras said in a Facebook messenger chat.

The candidate does not have to be new and may come outside both the ruling and opposition camps, he said.

The traditional political opposition is “so weak that in order for any alternative voice to emerge, it would come from people who are not necessarily from LP,” Mr. Contreras said.

Ms. Atienza said alliances could be formed as elections draw closer. “In this country, there are no disciplined political parties, she said. “Politicians gravitate to the party where the president is or where the candidate for president appears to be the strongest.”

She noted that PDP Laban had few members before the 2016 elections. When Mr. Duterte ran under it, many politicians jumped ship at the last minute before the elections and after he won.

Duterte says he’ll ease lockdown with enough vaccine stocks

By Kyle Aristopherre T. Atienza and Vann Marlo M. Villegas, Reporters

PHILIPPINE President Rodrigo R. Duterte on Sunday said he would put Manila and other cities under the most relaxed quarantine once the country gets at least two million doses of the coronavirus vaccine.

“Once we get a stock of two million, I will let go,” he told a televised news briefing in Filipino, referring to the general community quarantine (GCQ). “I will open the economy. We’re already suffering.”

Mr. Duterte said he was seriously considering a shift to a modified general community quarantine (MGCQ) because more people are getting hungry and losing their jobs.

“People have to eat, people have to work, people have to pay for their upkeep and the only way to do it is to open the economy. Without that we’re doomed,” he said in mixed English and Filipino.

Mr. Duterte last week rejected a proposal by his economic managers to ease the lockdown, citing the risk of infections from a more contagious coronavirus variant.

Mr. Duterte said he wouldn’t allow face-to-face classes for now. “I cannot make that decision. It will place the children in jeopardy.”

Things might become normal again by early 2023, Mr. Duterte said.

Meanwhile, the arrival of coronavirus vaccines made by AstraZeneca Plc, originally set for March 1, would be delayed by a week due to global supply problems, Health Secretary Francisco T. Duque III said.

“We received communication saying that it won’t proceed,” he told state television PTV 4 in Filipino, citing the World Health Organization. “It might take another week.”

Presidential spokesman Herminio “Harry” L. Roque, Jr. in a statement at the weekend said 525,600 doses of AstraZeneca’s vaccine would arrive on Monday.

The vaccines were supposed to be the first batch of vaccines under a global initiative for equal access.

Vaccine czar Carlito G. Galvez, Jr. last month said the Philippines would take delivery of 5.5 million to 9.3 million doses of AstraZeneca in the first half under the facility.

Nationwide round-up (02/28/21)

Supreme Court approves destruction of inspected illegal drugs even before case filing

THE SUPREME Court (SC) has approved the destruction of seized drugs that were already inspected by designated authorities even before a case is filed. The rule, published on Sunday and takes effect on March 16, is contained under A.M. 21-02-01-SC titled Rule on the Destruction of Seized Dangerous Drugs, Other Substances, and Instruments Prior to the Filing of an Information. The resolution cites the Comprehensive Dangerous Drugs Act of 2002, which provides that the law enforcement agent who seized the drugs must immediately file an application for destruction before the court that issued the search warrant or has territorial jurisdiction over the case and the place of seizure. The new rule states that “if the seized drugs amount to 1 kilogram or more… the judge shall conduct an ocular inspection… within 72 hours from the time the application is filed.” Further, within 24 hours after the ocular inspection, the court must issue an order for the retention of a representative sample of the seized drugs that will be kept in the forensic laboratory of the operating unit that seized the drugs. The taking of the representative sample must be witnessed by either the person from whom the drugs were seized or a representative counsel, an elected public official or a media representative who witnessed the inventory and documentation of the seized drugs, or a National Prosecution Service official. Within the same 24 hours after the ocular inspection, law enforcement agents must immediately turn over the remaining seized drugs to the Philippine Drug Enforcement Agency for immediate destruction. The actual destruction of the drugs must be witnessed by the same parties present during the taking of a representative sample. Seized drugs may be exempted from destruction if these are to be used for training K9 dogs in detecting narcotics. In July last year, the country’s highest court ordered lower court judges to comply with the law by ensuring the immediate inspection and destruction of seized drugs. — Bianca Angelica D. Añago

