‘We are waiting to die’: hope wanes for world’s poor after India halts vaccine exports

May 20, 2021 | 1:40 pm

NAIROBI/KUALA LUMPUR — When John Omondi received his coronavirus disease 2019 (COVID-19) vaccination last month, the Kenyan taxi driver counted himself one of the lucky ones.

Now, he’s not so sure — victim of a vaccine export freeze by mega-producer India that has dashed hopes of protection for millions of poor people caught in the pandemic.

“It was a good day when I got the vaccine. I needed it because of my age and my work,” explained Mr. Omondi, 59, as he navigated the busy roads of the Kenyan capital, Nairobi.

“I am supposed to get my second dose in June, but there aren’t any more vaccines and I am worried I may be less protected, especially against all these variants,” he said.

“Without the vaccine, it’s like we are waiting to die.”

Kenya is one of dozens of developing countries whose national vaccine rollout plans have suffered a blow after India, the world‘s biggest vaccine maker, curbed exports to meet surging domestic demand.

With a population of 50 million, the East African country has received about 1 million doses of the AstraZeneca vaccine made by the Serum Institute of India (SII) through COVAX, a global vaccine-sharing program to aid poor nations.

But India’s export ban means Kenya‘s second batch of 3 million doses — expected in June — is unlikely to arrive, leaving the country scrambling for alternatives.

“If we had the vaccines, we would have started the second phase of our deployment plan. The reality on the ground is that we don’t have the vaccines when we expected them,” said Patrick Amoth, acting director general at Kenya’s Health Ministry.

“We are hopeful the situation in India will be normalized soon … but we are also working on other streams to be able to get other vaccines like Pfizer and Johnson & Johnson.”

SHORTAGES, DELAYS

From Kenya and Ghana to Bangladesh and Indonesia, poor nations reliant on COVAX have no option but to halt vaccination drives and delay second doses due to the export curb.

SII, the largest vaccine supplier for COVAX, suspended exports in March, and Indian officials say they expect no meaningful resumption before October — at the least.

The result: a world short of some 190 million doses by the end of June, according to the United Nations children’s agency UNICEF, which is coordinating the COVAX scheme.

The shortage will leave poor countries even further behind, experts say, increasing vaccine inequity and complicating global efforts to tame a virus already spawning powerful variants.

“We are concerned that the deadly spike in India is a precursor to what will happen if those warnings remain unheeded,” said UNICEF Executive Director Henrietta Fore.

“Cases are exploding and health systems are struggling in countries near — like Nepal, Sri Lanka and Maldives — and far, like Argentina and Brazil.”

ASIA

Indonesia, the Philippines, Vietnam, and South Korea are among Asian countries hit by the vaccine delays from India, where more than 25.5 million people have died in the pandemic.

Indonesia launched its immunization campaign in January — aiming to reach 181.5 million of its 270 million people this year – and curb an epidemic that has killed more than 48,000.

But it has only received 6.4 million doses through COVAX — just over half its promised allocation, official data shows.

“The impact is big and our vaccination targets could be delayed. We are nervous about potential new waves,” said Pandu Riono, an epidemiologist at the University of Indonesia.

Indonesia has turned to China for extras and pushed hard for a vaccine patent waiver to ramp up production and ensure some tilt towards equity as the entire world competes for jabs.

Bangladesh has had to halt even its first doses.

The South Asian nation expected to get 5 million doses every month from neighboring India for the first half of this year — so far, just 7 million have landed, said officials. It also received 3.2 million AstraZeneca doses from India as gift.

Bangladesh has now approved the Russian Sputnik V vaccine for emergency use and 500,000 doses landed from China last week.

The nation, with a population of some 160 million and host to nearly a million Rohingya refugees, will also receive about 100,000 doses of the Pfizer vaccine next month under COVAX.

AFRICA

As for Africa — it is the world’s least vaccinated continent, with most of its 54 countries dependent on COVAX. Despite making up 14% of the global population, African countries account for only 1% of administered doses globally.

The continent had planned to vaccinate 30–35% of its population by the end of the year, and 60% within the next two to three years — an elusive goal if shortages continue.

Ethiopia, for example, planned to vaccinate 23 million of its 115 million population this year. So far, it has received 2.2 million doses from the 9 million requested from COVAX.

“What we encounter is a small number of doses and then a ban,” said Meseret Zelalem, secretary for Ethiopia’s COVID-19 vaccination program, referring to India’s curb.

“We need to knock (on) every door and every window to look for a different opportunity to really shield our population.”

Ms. Meseret said China had donated 300,000 doses of Sinopharm vaccine, and authorities were looking to buy other brands, too.

Gregory Rockson, founder of Africa-wide healthcare provider mPharma, said they were already feeling the effects of the export ban in his home country of Ghana.

“Our entire vaccine timeline has been pushed back,” he said, predicting a similar scenario would hit other African countries.

“Hopefully more vaccination candidates will be approved and there will be more options, then it will be less a supply concern and more an in-country distribution concern,” he added.

UNICEF and many charities are calling on rich nations to donate their surplus doses to COVAX, rather than squander the stockpile on less-vulnerable children.

UNICEF’s Ms. Fore said G7 countries could donate about 153 million doses if they shared only 20% of their available supply over June, July and August.

