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Regional Updates (03/18/21)

Boracay tourists can now use saliva RTPCR test for entry requirement

TOURISTS going to Boracay can now use a negative coronavirus result through saliva testing for entry, the task force managing the island announced Thursday. Environment Secretary Roy A. Cimatu, chair of the Boracay Inter-Agency Task Force, made the announcement through a virtual briefing from the island. The Department of Tourism (DoT), in a statement, said it welcomes the approval of the alternative testing option, which costs less and is not invasive. Under the approved policy, saliva testing should only be taken through the Philippine Red Cross or other laboratories with such accreditation from government health institutions. The DoT said it has also recommended to the national task force handling the coronavirus response to relax age restrictions for domestic tourism by allowing those below 15 and above 65 to travel for leisure purposes. At the same time, the DoT reiterated its constant reminder on responsible travel, which means strictly following health safety protocols “to protect both the tourists, tourism workers and the residents of host communities.”

Cagayan Valley Medical Center chief appeals to private hospitals to handle mild COVID cases

THE head of the Cagayan Valley Medical Center (CVMC) has appealed to private hospitals to admit patients with suspected or mild symptoms of the coronavirus as the government-run regional facility is now 100% occupied. In a statement from the Cagayan provincial office on Thursday, CVMC Chief Glenn Matthew Baggao said their ward for coronavirus disease 2019 (COVID-19) is currently handling 126 confirmed patients, “the highest” number recorded since the start of the pandemic. “We already added rooms but because of the increase in patients, we really have no more space, we cannot accept more… and it’s the patients who will suffer,” he said in Filipino. The doctor also called on authorities to monitor private hospitals, which are mandated to allocate at least 30% of their bed capacity to COVID-19 cases. “The supposed 30% allocation in private and government hospitals in the region, especially here in Tuguegarao City, is no longer being complied with,” he said. Apart from the confirmed cases, the hospital also has 38 suspected patients awaiting test results. As of Mar. 16, Cagayan Valley has recorded 10,173 coronavirus cases, of which 1,143 are active, 8,820 recovered, and 202 died. The region, with Tuguegarao City as center, is composed of the provinces of Cagayan, Isabela, Quirino, Nueva Vizcaya, and Batanes. — MSJ

Davao school brings non-digital ‘smart boxes’ to senior high students for hands-on training

A PRIVATE school in Davao specializing in hospitality, tourism, and culinary courses has partnered with the Department of Education to bring hands-on training to senior high school students at their homes through “smart boxes” that are not of the digital kind. “The delivery of skills training became more challenging during the pandemic. Schools were closed and all training delivery is done online or through modules delivered in homes of students who do not have internet connections. Together with my academic team, we needed to reset and re-calibrate our strategies,” said Joji Ilagan-Bian, chair of the JIB International Schools and founder of MinTVET, a network of technical-vocational schools in Mindanao. As tech-voc skills are best learned beyond reading modules, Ms. Bian and her team developed the JIB Smart boxes, which contain materials specific to a course — such as a cocktail glass and ingredients for those learning bartending, or protective gloves for shielded metal arc welding. “It was fulfilling to see the students wearing their JIB t-shirts and their chefs toques and aprons on screen as they do their assessments in their homes using the JIB SMART Boxes,” Ms. Bian said in an interview. The project is under the Education department’s Joint Delivery Voucher Program-Technical Vocational Learning program, which provides senior high students enrolled in public schools the opportunity to get tech-voc specialization through partner institutions such as JIB schools. The courses on offer include baking, pastry production, housekeeping, bartending, food and beverage services, and welding. — Maya M. Padillo

PSA signaling 7.5% year-on-year rise in first-quarter palay output

THE PHILIPPINE Statistics Authority (PSA) said it upgraded its first quarter estimate for production of palay, or unmilled rice, from a previous estimate made in January, with the latest projection representing a 7.5% rise in output from a year earlier.

In its palay and corn estimates report, the PSA said palay production for the three months to March is now estimated at 4.583 million metric tons (MT), up about 0.4% from the earlier forecast.

The PSA said total harvestable area for the quarter is expected to increase 4.6% year on year to 1.148 million hectares. Yield per hectare is also expected to increase 2.8% from a year earlier to 3.99 MT.

It added that 259,710 hectares, producing 933,660 MT of palay, have been harvested as of Feb. 1.

“Of the total area of standing palay to be harvested for April-June 2021, 42.8% or 634,511 hectares were at the vegetative stage, 35.1% or 519,794 hectares at the reproductive stage, and 22.1% or 328,499 at the maturing stage,” it added.

The PSA said corn output for the first quarter is expected to hit 2.52 million MT, representing a 0.3% downgrade from its January estimate.

If the projection is realized, corn output will have risen 9.6% from a year earlier.

The PSA said the harvest area for the quarter is expected to increase 2.4% year on year to 699,967 hectares. Yield per hectare was estimated at 3.60 MT, which would be up 7.1% from a year earlier.

It said about 244,093 hectares producing 759,500 MT of corn have been harvested as of Feb. 1.

“Of the total area of 635,986 hectares of standing crop for the April to June 2021 harvests, 30.1% or 191,113 hectares were at vegetative stage, 38.9% or 247,523 hectares at reproductive stage, and 31.0% or 197,349 hectares at maturing stage,” it added.

