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Inflation to ease by H2 as transport prices stabilize — Citi

HEADLINE INFLATION is expected to ease by the second half on subsiding pressure from transport and food prices, Citigroup said.

“We expect inflation to ease in H2, due to waning effects from transport services (higher air and road transport fares from July 2020),” Citigroup, Inc. economist for the Philippines Nalin Chutchotitham said in a note Tuesday.

Inflation hit a two-year high of 4.2% in January, against the 3.5% posted in December and the year-earlier level of 2.9%.

The Bangko Sentral ng Pilipinas (BSP) raised its average inflation forecast to 4%, which is at the high end of its target range, from 3.2% previously. Citi’s forecast for inflation this year is for an average of 3.6%.

BSP officials have noted that upside pressure from the increase in prices of food and fuel will continue in the next few months, although they expect inflation to remain manageable.

For 2022, BSP estimates average inflation of 2.7%.

“Our indicator of inflation pervasiveness shows that only 20% weight of the CPI (consumer price index) basket have higher than 4% inflation. Meanwhile, other measures of inflation — core inflation, wholesale and retail price inflation — have been relatively stable,” Ms. Nalin said.

“The high unemployment should also keep wage inflation in check,” she added. In October, the jobless rate stood at 8.7%, equivalent to about 3.813 million unemployed.

Meanwhile, core inflation, which strips out volatile items like food and fuel, was 3.3% in January.

Meat and vegetable prices grew in the double digits last month, rising 17.1% and 21.2%, respectively. The government has moved to expand the minimum access volume allocation for pork imports to increase supply and imposed a 60-day price ceiling for pork and chicken products in Metro Manila.

However, the measures have been resisted by the industry, with some vendors opting out of selling pork while the price controls are in force.

Ms. Nalin said the authorities have been quicker to implement measures this time around compared to the rice price crisis in 2018.

“While upside risks remain, we think inflation expectations should be better-anchored this time around,” she said.

Ms. Nalin said the central bank’s options “are limited” and is likely to maintain policy rates until mid-2022.

Last week, the central bank kept the key policy rate at 2% and BSP officials said its stance will remain accommodative to help support the economic recovery. — Luz Wendy T. Noble

House claims support from 224 legislators in show of force for 3rd stimulus

THE leadership of the House of Representatives is claiming support from 224 legislators for the proposed P420-billion stimulus package which will become the third Bayanihan law if passed.

In a statement Tuesday, Speaker Lord Allan Jay Q. Velasco said representatives from across the political spectrum expressed their support for House Bill No. 8628 which if approved will go into the books as the Bayanihan to Arise as One Act (Bayanihan III).

The third Bayanihan package would be the largest by far and at the bill stage will be subject to reduction as the government weighs its ability to fund the measure.

The proposed Bayanihan III bill has 12 principal authors and 212 co-authors and allocates P108 billion for social amelioration program assistance to families affected by the pandemic; P100 billion for capacity-building of businesses in critically-impacted industries; P70 billion for capacity-building for agricultural workers; P52 billion for wage subsidies; P30 billion for displaced workers; P30 billion for the internet expenses of teachers and students; P25 billion for COVID-19 vaccines and medicine; and P5 billion for the rehabilitation of typhoon-affected areas. 

“The 18th Congress, in its remaining legislative calendar, will carry out its duty to craft laws that will help our countrymen recover from this pandemic,” the Speaker said. “We deemed it necessary to address all fronts in stimulating our economy back to health, and Bayanihan III provides a holistic approach in addressing all our current woes,” he said.

Mr. Velasco said Bayanihan III will provide P8,000 to each worker displaced by the pandemic.

He added that each household member will receive P1,000 regardless of economic status. Each student and teacher will receive an additional P1,000 allowance.

The proposed law will also establish a “Bayanihan Council,” which will be responsible for the efficient implementation of the Bayanihan III programs.

Expenditure and implementation issues marred the first two Bayanihan packages, which Mr. Velasco promised to avoid. The first package, the Bayanihan to Heal as One Act, was signed in March 2020 and authorized the realignment of P275 billion for emergency spending items like cash aid for households unable to work during the quarantine. The second law, the Bayanihan to Recover as One, was signed in September and authorized up to P165 billion, including P25 billion contingent on the availability of funds, to help gradually reopen the economy. — Gillian M. Cortez

DPWH sets aside P1.2B for 82 infrastructure projects’ preliminary studies

THE Department of Public Works and Highways (DPWH) said Tuesday that it has a 2021 budget allocation of P1.23 billion for preliminary studies required to implement 82 big-ticket projects.

