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New COVID-19 variant defeats plasma treatment, may reduce vaccine efficacy

The new COVID-19 variant is 50% more infectious than previous ones, South African researchers said this week. It has already spread to at least 20 countries since being reported to the World Health Organization in late December.

JOHANNESBURG — The new COVID-19 variant identified in South Africa can evade the antibodies that attack it in treatments using blood plasma from previously recovered patients, and may reduce the efficacy of the current line of vaccines, scientists said on Wednesday.

Researchers are racing to establish whether the vaccines currently being rolled out across the globe are effective against the so-called 501Y.V2 variant, identified by South African genomics experts late last year in Nelson Mandela Bay.

“This lineage exhibits complete escape from three classes of therapeutically relevant monoclonal antibodies,” the team of scientists from three South African universities working with the National Institute for Communicable Diseases (NICD) wrote in a paper published in the bioRxiv journal.

“Furthermore, 501Y.V2 shows substantial or complete escape from neutralizing antibodies in COVID-19 convalescent plasma,” they wrote, adding that their conclusions “highlight the prospect of reinfection… and may foreshadow reduced efficacy of current spike-based vaccines.”

The 501Y.V2 variant is 50% more infectious than previous ones, South African researchers said this week. It has already spread to at least 20 countries since being reported to the World Health Organization in late December.

It is one of several new variants discovered in recent months, including others first found in England and Brazil.

The variant is the main driver of South Africa’s second wave of COVID-19 infections, which hit a new daily peak above 21,000 cases earlier this month, far above the first wave, before falling to about 12,000 a day.

Convalescent blood plasma from previous patients has not been shown to be effective when administered to severely ill patients requiring intensive care for COVID-19, but it is approved in several countries as an emergency measure.

British scientists and politicians have expressed concern that vaccines currently being deployed or in development could be less effective against the variant.

The paper said it remained to be seen how effective current vaccines were against 501Y.V2, which would only be determined by large-scale clinical trials. But results showed the need for new vaccines to be designed to tackle the evolving threat, it said. — Reuters

NutriAsia and Papa team up with DepEd to teach students about proper nutrition

Proper diet and nutrition are crucial in young children’s formative years. These foster proper development for children, leading to good health, intelligence, and behavior, thus giving them better chances in succeeding later in life.

In light of this, NutriAsia and Papa forged a partnership with both Marylindbert International and the Department of Education (DepEd) for the school year 2020-2021, the Pinggang Pinoy Pina-Sweet Sarap Comprehensive School Program advocacy. It is a special module that teaches the importance of having the right diet and nutrition. Advocated by Papa Banana Catsup and Papa Spaghetti Pack, the program aims to educate Grade 1 and 2 Filipino students about how keeping a good diet with the right nutrition lead to proper and healthy development.

“With the Pinggang Pinoy Pina-Sweet Sarap Comprehensive School Program, we have a whole plan ready for teaching young Filipinos how to keep a proper diet and take in the nutrients they need,” said NutriAsia President and COO Angie Flaminiano. “We hope to be a part of their good growth and development and, in turn, the Philippines’ growth as well. ”The Pinggang Pinoy program will be launched in 30 participating schools across the country, namely in Regions I, X, XI, and the Cordillera Administrative Region.

School children from Regions I, X, XI, and the Cordillera Administrative Region received DepEd workbooks and Papa products for a truly unique learning experience

The NutriAsia and Papa Pinggang Pinoy Pina-Sweet Sarap Advocacy Program are divided into three stages. The first stage is an in-classroom module and the second stage will involve cooking demonstrations and activities that will show students and parents how to prepare healthy snacks. Advocates Papa Banana Catsup and Papa Spaghetti Pack revealed that the culminating activity will involve a cooking contest that will challenge students, teachers, and parents to create unique recipes.

Papa’s advocacy of helping educate Filipinos in the classroom and beyond has also led them to produce edutainment Facebook videos for NutriAsia’s HomeSchool Program. These videos can be viewed at https://nutriasia.com/homeschool/

For more information and updates on Pinggang Pinoy and NutriAsia’s other initiatives, visit the official website at www.nutriasia.com, and follow NutriAsia on Facebook.

Biden White House pledges data, transparency, respect for free press

WASHINGTON — The press secretary of President Joseph R. Biden, Jr., held her first news conference on Wednesday, seven hours after Mr. Biden’s inauguration, vowing to bring truth and transparency back to government.

Jen Psaki, who served as the chief spokeswoman at the State Department under former President Barack H. Obama, told reporters she had a “deep respect for the role of a free and independent press in our democracy.”

Marking a contrast to former President Donald J. Trump and his top aides’ treatment of what they called “the fake news media,” Ms. Psaki pledged professional, civil exchange.