The Department of Agriculture has said that it targets output of 20.47 million MT of palay this year. Actual output in 2020 was 19.44 million MT. — Revin Mikhael D. Ochave

DA formally requests state of emergency to deal with ASF

THE Department of Agriculture (DA) has officially submitted its proposal to President Rodrigo R. Duterte for a state of national emergency to help contain African Swine Fever (ASF).

In a March 17 memorandum, Agriculture Secretary William D. Dar said he sent a draft proclamation to Malacañang seeking the declaration in order to appropriate funds more rapidly to deal with the emergency, which has reduced hog numbers drastically and caused food prices to rise, threatening another inflation crisis.

Mr. Dar said the DA plans to implement biosecurity measures to help rehabilitate the hog industry. More than three million pigs have died or were culled since the virus was first detected in 2019.

  “The declaration of a state of national emergency would mandate and capacitate concerned government agencies including local government units (LGUs) to work together to prevent and control the further spread of ASF,” Mr. Dar said.

“Over three million pigs have been lost… causing a contraction in pork supply and an unprecedented increase in the price of basic agricultural commodities,” he added.

During a March 9 hearing, the Senate Committee on Agriculture, Food, and Agrarian Reform approved a resolution requesting the DA to recommend a state of emergency declaration.

Senator Francis N. Pangilinan said at the hearing that such a declaration is needed to unlock the funding needed to address ASF.

Mr. Duterte issued Executive Order (EO) No. 124 which set a price ceiling on pork and chicken products.

The EO, issued on Feb. 1 and implemented a week after, temporarily capped the price of pork shoulder (kasim) at P270 per kilogram, pork belly (liempo) at P300 per kilogram, and whole chicken at P160 per kilogram.

The price controls are in place until April 8.

Asked for additional comment, DA Spokesman Noel O. Reyes told reporters in a mobile phone message that he will leave it to the Palace to announce the exact contents of the proclamation, likely after it is signed.

Samahang Industriya ng Agrikultura Chairman Rosendo O. So said the priority for the government should be the establishment of border inspection facilities.

“The idea of a state of national emergency is to re-channel funds. The priority should be border inspection facilities. The other (government) programs will be useless if the country does not have those,” Mr. So said in a mobile phone message.

Separately, the private sector has agreed to help the government implement programs to control the spread of ASF and to rebuild the hog inventory.

On March 17, the DA signed a memorandum of understanding with Univet Nutrition and Animal Healthcare Co. (UNAHCO) and other organizations to carry out the hog industry’s rehabilitation.

Signing up for the partnership were the Philippine College of Swine Practitioners; the International Training Center on Pig Husbandry; Pig Improvement Co.; Provimi Philippines; Cargill Philippines, Inc.; Novus International Pte Ltd.; Kemin Industries; Philippine Association of Feed Millers, Inc.; and SGS Philippines.

“I am confident that with this partnership, we can attain our goal of reviving the country’s swine sector, which is very crucial in our food security efforts,” Mr. Dar said during the signing.

According to the DA, UNAHCO will create a working group consisting of its industry partners and coordinate efforts with the Bureau of Animal Industry, National Livestock Program, and DA regional field offices.

They will help in the distribution of breeders, gilt and piglets, and disinfectant, among others.

Ricardo C. Alba, president of UNAHCO, said the company has also launched its own swine repopulation and biosecurity initiatives for backyard hog raisers.

“The extent of ASF has reached alarming proportions and the DA openly welcomes our help. This is a classic example of public and private helping each other,” Mr. Alba said during the signing.

Mr. Dar said LGUs are vital in the successful implementation of the hog repopulation and ASF control programs.

“I wish to reiterate my call on our partners — LGUs, hog industry stakeholders, veterinary associations, universities, and research institutions, farmers’ cooperatives and associations, and backyard and commercial hog raisers — to join us to implement stringent and sustainable biosecurity measures,” Mr. Dar said.

The Philippine Statistics Authority (PSA) has estimated that the national hog inventory as of Jan. 1 fell 24.1% year on year to 9.72 million animals. — Revin Mikhael D. Ochave

ARTA launches app integrating business permit process, contact tracing

THE Anti-Red Tape Authority (ARTA) will launch a digital platform unifying business permit transactions and contact tracing systems next month.

The Go SmARTApp, donated by Multisys Technologies Corp., will be used by local government units for business permit issuance and other transactions, ARTA said in a statement Thursday.

The platform will also incorporate the National Government coronavirus disease 2019 (COVID-19) contact tracing application StaySafe.ph along with the Department of Information and Communications Technology’s electronic business permits system.

ARTA is also in talks with other agencies to integrate Social Amelioration Program fund transfers into the platform.

The Go SmARTApp expands and renames the Smart City platform initially intended solely for local government transactions. The expanded functions were endorsed by the Ease of Doing Business and Anti-Red Tape Advisory Council Wednesday.

The seven-person council includes representatives from various government agencies, the ARTA Director-General, and two private sector representatives.

The council will also endorse a multi-agency draft circular suspending illegal fees and taxes charged by local governments on goods transport.