This could be done while still meeting commitments to vaccinate their own populations, she said.

The World Health Organization (WHO) is also urging vaccine manufacturers such as Pfizer and Moderna to make shots available to the COVAX scheme earlier than planned, to ensure vulnerable populations such as health workers and elderly are protected.

“We need doses right now and I call on them (vaccine manufacturers) to bring forward deliveries as soon as possible,” WHO Director-General Tedros Adhanom Ghebreyesus said on Monday.

“Only by working through COVAX can we quickly get vaccines to those health workers that have been on the frontlines of this pandemic for more than a year.” — Nita Bhalla and Beh Lih Yi /Thomson Reuters Foundation

Virus missteps could turn Philippines back Into Asia’s laggard

May 20, 2021 | 1:08 pm

COMMUNITRYPANTRY_MAGINHAWA_13_VARCAS_270421 — Michael Varcas, The Philippine Star

Snaking queues at Manila food banks have become a common sight as the economy continues struggling a year after the Philippines’ first coronavirus lockdown. It’s a sharp contrast to 2018, when hundreds lined up for the grand opening of Uniqlo Co.’s Global Flagship Store in Manila, its largest outlet in Southeast Asia.

Over the last decade the Philippines had managed to throw off its mantle as the “sick man” of Asia, with its 109-million strong population driving a consumption-led economy. An outsourcing boom and remittances from legions of citizens working abroad helped raise incomes and lifted at least 2 million Filipinos out of poverty.

But the pandemic has exposed structural weaknesses that the boom papered over, including a decentralized health-care system and rampant inequality. The Philippines suffered a record economic slump last year and its sluggish recovery was underscored again on Tuesday, when the government cut its growth outlook for this year and next.

“There’s not much momentum left in this once juggernaut economy,” said Nicholas Mapa, economist at ING Groep NV in Manila. Consumer sentiment is “deep in the red” amid high unemployment and underemployment, he said.

The Philippine economy won’t regain its pre-pandemic level until the end of 2022, said Katrina Ell, an economist at Moody’s Analytics Inc. in Sydney. In contrast, China, Taiwan and Vietnam already have returned to previous output levels, while South Korea, Indonesia and Thailand should do so this year, according to Ell.

“This makes the Philippines the clear laggard in Asia,” she said.

Though it implemented one of the world’s strictest lockdowns – including a shutdown of mass transport and a ban on minors and senior citizens in public spaces – Philippine authorities only managed to quell the outbreak for a few months before a fresh surge in cases in March forced renewed restrictions.

The economy continued shrinking in the first quarter and is expected to be among the slowest in Asia to recover, leaving lasting scars: Even by 2025, output will remain 11.5% below what it would have been if pre-pandemic trends had continued, according to Fitch Solutions Inc.

FRAGMENTED RESPONSE

The Philippines’ handling of the pandemic was hampered by a 1991 law that made city, town and village leaders responsible for the health system. Without uniform guidance, village-level health teams often follow rules set by mayors or chieftains, resulting in a fragmented response to COVID.

When Jaypee Sanchez, 33, caught the virus in March, his district’s contact tracer told Sanchez’s close associates that he had tested positive — and asked them to call others they had interacted with.

“Tracing stops with close contacts. It didn’t include establishments I’ve been to,” said Sanchez, who’s from the Manila area. “It’s confusing and sad.”

The situation worsened with the mass return of migrant workers who faced loose quarantine requirements and unreliable Covid testing, even as more contagious variants of the virus took hold. The Philippines has recorded more than 1.1 million COVID-19 cases, the second-most in Southeast Asia.

Life in lockdown has worsened already stark inequality. As the virus spread, relatively affluent Filipinos worked at home, ordering in groceries, prescriptions and wine. Meanwhile, the unemployed grasped at odd jobs as delivery riders or online sellers, with many yet to rejoin the labor force. The country is expected to suffer the highest unemployment rate this year among major Asian economies, according to a Bloomberg survey.

With infections easing from last month’s record, the government now is opting for more targeted restrictions than the blunt lockdown that closed 75% of the economy last year. Mass transport is operating in a limited capacity, and work in most sectors continues.

This time, “instead of avoiding the risk, we are managing the risk,” Economic Planning Secretary Karl Chua said Tuesday.

Even with restrictions loosened, however, Filipinos have been the least mobile in Southeast Asia, according to Google data. That’s an ominous trend for household consumption, which makes up more than 70% of the economy.

The government is slowly rolling out digital contact tracing and is pinning its hopes on vaccines, with total vaccine deliveries expected to reach 21.8 million doses this quarter.

“It’s critical that the government improves its COVID-19 management,” Ell of Moody’s Analytics said. “The Philippines is still in the thick of the crisis.” — Bloomberg

PHL lags behind global trade rebound

May 20, 2021 | 12:36 am

The Philippines’ export performance is lagging behind the global recovery led by East Asia. — REUTERS

By Jenina P. Ibañez, Reporter

PHILIPPINE EXPORT performance continues to lag behind a global rebound led by East Asia, a United Nations (UN) report said.

The UN Conference on Trade and Development (UNCTAD) global trade update released on Tuesday said global trade in goods have surpassed pre-pandemic levels, although services trade continues to lag.