Renewal of foreigners’ re-entry permits can now be done at airports

FOREIGNERS may now renew their re-entry permits to the Philippines upon arrival at the airport, the Bureau of Immigration (BI) announced on Sunday. “Many of these foreign nationals have already expired (re-entry permits) and (special return certificates), and the new procedure will allow them to renew this at the airport upon arrival,” BI Commissioner Jaime H. Morente said in a press release. Mr. Morente said this policy, which was ordered by the Department of Justice, “will facilitate the unhampered entry of foreigners with existing valid visas who were not permitted to enter the Philippines when the coronavirus struck the world last year.” A re-entry permit is issued to foreigners with immigrant visas but with permanent residence in the Philippines, while a special return certificate is issued to non-immigrants or those with working visas and student visas. The re-entry permits are valid for six months to one year from the date of a foreigner’s departure. — Bianca Angelica D. Añago

Bill filed to update, strengthen child online protection

A SENATOR has filed a measure to strengthen the protection of children against sexual exploitation online. Senator Risa N. Hontiveros-Baraquel filed Senate Bill No. 2068, which aims to amend Republic Act No. 9775 or Anti-Child Pornography Act of 2009 and RA No. 9995 or the Anti-Photo and Video Voyeurism Act of 2009. Ms. Baraquel said the current laws covering online sexual abuse and exploitation were “outdated” and “are not responsive to the protection needed by children using the internet.” The bill proposes treatments and penalties for unlawful acts constituting virtual abuse. She added that this will also strengthen government institutions, regulate industry players, and provide structures and services on the aftercare and reintegration of the victims. The senator noted that the Philippines has been considered as “one of the top sources of child abuse material” worldwide, citing a study by the International Justice Mission in 2020. About 43.7% of children aged 13 to 17 have experienced violence online, according to the UNICEF study in 2016, the proposed law’ explanatory note read. Under the bill, hiring and using children to create any form of abuse and exploitation online, conspiracy to commit such, production and direction and streaming of these contents are prohibited.

ISPS
The bill also requires internet service providers (ISP) to notify authorities within two days from obtaining facts of any form of child sexual abuse and exploitation. The ISPs will also be mandated to block the involved sites within 48 hours from discovery, and failure to do so “shall be conclusive evidence of willful and intentional violation thereof.” Owners of establishments that were used for committing online abuse crimes are also required to notify authorities within 48 hours from obtaining facts. Financial institutions or persons who have direct knowledge on transactions related to online abuses of children shall report suspected activities to authorities within seven days. ISPs and any person found guilty of failing to comply to give notice and other requirements will face a fine of at least P2 million and up to P10 million as well as revocation of license to operate. — Vann Marlo M. Villegas

Solon calls for 5-year extension of PHL-US military pact

DEPUTY Speaker Michael L. Romero called for a five-year extension of the Philippine’s Visiting Forces Agreement (VFA) with the United States after some senators last week recommended keeping the treaty. In a statement on Sunday, Mr. Romero said an extension of the bilateral military pact “would be the more prudent thing to do, but this time with a five-year program, where every year our counterparts in the US will have an assessment or review of sorts with our own defense secretary.” Senators last week said they support keeping the VFA to strengthen relations between the Philippines and the US. President Rodrigo R. Duterte has threatened to end the VFA, which affirms the 1951 Mutual Defense Treaty and serves as basis for the 2014 Enhanced Defense Cooperation Agreement between the two countries. Mr. Duterte said last week he will first seek public opinion before making a final decision of the VFA’s cancellation. — Gillian M. Cortez

Regional Updates (02/28/21)