The projects are now undergoing “feasibility study, preliminary and detailed engineering design, economic analysis, technical study, and traffic impact assessment,” the department said in a statement.

In Luzon, 33 proposed infrastructure projects have received study funding from the department.

“The Luzon projects include the Samson Road to NLEX Connector Link Project under DPWH National Capital Region costing P36.9 million and the Alaminos-Lucap Bypass Road in Pangasinan costing P11 million for Region 1,” it said.

The department allocated P91.4 million for seven projects in the Cordillera Administrative Region (CAR).

The CAR projects include the Mongol-Nalbu-Alimit-Nattum-Dulao Road and the Boliwog-Abinuan-Alimit (Mayoyao) Road.

In Region 2, P37.5 million was allocated for the Baybayog Bypass Road and the Quezon-Delfin Abano Road.

“There are four in Region 3 costing P60 million covering San Miguel-Cabanatuan Road and San Leonardo-San Antonio Bypass Road and Concepcion-Mabalacat Bypass Road among others; seven in Region 4-A costing P126.3 million, which include the Batangas Grand Terminal Flyover, Cavite-Batangas Bypass Road, and Tanza-Nasugbu Road,” the department said.

In Region 4-B, P68.6 million was allocated for Sablayan-Sta. Cruz Diversion Road and Lubang Island Circumferential Road.

The funding also covers five projects in Region 5, worth P47.1 million. The projects include the Sipocot Bypass Road and Mabolo-Almeda Bypass Road.

The funding covers studies of 19 projects in the Visayas.

Three projects in Region 6 have been allocated P66.4 million, including the Capiz-Aklan Coastal Road; six in Region 7 worth P106.2 million, including Pamplona-Tanjay City-Bayawan City Road and Mambaling South Boulevard; and 10 projects in Region 8 worth P108.9 million, inclusive of Baybay-McArthur Road and Nabang-Gadgaran Diversion Road.

The department identified 29 projects in Mindanao for study funding.

The Mindanao allocation is for four projects in Region 9 and is worth P71.4 million. They include the Sirawai-Tungawan Diversion Road in Zamboanga del Norte and Putik-Campo Island Diversion Road in Zamboanga City; 11 projects in Region 10 worth P160.4 million, including the Iligan City-Magsaysay Agri-Industrial Road and Dansolihan-Camp Kibaritan-Languindingan Road; four in Region 11 worth P51.5 million, including the Panacan-Bunawan Flyover and Tagum City-Sto. Tomas Diversion Road; two in Region 12 worth P17.4 million, including the Bolebak-Pansud Alternate Road and Midsayap-Libungan Bypass Road; and eight in Region 13 including the Libanga-San Miguel Road and NRJ Santiago-Cantilan Road.

“The Poblacion Sta. Maria-Malungon Road, an inter-regional road connecting Davao del Sur to Sarangani, has also received study funding in the amount of P17.4 million,” the department added. — Arjay L. Balinbin

Elderly PHL population a growing challenge to healthcare system — ADB

THE perception of Southeast Asia as a demographically young region may need rethinking as the Philippines reclassifies as an “aging society” by 2030, posing a challenge to the healthcare system, the Asian Development Bank (ADB) said.

The ADB Economic Research and Regional Cooperation Department said 10% of the Philippine population is projected to be 60 years or older by 2030, forcing the government to shift its priorities to focus more on the health of the elderly, noting that one of the key observations on the behavior of elderly patients is that there are gender differences in how they seek medical help.

“Uncovering gender differences in health outcomes and access to care is crucial to fine-tune policy reforms to address the needs of older adults in Southeast Asia, especially in light of the increased risks of getting sick during the coronavirus disease (COVID-19) pandemic,” it said.

A working paper, “Gender Differences in Access to Health Care Among the Elderly,” published Tuesday, found that women in the Philippines are more willing to seek treatment than men, especially as they grow older. It also concluded that the actual take-up of public healthcare services remains low.

“Women in Cambodia and the Philippines are more likely than men to seek healthcare treatment when they are sick or injured, and the difference is statistically significant. This result could reflect that women are more proactive than men in seeking treatment from formal sources, or women have less access to informal sources of care,” it said.

In Vietnam, it found that women are less likely to ask for treatment due to stigma and discrimination against those suffering from communicable diseases.

It said seeking treatment is nevertheless female-driven in all three countries.

In the Philippines, the study noted the low probability of receiving formal care treatment despite the availability of programs like Universal Health Care starting in 2019.