“Global trade is expected to further rebound in Q2. For 2021, global trade is projected to grow by 16 percent, but the outlook remains uncertain,” the report said.

Much of trade resilience last year was due to East Asian pandemic mitigation, UNCTAD said.

“The positive trends from the last few months of 2020 grew stronger in early 2021. In Q1 2021, the value of global trade in goods and services grew by about 4 percent quarter-over-quarter and by about 10 percent year-over-year,” UNCTAD said.

The UNCTAD report showed the Philippines scored 0.51 in export performance in the fourth quarter last year, based on an index in which a higher score indicates above average performance.

China scored 0.71, while Vietnam was at 0.59 and Korea at 0.52. However, Singapore was lower at 0.46 and Thailand at 0.43.

Philippine export volatility was 0.11, while Chinese and Korean exports were less vulnerable at 0.09 and 0.07, respectively. Singapore’s export volatility was at 0.01, and Thailand’s was at 0.04.

Philippine goods exports in March jumped 31.6% to $6.68 billion compared with the same month last year, data from the Philippine Statistics Authority showed. Export growth that month was the fastest in over a decade, or since the 46.8% growth in September 2010.

This hints at some improvement after goods exports fell 10.1% to $63.8 billion in 2020.

Philippine Exporters Confederation, Inc. (Philexport) is optimistic about Philippine export recovery this year, noting a potential increase in garment exports after labor strikes in Myanmar slowed production.

“Mining has been allowed to resume so (that) has upside too. Electronic(s) could do better if not due to shortages of parts,” Philexport Chairman George T. Barcelon said, referring to the lifting of a nine-year ban on new mining deals and a global semiconductor shortage that could last until next year.

UNCTAD noted trade rebound is stronger in developing countries compared with developed countries, but such recovery is muted when East Asian economies are not in the picture.

A positive 2021 global outlook, UNCTAD said, would depend on the further easing of pandemic restrictions but fiscal stimulus could also aid recovery.

“The fiscal stimulus packages, particularly in developed countries, are expected to strongly support the global trade recovery throughout 2021. The value of global trade should also rise due to positive trends across commodity prices,” UNCTAD said.

Some vulnerabilities include uneven economic recovery among different countries, with more pandemic-related disruptions expected in developing countries throughout the year.

Government interventions amid tensions among large economies could also restrict trade, UNCTAD said. Consumer behavior could also have changed due to the pandemic, with healthcare and communications demand increasing while travel goods demand slips.

“Some of these changes may be enduring, if so, they will be influencing the demand for foreign goods and services,” the report said.

Gov’t can pay its foreign debts, Finance chief says

May 20, 2021 | 12:35 am

Dominguez III-PCOO — FINANCE SECRETARY Carlos G. Dominguez III — PRESIDENTIAL PHOTO/ TOTO LOZANO

By Beatrice M. Laforga, Reporter

FINANCE SECRETARY Carlos G. Dominguez III on Wednesday said the government has ample reserves and maintains a strong fiscal position to service all of its foreign borrowings over the long term, amid concerns over the country’s growing debt.

In a statement, Mr. Dominguez said the country’s outstanding external debt only accounted for 25.2% of its gross national income (GNI), indicating that the government is in “a strong position to service foreign borrowings in the medium- to long-term.”

Latest Treasury data showed the country’s debt stock hit P10.77 trillion as of March, up 27% year on year. Of which, 72% or P7.745 trillion were local borrowings and the remaining P3.03 trillion were foreign debt.

The Finance department said foreign currency needed to settle maturing debt remained manageable, citing the weighted average maturity for all medium- to long-term accounts at 16.6 years, with public sector debt having a longer average term of 20.4 years than the private sector’s 7.3 years.

“External repayments can be easily met, given the sustained healthy level of GIR (gross international reserves) at 15.6 times the country’s debt service burden in 2020,” Mr. Dominguez said.

GIR grew to a fresh record high of $109.8 billion at the end of 2020, according to central bank data. As of March, GIR stood at $105.16 billion, 4.2% lower from the end-2020 level but 18% higher year on year.

“This sound and prudent management of the country’s GIR ensures that the government can service its external debt obligations and absorb shocks during any crisis,” the DoF chief said.

This strategy also helps boost investors’ confidence that the country can service its foreign debt, Mr. Dominguez said, citing the unchanged credit rating of the Philippines last year despite the crisis.

Major debt watchers Fitch Ratings, Moody’s Investors Service and S&P Global Ratings kept the Philippines’ credit ratings unchanged at “BBB,” “Baa2,” and “BBB+” ratings, respectively, last year.

“These credit rating upgrades and affirmations are a testament of the administration’s solid reforms and prudent public financial management amidst the pandemic,” Mr. Dominguez said.

Economic managers were resolute in maintaining fiscal prudence in the last few years, even throughout the pandemic-induced economic recession.

The Finance chief said such a move helped pull down the country’s borrowing costs, with total debt interest payment accounting for just 9% of total expenditures in 2020 against the 13.9% share in 2015. As a percentage of total revenues, the ratio of interest payments also inched down to 13.3% last year from 14.7% in 2015.

Foreign debt was key to funding public programs such as infrastructure projects, which create jobs and drive growth. Unplanned spending for the government’s pandemic response last year have also been largely supported by offshore borrowings, Mr. Dominguez said.

