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How the golden age of infrastructure began

JCOMP-FREEPIK

The country’s infrastructure network was at its breaking point when President Benigno Aquino III took office in 2010. Roads and bridges were acutely insufficient; airports and seaports were ageing, badly managed and short of capacity; railways were decrepit and poorly maintained; flood control structures were few and far between.

We faced an infrastructure crisis brought about by anemic spending over 11 years under the Estrada and Arroyo presidencies. Average infrastructure spending amounted to less than 1.5% of gross domestic product (GDP) for the said period, three times less than what it should have been.

All these came to a tipping point during President Aquino’s term. It choked economic development, jacked-up the cost of doing business and, more significantly, caused untold inconvenience for us all.

Duterte propagandists, particularly those whose mission is to vilify anything related to the Aquino brand, would like us to believe that the former administration did little towards infrastructure development. This is a lie. A review of the data shows that infrastructure spending increased five-fold during Aquino’s term, from P145.5 billion in 2011 (1.8% of GDP) to P759.6 billion in 2016 (5% of GDP). Although this pales in comparison to the debt-driven spending of the Duterte administration, these amounts were the most that the Aquino government could muster at that time.

The Aquino government cleverly augmented government-financed projects with those financed through Public Private Partnerships (PPPs). Among them are the Mactan International Airport, built and managed by Megawide Corp.; the NAIA-Expressway and Skyway Stage 3, built by SMC Infrastructure; Daan Hari-SLEX Link by Ayala Infrastructure; and the NLEX Harbor Link Road by the Metro Pacific Group.

Back in 2010, the Department of Public Works and Highways (DPWH) penned an ambitious masterplan to elevate Philippine infrastructure to regionally competitive levels. This involved the expansion of road networks, the upgrade of maritime ports and airports, the expansion of railways, the construction of flood control structures, and building classrooms for the Department of Education.

What made the masterplan unique was that it was not politically driven. Infrastructure projects were initiated not based on the political leanings of a particular local government unit (as it was during the Estrada and Arroyo years) but based on necessity and its role in the overall masterplan.

In fact, a review of infrastructure spending from 2010 to 2016 shows that Mindanao got the bulk of the appropriation with a 31.6% share. It was followed by Northern Luzon with a 22.9% share, Southern Luzon with 19.6% share, the Visayas with 18.5% share, and the NCR with 7.4% share.

The Mindanao Logistics Network Masterplan was also formulated to make the island more conducive for agro-industrial manufacturing. A massive 2,206 kilometers of new roads were built at the cost of P80.4 billion.

In terms of roads, the masterplan called for the construct of high quality, multi-lane roads to link airports and RORO ports to tourism sites and industrial zones. For agrarian communities, the thrust was to link farms to markets. A total of 18,547 kilometers of national roads and 8,931 kilometers of local roads were built from 2011 to 2016. This includes the Baybay City Diversion Road in Leyte, the Candelaria Bypass Road in Quezon, the Laoag City Bypass Road in Ilocos, the Butuan-Cagayan de Oro link, the Plaridel Bypass Road in Bulacan, the Abbut-Conner-Kabugao-Solsona Road in Apayao, the Duyoc Calaan-Panitian Road in Capiz, and the STAR Highway in Batangas, among others.

A total of 1,550 kilometers of tourism-related roads were built primarily in Palawan, Batangas, Bohol, Banaue, and Surigao.

As for bridges, 107,579 linear meters of national bridges and 16,550 linear meters of local bridges were built. All wooden bridges were replaced with ones made of concrete and steel.

For flood control, 12,072 projects were completed which include new dikes, river walls, drainage, and mini dams. Among them were the Obando flood control project in Bulacan, the Tibu River channel in Legazpi City, and the Mandaluyong main drainage project.

For the Department of Education, 35,484 classrooms were constructed, 10,000 of which were built via PPP (care of Megawide Corp.) and 1,138 funded by PAGCOR (the Philippine Amusement and Gaming Corp.).

Railways, airports, and seaports are another story since these were under the jurisdiction of the Department of Transportation and Communications (DoTC). Admittedly, the DoTC’s performance was not as stellar as that of the DPWH. It is better remembered for mismanaging the accident-prone MRT-3 and NAIA (named world’s worst airport) rather than its body of good work. To be fair, the DOTC laid the groundwork for the LRT 1 extension to Cavite and the MRT2 extension to Antipolo. It also initiated the expansion and privatization of the Caticlan airport, finished construction of the Laguindingan airport, and initiated the construction of the airports in Puerto Princesa, Bacolod, Iloilo, and Bicol, among others.

All things considered, to say that the Aquino administration did little towards infrastructure development is both untrue and unfair. It did a lot considering the scarce resources it had to work with. They certainly did much more than President Gloria Macapagal Arroyo’s government.

The Duterte administration is fortunate in that President Aquino left him an economy in the pink of health. Debt was down to 44% of GDP, Government International Reserves were up to $84 billion, Government’s revenue collection ratio was up to 15.2%, the budget deficit was at a manageable 2%, and both foreign direct investments and export revenues were up. All these gave the Duterte government the latitude to borrow and spend on infrastructure. It is a case of one administration riding on the success of its predecessor, as it should be.