“Uncovering the reasons for fairly low take-up of formal healthcare services and gender differences in access to care is crucial to designing policies to better meet the needs of older persons in Asia, especially in light of the increased risks of getting sick during the COVID-19 pandemic,” it said. — Beatrice M. Laforga

Ironies and opportunities in digital PHL

In the digital innovation landscape, the Philippines stands at a road filled with stark irony: on one hand, some 73 million Filipinos are Internet users, with the World Bank noting that the Philippines is seen as a “potentially significant player” in the global digital market. On the other hand, the country is seemingly running aground when it comes to internet penetration.

According to the recent Digital 2021 Report from We Are Social, around 37 million Filipinos are still not online. At the same time, however, the Digital 2021 Report also noted that Filipinos top the daily usage charts, spending an average of nine hours and 45 minutes per day online. Filipinos are also the most active on social media averaging three hours and 53 minutes on social media every day.

A nation with millions of active Internet and social media users, but also a nation running aground when it comes to internet penetration. What went wrong? A cursory review of the past year will show that an important constraint which the Duterte administration sought to resolve was the bureaucratic delay in the processing of telecommunications towers by both the national and local governments. No less than the President himself ordered the whittling down of the number of days and signatures for the approval of tower applications.

However, the path towards full digital transformation is still far and long. The number of unconnected Filipinos is worrisome given our quick and unexpected shift towards digital brought about the COVID-19 (coronavirus disease 2019) pandemic. Reliable and effective online services are so much more essential now that our mobility is limited. Ask any regular Filipino Internet user, or scrounge around social media, and it would be easy to see the frustration of our countrymen on the Philippine Internet’s state of affairs.

The pandemic opened a deep rabbit hole which exposed the need — yet lack of — stable and reliable e-government services. These services have not yet been fully integrated nor intuitive to public needs. As an example, the driver’s license databases are not fully integrated with vehicle information and other databases, such that traffic management cannot implement an efficient and immediate contactless apprehension system. The current contactless apprehension setup takes at least several months to more than a year to collect fines from traffic violators.

For the most part, the Philippines has mostly been a consumer of IT (information technology), instead of trailblazing innovation and technology in this field. Our investment in AI (artificial intelligence) is limited to financial and other business-to-business services, and we have yet to see Filipino tech companies emerging, if not dominating in this field. However, there is a bright spot in the financial technology sector with the new round of investments in GCash by foreign investors, as the current valuation may raise the company to the level of one of Southeast Asia’s valuation unicorns, those with market valuations of more than $1 billion. This may serve as the first push that the country needs in further developing our know-how and putting the country on a world stage.

The role of the government in tech is to encourage growth and raise the level of domestic and foreign investments in the sector. This means defining the role of tech in national development: remove bureaucratic roadblocks and allow the sector a wide latitude to innovate. Government financial institutions can even set aside investment funding to support nascent domestic tech initiatives, for as long as there is a clear proof of concept and plan of growth.

One key area where the government can practice this is in finding solutions on how Internet coverage can be expanded even in the remotest sections of the archipelago. Many areas, especially in rural parts of the country, are underserved or completely unserved by the country’s commercial Internet Service Providers (ISPs), leaving millions disconnected from digital services and opportunities.

There are developing technologies, like Starlink’s use of thousands of internet-beaming satellites floating in Earth’s low orbit, which could bridge the wide connectivity gap in many of our islands where enabling infrastructure has yet to be built. One big asterisk, however, is the cost, with these new technologies currently costing current pilot customers almost tens of thousands of pesos per month in Internet subscription. This is above and beyond what regular broadband subscribers in Metro Manila pay. A proven strategy of many countries is for the government itself to invest in the enabling infrastructure that it’s people are desperately in need of.

Such investments can be tapped for use in public services, such as integrating it with the implementation of Republic Act No. 10929 or the Free Public Wi-Fi Law, so our countrymen in far-flung islands and communities can potentially benefit from the expanded Internet coverage without shouldering the heavy costs.

As a nation, we are barely keeping afloat in the wide ocean of digital innovation. We need government support, openness, and keen interest to innovate if we want to make our mark. Just this Feb. 9, the Philippines commemorated the “Safer Internet Day for Children” under Presidential Proclamation No. 417. But while such red-letter days may seem to be a step in the right direction, what we need m¥ore of are laws, policies, and government actions that provide concrete platforms for speedier digital innovation.

 

Terry Ridon is a Non-Resident Fellow of the Stratbase ADR Institute and Convenor of InfraWatch PH.

Tax treatment of COVID-19 vaccines

In the beginning of the COVID-19 (coronavirus disease 2019) pandemic, strict government regulations were imposed as an attempt to stem the transmission of the virus. These restrictions required business establishments to put their workplace operations on hold, save for businesses deemed necessary to provide basic necessities.