As of April, the government has obtained $18.4 billion in foreign loans to finance its pandemic response, such as testing subsidies, contact tracing efforts, mass vaccination rollout and healthcare system upgrades.

For Security Bank Corp. Chief Economist Robert Dan J. Roces, the strategy of fiscal prudence has its own advantages such as keeping credit rating intact, leaving enough space for post-pandemic borrowings and maintaining cheap borrowing costs.

However, Mr. Roces noted that an expansionary fiscal policy is still needed to complement the monetary stimulus and help the economy recover faster from the pandemic.

“With this foresight should also be the need to ensure that enough fiscal support is made to the economy to nudge a recovery,” he said in a Viber message.

PHL among most risk-exposed Asian economies due to slow vaccination

May 20, 2021 | 12:34 am

More than 2.5 million have already received a coronavirus vaccine dose in the Philippines as of May 18, based on data from the Health department. — PHILIPPINE STAR/ MICHAEL VARCAS

By Luz Wendy T. Noble, Reporter

THE PHILIPPINES’ economic recovery may continue to lag behind its Southeast Asian neighbors this year, due to the sluggish pace of its coronavirus vaccine rollout, according to Paris-based investment bank Natixis.

While some economies that have contained the coronavirus disease 2019 (COVID-19) infections can afford to have a slow vaccination drive, Natixis Asia Pacific Chief Economist Alicia Garcia-Herrero said the Philippines, Thailand and Malaysia could face risks due to their dependence on international mobility and the coronavirus surge.

“Indonesia, Thailand, Taiwan, the Philippines, and Vietnam have still failed to acquire the necessary dosages for mass immunization. That said, demand remains weak from the public,” she said in a note.

ING Bank N.V. Manila Senior Economist Nicholas Antonio T. Mapa said mass vaccination is crucial in reviving consumer confidence, as many live in fear of getting COVID-19.

“Vaccinations will help improve consumer sentiment as Filipinos will be confident to go out without fear of catching COVID-19. This in turn will boost spending but we will need to achieve herd immunity before this happens,” Mr. Mapa said in an e-mail.

Consumption makes up 70% of the Philippine economy. Household spending continued to shrink in the first quarter, with a 4.8% decline.

Based on the countries’ track record in virus containment, Ms. Garcia-Herrero said they deemed the Philippines as “worst” and is followed by Indonesia.

The Philippines and Indonesia have both recorded over one million COVID-19 infections. However, the Philippines has more cases per one million compared with Indonesia.

As of Wednesday, the Philippines reported 4,487 new COVID-19 cases, with the total now at 1,149,925.

Based on data from the Johns Hopkins University, Indonesia has fully vaccinated 9.09 million, which is equivalent to 3.36% of its population. In the Philippines, only 0.63% have received two doses so far.

The Health department said more than 2.5 million have already received a vaccine dose in the Philippines as of May 18. Among them, 786,528 have gotten two vaccine doses.

At its current vaccination pace of 67,780 average doses per day, Bloomberg estimates that the Philippines will be able to vaccinate 75% of its population after 6.4 years.

“The Philippines and Thailand cannot even speed up the drive due to supply constraints,” Ms. Garcia-Herrero said in a note.

Aside from lack of vaccine supply, countries also have to deal with vaccine hesitancy.

“Skepticism over the newly developed vaccines seems to be a common reason for the hesitance globally. But it is even more so in Asia where a more effective containment has led to a lower sense of urgency,” she said.

In terms of dependence on international mobility, Ms. Garcia-Herrero said the Philippines and Thailand are the most vulnerable.

“The broader economic reopening in the West that is built upon a much faster vaccine rollout, especially for the US and increasingly for the European, could add to the divergence, making Asia look more fragile on its path to recovery and less favorable as an investment option,” she said.

Vaccination will be a crucial factor in economic recovery but other policies can still be adopted given the slow pace, Mr. Mapa said.

“Authorities can pour money into virus mitigation and expand the capacity of the public health sector to handle a spike in cases,” he said.

The government targets to inoculate as many as 70 million adult Filipinos by end-November. Vaccination efforts are currently focused in the National Capital Region and nearby provinces, which saw a surge in COVID-19 cases in March.

Poor nations face logistical hurdles in vaccine distribution

May 20, 2021 | 12:33 am

DHL Express successfully delivered the first batch of Pfizer COVID-19 vaccines and diluents to the Philippines earlier this month. — COMPANY HANDOUT

DHL EXPRESS said the distribution of coronavirus vaccines in poor countries, including those in Southeast Asia and Africa, continue to face logistical challenges due to a lack of cooling facilities and infrastructure.

“We don’t have any problem to deliver vaccines into 220 countries and territories. To get into the country is not the bottleneck. Things get rough once you are in the country, and you don’t have enough cooling facilities and you don’t have the local infrastructure…. Unfortunately, this is the situation you may find in Southeast Asia and Africa, but we really hope nobody gets left behind in this process,” DHL Chief Commercial Officer Katja Busch said at an online briefing on Tuesday.

“In theory, virtually, the timeframe from production… is between two days and seven days, never longer. So again, the factor that limited [the distribution] is the amount of the available vaccines, never the speed from production to the jet,” she added.