The tragedy is that the Duterte government will not be leaving an economy in good health. The budget deficit is at alarming level as is the national debt. Meanwhile, most sources of tax revenue have dried up. Although it is mostly pandemic induced, records show that the degradation of the economy really started in 2018, only to fall off the cliff with the mismanagement of the contagion.

The next administration will be hard pressed to sustain the current trend of infrastructure spending of five to six percent of GDP. But then again, we should never underestimate a determined Chief Executive. As seen in the case of President Aquino, much can be done with scarce resources if only good governance is put into play.

 

Andrew J. Masigan is an economist

andrew_rs6@yahoo.com

Facebook@AndrewJ. Masigan

Twitter @aj_masigan

More than allies

BW FILE PHOTO

AS MY TIME in the Philippines draws to a close, I consider with hope the future of our bilateral relationship. I smile as a I remember how quickly Manila came to feel like home, thanks to the hospitality and bayanihan spirit of the Filipino people. Above all, I reflect on the deeply moving moments I have been privileged to share, from meeting Filipino heroes at the Day of Valor in Bataan, to honoring World War II veterans with US Congressional Gold Medals, to the extraordinary efforts of today’s frontliners battling the COVID-19 pandemic.

The United States will continue to do all in our power to help the Philippines prevail in its fight against COVID-19, through vaccine donations, medical equipment, and public health assistance. To date, the US has donated over 13 million vaccine doses to the Philippines through COVAX. Millions more will come; the Philippines will receive 44 million vaccine doses from COVAX. I am heartened by each delivery of these life-saving vaccines, which are saving lives and bolstering confidence that, together, we will overcome this terrible pandemic. Our support goes beyond vaccines to include over P1.38 billion in assistance, including ventilators, ICU beds, personal protective equipment, and training.

Historically, our security alliance has been the backbone of US-Philippine relations. We deeply appreciate President Duterte’s decision in July to restore the Visiting Forces Agreement, key to the operational effectiveness of our Mutual Defense Treaty — whose 70th anniversary we commemorate this year. We believe our alliance strengthens both countries’ operational readiness, deters conflict, and defends a peaceful, stable, rules-based order throughout the region. The recent visits by our Defense Secretary and the Commander of the US Indo-Pacific Command highlight our unwavering commitment to our oldest treaty ally in the region.

September marks Maritime Archipelagic and Nation Awareness Month — a timely reminder that a strong maritime presence includes much more than traditional security. During the past three years, our cooperation has promoted the economic and environmental sustainability of the West Philippine Sea, whose resources are critical to Filipino livelihoods and to the nation’s prosperity. USAID’s Fish Right Program has advanced best-practice fishery and maritime resource management and curtailed illegal, unreported, and unregulated fishing in Philippine waters. Together we are supporting innovative approaches to reduce ocean pollution; protect sensitive marine environmental areas; and strengthen international maritime scientific research. It is so inspiring to see the creative ideas pursued by the next generation of Filipino leaders, such as the team from Agusan del Norte that won the Department of State’s 2021 regional Haquathon competition.

I am confident that our security alliance and our cooperative partnership will continue to thrive in the years to come, and that our countries will grow ever more secure and prosperous. My optimism is rooted in something far more profound and lasting than our shared political and economic interests; it springs from the hearts of our two peoples. We are more than allies: we are friends and family. The ties between Americans and Filipinos stretch back over a century, refreshed each day by the close bonds among millions of our countrymen. My wife and I feel so very fortunate to have experienced that warmth and that friendship with so many Filipinos we have met throughout this beautiful country. Though we could stay only a few years, we are so happy we could call this land our home, if only for a while. These friendships and memories we will take with us, and cherish always.

It has been an immense privilege to serve in the Philippines these past three years, and I leave deeply grateful to the Filipino people for their kindness and friendship. Salamat, hanggang sa muli.

 

John C. Law is the outgoing Chargé d’Affaires of the Embassy of the United States of America.

Rich nations likely to have 1.2 billion extra COVID vaccine doses by yearend

REUTERS

WEALTHY COUNTRIES face mounting pressure to divert coronavirus disease 2019 (COVID-19) vaccine supplies to lower-income regions, with a new analysis showing they’ll likely have about 1.2 billion extra doses available by the end of the year.

The US, Britain, European nations and others could satisfy their own needs — vaccinating about 80% of their populations over the age of 12 and moving ahead with booster programs — and still have large quantities to redistribute globally, according to London-based analytics firm Airfinity Ltd.

Those governments have so far delivered a meager amount of the supplies they’ve pledged to poorer countries as some move forward with plans for booster shots in a race to combat the delta variant. Health advocates worry that the slow pace will prolong the pandemic and increase the risk more worrisome variants will emerge. Some are also calling for more transparency on the agreements between governments and manufacturers.

“There needs to be an urgent global reckoning,” said Fatima Hassan, founder and director of the Health Justice Initiative, a nonprofit in Cape Town. “We need to divert doses to those in need and open all the contracts.”

An independent review of the international COVID response earlier this year urged high-income nations to provide more than two billion doses to poorer regions by mid-2022. Of the more than 1 billion doses Group of Seven countries and the European Union (EU) have pledged, less than 15% has been delivered, Airfinity found.

The issue is often seen as a choice between going ahead with booster campaigns at home or reallocating doses abroad, Rasmus Bech Hansen, the company’s chief executive officer, said in an interview.