“Among others, the memorandum will move to repeal policies, issuances, or ordinances imposing pass-through fees in several LGUs (local government units),” ARTA said. — Jenina P. Ibañez

Construction starts fall on weak confidence

CONSTRUCTION starts, as measured by permit approvals, fell sharply in the fourth quarter, headlined by a 20% decline in the largest segment, residential buildings, as commercial construction declined nearly 32%, the Philippine Statistics Authority, noting disruption and reduced confidence due to the pandemic.

Approved building permits in the three months to December period totaled 31,026, down from 39,242 a year earlier.

The building projects were equivalent to 5.78 million square meters of space and were valued at P62.96 billion. The estimated value was down 46.6% from a year earlier.

Residential construction, which accounted for 70.6% of all approved building permits, declined 20% year on year to 21,892 permits. The value of all approved residential projects was P32.61 billion.

Permits to build duplexes/quadruplexes fell 69.8% to 255, followed by residential condominium (minus 64.1% to 14), apartments/accessorias (minus 46.3% to 2,010), “other residential” buildings (minus 31.9% to 32), and single houses (minus 13.7% to 19,581).

Non-residential construction declined 29.4% to 4,670 permits. Non-residential buildings for which permits were sought were valued at P25.95 billion.

The commercial category contracted 31.9% year on year to 2,854 permits. Permits to construct institutional buildings fell 30.6% to 961, followed agricultural buildings (minus 27.4% to 183), industrial buildings (minus 16.7% to 533), and “other non-residential” buildings (minus 10.3% to 139).

Permits to add to existing structures dropped 66.1% to 465, while permits to make alterations and repairs rose 2.9% to 3,999.

The Calabarzon region — composed of the provinces of Cavite, Laguna, Batangas, Rizal, and Quezon — had the highest number of approved permits with 6,368. The Ilocos Region and Central Luzon followed with 4,199 and 3,589, respectively.

John Paolo R. Rivera, an economist with the Asian Institute of Management, said the decline in construction activity reflects shaky confidence in the economy due to the pandemic.

He also cited possible factors like “liquidity constraints, rapid increases in inflation,” which reduced builders’ confidence in making significant financial commitments, Mr. Rivera said in an e-mail.

Inflation in the fourth quarter averaged 3.1%, the highest since the 3.8% recorded in the first quarter of 2019. Meanwhile, inflation in January and February came in at 4.2% and 4.7%, respectively. The February was the highest since the 5.1% posted in December 2018 and was attributed to higher food prices and transport costs.

“Unless we reduce economic uncertainties, a declining trend is possible. Construction companies must also feel the confidence that economic prospects (are improving),” Mr. Rivera said, referring to the 6.5% to 7.5% growth target set by the government’s economic managers this year, as well as the 8% to 10% target in 2022.

“Recovery is conditional on initiatives by the government to manage and contain the pandemic that will regain trust and confidence in the economy,” he added. — Marissa Mae M. Ramos

Legislator expresses optimism Senate will support economic amendments to Constitution

A DEPUTY SPEAKER said deliberations on economic amendments to the Constitution will likely continue in May for timely transmission to the Senate, where he is confident the amendments will find support.

In a statement Thursday, Representative Rufus B. Rodriquez said: “Since we will have a break next week on March 25, the deliberations will continue when we resume session on May 17.”

Mr. Rodriguez said by the time the amendments are transmitted to the Senate, that chamber will have sufficient time to consider the proposed changes to the Constitution.

The House committee on constitutional amendments last month adopted Resolution of Both Houses No. 2 which inserts the phrase “unless otherwise provided by law” in the foreign investment restrictions in the Constitution, which would allow greater foreign participation in the economy with the passage of appropriate laws.

“The changing of those restrictions will hasten the country’s recovery from this crippling pandemic,” he said, adding that statements of support by some Senators makes him confident that the chamber “will tackle our amendment proposals once transmitted to them and will eventually consider approving them.”

He added that the House will propose only economic amendments.

Senate President Vicente C. Sotto III said in January that a one-line amendment to relax foreign ownership limits in the Constitution has a chance of being passed by the Senate. — Vann Marlo M. Villegas

LGU real property tax cases worth P4.53B resolved in 2020

THE Central Board of Assessment Appeals (CBAA) resolved cases raised by local government units (LGUs) last year involving an estimated P4.53 billion worth of real property taxes, the Department of Finance (DoF) said Thursday.

Twenty-two cases remain pending after hearings were suspended at the height of the lockdown last year, according to the DoF, citing a report from CBAA Chairman Robert Hernando Tobia.

Of the 16 resolved cases received by the board, nine were from Mindanao, four from Visayas and three in Luzon.

Republic Act No. 7160 or the Local Government Code, created the CBAA as an independent, quasi-judicial body to rule on assessment and collection cases brought by municipalities, cities and provinces.

Mr. Tobia said in his report that six of the resolved cases are awaiting rulings from the Court of Tax Appeals.

The DoF said several Local Boards of Assessment Appeals (LBAAs) remain inactive or have yet to be organized, “depriving taxpayers of real property tax remedies and procedures that should be available to them.”

Finance Secretary Carlos G. Dominguez III said the CBAA should work with the Department of the Interior and Local Government to help organize LBAAs even during quarantine. — Beatrice M. Laforga

Peso rebounds on dovish Fed

THE PESO rebounded versus the greenback on Thursday as the US Federal Reserve renewed its commitment to keep rates low to support the recovery of the world’s largest economy.