The logistics giant estimated around 10 billion vaccine doses are needed globally by end of 2021 for “high levels of immunization.”

In its white paper titled “Revisiting Pandemic Resilience” released on Tuesday, DHL said more than 95% of global coronavirus disease 2019 (COVID-19) vaccine doses are produced in eight countries, including the United States, Belgium, Germany, Russia, China, and India.

“Last-mile vaccine rollout is the largest logistical challenge, given its unprecedented scale and speed: the aim is to distribute and administer about 10 billion doses by the end of 2021,” DHL said.

The company identified three areas of priorities to speed up the vaccine distribution: collaboration among industries and countries, ensuring safe inbound supply flows, and putting in place locally tailored last-mile, ground distribution models.

DHL Express successfully delivered the first batch of Pfizer COVID-19 vaccines and diluents to the Philippines earlier this month.

The company also expects the Philippine economy to gradually rebound from this year onwards, DHL Global Philippines Managing Director Yvonne G.H. Lee told BusinessWorld in a recent e-mail interview. — Arjay L. Balinbin

BIR sets floor price for tobacco, vapor products

May 20, 2021 | 12:32 am

THE BUREAU of Internal Revenue (BIR) issued guidelines on how to determine the floor price for cigarettes, as well as heated and vapor tobacco products.

Revenue Regulations No. 7-2021 serves as the implementing rules and regulations for Republic Act (RA) 11346 that increased the excise taxes on so-called “sin” products such as tobacco and alcoholic beverages.

Under the guidelines, the agency said the minimum price of cigarette, heated and vapor tobacco products will be computed by adding the total production cost of the cheapest brand per tobacco product, the excise tax and the value-added tax (VAT).

The BIR determined the reference rates for taxation purposes in case there are no documents available on the actual price of the product.

For instance, a floor price of P78.40 will be imposed for cigarettes with production cost of P20, excise tax of P50 and VAT of P8.40.

Heated tobacco products with a P20 production cost, P42 in excise tax and P7.44 in VAT should have a minimum price of P69.44.

For vapor products, the BIR said 0.7 milliliter (ml) pod of nicotine salts will have P125.44 as floor price this year — given its P70 production cost, P42 in excise tax and P13.44 in VAT. A nicotine salt of 2.5 ml will have P421.12 as a minimum price, while a 4-pod item has P2,195.20.

The floor price for 10-ml tank of freebase nicotine with a production cost of P50 each, P50 in excise tax and P12 in VAT, was estimated at P112, while a larger tank with 25 ml has a P308 minimum price.

“The ELTRD (Excise Large Taxpayer Regulatory Division) shall establish a monthly data profile based on the required periodic manufacturer’s or importer’s sworn declaration for all brands per tobacco product category,” the BIR said.

For those caught selling tobacco and vapor products below the floor price will face penalties from P200,000 to P500,000, or worth 10 times the amount of excise tax and VAT due. Sanctions also include 4-6 years of imprisonment.

“Any person who sells tobacco products including heated tobacco products and vapor products at a price lower than (the floor price) shall be punished with a fine of not less than 10 times the amount of excise tax plus VAT due but not less than P200,000, nor more than P500,000, and imprisonment of not less than 4 years,” it added.

The BIR also imposed inspection fees — 50 centavos per 1,000 pieces of cigars, 10 centavos per 1,000 sticks of cigarettes, and 10 centavos for 1,000 units of heated tobacco products. Meanwhile, one centavo of inspection fee was set per ml of vapor product, two centavos per kilo of whole leaf tobacco and three centavos per kilo of tobacco scraps.

To signify that excise taxes have been paid, the BIR said tax stamps should be attached on the packaging of these “sin” products.

Those who will affix previously used tax stamps, erase cancellation marks or make any alterations on the stamps will have to pay a fine of least P10 million and up to P500 million, with imprisonment of 5-8 years. Selling and using fake stamps will also face similar charges, according to the bureau.

The IRR was signed by BIR Commissioner Caesar R. Dulay and Finance Secretary Carlos G. Dominguez III on May 18 but the document was only published on Wednesday. The guidelines will take effect early next month or 15 days after its publication.

The Department of Finance expects to collect P297.8 billion from “sin” taxes this year. — Beatrice M. Laforga

Coronavirus surge in Asia has traders seeking more data for investments

May 20, 2021 | 12:31 am

PSE Trading Floor — COURTESY OF PHILIPPINE STOCK EXCHANGE, INC.

EQUITY INVESTORS in Asia are actively screening hospitalization rates and watching predictions on virus peaks, as several countries in the region struggle with a fresh jump in cases.

The pandemic’s resurgence has already worsened Asian stocks’ underperformance against their global peers this year. With efforts by countries to reopen their economies taking a hit, the severity of restrictions, the pace of increase in caseloads, the preparedness of governments and progress in vaccination rollouts have become key yardsticks for stock traders.

“We continue to monitor the infection numbers across Asia, in terms of whether we are starting to see the peak in infection numbers,” said Tai Hui, chief Asia market strategist at JPMorgan Asset Management. “Northeast Asian markets are arguably more resilient than Southeast Asia. China is still in its own league when it comes to containing the pandemic, despite some weaker-than-expected economic data for April.”