“There will be moments when we disagree, and there will certainly be days where we disagree for extensive parts of the briefing even, perhaps,” she said. “But we have a common goal, which is sharing accurate information with the American people.”

Mr. Biden plans to “bring transparency and truth back to the government to share the truth, even when it’s hard to hear,” she said.

Ms. Psaki said she expected to hold daily briefings at the White House on weekdays, and to make available health officials to explain efforts to get the COVID-19 pandemic under control.

Under Mr. Trump, the White House banned news organizations it viewed as too critical from briefings and moved to off-camera “gaggles” instead of daily televised news briefings.

During a virtual White House ceremony to swear in nearly 1,000 federal appointees and staff who do not need Senate confirmation, Mr. Biden on Wednesday emphasized public service and respect.

“If you’re ever working with me and I hear you treating another colleague with disrespect, talking down to someone, I will fire you on the spot,” he warned the staff. — Reuters

In hidden message on White House website, Biden calls for coders

WASHINGTON — The recently updated website for the White House of President Joseph R. Biden, Jr., carried an invitation for tech specialists savvy enough to find it.

Hidden in the HTML code on https://www.whitehouse.gov/ was an invitation to join the US Digital Service, a technology unit within the White House.

“If you’re reading this, we need your help building back better,” the message said.

Former President Barack Obama launched the service in 2014 to recruit technologists to help revamp government services—for example by modernizing Medicare’s payment system or reforming hiring practices across government agencies.

Tech specialists join the Digital Service for typically one or two years. — Raphael Satter/Reuters

WHO plans slew of COVID-19 vaccine approvals for global rollout

BRUSSELS — The World Health Organization (WHO) plans to approve several COVID-19 vaccines from Western and Chinese manufacturers in coming weeks and months, a document published on Wednesday shows, as it aims for rapid rollouts in poorer countries.

COVAX, a global scheme co-led by the WHO, wants to deliver at least 2 billion COVID-19 doses across the world this year, with at least 1.3 billion going to poorer countries.

But it has so far struggled to secure enough shots due to a shortage of funds, while wealthy nations have booked large volumes of vaccines for themselves.

In the race to deploy shots, regulatory approvals are key to confirming the effectiveness and safety of vaccines, and to boosting output. But some poorer countries rely mostly on WHO authorizations as they have limited regulatory capacity.

The WHO is therefore “expediting” emergency approvals, according to a COVAX internal document seen by Reuters.

The COVID-19 vaccine developed by AstraZeneca and manufactured by the Serum Institute of India (SII) could be authorized by the WHO in January or February, the document says.

The same vaccine produced in South Korea by SK Bioscience could be approved by the UN agency in the second half of February, at the earliest, a provisional calendar published by the WHO on Wednesday shows.

As well as vaccines, regulators usually authorise their manufacturing processes in different plants.

SII chief executive Adar Poonawalla told Reuters last week he expected WHO approval “in the next week or two.”

AstraZeneca did not respond to requests for comment, while SK said it was not aware of the WHO’s approval timeline.

The AstraZeneca vaccine, developed with Oxford University, has already been given emergency approval in Britain, while decisions in the European Union and the United States are close.

COVAX has supply contracts with AstraZeneca and SII for about 400 million doses and an option for many more hundreds of millions, although the timing of deliveries is uncertain.

OTHER WESTERN SHOTS

The WHO authorized the vaccine developed by Pfizer and its German partner BioNTech at the end of December.

WHO officials have said they are seeking a supply deal with the US pharmaceutical giant, which has already committed hundreds of millions of doses this year to several wealthy nations.

COVAX had not initially included the Pfizer/BioNTech shot in its shortlist for advance purchases.

Pfizer did not respond to a request for comment on whether a deal was close and whether it would involve only a limited number of doses this year.

The provisional approval calendar also shows the WHO is expected to approve Moderna’s COVID-19 vaccine, which is based on the same messenger RNA (mRNA) technology as Pfizer’s, at the end of February.

Moderna, whose vaccine is already approved in many Western countries including in the United States and the European Union, had no immediate comment.

The vaccine developed by Johnson & Johnson (J&J), which has a non-binding agreement to supply COVAX with 500 million doses over an unspecified timeframe, is expected to get WHO approval in May or June at the earliest, the WHO document says.

J&J has not yet published results of its vaccine’s Phase III clinical trials, but the EU has said it expects the company to apply for approval as early as February.

A J&J spokesman did not respond to a request for comment.

CHINA AND RUSSIA

The WHO is also considering possible quick approvals for two Chinese vaccines, the provisional calendar shows.