Siquijor, Negros Oriental preparing for domestic tourism reopening

THE PROVINCES of Negros Oriental and Siquijor are gearing up to reopen for domestic visitors nationwide, joining their two neighbors, Cebu and Bohol, in the Central Visayas Region that have already resumed tourism activities. Tourism Secretary Bernadette Romulo-Puyat visited the two provinces last week to discuss how the national department can assist in the local industry’s revival, such as the adaption of the Visitor Information and Travel Assistance (VISITA) digital platform for registration and tracking. “Everyone is aware that the country’s tourism industry suffered a major setback last year, which prompted many of our destinations, including Negros Oriental, to put up travel restrictions. I am happy to say, however, that there has been significant progress in our efforts to rebuild tourism here in Negros Oriental,” she said. One of the first towns in Negros Oriental that recently reopened is Dauin, where some diving establishents have already been allowed to resume operations. Ms. Puyat, who chairs the Philippine Commission on Sports Scuba Diving, said more representatives of the agency will be deployed in the region to strengthen capacity and accredit more dive establishments. “This would allow the more efficient processing of the requirements to reopen dive establishments in Negros Oriental. The Department of Tourism-Region 7 office has also set up several diving activities for the year, including support for a marketing event previously discussed with the Negros Oriental Dive Association,” she said.

SIQUIJOR
In Siquijor, Ms. Puyat said the island province is an ideal destination given the stronger market demand for mainly outdoor and cultural tourism activities amid the continued coronavirus threat. “Known as the Healing Island of Central Visayas, Siquijor has much to offer to nature lovers, adventure junkies, beach goers and divers, and culture enthusiasts, providing us ample reason to believe that the tourism sector in this province can successfully re-emerge from this crisis,” she said. Apart from its beaches and traditional healing traditions, Siquijor is also known for the Lazi Church and Convent, declared as a National Cultural Treasure by the National Museum of the Philippines. About 37 tourism establishments on the island have already been accredited for reopening. As of February 15, the tourism regional office has already inspected and certified 962 establishments across Central Visayas. — MSJ

Mt. Apo remains open with stricter policing from porters and guides

MOUNT Apo, the country’s highest peak, will remain open to climbers and trekkers after the protected area’s management board voted to defer a proposed closure due to irresponsible tourists who recently left trash along the trails and campsites as well as vandalized boulders. Julius R. Paner, tourism officer of Sta. Cruz town which is one of the entry points to the mountain, said there are enough policies and guidelines in place, and what is crucial is stricter implementation. “Basically, these policies are stipulated in the Unified Trekking Policy and I found it effective in maintaining our trail,” he said. “When it comes to trash particularly in the trail of Sta. Cruz, our porters and guides are tasked to police to ensure that there are no trash left by the trekkers,” he added. The Protected Area Management Board handling Mt. Apo, in an en banc meeting last week, voted 28 to eight in favor of continuing climbing activities. Mt. Apo was reopened in November 2020 with additional safety protocols in consideration of the coronavirus pandemic. Earlier this month, Environment and Natural Resources Davao Regional Director Bagani Fidel A. Evasco pushed for the temporary closure of the Mt. Apo park after a weekend camp assessment showed the violations. Mt. Apo straddles Davao City and the provinces of Davao del Sur and North Cotabato. “We aim for the improvement of condition and sustainability of Mt. Apo. We must do what it takes to safeguard the country’s highest peak — to protect it as a key biodiversity area and one of our immense natural resources,” Mr. Evasco said during the board meeting. — Maya M. Padillo

Leading HK democrats charged with subversion

HONG KONG — Forty-seven Hong Kong (HK) democrats and activists were charged on Sunday with conspiracy to commit subversion, in the largest single crackdown on the democratic opposition under a China-imposed national security law.

Sam Cheung, a young activist and a participant in an unofficial primary election last summer, was charged after reporting to a local police station, dressed in a black mask and accompanied by his wife.

“Hong Kongers have a really tough time these days,” he told reporters before entering the station. “I hope everyone won’t give up on Hong Kong … (and) fight on.”

Mr. Cheung was arrested in a dawn raid along with more than 50 other democrats on Jan. 6 in the largest national security operation since the law’s passage last June.