“Our data is showing it’s a false dichotomy,” he said. “You can do both.”

Global output is rising steadily, and disruption seems unlikely, he said. Production could cross 12 billion doses by the end of the year, including shots in China, Airfinity estimates. That’s more than the roughly 11 billion required to vaccinate the world.

Western countries have about 500 million doses available to be redistributed today, some of that already donated, with that number rising to about 2.2 billion by the middle of 2022, the analysis shows. The Pfizer, Inc. and BioNTech SE vaccine accounts for about 45% of the available shots that could be redistributed, while Moderna, Inc.’s makes up roughly a quarter of the total, according to Airfinity.

Many lower-income nations are relying on Covax, an initiative led by groups including the World Health Organization that’s designed to provide fair access to the shots for every country, but the program has fallen short of its targets. COVID booster plans should be postponed until more shots are distributed to countries where they’re scarce, WHO Director-General Tedros Adhanom Ghebreyesus has said.

Meanwhile, President Joseph R. Biden’s booster program is mired in controversy of its own, having encountered pushback from health authorities in the Food and Drug Administration and the Centers for Disease Control and Prevention who say scientific support is lacking. Health leaders in the EU have also said that boosters aren’t yet needed as the current regimens of COVID shots remain effective.

“High-income countries have ordered over twice as many doses as are needed for their populations,” the former co-chairs of the panel that reviewed the Covid response wrote last week. “Now is the time to show solidarity with those who have not yet been able to vaccinate their frontline health workers and most vulnerable populations.”

It’s not just a question of having the means to acquire COVID vaccines, Bech Hansen said. There needs to be a more coordinated effort globally to allow countries with ample supplies to resell and donate doses, he said. 

“It’s not a purely high-income-world, low-income-world discussion — it’s a little more complicated than that,” he said. “One could imagine the US, the UK and the EU getting together and agreeing on a way forward.” — Bloomberg

Over 1 billion Asians will join global middle class by 2030

REUTERS

MORE THAN one billion Asians are set to join the global middle class by 2030, according to a new study that predicts the pandemic will prove just a temporary pause in the world economy’s great demographic shift.

The middle class — households where per-capita spending is between $11 and $110 a day — amounts to some 3.75 billion people this year, according to the World Data Lab. That cohort is projected to keep growing through 2030 with India and China, the most populous countries, adding about three-quarters of a billion members between them.

The other biggest contributors are also in Asia. They include countries like Indonesia — projected to have the world’s fourth-biggest middle class by 2030, overtaking Russia and Japan — and Bangladesh, a densely populated country the size of Iowa, which is set to rise up the rankings faster than any other nation. It’s forecast to jump from 28th to 11th place, adding more than 50 million middle-class consumers.

Asian countries already make up more than half of the world’s middle class, but they account for only 41% of that group’s consumer spending, according to the study. The share is set to exceed 50% by 2032.

China, India and the US are projected to retain the top three rankings as the countries with the largest middle-class populations, according to World Data Lab. Slow or negative population growth in some advanced economies will lead to a shrinking middle class in countries like Japan, Germany, Italy and Poland. — Bloomberg

Brazil health regulator suspends use of 12 million Sinovac vaccine shots

PHILIPPINE STAR/ MICHAEL VARCAS

SAO PAULO — Brazil’s federal health regulator Anvisa on Saturday suspended the use of over 12 million doses of a COVID-19 vaccine developed by China’s Sinovac Biotech Ltd. that were produced in an unauthorized plant, it said in a statement.

Anvisa said it was alerted on Friday by Sao Paulo’s Butantan institute, a biomedical center that has partnered with Sinovac to locally fill and finish the vaccines, that 25 batches, or 12.1 million doses, sent to Brazil had been made in the plant.

“The manufacturing unit … was not inspected and was not approved by Anvisa in the authorization of emergency use of the mentioned vaccine,” the regulator said. The ban was “a precautionary measure to avoid exposing the population to possible imminent risk,” it added.

Butantan also told Anvisa that another 17 batches, totaling 9 million doses, had been produced in the same plant, and were on their way to Brazil, the regulator said.

During the 90-day ban, Anvisa will seek to inspect the plant, and find out more about the security of the manufacturing process, it said.

During Brazil’s vaccine rollout earlier this year, the vast majority of administered vaccines were from Sinovac. More shots from other manufacturers have since come online.

Brazil on Saturday reported 21,804 new coronavirus cases, and 692 COVID-19 deaths. — Reuters

45 and beyond: How PICC continues to be the premier MICE venue for decades

The iconic façade of the Philippine International Convention Center.

The setting for many of the country’s biggest and most historic events celebrates its 45th year

On Sept. 5, 1976, all roads led to the Philippine International Convention Center (PICC) as it opened its doors and made headlines as Asia’s first international convention center.

Delegates and guests from all over the world were welcomed to this architectural wonder that was designed by Leandro Locsin, Filipino National Artist for Architecture, and took only 23 months to build. Sitting on a 12-hectare area within the Cultural Center of the Philippines complex in Pasay City, the PICC boasts a most elegant, chandelier-lit lobby, a Reception Hall that can accommodate 5,000 guests, a 3,500-seat Plenary Hall, more than 30 event and meeting rooms, plus a wide range of facilities that can accommodate almost any gathering of any size. It’s equipped with dedicated wired and wireless internet connectivity and everything that makes it an ideal MICE (meetings, incentives, conferences, and exhibitions) venue. It has prayer rooms for Muslim guests. It’s got a state-of-the-art central kitchen, a cold kitchen, a halal kitchen with walk-in and blast freezers.