The local unit closed at P48.68 versus the dollar yesterday, appreciating by 4.5 centavos from its P48.725 close on Wednesday, data from the Bankers Association of the Philippines showed.

The peso opened Thursday’s session at P48.64 per dollar. Its weakest showing was at P48.68 while its intraday best was at P48.62 versus the greenback.

Dollars traded dropped to $748.3 million from $793.7 million on Wednesday.

The peso strengthened after the Fed said it would remain accommodative, a trader said in an email.

Fed Chairman Jerome Powell said the recent uptick in US inflation will not change their pledge to leave the benchmark overnight interest rate near zero to support the virus-stricken economy, Reuters reported.

“We are committed to giving the economy the support it needs to return as quickly as possible to a state of maximum employment,” Mr. Powell said at the close of the US central bank’s two-day policy review.

The Fed’s higher economic growth and employment estimates also boosted the peso, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a text message.

Fed officials said they expect US gross domestic product to expand by 3.3% and 2.2% in 2022 and 2023, beyond the estimated long-term potential growth of 1.8%.

Meanwhile, the Fed sees unemployment settling at 4.5% by end-2021, better than the 6.4% outlook it gave in June last year.

For Friday, the trader gave a forecast range of P48.50 to P48.70 per dollar, while Mr. Ricafort expects the local unit to move within the P48.63 to P48.73 levels. — LWTN with Reuters

PHL shares rise as Fed keeps key rate near zero

PHILIPPINE SHARES climbed on Thursday after the US Federal Reserve kept its key interest rate near zero to support the recovery of the world’s largest economy.

The Philippine Stock Exchange index (PSEi) rose by 64.02 points or 0.97% to close at 6,630.85 on Thursday. The all shares index also climbed by 40.31 points or 1.01% to finish at 4,005.09.

“Market moved up [on Thursday] in line with most regional markets as [the] US Fed maintained overnight rates to reassure the market of its tolerant stance on inflation [and] renewed emphasis on continued policy support,” Diversified Securities, Inc. Equity Trader Aniceto K. Pangan said via text message.

“The PSEi climbed higher led by recently battered blue chip property and bank stocks. Trading volumes continue to decline as investors take a wait-and-see approach,” AAA Southeast Equities, Inc. Research Head Christopher John J. Mangun said in an e-mail.

The US economy is heading for its strongest growth in nearly 40 years, the Federal Reserve said on Wednesday, and central bank policy makers are pledging to keep their foot on the gas despite an expected surge of inflation, Reuters reported.

“Strong data are ahead of us,” a confident Fed Chair Jerome Powell said after a two-day policy meeting, ticking off the list of forces Fed officials expect will produce 6.5% gross domestic product growth this year — from massive federal fiscal stimulus to optimism around the success of coronavirus vaccines.

The Federal Open Market Committee’s policy statement, which kept the benchmark overnight interest rate in a target range of 0-0.25%, was unanimous.

“We are committed to giving the economy the support it needs to return as quickly as possible to a state of maximum employment,” Mr. Powell said in a briefing after the Fed released its new economic projections and latest policy statement.

Back home, all sectoral indices improved except for holding firms, which declined by 3.93 points or 0.05% to 6,694.43.

Meanwhile, financials went up by 32.05 points or 2.28% to 1,436.33; property improved by 71.29 points or 2.18% to 3,333.76; mining and oil increased by 134.28 points or 1.58% to 8,619.13; industrials rose by 54.82 points or 0.64% to 8,582.71; and services added 3.45 points or 0.24% to close at 1,438.68.

Value turnover climbed to P8.85 billion on Thursday with 3.06 billion shares switching hands from the P6.85 billion with 4.62 billion issues traded on Wednesday.

Advancers beat decliners, 149 against 64, while 41 names closed unchanged.

Net foreign selling grew to P397.96 million on Thursday from the P256.96 million seen the day prior.

“There is still some hope that the pandemic situation will improve in the coming weeks which will give the investor sentiment a boost,” AAA Southeast Equities’ Mr. Mangun said. “Until then, the market will continue sideways with a slight negative bias.” — KCGV with Reuters

The other side of the pandemic

The International Monetary Fund’s (IMF) recent issue of Finance and Development for March highlighted the other side of the health pandemic. The virus that we dread helped accelerate the digital future and its good and bad consequences. The Fund drew global attention to its potential impact on poverty and inequality following the pandemic shock and the quality of public health response.

IMF’s chief economist Gita Gopinath estimated that 90 million people are likely “to fall into extreme poverty during 2020 and 2021, reversing the trend of the past two decades.”

The Philippines is no stranger to poverty. This is a reality close to the experience of at least the families of the four million unemployed as of January. In addition, underemployment prevents people from mitigating their material lack. Between October 2020 and January 2021, underemployment rose from 14.4% to 16%, or nearly seven million Filipinos.

Labor market statistics here and in other countries would confirm that unemployment has exacerbated pre-pandemic poverty and inequalities.

Work automation, the threshold to the digital future, has no doubt contributed to labor redundancy.

Gopinath explained that the upgrades in the growth projections in the January’s World Economic Outlook assumed mass vaccination, sustained policy support in large economies and adherence to social distancing rules. With uncertainty in the implementation of public policy, the Fund was concerned with divergences in the growth prospects of member countries.

How did the Fund propose to achieve minimal economic scarring?