They were accused of organizing and participating in an unofficial “primary election” last July aimed at selecting the strongest candidates for a legislative council election.

The Hong Kong police said in a statement they had laid a charge against 47 persons with the single count. They will appear in court tomorrow morning, the statement added.

The democrats were detained at the time, questioned, and some had their mobile phones and computers confiscated, then released pending further investigations.

“My chance of bail won’t be too great,” wrote Benny Tai in an earlier social media post. He was also charged and accused by Chinese authorities of being a key tactician for the pro-democracy movement in the former British colony.

Those also called in by Hong Kong police include a group of younger “resistance camp” democratic activists including Lester Shum, Sam Cheung, Ventus Lau and Fergus Leung.

The democrats denounced the arrests as political persecution for the informal, peaceful poll that drew 600,000 votes in a city of 7.5 million.

A rights advocacy group, “Power for Democracy,” that co-organized the primary elections, said in a Facebook post it had disbanded.

The Hong Kong police say 99 individuals have been arrested for suspected violations of the security laws so far.

Some of these have been denied bail, including media mogul and prominent China critic Jimmy Lai, despite protracted legal appeals.

The sweeping national security laws — seen by critics as a threat to Hong Kong’s freedoms and autonomy — punish acts of subversion, secession, collusion with foreign forces and terrorism with possible life imprisonment. — Reuters

Johnson & Johnson COVID-19 vaccine cleared for use in US

JOHNSON & JOHNSON’S (J&J) coronavirus vaccine was cleared for use in the US, making a third shot available that could plug gaps in the nation’s immunization campaign as concern grows over an influx of virus variants.

The Food and Drug Administration  (FDA) said in a statement on Saturday that it had granted an emergency-use authorization for the single-dose vaccine for people 18 and older.

The decision comes after virus deaths topped 500,000 in the US and as health officials raise alarms that a recent decline in new cases may be stalling.

The J&J shot is highly effective at preventing severe coronavirus disease 2019 (COVID-19), with no serious side effects, agency staff said in a report Wednesday. On Friday, a committee of outside advisers to the FDA voted unanimously that the vaccine’s benefits outweigh any risks. In the week ahead, J&J is prepared to ship 3 million to 4 million doses.

“We’re in a race between the virus mutating — new variants coming out that could cause further disease — and stopping it,” said Jay Portnoy, director of the division of allergy, asthma and immunology at Children’s Mercy Hospital, who supported an emergency authorization. “We need to get this vaccine out.”

The clearance is another milestone in an unprecedented global scientific sprint. Since the World Health Organization declared the coronavirus a pandemic nearly a year ago, numerous vaccines have been deployed around the world, including shots developed in China and Russia. Worldwide, more than 231 million doses have been administered in 100 countries, according to data collected by Bloomberg.

J&J’s shot is expected to be easier to distribute and administer than the Pfizer, Inc.-BioNTech SE vaccine and the Moderna, Inc. shot that were cleared by the FDA late last year. To reach full effectiveness, the earlier shots require two doses several weeks apart. They must also be kept at very cold temperatures, while J&J’s doses can be stored in a refrigerator for long periods.

President Joseph R. Biden hailed the vaccine’s authorization, calling it “exciting news” in a statement on Saturday.

“Thanks to the brilliance of our scientists, the resilience of our people, and the eagerness of Americans in every community to protect themselves and their loved ones by getting vaccinated, we are moving in the right direction,” Mr. Biden said.

The inoculation drive in the US has accelerated in recent weeks, with more than 70.5 million doses given as of Friday, according to Bloomberg’s Vaccine Tracker. However, Mr. Biden cautioned that the rise of the new coronavirus variants still poses a threat.

Fast-spreading mutations first reported in the UK, South Africa and Brazil have appeared in the US, while domestic variants spotted in California and New York are raising new concerns among some scientists.