PICC is also the proud home of some of the country’s most prized art pieces. In 2003, the PICC Forum, a tent facility, was inaugurated to address the need for an exhibition and event space.

HOST TO WORLD LEADERS AND WORLD-CLASS ARTISTS

Over the past 45 years, PICC has played host to many international conferences attended by world leaders, like the APEC Summit in 1996 and 2015, 112th Inter-Parliamentary Union and related meetings in 2005, ADB Meeting of the Board of Governors in 2012, and ASEAN Summit in 2017.

World-class concert artists have graced its stage, like Burt Bacharach, Luciano Pavarotti, Janet Jackson, Ricky Martin, Michael Buble, Josh Groban, and our very own Lea Salonga. Even saints (Mother Teresa and Pope John Paul II) and royalty (Queen Maxima of The Netherlands) once walked through its gleaming, immense halls.

The famed Plenary Hall where most university graduations happen

The eyes of the world were on the PICC when it hosted the 1994 Miss Universe pageant, where Miss India Sushmita Sen ran away with the crown.

Over the years, PICC has undergone several renovations and improvements, updating and upgrading its equipment and facilities.

PICC General Manager Renato Padilla adds, “We have also adopted sustainable practices in our operations, like installing solar panels on our roof decks, converting to LED lights, replacing air-conditioning units to inverter type of technology, and implementing other energy-efficient measures and water conservation efforts to minimize our environmental impact and the carbon footprint of our events.”

PICC Deputy General Manager Roberto Garcia cites 2019 as PICC’s best year yet, with the most number of events and the highest revenue to date. That year, PICC hosted 763 events and was expecting, more or less, the same number of events in the succeeding years. In fact, 2020 saw a strong booking calendar, with events already confirmed. But the COVID-19 pandemic did not spare the Philippines as it swept across the globe.

“The pandemic adversely affected business operations of the Center as a venue for meetings, conventions, exhibitions and special events,” discloses Garcia, who is also chairperson of the PICC COVID-19 Task Force. “While a few government-initiated meetings have taken place at the PICC this year, varying degrees of restrictions on mass gatherings have forced our clients to either cancel or postpone their bookings.”

FACING THE PANDEMIC HEAD-ON

Amid the pandemic, PICC rose to the occasion. PICC continues to be in operation, providing services to its tenants and the general public who continue to make transactions with them.  These tenants are the Securities and Exchange Commission (SEC), Professional Regulation Commission (PRC), National Privacy Commission (NPC), and the Senate Electoral Tribunal (SET).

Over 2 months ago, the One Hospital Command Center moved into the 4th floor of the Delegation Building for its 24/7 operations and the Office of the National Vaccination Operations Center also moved in just 2 weeks ago.

The PICC was one of the first to respond to the governments’ call for the need of quarantine facilities in the Metro when the lockdown was first implemented. In April 2020, the PICC Forum was turned over to the Department of Health to serve as a 294-bed quarantine facility, as it is today.

“While the events industry is finding ways to conduct activities in the new normal, the PICC has deemed it well to maximize the lull in the holding of events by implementing and fast-tracking a number of infrastructure projects to generate additional revenue as well as improve business operations in the future.  Amongst these are the rehabilitation of the 4th floor of the Reception Hall and the 3rd floor of the Plenary Hall which will be converted into additional office spaces for lease,” says Garcia.

A grandiose spectacle await guests inside the Reception Hall, taken by Patrick Kasingsing

Aside from the required safety and sanitation measures, PICC also upgraded its WiFi and technology capacities to address the requirements of virtual and hybrid events.

While most companies retrenched personnel due to losses as a result of the pandemic, PICC retained its workforce — yes, no layoffs, no furloughs. A task force committee was created to monitor the health and well-being of PICC personnel and ensure compliance with safety protocols.

Employees underwent RT-PCR tests quarterly in 2020, and 100% of PICC employees have been vaccinated against COVID-19. 99% of its outsourced personnel (Housekeeping, Security, Landscaping, Physical Arrangements, Audio-Video, and Aircon Technicians) have also been vaccinated to date.

PICC staff dressed in their PPEs regularly disinfect the venue as part of sanitary protocols, taken by Basilio Sepe

“We have been implementing strict preventive measures within our premises to ensure the safety and security of all employees, clients, and guests,” Garcia points out. “At the onset of the pandemic in 2020, thermo-scanners, personal protective equipment, disinfection equipment, air ionizers, hand sanitizers were procured. In compliance with government-mandated health and safety protocols, wearing of masks and shields, an accomplishment of health declaration forms, and physical distancing are enforced as well as regulations governing the conduct of food and beverage services. Printed signages and LED monitors in public areas bear messages on the guidelines of health and safety. Meeting rooms, offices and public areas are disinfected twice daily with touchpoints being disinfected more frequently throughout the day.”

You will also find isolation rooms at the main entrances of the Delegation and Secretariat Buildings that serve as temporary holding areas in case there are guests who manifest symptoms of COVID-19.