A surge in virus cases in Taiwan and Singapore last week contributed to a 3.2% plunge in the MSCI Asia Pacific Index, the biggest weekly loss since February. Indonesia’s stock benchmark narrowly missed a technical correction on Tuesday over fears that an expected jump in COVID-19 cases post Eid holidays could hurt the economic recovery. While stock gauges in Taiwan and Singapore have bounced back, they are still among the world’s worst performers this month.

“Countries are becoming too ‘comfortable’ with respect to COVID-19, and this could delay full recovery,” said Paul Sandhu, head of multi-asset quant solutions Asia Pacific at BNP Paribas Asset Management. “This is the biggest risk I see right now.”

That investors are watching factors other than just an increase in caseloads is evident from the market’s varied response to the pandemic situation in different countries. Even as their peers in Taiwan and Singapore got hammered after the latest flareups, equity benchmarks in India and Vietnam have continued to defy similar worries and are outperforming the broader MSCI Asia Pacific Index this month.

While India is battling the world’s worst outbreak of COVID-19, the S&P BSE Sensex has rallied 2.9% so far in May, with investors taking comfort from less-stringent curbs on activity as the government tries to limit the blow to the economy. The VN Index is also up 1.2% this month and hit a record last week, as retail investors pile into Vietnam stocks.

Cases in India may have peaked and investors are now looking at how quickly the wave descends along with how quickly vaccinations can be deployed, analysts at Morgan Stanley wrote in a note.

“In particular, I will be watching developments in Singapore given their relatively good progress in vaccination, which I hope will be an example of what the rest of Asia should be working towards,” said JPMorgan Asset’s Mr. Hui.

Meanwhile, the Philippine Stock Exchange index has slumped almost 13% this year, making it the world’s worst-performing major benchmark, amid growing concerns over the economy’s recovery.

With the utilization of ICU beds and ventilators already running at about 50% and 40%, respectively, “an acceleration in cases would likely prompt the government to announce a more severe lockdown,” said Gary Dugan, chief executive officer at Global CIO Office.

Southeast Asia’s stock benchmark is lagging the broader Asia-Pacific region for a second straight month, reversing two months of outperformance marked by the value rotation, as Singapore, Malaysia and Thailand adopt stronger restrictions on movement.

“In Southeast Asia, the benefit from strong exports still exists, but weakness in domestic demand because of lockdown measures could delay recovery more so than in Northeast Asia, including tourism,” said Mr. Hui. — Bloomberg

Monde Nissin secures cornerstone investors for IPO

May 20, 2021 | 12:10 am

By Keren Concepcion G. Valmonte

MONDE Nissin Corp. has secured “overwhelming commitments” from cornerstone investors for its P55.9-billion initial public offering (IPO), it said on Wednesday on what it called a “strong vote of confidence.”

“We are pleased that these world-class investors share our vision of the future and will cornerstone our IPO. Their commitment is a strong vote of confidence in our company, strategy and talented team,” Henry Soesanto, chief executive officer of Monde Nissin, said in a statement.

The cornerstone investors for the listing include AIA Investment Management Private Ltd., Avanda Investment Management Pte. Ltd., Eastspring Investments (Singapore) Ltd., FIL Investment Management (Hong Kong) Ltd., and GIC Private Ltd.

Goldman Sachs Asset Management (Singapore) Pte. Ltd., M&G Investment Management Ltd., NS Partners Ltd., RWC Asset Advisors (US) LLC, Stichting Depositary APG Emerging Markets Equity Pool, and The Capital Group Funds are also part of the list.

“There was very strong demand from local and foreign institutional investors during the book-build. We cannot say the number, but with the book several times oversubscribed, Monde Nissin secured several renowned cornerstone investors,” BDO Capital & Investment Corp. President Eduardo V. Francisco said during the company’s IPO briefing on Wednesday.

Mr. Francisco added that there are also several local cornerstones that are not yet named.

“This may show the conviction that some investors have on the company’s management team as well as their growth plans over the long term, both locally and abroad,” Timson Securities, Inc. Trader Darren Blaine T. Pangan said in a Viber message.

Monde Nissin also announced that the Securities and Exchange Commission issued the order of registration and permit to sell for the IPO. Its listing consists of 3.6 billion common shares priced at P13.50 apiece, with an overallotment option of 540 million common shares.

The company’s shares are slated to list and begin trading on the main board of the Philippine Stock Exchange (PSE) under the stock symbol “MONDE” on June 1, earlier than the initial June 7 schedule.

Monde Nissin is expected to net P55.9 billion in proceeds, which it will use to fund its capital expenditures, the redemption of its Arran Convertible Note, and the repayment of bank loans.

For Philippine-based trading participants, the offer period was set to run from May 19 to May 25.

BDO Capital, First Metro Investment Corp., and BPI Capital Corp. were assigned as the local lead underwriters and joint bookrunners for the transaction.

UBS AG Singapore Branch, Citigroup Global Markets Ltd., and JPMorgan Securities Plc. were tapped as joint global coordinators and joint bookrunners.

Credit Suisse (Singapore) Ltd. is a joint international bookrunner. Macquarie Capital Securities (Singapore) Pte. Ltd. and Jefferies Singapore Ltd. are international bookrunners.