J&J is on track to supply 20 million doses to the US by the end of March, and 100 million by the end of June, an executive said at a congressional hearing on Feb. 23. Globally, J&J expects to produce 1 billion doses this year. Regulators in the European Union could clear the shot in early March.

J&J’s shot is unlikely to be the last to come available in the US Both AstraZeneca Plc and Novavax, Inc. are expected to seek authorization in the coming months for their vaccines, pending results of big US trials that are now fully enrolled.

DIFFERENT PLATFORM
J&J’s vaccine is made from a common cold virus that doesn’t replicate in the body but triggers an immune response to fight off infection. In the US portion of a more than 43,000-person global trial, it was found to be 72% effective at preventing moderate to severe COVID.

That is a lower overall efficacy rate than the Pfizer-BioNTech and Moderna vaccines, which are based on technology called messenger RNA that primes the body to ward off the virus. Each of those was found to be more than 90% effective.

Still, all three shots are extremely reliable at preventing hospitalizations and deaths. And J&J’s does that quickly, with protection against severe disease starting only seven days after vaccination, and ramping up over the course of about two months.

Public-health officials hope that as more people get them, they will greatly reduce the strain the pandemic has placed on the health-care system. Already, more people in the US have received at least one vaccine dose than have tested positive for the virus.

The FDA prescribing document for J&J’s vaccine said not to give it to individuals with a known history of severe allergic reaction, including anaphylaxis, and that sites giving the shots must have treatments for managing such reactions. The same protocols are in place for the shots from Pfizer and Moderna.

The most commonly reported side effects were pain at the injection site, headache, fatigue, muscle aches and nausea. Most were mild to moderate in severity and lasted one to two days.

Policy makers are eager to get more people immunized before virus mutations can take firmer hold in the US.

J&J’s vaccine provided less protection against the new variants, trial data suggested. In Brazil, the shot was 68% effective against moderate-to-severe disease 28 days after vaccination, while in South Africa it was 64% effective. But across the globe, including in countries with emerging variants, the shot successfully prevented all hospitalizations and deaths.

Mathai Mammen, the head of global research and development for J&J’s pharmaceutical division, said in an interview last month that it’s impossible to compare overall efficacy levels between the vaccines, given that the trials were carried out in different locations at different times in the course of the pandemic.

“What people fear is getting sick, so sick they have to go to an emergency room, or hospital, and even die,” he said “This vaccine, in a single shot, protects completely from that kind of fear.”

J&J is still testing a two-shot regimen in a large, global trial that is expected to produce results before year-end. Like Pfizer and Moderna, the company is working on boosters tailored to the variants. And it plans studies soon in children, pregnant women and the immunocompromised.

J&J executives have said the company will charge no more than $10 a dose for the vaccine during the pandemic — a price at which it won’t profit. The Pfizer-BioNTech vaccine costs the US $39 for the full regimen, and the Moderna vaccine costs $33 for both doses.

PANDEMIC PREPAREDNESS
New Brunswick, New Jersey-based J&J has spent more than a century combating infectious diseases. It created the so-called Epidemic Mask to prevent the spread of the 1918 Spanish Flu, and developed an Ebola vaccine that was approved in Europe in 2020.

Its COVID-19 vaccine uses the same adenovirus platform that is the basis of the Ebola shot. The company collaborated on its development with researchers from Harvard University and US health agencies, including the Biomedical Advance Research and Development Authority and the National Institutes of Health.

Like the Pfizer-BioNTech and Moderna shots, J&J’s vaccine was one of six that was selected by the Trump administration’s Operation Warp Speed program, receiving some $1.5 billion in backing from the US government, which has options to acquire additional supply.

J&J Chief Scientific Officer Paul Stoffels said he hopes it’s another hundred years before another pandemic sweeps the world, but realistically, the US should have a heightened alert that it could happen at any time.

“A whole new field of science and pandemic preparedness is needed,” Mr. Stoffels said. — Bloomberg

Myanmar police crack down on protests; two dead

MYANMAR police shot and killed two protesters on Sunday and wounded several as they cracked down in a bid to end weeks of demonstrations against a Feb. 1 military coup, a doctor and a politician said.