When booking their events, clients are advised on the new guidelines, food and beverage protocols, venue capacities, and logistical requirements. These guidelines are based on industry standards and the protocols of the World Health Organization and Inter-Agency Task Force on Emerging Infectious Diseases.

For now, PICC is only accommodating clients and guests of tenants to limit the number of people inside the Center and minimize the risk of virus transmission. Dealings are on a per appointment basis and may take the form of a virtual engagement if needed.

LONGEVITY SECRET

Chandeliers lit up as PICC welcomes its guests for the day.

Celebrating its 45th anniversary this year, the PICC has stood the test of time as a cultural treasure and historical icon. “The PICC has remained as one of the country’s premier event venues due to the support of the Bangko Sentral ng Pilipinas which has remained committed to its mandate of operating an International Convention Center with the highest quality of facilities and services,” Padilla reveals. “Our commitment to help our customers create successful events has been key to our success in the last 45 years. Our clients have remained loyal to us because of the excellent service our skilled people provide, before, during, and after their events. Excellent service in Events Management seems to be a natural birthright of all our employees.”

Expect a lot more as you unravel future plans for PICC. Padilla shares, “A two-storey office and commercial building will be constructed south of the Secretariat Building, which will allow us to lease more spaces for government offices and commercial establishments. When the Forum ceases to be used as a quarantine facility for COVID-19 patients, it will eventually be replaced with a new, modern, and state of the art building that will have 30,000sqm for the holding of Trade Exhibitions and 60,000 sqm for Office spaces for lease on the upper floors and a multi-storey parking building that will accommodate more than 200 vehicles of event attendees and office space lessees.”

Coming up are more infrastructure projects to address the ever-changing needs of PICC clients, like replacing elevators and converting to sensor-type escalators, constructing covered pathways and service hallways at the Secretariat Building meeting rooms, converting air-conditioning systems at the Plenary and Reception Halls to make them more cost-effective, and upgrading the sewage treatment plant.

Looking ahead, when the PICC celebrates its golden year in 2026, it will be more than a nice MICE venue. “It will be a multi-use facility that’s a mix of the old and the new — a convention center, a house of art and culture, a government office complex, and a commercial establishment,” Padilla muses.

He hastens to add, ” We also plan to continue our environmental stewardship and be more aggressive in promoting our advocacy on environmental sustainability, and to be eventually recognized as a model “green” MICE venue.”

At 45, the PICC shines as an architectural icon, a national cultural heritage, and a priceless gem of a venue.

 

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Philippine Airlines files bankruptcy as travel fallout rises

A Philippine Airlines plane is seen flying over Antipolo, Rizal in this file photo. -- Photo by Michael Varcas, The Philippine Star

Philippine Airlines Inc. filed for Chapter 11 bankruptcy in New York with a lender-supported plan that helps the country’s main carrier recover after the pandemic devastated global travel.

The company aims to cut $2 billion in borrowings through a proposed restructuring plan, which needs court approval and will allow the carrier to reduce its fleet capacity by 25%, it said.

Philippine Airlines will also get $505 million in equity and debt financing from its majority shareholder, as well as $150 million of debt financing from new investors.

Chapter 11 lets a company continue to operate while it restructures. The filing on Friday comes after the airline spent months negotiating with its stakeholders. Billionaire owner Lucio Tan called the filing a “major breakthrough” for the carrier.

The restructuring plan allows the airline “to overcome the unprecedented impact of the global pandemic that has significantly disrupted businesses in all sectors, especially aviation, and emerge stronger for the long-term,” Mr. Tan, who’s the chairman and chief executive officer, said in a statement.

While an end to lockdowns eased the strain on travel at the start of the summer season in the Northern Hemisphere, the delta variant of COVID-19 has recently begun hurting many airlines, especially in the U.S. and China.

NEW FINANCING

Mr. Tan has said previously that the airline, which was founded in 1941, was working on a comprehensive restructuring plan.

Philippine Airlines is the latest international carrier to reorganize in the United States, under U.S. bankruptcy code. By using Chapter 11, the company will subject its reorganization plan to the final decision of a U.S. judge.

Bankruptcy experts say the U.S. is often the preferred venue, in part because the law in America is more favorable to a company, and partly because creditor contracts are often based on state law in New York or Delaware. Latam Airlines, based in Chile, Aeromexico and Colombia’s Avianca Holdings all sought court protection in New York last year, blaming the drop in air travel caused by the coronavirus.

The pandemic has forced airlines to suspend flights, lay off employees and seek financial help. In June, PT Garuda Indonesia’s president said the carrier was considering options including restructuring debt and renegotiating contracts with aircraft lessors.

The challenges for PAL Holdings Inc., the holding company of Philippine Airlines, predate the pandemic. It has reported losses since the first quarter of 2017. The company suffered a record P71.8 billion ($1.4 billion) loss in 2020, compared with a P10.3 billion shortfall the year before.

The airline will continue to operate its passenger and cargo flights based on demand and travel restrictions. The company also said it expects to gradually add domestic and international flights as the market recovers.