China Bank Capital Corp., PNB Capital and Investment Corp., and SB Capital Investment Corp. are tagged as the domestic co-lead underwriters.

“We are excited about the opportunities that lie ahead as we accelerate our growth plans for our meat alternative business Quorn, which is a global player in the transformation of sustainably produced healthier food, and extend our leadership position in the Asia-Pacific Food and Beverage business through continued innovation and constant dialogue with our consumers,” Mr. Soesanto said.

Monde Nissin through its Quorn Foods brand is ramping up expansion plans in the US and is eyeing further market penetration via quick-service restaurants.

Dining via the cloud

May 20, 2021 | 12:09 am

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GrabKitchen opens more branches

RIGHT before the pandemic closed down restaurants and encouraged dining at home, GrabFood introduced its GrabKitchen concept — a “cloud kitchen” — in Glorietta last year. In the aftermath of coronavirus disease 2019 (COVID-19), GrabKitchen is expanding. It opened a branch in Sampaloc in February, and will soon open two more in Malate, and Paranaque — the last two were announced in a press conference on Zoom on May 12.

A “cloud kitchen” is a restaurant that focuses exclusively on takeout and/or delivery, with no dine-in section. In the Grab version, GrabKitchen serves as a central commissary, with multiple brands sharing the same kitchen. With this set-up customers can order items from different restaurants at the same time and have them delivered together

GrabKitchen’s Glorietta branch, which opened just as the pandemic was starting in Feb. 2020, served as the cloud kitchen (albeit with limited seating) for Omakase, Mister Kabab, 24 Chicken, Recovery Food, Frank and Dean, and CoCo Fresh Tea and Juice. The cloud kitchen setup enabled customers to order from these restaurants, despite the absence of a brick-and-mortar store.

What was once presented as novel in the early days of 2020 — although GrabKitchens have been up in Indonesia since 2018, and the concept is present through most of Grab’s Southeast Asian market — has now become an essential in the metro.

The pandemic did put a hitch in Grab Philippines’s original plans — they had been slated to open three GrabKitchen branches in 2020. It is now catching up.

The newly opened Sampaloc branch carries the following brands: CoCo Fresh Tea and Juice, Conti’s, Omakase Sinangag Express, Mister Kabab, Army Navy, Pizza Telefono, and Happilee.

The soon-to-open Malate branch will have Omakase, Frankie’s, Recovery Food, Paper Moon, Yogorino, Pepi Cubano, Dapo at Tisa, King Chef, La Tita, Selecta, So Mot, Blu Kouzina, Coco Fresh Tea and Juice, Merienda by Pan De Manila, and Go! Salads.

The Parañaque branch will service select areas nearby in Cavite, Las Pinas, and Muntinlupa. It will offer 24 Chicken, Alishan at the Alley, Army Navy, Cara Mia, La Titas MNL, Pizza Telefono, Kyoto Sushi Bake, Bahn Mi Kitchen, El Nacho Libre, Sheikh’s Kebab, Breakfast for 2, and Black Kimchi, Selecta, Omakase, and Dapo at Tisa.

According to a company press release, “Filipinos can look forward to the opening of many more GrabKitchen branches soon.”

“These new GrabKitchen branches in these locations help to bring a wider variety of delicious food options to consumers. People can sample new tastes as well as enjoy their most well-loved favorites such as Japanese, Korean, Chinese, Filipino, European, and American. We want consumers and their friends and families to really enjoy their meals, and they can choose from our wide selection of cuisines and restaurants, mix and match their orders, and pay for one delivery fee,” Josephine Kamiyama, Project Lead for GrabKitchen in the Philippines, as quoted as saying in a press release.

It is the mixing and matching option that has pushed the concept, she said in an e-mail to BusinessWorld.

“Since the launch of GrabKitchen Makati, we’ve been seeing continued interest in the idea of mixing and matching orders to satisfy the different palates of friends and family. I think this is one of the driving factors why the concept works,” she said.

The app’s historical data provided the information needed to come up with precise mix of food on offer and the best locations for the kitchens.

“We also see that consumers are responding well to the different cuisines of GrabKitchen merchants, which we identified in the first place by leveraging historical data from the app and use that as the basis for our expansion plans. By leveraging on data, we saw the demand from consumers, and expanded to the three new locations of GrabKitchen,” Ms. Kamiyama told BusinessWorld.

“Our end goal is to provide a variety of cuisines to cater to the diverse demands of consumers,” she said. “We use our data to identify what the cuisine gaps are in the area, and look for merchants who may be interested to expand with us through GrabKitchen. For example, Frankie’s is a well-loved chicken restaurant in the QC, Pasig areas, but customers in Manila wouldn’t have access to it because of the distance. Now that it’s in GrabKitchen Malate, customers in the Manila area can not only order their favorite chicken dish from Frankie’s, they can also mix-and-match it with a variety of choices from other restaurants — all in one delivery fee. ”

The company sees the opening of more GrabKitchens soon.

The benefit to the consumer is easy to see, but what about for the merchants?

Ms. Kamiyama told BusinessWorld that merchants earn through “a revenue-sharing agreement with our partner merchants, which varies depending on different considerations.”