While the regulations were meant for the immediate protection of people’s health, their adverse economic impact was deeply felt by establishments relying heavily on actual customer contact.

To keep their businesses afloat, employers needed to adjust to the demands of the situation by adopting flexible work policies. Indeed, while businesses were forced to operate at a reduced on-site workplace capacity, technology made employees conveniently accessible to their employers. This ensured the on-boarding of every employee daily and, effectively, serves as a prelude to the new normal business operations.

Undeniably, physical interactions are still key for some industries and work productivity in the workplace setting has been proven to be effective. As such, employers cannot be faulted for seeking the “old” normal. However, since we are still without a universal cure for COVID-19, society’s hope for the return of normalcy would rely heavily on safe and effective vaccinations. Given that the government’s vaccination plan prioritizes frontline health workers and other vulnerable sectors, employers are taking charge and are beginning to procure vaccines for their employees.

Aside from deciding on what vaccine brand to procure, employers are determining the proper tax treatment of the employees’ vaccine benefit, i.e., whether or not it is taxable as additional compensation of employees subject to withholding tax on compensation.

DE MINIMIS BENEFITS
In general, all compensation for services performed by employees for their employers are subject to withholding tax on compensation (WTC). However, De Minimis benefits are exempt from income tax and the consequent WTC. These are the benefits of relatively small value and are offered or furnished by the employer merely as a means of promoting the health, goodwill, contentment, or efficiency of his or her employees.

Under Revenue Regulation No. 02-98, as amended, the following are considered De Minimis benefits:

“xxx

b. Medical cash allowance to dependents of employees, not exceeding P1,500 per employee per semester or P250 per month;

xxx

e. Actual medical assistance not exceeding P10,000 per annum;

xxx”

ACTUAL MEDICAL ASSISTANCE
In Bureau of Internal Revenue (BIR) Ruling No. 019-02, the BIR clarified that in order for yearly medical benefits to be considered as De Minimis benefits exempt from tax, these must not exceed P10,000 per annum and it must be actually used or utilized for medical reasons. As such, the following conditions must concur:

1. The amount given to the employee shall be for his own medical expenses;

2. The amount actually given and actually spent shall not exceed P10,000 in any given calendar year; and

3. The employee must fully substantiate with official receipts in his name the medical allowance so granted, on or before the annualization of withholding taxes in any given calendar year.

Based on the above, the benefit of COVID-19 vaccination may fall under “actual medical assistance,” provided the requisites are met.

It is worthy to note that because of the P10,000 threshold, the value of the vaccine will be added to the value of other medical assistance actually provided by the employer for the year. The amount exceeding the threshold shall be subject to tax or it may be considered in determining the P90,000 threshold of other benefits excluded from gross income provided in Section 32 (B)(7)(e)(iv) of the Tax Code.

Nevertheless, if the value of the vaccine added to other benefits goes beyond the P10,000 threshold for actual medical assistance and the P90,000 threshold for other benefits, it may still be argued that it is exempt from tax as it is provided for the ultimate benefit of the employer and that the convenience on the part of the employer can be sufficiently proven. The employer is ultimately benefited by having a healthy worker and workforce.

MEDICAL CASH ALLOWANCE TO DEPENDENTS OF EMPLOYEES
For employers who intend to subsidize their employees’ dependents/immediate family, only to the extent of P1,500 per employee per semester or P250 per month may be considered exempt De Minimis benefit. Thus, the amount exceeding the threshold is taxable or may be considered in determining the P90,000 threshold for “other benefits.”

BUSINESS EXPENSE OF THE EMPLOYER
At the end of the day, whether or not the vaccine benefit is considered as taxable compensation of the employees or not, it may be considered as business expense deductible from the employer’s gross income.

The views and opinions expressed in this article are those of the author. This article is for general information and educational purposes, and not offered as, and does not constitute legal advice or legal opinion.

 

Kristel Mariz G. Marajas is an Associate at the Tax Department of the Angara Abello Concepcion Regala & Cruz Law Offices.

(632) 8830-8000

kgmarajas@accralaw.com

The EU is much less wonderful than it thinks

RAWPIXEL.COM-FREEPIK

URSULA VON DER LEYEN did the right thing last week after she’d tried everything else. The European Commission president finally apologized for the failings of the continent-wide vaccine procurement scheme.

It followed an unseemly few weeks of battle over the vaccine, during which Von der Leyen scapegoated the Anglo-Swedish pharma company AstraZeneca Plc for supply holdups and threatened to close the Irish land border to imports of vaccines from the European Union (EU). Even Brussels, which is loath to admit fault, finally conceded that its vaccine rollout has been unsatisfactory.