The case is Philippine Airlines Inc., 21-11569, U.S. Bankruptcy Court for the Southern District of New York (Manhattan). — Bloomberg

New virus variants could push ASEAN recovery to 2023

The Philippines is currently in the midst of a Delta-driven surge in COVID-19 infections, with 20,310 new cases reported on Friday. -- Photo by Michael Varcas, The Philippine Star

The economic recovery of the Philippines and rest of Southeast Asia may be pushed back to 2023, amid the threat of new and more contagious coronavirus disease 2019 (COVID-19) variants, Oxford Economics said. 

Philippine gross domestic product (GDP) is expected to grow by 3.5% this year, Makoto Tsuchiya, economist at the think tank, said in an email.  

This is more pessimistic than the 4.5% it gave last month and is also below the 4-5% full-year target of the government.  

“If new virus variants result in another global lockdown, we expect ASEAN’s growth recovery will be further delayed to 2023 from 2022,” Sung Eun Jung, a senior economist at Oxford Economics said in a note on Friday. 

Mr. Jung said this will be the case in a “long COVID-19” scenario which would require the need for stricter lockdowns and in turn, result in persistent risk aversion. 

“In our baseline, for most of our ASEAN-6 economies, we forecast above-trend growth next year. But in this downside scenario, we would expect these above-trend growths to be further delayed to 2023,” Mr. Jung said in an email. 

The World Health Organization (WHO) has said that the more infectious Delta has become the dominant variant in the Philippines. The Lambda variant, which was first identified in Peru and is considered a variant of interest by the WHO, was also already detected in the Philippines by mid-August. 

New COVID-19 cases on Friday rose by 20,310, the second highest daily tally since the pandemic began. This brought the total active cases to 158,994, based on data from the Department of Health.  

Oxford Economics said the new wave of infections which resulted to tighter restriction measures is expected to hurt third quarter growth in the Philippines and across the region.  

The research firm expects the Philippine economy to grow by 4.3% for the July to September period. Metro Manila was placed under the most stringent form of lockdown for two weeks in August, and is currently under modified enhanced community quarantine until Sept. 7. 

In the second quarter, GDP rose 11.8% year-on-year but  declined by a seasonally adjusted 1.3% quarter on quarter. 

“The main threat remains the Delta variant and the possible tightening/extension of the restrictions. This is especially the case given the rising COVID-19 cases and a low vaccination rate, with only less than 13% of the total population fully vaccinated,” Mr. Tsuchiya said in an email.  

“Tighter social distancing measures would weigh on sentiment and consumer spending, particularly on social spending,” he added. 

Household spending, which accounts for about 70% of the economy, rose 7.2% year on year in the second quarter. Seasonally adjusted, it declined by 2.4% in the second quarter versus last year’s -13.3% contraction. 

Meanwhile, Mr. Tsuchiya said the manufacturing sector will likely benefit from relatively strong external demand, making it likely perform to perform better than the services sector.  

However, he cautioned the new surge in infections in the ASEAN region could pose risks for manufacturing and exports. 

“The short-term manufacturing and export outlook faces several headwinds, including lower growth expectations among major trading partners and supply disruptions due to renewed COVID-19 outbreaks in the region,” he said. 

Anti-graft council created amid probe on state corruption

President Rodrigo R. Duterte has continued to reiterate his pledge to fighht corruption despite scandals involving key allies. -- Photo by Michael Varcas, The Philippine Star

The Presidential Anti-Corruption Commission (PACC) on Friday formed a new inter-agency task force to bring its campaign against graft and corruption to the lowest level of the government, as the administration faces questions over allegedly anomalous deals.  

More than 40 agencies under the Executive branch signed a memorandum of agreement to form the National Anti-Corruption Coordinating Council, which will institutionalize anti-corruption committees (ACCs) in all levels of government. 

The new inter-agency task force was created to quicken the detection of irregularities in all levels of government, PACC Chairman Greco B. Belgica said at the project’s virtual lunch.  

“Bawat opisina, hanggang sa barangay, merong PACC na lumalaban at itinatag na institusyon para labanan ang korapsyon,” Mr. Belgica said. “We have not seen this in any government.” 

The creation of the new anti-graft body, which will be chaired by President Rodrigo R. Duterte, comes after senators launched an inquiry into the government’s procurement of overpriced medical goods from Pharmally Pharmaceutical Corp. Executives of the subsidiary of Taiwan-based Pharmally International have been linked to various crimes. 

In a taped message, the President pledged his support for the PACC’s anti-corruption efforts. 

“The fight against corruption allows us to serve the public with utmost excellence and integrity as well as regain the trust and faith of our people in our institutions,” said Mr. Duterte, who has slammed senators for investigating the government’s pandemic spending. 

“Let us work together to fully realize our dream of a corruption-free Philippines,” he added. 

In March 2017, the President was introduced by his former economic adviser, Michael Yang, to executives of Pharmally International. 

The initiative “amplifies the effort of the Duterte administration in fighting graft and corruption,” Senator Christopher Lawrence T. Go said at the virtual launch.  

Mr. Go, the President’s long-time friend, has been linked to former Budget official Lloyd Christopher Lao, who signed most of the deals with Pharmally. 

The new anti-corruption council is “nothing but a konseho de abswelto (acquittal council) of government, given the unending high-level controversies surrounding the administration,” InfraWatchPH convenor Terry L. Ridon said in a Facebook Messenger chat. 