“I think it minimizes the risk, as opposed to opening a brick and mortar [restaurant],” said Vicente Raphael del Rosario IV, Senior Vice-President of Viva International Food and Restaurants, Inc., the dining division of the Viva Group of entertainment companies.

Viva International Food and Restaurants’ brands — Paper Moon, Botejyu, Wing Zone, Pepi Cubano and Yogorino — are well-represented in the new GrabKitchens.

“It’s really an extension of your restaurant, or of your brand. You’re able to bring it to more places. It’s a big help to be present everywhere,” said Mr. Del Rosario.

If one happens to live in the Makati, Malate, Sampaloc, and Parañaque areas, one can order through GrabKitchen on the Grab App. Delivery is free with a minimum purchase of P500 with the use of the promo code GRABKITCHEN! — Joseph L. Garcia

NGCP ‘on track’ with planned IPO

May 20, 2021 | 12:09 am

NATIONAL Grid Corp. of the Philippines (NGCP) is on schedule with its planned initial public offering (IPO), it said on Wednesday, shortly after the energy regulator gave the privately led company a six-month extension to complete its listing requirements.

“We are on track with our planned listing. We will inform the ERC (Energy Regulatory Commission) of the developments, in line with its directive for us to submit a monthly compliance report,” NGCP Spokesperson Cynthia P. Alabanza told BusinessWorld in a Viber message Wednesday.

The ERC order was issued on March 10.

In a briefing with reporters on Wednesday, Ms. Alabanza said that NGCP has been preparing for the listing even before the pandemic.

“This is something we’ve been doing for quite a while. We’ve [been] preparing for it as early as 2010, so we will just make sure that we will comply with the ERC order,” she said.

The company earlier asked the ERC for an extension of its IPO deadline, explaining that market conditions were unsuitable for the listing.

In its order, the ERC said NGCP failed to establish why the pandemic is deemed unsuitable for IPOs, since two companies — grocery retailer MerryMart Consumer Corp. and internet service provider Converge Information and Communications Technology Solutions, Inc. — were able to hold public offerings at the height of the pandemic and lockdown, which were well-received by the public.

Citing BDO Capital and Investment Corp. President Eduardo V. Francisco, the ERC estimated the value of NGCP’s planned IPO shares to be at around $1 billion. He was the expert witness whom NGCP asked to support its appeal for an IPO extension.

The ERC added the transmission service provider had begun complying with its IPO requirements and “only needs to complete the process.”

‘MARKED DECLINE’ IN TRIPPING INCIDENTS
Separately, NGCP said in a press release on Wednesday that there were fewer tripping incidents recorded across the three major island grids last year, compared with values recorded in 2008, or just after the consortium behind it won the 25-year concession in 2007 to operate the country’s power transmission network.

In the Luzon grid, tripping incidents were down by 76% to 0.932, from the 3.985 recorded in 2008. The Visayas grid reported a decline of 92.6% to 0.335 last year, from 4.542; while the Mindanao grid logged a 93.6% drop to 0.504 in 2020, compared to 7.951.

“The FOT (frequency of tripping) is the most tangible proof of our performance felt by end users. Our improved numbers are attributed to the continuous improvement and upgrading projects such as wood pole replacement, substation additions, capacitor bank projects, and new transmission lines, effectively reinforcing the stability and reliability of the grid in any condition,” NGCP said.

The FOT measures the number of times high-voltage transmission lines had tripped or experienced forced outages for every 100 circuit kilometers.

NGCP added that it had improved the grid’s capacity to mitigate the effects of power interruptions last year, citing indicators such as system availability (SA) and the system interruption severity index (SISI).

“In 2020, Luzon’s SA scored 99.208%, Visayas at 99.764%, and Mindanao at 99.736%. For the SISI, Luzon only recorded 0.869 system minutes of interruptions in 2020 compared to 9.537 in 2008; 10.010 from 83.559 in Visayas; and 9.124 from 10.434 in Mindanao,” the firm explained. — Angelica Y. Yang

‘Buttery, creamy, sugary, delicious’: a sneak peek of Harry Potter’s butterbeer in NYC

May 20, 2021 | 12:08 am

HARRY Potter fans will soon get to clink glasses filled with “buttery, creamy, sugary, delicious” butterbeers at an official Harry Potter flagship store in New York City, which opens on June 3.

Actress Evanna Lynch, who played Luna Lovegood in the Harry Potter film series, likened the taste to butterscotch.

“Butterbeer is the drink that all the Hogwarts students drink,” she said.

Ms. Lynch said she was thrilled that the bottled butterbeer — which is non-alcoholic — came in a vegan version.

“I actually didn’t drink any butterbeer in the movies,” she said. “That’s more for like the cool kids, the Gryffindors.”

When Harry Potter New York officially opens its doors to the public on June 3, customers will be able to choose from draft or bottled butterbeers and eat butterbeer ice cream. Nearly 1,000 bottles hover over the bar while butterbeer moves through copper pipes.

The retail store, at over 21,000 square feet (1,950 square meters) and spanning three floors, will also sell a huge collection of Harry Potter and Fantastic Beasts products.

Author J.K. Rowling’s seven Harry Potter novels about a boy wizard have sold more than 500 million copies worldwide and were turned into eight blockbuster movies. She followed up with a spin-off movie franchise, Fantastic Beasts and Where To Find Them. — Reuters