We completely agree that the “the pandemic is not over until it is over everywhere.” Thus, the Fund proposed global action to increase vaccine production, additional funding for the COVAX initiative to scale up coverage beyond 20% of the global population, and greater logistics support for administering the vaccines.

On the economic side, the Fund reiterated the need for expansion of public spending even by borrowings. Those with limited fiscal space should prioritize health mitigation and cash transfers to the poor. Support can also be extended to small business. The Philippines supported the poor and the vulnerable during the pandemic and helped small business. However, we failed in our pandemic mitigation. Therefore, we also failed in protecting our livelihoods. Today, we continue struggling with surges in new cases and mortalities, and weak business activity.

With a longer-lasting scar, school closures can also threaten the livelihood of a generation of children. This could widen the divergence in growth prospects.

The IMF believes in the primacy of addressing the pandemic first through strategic and quick deployment of multiple vaccines and the orchestrated moves of all sectors to “avert a great divergence in prospects across countries.”

MIT’s Daron Acemoglu of Why Nations Fail fame with James Robinson, raised the need to regulate automation if we wish to reverse the widening inequality.

Acemoglu observed what seems obvious to many. Economic growth in the US and the rest of the industrial world has become much less shared since the 1980s. It has been less inclusive. This phenomenon involves widening inequality, the disappearance of good, high-paying jobs; and the drop in the real wages of those with less education. These factors were behind the pervasive discontent and social protests across the political spectrum. Populism and authoritarianism are fueled by social alienation.

Acemoglu found that automation, among other factors, would explain this phenomenon of less inclusive economic growth. With more advances driven by machine learning and artificial intelligence, automation could increase inequality. The challenge is to properly harness it and direct it through appropriate public policy to contribute to more inclusive growth.

True, automation has been an engine of growth since the Industrial Revolution. Its labor-saving effect has been more than matched by the significant gains in labor productivity and employment opportunities.

However, the pandemic has recently incentivized employers to explore various ways to further intensify machine use and recent evidence confirms this. The evidence also disproves that idea that “new technologies will increase productivity and enrich us, even if they dislocate some workers and disrupt existing businesses and industries.” Industries that are more reliant on these new technologies have not performed better in terms of total factor productivity (TFP), output, or employment growth. Acemoglu claimed that the gains in TFP in the last 20 years of technological leaps and bounds paled in comparison with those after World War II.

Why this irony?

Acemoglu explained that automation has been quite excessive. Businesses automate beyond those levels that reduce production costs. Social costs actually increase because jobs are lost and labor wages decline. Productivity growth is also weak because the singular focus on automation technologies may lead businesses “to miss out on productivity gains from new tasks, new organizational forms, and technological breakthroughs that are more complementary to humans.”

This disconnect between technology use and productivity gains may not be true as yet in the Philippines but with globalization and business process outsourcing, spillovers may not be too far behind. We need to keep a good balance between automation and human creativity especially during this pandemic.

We share Acemoglu’s assertion that the path of future technology centered on automation is not “preordained.” The choice made in the past should be rectified to direct the technology of automation to boost productivity rather than simply to save on labor.

Acemoglu’s recommendation might surprise many. He would like the government to provide incentives that would shift the composition of innovation from undue focus on automation to more human-friendly technologies. Government is not expected to block or discourage technological progress but to keep the mantra of business to provide job opportunities and allow for a more inclusive growth.

This can be done in education and healthcare to better equip their constituencies through AI and machine learning. In manufacturing, the so-called augmented reality and computer vision could enhance labor productivity.

Indeed, Zoom and digital payments have multiplied people’s coping capability during the pandemic and therefore technological innovations should continue with the same thrust of helping people. People can be retooled and technology should be able to create new opportunities by pointing the way.

This is not to make governments authoritarian. Acemoglu suggested the same direction that was followed in the discovery and development of antibiotics, sensors, and the internet. Without public intervention, these game-changing innovations would not have been possible.

The biggest challenge in harnessing technology is its potential impact on democracy.

With fake news and misinformation easily transmitted globally, AI-powered social media could also undermine democratic discourse.

Therefore, digitalization technology can only promote inclusiveness if it has public value. Of relevance here is the article on the need for public goods to support private innovation written by Bank for International Settlements (BIS) staff Jon Frost, Leonardo Gambacorta, and our friend Hyun Song Shin, economic adviser and head of research.

The BIS zeroed in on digital technology transforming the financial industry in payments, savings, borrowing and investment on digital platforms. Fintech and Bigtech companies, according to the BIS, now compete with banks and other financial market players in a wide spectrum of financial services.

While progress in this area has been impressive, as 1.2 billion adults gained access to financial accounts between 2011 and 2017, BIS argued that for digital technology to further bolster financial inclusion, public goods are critical. “Public goods provide the underpinnings of financial inclusion.”

The pandemic imposed social distancing and economic lockdowns and since then, digital payments have become the lifeline of many people — selling and buying goods, depositing and transferring money without contact.

Related to this, the BIS raised a most fundamental point that has been sadly missed by many proponents of financial inclusion. Digital technologies cannot succeed on their own. They need enablers: mobile phones, internet, storage and processing of large volumes of digital data, and other infrastructure like cloud computing, machine learning, distributed ledger technology, and biometric technologies.