“It is nothing more than a PR play seeking to douse cold water on the public’s mounting anger over allegations of overpricing and profiteering during the current pandemic,” Mr. Ridon said. 

“Had they truly been serious about corruption, this should have been launched years ago, and more importantly, the overpricing in the pandemic response would not have slipped under the nose of PACC,” he added.  

‘COMPLEMENTARY’ 

Mr. Belgica said the new anti-graft council complements the Department of Justice (DoJ)-led Task Force Against Corruption.  

“It will be complementary because the DoJ-led task force also meets office, also meets people and is more investigative than what we are doing today which is preventive as well as educative,” he said. 

The future anti-graft committees would also complement the functions of the Commission on Audit’s resident auditors, he added. 

The Philippines slipped two spots in a global corruption index released by Transparency International in January.  

Widespread corruption has weakened many countries’ response to the coronavirus pandemic, it said. 

Exporters call for global product compliance standards

Exporters are urging the government to implement global product quality compliance standards. -- Photo by Michael Varcas

Exporters are urging the government to implement global product quality compliance standards to improve international trade. 

Philippine Exporters Confederation, Inc. in a statement Friday said the use of global supply chain standards would promote product safety and improve business transition to digital systems. 

Philexport President Sergio Ortiz-Luis, Jr. during his opening remarks at the GS1 Philippines National Conference said the government should “seriously consider globally accepted standards to develop not only trust in cross-border and domestic trade but also ensure consumer safety and protection.” 

Roberto C. Amores, president of the Philippine Food Processors and Exporters Organization, Inc., said during the same event that global standards compliance is crucial in agriculture and food production. 

Producers, consumers, and policy makers can work together in adopting standards that would reduce the risk of food contamination, which Mr. Amores said could threaten productivity. 

“The COVID-19 (coronavirus disease 2019) pandemic halted further the growth and development which we would like to see in the food and agriculture sector,” he said.  

“For us to reach full throttle in agriculture, one very significant component is food and agriculture safety that can be met consistently through standards and traceability. Without any form of standard or criteria in the food supply chain, food security and self-sufficiency may not come to fruition for us.” 

The export industry has been experiencing pandemic-related constraints. The global shipping industry has been facing a shortage of vessel space as industries catch up with a demand rebound, pushing freight rates higher and delaying goods shipments. 

E-business firm 8Layer Technologies Director for Agritech Jim Leandro Cano said that the lockdowns declared to contain the coronavirus disease 2019 (COVID-19) pandemic has accelerated the adoption of digital technologies.  

Traceability, or a system tracking products from production to consumption, would improve food safety and identify inefficiencies in the food supply chain, he said. 

“The Philippine agricultural supply and value chains are very fragmented and has been fragmented for the last decades, and needs a lot of integrated solutions,” he said. 

He added that traceability would track environmental and health metrics and give farmers the ability to access loans by helping them create records. 

Goods exports in June grew 17.6% year on year to $6.51 billion, preliminary data from the Philippine Statistics Authority showed. — Jenina P. Ibañez 

Rich Asians jump booster shot queue amid vaccine shortages

People wait for their turn to get a vaccine dose inside a cinema at a mall in Antipolo, Rizal, Aug. 24. -- Photo by Michael Varcas, The Philippine Star

In some of Asia’s COVID-19 hotspots, powerful and wealthier citizens are nabbing booster shots even as most people remain unvaccinated, undermining the inoculation strategies of nations struggling with the highly infectious delta variant. 

The growing trend in countries like Indonesia, Thailand and the Philippines is worsening inequities at a time when they are grappling with vaccine shortages.  

In Indonesia — where the health ministry has said boosters are only for health workers — members of the political elite, including the governor of a prominent region, were caught on camera discussing the boosters they received. The conversation was inadvertently broadcast in a livestream of an event on the Presidential Secretariat’s official channel. President Joko Widodo could be heard saying he hasn’t received a booster because he was waiting for Pfizer Inc.’s shot to be available. Widodo’s office and the governor didn’t respond to requests for comment at the time, and the video has since been deleted.   

Thailand is investigating a director and a doctor at two hospitals who allegedly gave Pfizer Inc. jabs meant for pregnant women and health workers to family members and aides. Ronaldo Zamora, a representative for San Juan City in the Philippines, has spoken openly at a press conference about getting four COVID shots — a round of Pfizer, adding to the Sinopharm Group Co. vaccine he received last year before it was even approved by regulators. His son, a mayor of the same city, later said it was done under doctor’s orders because Zamora was immunocompromised. 

The chase for added inoculations comes at a time when there is a growing global debate around booster shots, which have been shown to increase protection against the virus as the delta variant drives up cases worldwide. The World Health Organization has urged developed nations to hold off on boosters until supplies are available for poorer nations. Meanwhile, at the end of August, U.S. President Joe Biden said his administration was considering giving boosters five months after the second dose.  

For countries in Southeast Asia that are hamstrung by vaccine shortages, extra doses for the well-connected means fewer stockpiles for health professionals or the vulnerable. In the  Philippines, Malaysia and Thailand, daily infections are near record levels, while Indonesia’s death toll is among the world’s highest. Displacing others in the vaccine queue is “very morally questionable” and also puts the entire population at greater risk of the virus in the long run, said Voo Teck Chuan, assistant professor at the Centre for Biomedical Ethics of the National University of Singapore.  