It’s an admission that reveals deeper problems in institutional Europe. Bluntly, the EU isn’t as effective as it likes to think it is in many policy areas where it took over responsibility from member states.

It has also lost two opportunities to lord it over others in recent months. One is Brexit, which — while still disruptive — ended in a trade deal rather than the unregulated chaos threatened by its most vociferous opponents. Another is Donald Trump, that willful exemplar of bad faith and anti-liberal politics, who’s fallen from power.

The net effect is that the EU can no longer shine on the global stage by virtue of contrast with wicked Trump and blundering Boris Johnson. Brussels is meant to work well on many fronts, but it doesn’t and electorates are taking notice.

The world’s largest economic bloc is proving erratic as a champion of democracy, too. It has vast reserves of soft power, but rarely deploys them. Under its largely German leadership, it has difficulty combining commercial realpolitik with its stated aim of advocating for pluralism and encouraging democracy in Eastern Europe and elsewhere.

The immunization debacle had a sorry aftermath. On a visit to Moscow earlier this week, Josep Borrell, the EU’s foreign policy chief, was all smiles as he praised Russia’s COVID vaccine, Sputnik V. It may have been necessitated by the EU’s possible future shortages but the timing was awful. Alexei Navalny, the dissident leader who survived a military-grade poisoning, was being dragged out of prison to face more trumped-up charges.

Vladimir Putin understands propaganda better than his European counterparts and gave Borrell a public dressing down. At a joint press conference, Sergei Lavrov, Russia’s foreign minister, sneered that the EU wasn’t “a reliable partner.” The Brussels representative learned from his Twitter feed that three European diplomats were being expelled from Moscow for appearing at demonstrations supporting Navalny.

There are plenty of other failures in diplomatic muscularity to pick over. Frank-Walter Steinmeier, Germany’s head of state, hardly helped when he defended construction work on a Russian gas pipeline beneath the Baltic, Nord Stream 2, on the grounds that his country owes Moscow a debt of guilt for the sins of World War II.

Alas, this deal has losers as well as winners. Ukrainians will be deprived of transit payments from the current land-based pipeline (and are deeply unhappy about any downplaying of their own losses in World War II). Other Eastern European democracies fear Putin is getting the means to cut off their gas without hurting his rich German client. Despite her upbringing in East Germany, which makes her more wary of the Russians than her Social Democrat coalition partners, Angela Merkel has opted for commercial advantage.

It’s not just Russia. The chancellor and Von der Leyen also handed President Joe Biden a nasty surprise as he prepared to take office by announcing an investment agreement with China. What will Trump’s replacement see when he looks at this muddled Europe?

While avoiding Trump’s tub-thumping, Biden aims to continue “extreme competition” with Beijing and to hold it accountable for human rights violations. Merkel, echoed by France’s Emmanuel Macron, makes clear she won’t join any new Cold War against Beijing and warns against dividing the world into competing blocs. China is Germany’s biggest export market for cars.

This all changes some of the diplomatic geometry between the US, EU, and Britain. Biden disapproves of Brexit and had no contact with Prime Minister Johnson when the latter was the UK’s foreign secretary, but the new president has been forced to fall back on his country’s traditional ally for moral and diplomatic support. In a crunch, only the British and the other Anglosphere countries of Australia, Canada, and New Zealand have stood up to Beijing.

The paradox is that Merkel talks the global liberal talk while acting purely in German interests — whereas Johnson sounds like a loudmouthed populist but has walked the walk on Chinese human-rights violations. He is stripping Huawei Technologies Co.’s equipment from Britain’s telecoms networks and he’s offered Hong Kong residents a path to UK citizenship after China’s crackdown on the democracy movement.

The EU is both a commercial trading bloc and a “values” community. There’s a tension here. Von der Leyen says she wants to lead a “geopolitical Commission.” The gap between aspiration and reality is becoming dangerously wide. After Merkel retires in the autumn, a new generation of leaders will need to choose more clearly how it sets about this role. Europe won’t have Brexit and Trump to hide behind.

BLOOMBERG OPINION

World likely to pay more for meat as food inflation deepens

THERE are signs that the food inflation that’s gripped the world over the past year, raising prices of everything from shredded cheese to peanut butter, is about to get worse.

The coronavirus disease 2019 (COVID-19) pandemic upended food supply chains, paralyzing shipping, sickening workers that keep the world fed and ultimately raising consumer grocery costs around the globe last year. Now farmers — especially ones raising cattle, hogs and poultry — are getting squeezed by the highest corn and soybean prices in seven years. It’s lifted the costs of feeding their herds by 30% or more.