Because digital technology is scalable and can improve risk assessment based on the same by-product of data, numerous services and functionalities have been opened by digital technology. Lending without collateral may now be possible. Bigtech companies hold a great amount of credit information about the potential borrower. But Bigtech companies have become too big to fail.

BIS proposed five policies to leverage on the benefits of digital technology while safeguarding financial stability and consumer rights. One, open, inclusive digital infrastructures should be built. Two, common standards should be introduced to encourage competition. Three, competition policies should be updated. Four, data privacy should be strengthened. And finally, policymakers like central banks, regulatory, competition and privacy authorities should get and work together.

This is the other side of the pandemic. It has spawned innovation that unless tamed, could in fact exacerbate poverty and inequality.

 

Diwa C. Guinigundo is the former Deputy Governor for the Monetary and Economics Sector, the Bangko Sentral ng Pilipinas (BSP). He served the BSP for 41 years. In 2001-2003, he was Alternate Executive Director at the International Monetary Fund in Washington, DC. He is the senior pastor of the Fullness of Christ International Ministries in Mandaluyong.

Vaccine vacuity

One year and six days ago, on March 13, 2020, after several weeks during which the growing number of COVID-19 cases had forced other countries to bar visitors from likely sources of the novel coronavirus such as China, the Duterte administration finally imposed what turned out to be the longest-running lockdown in the world. This was after the Secretary of Health resisted a ban on Chinese visitors (“why single them out?”), and government spokespersons had minimized the threat.

As usual, President Rodrigo Duterte put the former military men in his administration in charge as the number of cases multiplied despite the lockdown and ban on visitors from other COVID-afflicted countries. The police and military arrested people without face masks, erected checkpoints, deployed heavily armed soldiers at key points in cities and countryside, and used other coercive means against the populace with little effect on curbing the rapid increase in the number of cases. They quite probably even helped spread the disease in the country’s prisons by cramming in them those they were arresting for violations of health protocols. Meanwhile, the “pastillas” racket at the Bureau of Immigration, which for P10,000 each allowed tourists and POGO (Philippine Offshore Gaming Operators) workers from China to enter the country, undermined the effectivity of the ban on visitors and very likely helped boost the number of the infected. The usual corruption and indifference to the public welfare that afflict much of the bureaucracy were still at work, and at the expense of the health and lives of the populace.

As the number of cases surged enough to put the Philippines ahead of other countries in Southeast Asia; as millions of workers lost their jobs; as schools and businesses ceased operations and even closed permanently; and as the economy spiraled into a recession, apparently at a loss over what to do, Mr. Duterte on a number of occasions declared that only a vaccine could stop the pandemic.

Vaccines have since been developed in Russia, China, the United States, Belgium, the United Kingdom, and India. But the country that for two months last year led all other ASEAN countries in the number of COVID-19 cases is now the last to get, and, in an agonizingly slow process, to administer them.

Without citizens’ being inoculated fast enough and in sufficient numbers, there might as well be no vaccine at all. The Duterte regime has offered all sorts of excuses for the inexcusable delay, with some of its officials blaming the pharmaceutical firms for it. But as the British publication The Economist noted in a Feb. 10 article that was quoted by Philippine media, “Few countries have handled vaccine procurement as shambolically (in as disorganized a manner) as the Philippines.” Translation: government has only itself to blame.

The Department of Health in fact hemmed and hawed for months before it concluded a procurement agreement with Pfizer, a US pharmaceutical firm, apparently because the Duterte regime, rather than welcoming vaccines from whatever source so long as they’re safe and effective, preferred vaccines from China. As early as during his State of the Nation Address in July last year, Mr. Duterte begged President Xi Jinping for the Chinese government, once its laboratories develop a vaccine, to make it immediately available to the Philippines on credit.

China instead donated to the Philippines 600,000 doses of the Sinovac vaccine one of its drug firms has developed. The shipment arrived via a Chinese air force plane on Feb. 28, 2021 amid great media fanfare, and voluminous praise for the Chinese government from Philippine officials led by Mr. Duterte himself. It has since been distributed to health workers and some local governments despite initially widespread resistance, which was generally interpreted as due to the antipathy to vaccinations generated by the exaggerated and politicized accounts in 2018 of the supposedly dangerous reactions of some children to the anti-dengue Dengvaxia vaccine.

But it wasn’t so much resistance to vaccinations per se but fears of a particular vaccine’s side effects and awareness of its limited efficacy that were driving health workers’ and other sectors’ hesitation in having themselves inoculated. The reluctance of a majority of the population was due to Sinovac’s reported 50.4% efficacy and its possible side effects to which the news media referred when they reported that some of those inoculated with it had suffered “adverse reactions” — without saying, however, exactly what those side effects were.

Neither did Mr. Duterte’s breaking his earlier promise that he would be the first to be inoculated help generate public confidence in Sinovac.

Nevertheless, health workers and some government employees eventually agreed to be inoculated with Sinovac since, despite assurances from Duterte “vaccine czar” retired General Carlito Galvez, Jr. that Pfizer and AstraZeneca vaccines would arrive mid-February, by March 1 it was still the only one available.

Some 400,000 plus doses of AstraZeneca did arrive on March 4, but, together with the Sinovac doses, added up to only a little over a million shots, or far, far less than what are needed — 70 million — to achieve herd immunity for the country’s over 100 million population. Not a single Pfizer dose has so far found its way to the Philippines as of March 17. But even if there were enough shots available, at the inoculation rate of 20,000 per day that the Department of Health claims, it will take a decade to meet the 70 million target.