“You might or might not make yourself safer by taking a booster shot,” Voo said. “But if you let the virus continue to transmit and mutate across your community, you will see more variants and more infections. Then, you’re not sure if your vaccine, no matter how many you’ve taken, will be enough.”  

LIMITED IMMUNITY 

In the U.S., White House chief medical adviser Anthony Fauci said Thursday that three doses of COVID-19 vaccine may become the standard regimen for most people.  

Southeast Asia is particularly emblematic of the complexities of the debate around boosters because countries like Indonesia and the Philippines relied heavily on inactivated shots made by Chinese companies, which studies have found to be less effective than the mRNA vaccines made by Moderna Inc. as well as Pfizer Inc. and its German partner BioNTech SE.  

With the exception of Singapore, which has met its goal of inoculating 80% of its population, many Southeast Asian nations are falling behind their vaccination goals. Both the Philippines and Indonesia are at 13%. Vietnam and Thailand are at 10% and 11%, respectively. The Philippines has yet to approve booster shots, unlike Thailand and Indonesia which have greenlit extra doses for priority groups. 

Often, it is money, connections or influence that help people jump the queue for vaccines. However, the rush to distribute shots as quickly and as widely as possible has also left open loopholes for many who want to take advantage. In Indonesia, instances of booster misuse were spotted in the government’s registry after complaints were raised by whistle-blowers, according to crowd-sourcing platform LaporCOVID-19. 

In the Philippines, it’s possible to register in one city as a resident and in another as an employee, with no unified database. That’s helping a privileged few with better jobs and higher salaries get added jabs.  

A project manager in metropolitan Manila, who asked not to be named discussing his inoculations, initially signed up for a jab with his company because the Philippines allows the private sector to procure and vaccinate workers. However, with little clarity on when his vaccine would arrive this year, he chose to take two shots from China’s Sinovac Biotech Ltd. through the government program when supplies became available in a nearby city.  

Still, the limited data then available on Sinovac’s effectiveness against the Delta strain weighed on his mind, he said. He didn’t report the vaccination to his company and went on to take a round of the Moderna vaccine through the firm this August.  

In Indonesia, meanwhile, the military chief, who was also seen and heard on the livestream on the Presidential Secretariat’s official channel, denied getting a vaccine booster and said he had used the term ‘booster” to refer to a stem cell treatment he had received.  

Amid shortages, some in Southeast Asia have resorted to traveling great distances or camping out at health centers just to vie for first or second shot. As governments start to ease lockdown measures for the vaccinated, crowds have swelled further, increasing the risk of infection.  

Illicit booster shots undermine the government’s surveillance abilities because if authorities don’t know how many people have been inoculated or what segments of society remain exposed, it hinders their ability to track transmission, said Leonila Dans, a clinical epidemiologist at the University of the Philippines.  

“Jumping the queue harms not just one or two people,” Dans said. “It puts the entire community at risk.” — Bloomberg  

Over 20,000 new COVID cases says Health dept.

The Philippines’ active coronavirus cases hit more than 158,000 after the country logged a record-high number of infections on Friday.

This as a group of medical professionals said that lockdowns would only work if they were enforced for a long period of time and calling instead for more permanent solutions to the ongoing pandemic.

The country recorded 20,310 new coronavirus cases, bringing the total number of cases since the pandemic started last year to 2,040,568, the Department of Health (DoH) said in its case bulletin for Sept. 3.

The country’s death toll rose to 33,873 after 193 more patients died, while recoveries increased by 7,710 to 1.85 million, the agency said.

There were 158,994 active cases, 96.5% of which were mild, 1.1% were asymptomatic, 1% were severe, 0.92% were moderate, and 0.5% were critical.

The DoH said 226 duplicates were removed from the tally, 219 of which were recoveries. It added that 84 recoveries were reclassified as deaths. Six laboratories did not submit data on Sept. 1.

The country is battling a fresh spike in coronavirus infections believed to be triggered by the highly contagious Delta variant.

NO LONG-TERM SOLUTIONS

The government has failed to implement long-term solutions to address the country’s coronavirus situation more than a year since the pandemic hit the country, a group of medical professionals said.

Aileen Espina of the Healthcare Professionals Alliance Against COVID-19 (HPAAC) told a virtual media briefing that the government’s coronavirus data conflicts with what is happening on the ground.

Ms. Espina also cited the government’s lack of political will to create new strategies to contain the evolving coronavirus.

HPAAC said the government must come up with permanent solutions to address the country’s coronavirus situation, noting that lockdowns would only work if they were enforced for a long period of time.

“We need to realize that these lockdowns are just band-aid solutions,” Maria Encarnita Limpin of the HPAAC said at the same briefing. “The effects of lockdowns are just for short-term. What we need are permanent solutions,” she said.

“We will just have a seesaw battle if we will just resort to lockdowns,” Ms. Limpin added.

The discussion on the country’s pandemic recovery should not be centered on whether or not the country needs more lockdowns, said Antonio L. Dans, the group’s spokesperson.

“The question should be centered on whether we are ready for the reopening of the economy,” the medical doctor said at the same briefing. “Did our situation improve? What are the improvements after the lockdowns?”

“We should learn how to live with the virus without getting infected,” Mr. Dans added. — Kyle Aristophere T. Atienza

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