To stay profitable, producers including Tyson Foods, Inc. are increasing prices, which will ripple through supply chains and show up in the coming months as higher price tags for beef, pork and chicken around the world.

Feed prices “go up and down, and you tend to take the rough with the smooth,” said Mark Gorton, managing director at the British chicken and turkey producer Traditional Norfolk Poultry. “But when it rallies as much as it has, it starts to impact massively on the business.”

The last time grains were this expensive was after the US drought of 2012, and meat prices saw a dramatic run-up. Now, meat is again poised to become a driver of global food inflation, and part of the intensifying debate over the path of overall inflation and exactly what central banks and policy makers should do to aid economies still working to recover from the pandemic.

Vaccinations promising a return to normal life and fiscal stimulus programs amounting to trillions of dollars are already expected to unleash pent-up demand and drive a surge in consumer prices. US and European bond markets are sending signals that inflation is back. Americans’ one-year inflation expectations last week rose to the highest since 2014.

As for what’s driving the feed prices, that’s due to bad crop weather shrinking world harvests. Demand is also increasing. China, the biggest buyer of commodities, is scooping up record amounts of the available supplies to feed its expanding hog herds.

Meat producers across major exporting countries are feeling the impact of the higher grain costs. In Brazil, the biggest poultry shipper, the cost of raising chickens jumped 39% last year due to feed, according to Embrapa, a state-owned agricultural research agency. Costs rose again last month by around 6%, said Itau BBA bank.

In Europe profitability of livestock operations has plunged due to the combination of high feed expenses and stifled demand from Covid-19 lockdowns. Some smaller hog farmers may be forced to exit the market, according to Rabobank senior analyst Chenjun Pan.

The United Nations’ Food & Agriculture Organization (FAO) said global meat prices in January climbed the fourth straight month.

Since Dec. 1, corn futures in Chicago have risen 28% and soybeans 18%.

Animal disease outbreaks could also push meat prices higher, with parts of Europe and Asia seeing avian influenza outbreaks. A deadly hog virus called African swine fever is still spreading in some countries after decimating Chinese herds, and recently caused a Philippine hog company to exit the industry.

SHRINKING HERDS
Meat prices at retail grocery stores rise the most after farmers shrink their herds due to declining profits. That’s a process that takes time, which means there’s a lag between the feed-cost inflation and rising consumer prices, said Will Sawyer, animal protein economist at farm lender CoBank ACB.

In the US, livestock and poultry operations have already started contraction due to slim profits amid the pandemic. The American hog herd in December fell 0.9% from the previous year and the cattle herd in January by 0.2%, according to government data.

Cattle profits are already down. CRI Feeders in Oklahoma, a feedlot with 42,000 animals bulking up on corn, is breaking even, said co-owner Scott Anderson. Expanding drought is withering pastures and feed prices have shot up 30%.

The market and weather challenges likely will prompt ranchers to scale back, according to Clayton Huseman, executive director of the Kansas Livestock Association.

“Over the next couple of years, we do expect the supply to get tighter,” Mr. Huseman said. — Bloomberg

UN warns Myanmar vs harsh response to coup protesters

REUTERS/MIKE SEGAR

THE UNITED Nations (UN) special envoy has warned Myanmar’s army of “severe consequences” for any harsh response to protesters demonstrating against this month’s coup in a call with the military leadership, a UN spokesman said.

Despite the deployment of armored vehicles and soldiers to some major cities at the weekend, protesters have kept up demonstrations to denounce the Feb. 1 takeover and demand the release of detained leader Aung San Suu Kyi and others.

Protests on Monday were smaller than the hundreds of thousands who had joined earlier demonstrations but broke out in many parts of the Southeast Asian country, where the coup has halted a decade of unsteady transition to democracy.

Small crowds gathered in two places in the main city of Yangon on Tuesday — at a traditional protest site near the main university campus and at the central bank, where protesters hoped to press staff to join a civil disobedience movement.

The army cut off the internet for a second consecutive night early on Tuesday though it was again restored at about 9 a.m. (0230 GMT)

UN Special Envoy Christine Schraner Burgener spoke on Monday to the deputy head of the junta in what has become a rare channel of communication between Myanmar’s army and the outside world.

“Ms. Schraner Burgener has reinforced that the right of peaceful assembly must fully be respected and that demonstrators are not subjected to reprisals,” UN spokesman Farhan Haq said at the United Nations.

“She has conveyed to the Myanmar military that the world is watching closely, and any form of heavy-handed response is likely to have severe consequences.”

In an account of the meeting, Myanmar’s army said junta Number Two, Soe Win, had discussed the administration’s plans and information on “the true situation of what’s happening in Myanmar”.