In the midst of the chaos and contradictions in official statements and spur-of-the-moment policies, and despite the arrival of the vaccines, came the resurgence of Philippine COVID-19 cases this month to September 2020 levels at the rate of 3,000 to 4,000 new infections a day, with some experts predicting they could go up to 5,000 to 8,000 daily by the end of March. As usual, government spokespersons are blaming the surge on the citizens, whom they say are in violation of health protocols. But it was the National Government itself that in its less than well-thought-out decision to hasten the recovery of the economy allowed the reopening of cinemas and relaxed the requirements for domestic travel and international tourism despite the objections of local government executives.

The COVID-19 pandemic could not have come to the Philippines at a worse time. It has tested the mettle of leaders and governments across the planet, some of which have proven themselves equal to the tasks of combating the contagion and keeping its impact on the economy and their citizens at a manageable level. But the mess the Philippines is in has only exposed not just the inadequacies of its healthcare system, but also the weaknesses of its State institutions and the intellectual and moral limitations of the bureaucrats who constitute what passes for its leadership.

Those limitations explain why the Philippine power elite is unable to even plan ahead, or to transcend such of its ideological biases as its reliance on the goodwill and approval of a foreign power while risking the displeasure of another despite the obvious imperative during these perilous times to, in the words of the late statesman and Senator Claro M. Recto, “make no enemies where (the Philippines) can make no friends.” The veritable vacuity of the vaccination program has its counterpart in, and is due to, the competency vacuum in government and its indifference to the health, the well-being, and the very lives of the millions it is supposed to serve.

 

Luis V. Teodoro is on Facebook and Twitter (@luisteodoro).

www.luisteodoro.com

How job-killing technologies liberated women

AS THE MANY MOTHERS who’ve left their jobs to cope with pandemic remote schooling can testify, “free” household labor isn’t really free. It always entails the opportunity cost of what you could otherwise be doing.

But women’s domestic tasks get short shrift in the history of labor-saving technology because historically much of that work received no direct monetary compensation. “We are all familiar with our grandmothers’ adage, ‘A woman’s time is nothing,’” wrote an essayist in 1870, lamenting how little inventive effort was going toward easing women’s domestic burdens. Whether by unpaid housewives or poorly paid servants, the work still had to be done.

March is Women’s History Month, a good time to remember that the history of women’s work sheds light on the broader questions raised by labor-saving technologies, past and present. Viewed through the lens of women’s experiences, inventions often derided as job-killers look like “Engines of Liberation,” the title of an influential 2005 article by economists Jeremy Greenwood, Anath Seshadri and Mehmet Yorukoglu.

By making women more productive and opening new demands for their services, labor-saving technologies gave them greater control over their time, more freedom to choose their occupations and the earning power to shape their own lives — all while propelling economic changes that boosted the overall standard of living.

Consider a few examples:

THE WATER-POWERED GRIST MILL
This technology for grinding grain spread through Europe in the Middle Ages, revolutionizing how women spent their time. To digest cereal grains like wheat, humans first have to remove their husks and turn them into flour. That means many hours of pounding and grinding. As late as the 1990s, women in rural Mexico were still using these traditional methods to produce masa, the corn flour in tortillas. Food historian Rachel Laudan estimates that it takes about five hours of grinding to produce enough masa to supply a family of six with a day’s tortillas.

Grist mills opened up women’s time for other tasks, most prominently spinning. Less arduous than grinding grain, it was no less necessary or time-consuming. A Medieval woman using a spinning wheel would have spent about 110 hours spinning enough wool for a pair of trousers.

By freeing women to produce more yarn, historian Constance H. Berman argues, grist mills enabled the wool-based trade that set off the commercial revolution of the late Middle Ages, leading to new financial institutions and the rise of prosperous new centers like Antwerp, London, and Florence. “It is possible that without this change in women’s work,” she writes, “such industry would not have taken off as it did.”   

SPINNING MILLS
Spinning remained the bottleneck in textile production. “The spinners never stand still for want of work; they always have it if they please; but weavers are sometimes idle for want of yarn,” wrote the agronomist and travel author Arthur Young, who toured northern England in 1768. Supplying a single weaver, he noted, took at least 20 spinners.

In a workforce of 4 million Britons, economic historian Craig Muldrew estimates, well over a million women were working as spinners. Their labor was the biggest expense in cloth production other than raw fiber, often totaling more than twice the cost of weaving. Yet spinners’ wages were pitiful, for the simple reason that it took so many hours to produce a useful amount of yarn. The spinning machines that set off the Industrial Revolution in the late 1700s changed that calculus. Suddenly yarn that once required days to spin could be had in hours, or even minutes.

Before the Civil War, the “mill girls” of New England found new independence in the region’s textile plants. Although the work was grueling, the mills gave young women their own incomes and a chance to broaden their horizons. “There are girls here for every reason, and for no reason at all,” one wrote in an 1844 edition of the Lowell Offering, a magazine published by female mill workers. Many were drawn by the opportunity to buy their own clothes. By making “pretty gowns and collars and ribbons” affordable, the textile revolution created a powerful enticement to cash employment.