Police opened fire in the town of Dawei, killing one and wounding several, politician Kyaw Min Htike told Reuters from the southern town. The Dawei Watch media outlet also said at least one person was killed and more than a dozen wounded.

Police also fired in the main city of Yangon and one man brought to a hospital with a bullet wound in the chest had died, said a doctor at the hospital who asked not to be identified. The Mizzima media outlet also reported that death.

Police and the spokesman for the ruling military council did not respond to phone calls seeking comment.

Myanmar has been in chaos for a month since the army seized power and detained elected government leader Aung San Suu Kyi and much of her party leadership, alleging fraud in a November election her party won in a landslide.

The coup, which stalled Myanmar’s progress toward democracy after nearly 50 years of military rule, has brought hundreds of thousands of protesters onto the streets and drawn condemnation from Western countries, with some imposing limited sanctions.

In Yangon, several people, some bleeding heavily, were helped away from protests, images posted earlier by media showed.

It was not clear how they were hurt, but media reported live fire. The Myanmar Now media group said people had been “gunned down” but did not elaborate.

Police also threw stun grenades, used tear gas and fired into the air, witnesses said.

Junta leader General Min Aung Hlaing has said authorities have been using minimal force to deal with the protests.

Nevertheless, at least five protesters have died in the turmoil. The army said a policeman has been killed.

The crackdown appears to indicate a determination by the military to impose its authority in the face of widespread defiance, not just on the streets but more broadly in areas such as the civil service, municipal administration, the education and health sectors and media.

Police were out early on Sunday, taking positions at main protest sites in Yangon as protesters, many clad in protective gear, began to congregate, witnesses said.

They moved swiftly to break up crowds.

“Police got out of their cars and started throwing stun grenades without warning,” said Hayman May Hninsi, who was with a group of fellow teachers in Yangon. They fled to nearby buildings. “Some teachers got hurt running.”

Doctors and students in white lab coats fled as police threw stun grenades outside a medical school elsewhere in the city, posted video showed.

Police in the second city, Mandalay, fired guns into the air, trapping protesting medical staff in a city hospital, a doctor there said by telephone.

Saturday brought disturbances in towns and cities nationwide as police began their bid to crush the protests with tear gas, stun grenades and by shooting into the air.

State-run MRTV television said more than 470 people had been arrested on Saturday. It said police had given warnings before using stun grenades to disperse people. — Reuters

Grab drive-thru service to boost vaccination drive

SOUTHEAST ASIA’s ride-hailing giant Grab Holdings, Inc. is setting up drive-thru vaccination services across Indonesia in collaboration with the government to help the nation inoculate more than 180 million people against Covid-19.

The program, which started Sunday on the resort island of Bali, is the first to be done in Southeast Asia, Grab Indonesia President Ridzki Kramadibrata said in a virtual news briefing.

Indonesia has made it mandatory for eligible citizens to take a shot. The nation is aggressively rolling out a mass-inoculation drive as it struggles to contain the largest coronavirus outbreak in Southeast Asia. It plans to vaccinate 70 million people by August, roughly a third of the total target of 181.5 million for the public campaign.

“We need to collaborate with the private sector to speed up the vaccine campaign,” Health Minister Budi Gunadi Sadikin said at the briefing.

The Grab vaccine center in Bali is prepared to dispense 840 shots a day, for a total of 5,000 vaccinations in a week, the company said in a statement. The first center plans to vaccinate 2,500 drivers in the transportation sector, including Grab drivers and delivery-partners and 2,500 public sector workers in tourism in Bali. More drive-thru centers will be set up soon in various cities, Mr. Kramadibrata said.

As of Saturday, 1.47 million people in Indonesia have received their first dose of the Sinovac Biotech Ltd. vaccine, while over 980,000 have taken their second. Around 1.3 million people in the country have been infected and more than 35,000 died from the virus. — Bloomberg

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