The unrest has revived memories of bloody outbreaks of opposition to almost half a century of direct army rule that ended in 2011 when the military began a process of withdrawing from civilian politics.

The army said late on Monday that protests were harming stability and had left people in fear.

“People are delighted to have the security patrols and the security forces will conduct them day and night,” its True News information team said.

An activist group, the Assistance Association for Political Prisoners, said it had recorded 426 arrests between the coup and Monday and it feared the military was using internet blackouts to arrest more opponents, particularly after it suspended legal constraints on search and detention powers.

Violence during the protests has been limited compared with that under previous juntas, but police have opened fire several times, mostly with rubber bullets, to disperse protesters, including on Monday. — Reuters

WHO approves AstraZeneca COVID vaccine for emergency use

GENEVA — The World Health Organization (WHO) on Monday listed AstraZeneca and Oxford University’s coronavirus disease 2019 (COVID-19) vaccine for emergency use, widening access to the relatively inexpensive shot in the developing world.

“We now have all the pieces in place for the rapid distribution of vaccines. But we still need to scale up production,” Tedros Adhanom Ghebreyesus, WHO Director-General, told a news briefing.

“We continue to call for COVID-19 vaccine developers to submit their dossiers to WHO for review at the same time as they submit them to regulators in high-income countries,” he said.

A WHO statement said it had approved the vaccine as produced by AstraZeneca-SKBio (Republic of Korea) and the Serum Institute of India.

“In the first half of 2021, it is hoped that more than 300 million doses of the vaccine will be made available to 145 countries through COVAX, pending supply and operational challenges,” the British drug maker said in a separate statement announcing the approval.

The listing by the UN health agency comes days after a WHO panel provided interim recommendations on the vaccine, saying two doses with an interval of around 8 to 12 weeks should be given to all adults, and can be used in countries with the South African variant of the coronavirus as well.

The WHO’s review found that the Astrazeneca vaccine met the “must-have” criteria for safety, and its efficacy benefits outweighed its risks.

The AstraZeneca/Oxford shot has been hailed because it is cheaper and easier to distribute than some rivals, including Pfizer/BioNTech’s , which was listed for emergency use by the WHO late in December.

Nearly 109 million people have been reported to be infected by the novel coronavirus globally and more than 2.5 million have died, according to a Reuters tally. Infections have been reported in more than 210 countries and territories since the first cases were identified in China in December 2019.

AstraZeneca’s vaccine makes up the lion’s share of doses in the COVAX coronavirus vaccine sharing initiative, with more than 330 million doses of the shot due to begin being rolled out to poorer countries from the end of February.

The WHO established its emergency use listing (EUL) process to help poorer countries without their own regulatory resources quickly approve medicines new diseases like COVID-19, which otherwise could lead to delays.

The COVAX Facility, which is co-led by GAVI, the World Health Organization, the Coalition for Epidemic Preparedness Innovations and the UN Children’s Fund, has said doses would cover an average of 3.3% of total populations of 145 participating countries. — Reuters

Would ‘COVID loans’ be a more affordable and sustainable way to support national economies?

Faced with a COVID-19 pandemic of unknown severity and duration, governments around the world are looking for effective and sustainable ways to maintain economic confidence and employment.

Even New Zealand, where lockdowns have been few and short-lived, is confronting the reality of repeated lockdowns, especially since the United Kingdom variant has now been detected in community cases.

With vaccines likely to require all of 2021 to be rolled out in significant numbers, more economic disruption has to be expected this year, with each successive shock further testing economic resilience.

For many countries, targeted wage subsidies of some form have been the principal tool for maintaining employment and economic confidence, often complemented by small business loans. While these have clearly been useful, they also have clear limitations — not least their cost.

This raises questions about the ongoing viability of wage subsidies and small business loans as the economic response measures of choice.

My recently published policy paper proposes an alternative approach, modelled on student loans schemes such as those operating in New Zealand, Australia and the UK.

Rather than attempting to support firms and households to pay wages, rents and other expenses, this alternative enables firms and households whose incomes have fallen due to the pandemic to take out government-supported “COVID loans” to restore their pre-pandemic income levels — a form of “revenue insurance”.

I argue this alternative approach will be not just more affordable and sustainable, but will also be more effective and more equitable.

Insuring small business and household revenues means they should be able to meet all their outgoings, not just wages and rents which are subject to selective support measures under the current approach.

Borrowers can simply determine which outgoings they need to prioritize, and access the resources they need to meet those costs.

This also simplifies administration, since only one support scheme is required, rather than multiple schemes. With student loan schemes already in place in many countries, experience and infrastructure are available to support the rollout of the proposed loans.