Even when wages and working conditions worsened, mill work gave women new forms of autonomy, including the role of labor leaders. The work offered women a public identity, beyond hearth and home.

ROTARY PRESSES
That mill girls could publish their own literary magazine testifies to another invention rarely noted as a liberator of women: the steam-powered rotary printing press. Invented in the 1840s, it increased printing speeds tenfold, a pace soon doubled by an invention allowing machines to print both sides of the paper simultaneously. By lowering the cost of high-volume printing, the new technology vastly expanded the market for books, magazines and newspapers — and the writers to fill them.

Fiction writers like the Brontë sisters and Louisa May Alcott, as well as many now-forgotten popular authors, could now make an independent living. With Jane Eyre, Charlotte Brontë earned 25 times her salary in the hated job of governess. Alcott ground out “blood and thunder tales” for magazines and wrote Little Women for the money.

“Newspaper girls” filled the columns of the mass-market press. Touting their own lifestyle in articles, they created a new model of “the bachelor girl,” a single professional woman distinct from the sad stereotype of the old maid. “These women are for the most part our best modern type, educated, energetic, independent, enterprising,” declared the New York Press in 1894.

Some female journalists offered womanly advice or chronicled the social whirl, while others pursued investigative reporting. In her Memphis newspaper, Ida B. Wells exposed lynching in the South. New York World reporter Nellie Bly went undercover in a mental hospital. Elizabeth L. Banks labored in sweatshops on the Lower East Side and lived on $3 a week, “telling each day in the paper just what I had to eat, and describing all my comforts and discomforts.” In London, she hired out as a maid and worked in a laundry.

THE SEWING MACHINE
It was widely recognized as the exception to 19th century inventors’ indifference to the value of women’s time. “It is the only invention that can be claimed chiefly for woman’s benefit,” declared the New York Times in 1860. A sewing machine bought on time could clothe a family or set up a business.

Working with a hand needle, a good seamstress took about 14 hours to make a shirt. With a sewing machine, she could do the same job in an hour. It was an early example of “the robots are taking our jobs.” In an 1888 essay titled “Labor-Saving Machines as an Evil,” the Ohio journalist Samuel Rockwell Reed used the sewing machine as a prime example, singling it out for “enhancing the hard fate of women” by putting hand-sewers out of work. A single machine, he calculated, “deprives 25 children and five widows of bread.”

The claim was actually satirical. Human history, Reed pointed out, is a progression of such inventions. The steel needle replaced the bone needle, with which “three or four wives might be sufficiently employed in making up one man’s rude garments, whereas such facility was given to this by the invention of the steel needle that he hardly had a need of one wife.”

Instead of impoverishing widows and orphans, the sewing machine made seamstresses more productive, giving rise to a large ready-to-wear industry. Although we now remember it mostly for its sweatshops and the labor activism they sparked, it offered generations of mostly female workers, from the Lower East Side to Vietnam, the first step out of poverty.

THE WASHING MACHINE
Elizabeth Banks’s stint wading through soapy water points to another liberating invention: the electricity-powered washing machine. Before its arrival, laundry was such a laborious task that even poorly paid shop girls hired someone else to do it. Just reading the list of “equipment for a home laundry” in a 1900 laundry manual is exhausting.

In Engines of Liberation, Greenwood, Seshadri, and Yorukoglu cite a study of farm wives that found that doing a 38-pound load of laundry by hand required four hours, with another four or five for ironing. Using electrical appliances, the washing took just 41 minutes and the ironing an hour and 45 minutes. The number of steps walked in the process was cut almost 90%. “No man worth his salt would spend a seventh of his time at a tub,” declared journalist Allan L. Benson in a 1912 Good Housekeeping article.

“Power laundry machinery is not so expen-sive that people in ordinary circumstances cannot afford to buy it, whereas washing by hand is so hard that no woman should do it,” Benson wrote. “It makes no difference who the woman is, whether she is a housewife or a servant, washing is too hard for her. In the winter, it invites pneumonia. At all times of the year, it is drudgery.”

SYNTHETIC FIBERS
A 19th century laundress would have envied her 1940s counterpart, but even by the mid-20th century, washing, drying and ironing still took plenty of time and attention. The invention of nylon in 1934 set off a materials revolution — the advent of synthetic fibers and plastics — and further eased the laundry burden.

Synthetic fibers fostered a fundamental fashion shift that continues to today’s pandemic yoga pants. “More than looks,” writes business historian Regina Lee Blaszczyk, “the characteristic that I call ‘high performance’ distinguished the panoply of postwar products from their early-20th century predecessors…. Curtains that could be drip dried, uniforms that never needed ironing, and sweaters that could be washed without shrinking reduced domestic burdens.” When large numbers of American women entered the workforce in the 1970s, they did so wearing easy-care polyester pantsuits.

Over the succeeding decades, synthetic fabrics got better — softer, more breathable, less likely to snag and pill, more varied in look and feel. Today’s women — and men — are free to use their time in more productive and fulfilling ways.

Looking back on the endless labors of our foremothers reminds us that it’s easy to create jobs by making work harder and slower. But you create wealth — and freedom — by making it faster and easier. The next time you throw a detergent pod into a load of clothes and go off to work on your laptop, consider all the could-be washerwomen now doing something else.

BLOOMBERG OPINION