Just as importantly, firms and households that take out COVID loans would effectively be borrowing against their own future incomes. This places less of a burden on future taxpayers than wage subsidies financed through extra government debt.

In turn this makes the approach more equitable than debt-financed wage subsidies, since that extra government debt is a charge against future generations.

In terms of affordability, loans to make up drops in income would be repaid via tax surcharges on those taking out loans, as and when their future incomes allow. This means would-be borrowers need not be deterred by fixed repayment deadlines in times of ongoing economic uncertainty.

Furthermore, since any firms and households borrowing against their own future incomes will ultimately be repaying their debt, COVID loans represent an asset on government balance sheets.

This offsets the extra liabilities governments take on by borrowing to finance these loans — something wage subsidies do not do. This increases the affordability of a loans-based approach from a government perspective (even allowing for defaults and subsidies implicit in student loan schemes).

Using illustrative data for New Zealand, my paper shows COVID loans are 14% cheaper than wage subsidies (and small business loans) in terms of their impact on net government debt.

More importantly, they are almost 2.5 times as effective in terms of the level of support they offer. And since 67% of the cost of COVID loans ultimately falls to those who make use of them (allowing for defaults and implicit subsidies), they place less of a burden on future taxpayers than deficit-funded wage subsidies.

Affordability is also enhanced by a subtle feature of the proposed scheme. By making COVID loans generally available to all firms and households, the scheme sustains economic confidence.

Firms and households are assured the other firms and households they rely on for their own economic prospects have access to the same effective financial lifeline throughout the pandemic.

Households can therefore keep spending confidently, and employers can confidently keep employing. This means the loans might actually not need to be used to any great extent. Their strength lies in preventing economic decline — much like a vaccine’s strength lies in preventing disease.

Finally, COVID loans are not just a sustainable policy tool for minimizing the economic harm of COVID-19. They also provide a benchmark for assessing how cost-effective other support measures such as wage subsidies have been, and a possible solution for future pandemics. – Reuters

Reyes ready to embrace pressure anew of coaching in pro league

By Michael Angelo S. Murillo, Senior Reporter

BACK ON the helm as coach in the Philippine Basketball Association (PBA) after nearly a decade away from it, Chot Reyes said there is no denying the pressure that goes with it, but it is something he is ready to embrace.

Speaking on The Game over One PH on Monday night, Mr. Reyes, who is making a coaching back with the TNT Tropang GIGA, said he is looking forward to get back on the swing of things and welcomes the challenge of being a head coach anew in the PBA, including the pressure and the expectations that will be thrown his way.

“Once you accept a coaching job, there is always pressure, of course. That’s why it’s called the hot seat. And to a take a high-profile job like that with TNT, there are very high expectations. But I’m kinda used to and there is no pressure greater than the pressure I put on myself,” said Mr. Reyes.

The former Gilas Pilipinas coach last handled a PBA team in 2012 with TNT.

Mr. Reyes, an eight-time PBA champion coach, concentrated on the national team after that and later became a top executive of TV5 until he stepped down in 2019.

In bringing him back, the TNT management said it hopes to revisit the kind of success it had with Mr. Reyes as coach, which included four PBA titles, the last one during his last year as coach with the Philippine Cup crown.

Mr. Reyes takes over from TNT active consultant Mark Dickel, who ran the team along with coach Bong Ravena for the last couple of years.

Mr. Dickel was asked to stay with the team, but declined the offer to look for new opportunities elsewhere. Mr. Ravena though is still part of the coaching staff.

The comebacking coach said he has yet to sit down with his team to talk about the direction they are going to take moving forward.

But he shared that the philosophy for him is still the same and he just needs to adjust his system with the pieces that he has and the competition ahead.

“I’m a big believer in values-based, purpose-led coaching. I don’t think that’s going to change. The values that I believe in, the foundations of my coaching philosophy, they are going to be the same but the tactics, the strategies, the ways of doing things are going to be different depending on the personnel I have and depending on the competition,” he said.

Mr. Reyes went on to say that given the landscape in the PBA right now, work is cut out for them to achieve the success they want.

“It’s not going to be easy. This is not going to be a walk in the park. This is not going to be an instant thing,” he said.

With TNT, Mr. Reyes will lead a team bannered by veteran Jayson Castro, Roger Pogoy, Ray Parks, Jr., Troy Rosario, and JP Erram.

Also part of the squad are Ryan Reyes, Simon Enciso, Samboy De Leon, Lervin Flores, Jay Washington, David Semerad, and Almond Vosotros, as well as new signings Glenn Khobuntin, Dave Marcelo, and Ping Exciminiano.

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