Sinopharm and Sinovac have filed their applications with the WHO, which is reviewing them and could make decisions on both in March at the earliest, it says.

Neither vaccine was shortlisted by the WHO for possible advance purchase deals. WHO approval does not automatically lead to purchases by COVAX. It could also facilitate the rollout in poorer countries that acquire the vaccines directly.

Sinopharm has filed applications for two COVID-19 vaccines, but the possible March approval concerns only the one developed by its Beijing-based affiliate, Beijing Institute of Biological Products Co., Ltd (BIBP), which has already been widely used for inoculations in China.

Sinovac has yet to release global results of its Phase III trials, but its vaccine has been approved for emergency use in countries including Brazil, Indonesia, and Turkey.

Sinopharm and Sinovac did not respond to requests for comment.

There is no provisional timetable yet for the possible approval of Russia’s Sputnik V vaccine, despite its developers having filed the relevant documentation, the timetable shows.

The Russian Direct Investment Fund (RDIF), the main financial backer of Sputnik V, did not respond to a request for comment. — Francesco Guarascio/Reuters

India’s Bharat Biotech seeks emergency use approval for vaccine in Philippines

MANILA – India’s Bharat Biotech submitted on Thursday an application for the emergency use of its COVID-19 vaccines in the Philippines, Food and Drug Administration chief Rolando Enrique Domingo said.

Bharat Biotech, which has developed COVAXIN with the Indian Council of Medical Research, is the fourth vaccine maker to apply for emergency use in the Philippines.

‘We must end this uncivil war,’ Biden says, taking over a US in crisis

WASHINGTON – Joe Biden was sworn in as president of the United States on Wednesday, offering a message of unity and restoration to a deeply divided country reeling from a battered economy and a raging coronavirus pandemic that has killed more than 400,000 Americans.

Standing on the steps of the U.S. Capitol two weeks after a mob of then-President Donald Trump’s supporters stormed the building, Biden called for a return to civic decency in an inaugural address marking the end of Trump’s tempestuous four-year term.

“To overcome these challenges, to restore the soul and secure the future of America, requires so much more than words. It requires the most elusive of all things in a democracy: unity,” Biden, a Democrat, said after taking the oath of office.

“We must end this uncivil war that pits red against blue, rural versus urban, conservative versus liberal. We can do this – if we open our souls instead of hardening our hearts.”

The themes of Biden’s 21-minute speech mirrored those he had put at the center of his presidential campaign, when he portrayed himself as an empathetic alternative to the divisive Trump, a Republican.

Saying there was “no time to waste,” Biden signed 15 executive actions shortly after entering the White House on Wednesday afternoon to set a new course and overturn some of Trump’s most controversial policies.

The orders included mandating masks on federal property, halting the withdrawal from the World Health Organization, rejoining the Paris climate accord and ending a travel ban on some Muslim-majority countries.

Biden told reporters in the Oval Office that Trump had left him “a very generous letter,” but he would not disclose its contents.

The inauguration itself, one unlike any other in U.S. history, served as a stark reminder of both the tumult that defined the Trump era as well as the pandemic that still threatens the country.

Amid warnings of possible renewed violence, thousands of armed National Guard troops circled the Capitol in an unprecedented show of force. The National Mall, typically packed with throngs of supporters, instead was filled with nearly 200,000 U.S. flags. Attending dignitaries – including former U.S. Presidents Barack Obama, George W. Bush and Bill Clinton – wore masks and sat several feet apart.

Biden’s running mate, Kamala Harris, the daughter of immigrants from Jamaica and India, became the first Black person, first woman and first Asian American to serve as vice president after she was sworn in by U.S. Supreme Court Justice Sonia Sotomayor, the court’s first Latina member.

The president spoke forcefully about the Jan. 6 Capitol siege when Trump backers breached the building, sending lawmakers fleeing for safety and leaving five dead, including a police officer. But Biden never mentioned his predecessor by name.

The violence prompted the Democratic-controlled U.S. House of Representatives to impeach Trump last week for an unprecedented second time, accusing him of incitement after he exhorted his backers to march on the building to press false claims of election fraud.

‘SACRED GROUND’

“Here we stand, just days after a riotous mob thought they could use violence to silence the will of the people, to stop the work on our democracy, to drive us from this sacred ground,” Biden said. “It did not happen; it will never happen. Not today, not tomorrow, not ever.”

The norm-defying Trump flouted one last convention on his way out of the White House when he refused to meet with Biden or attend his successor’s inauguration, breaking with a political tradition seen as affirming the peaceful transfer of power.

Trump, who never conceded the Nov. 3 election, did not mention Biden by name in his final remarks as president on Wednesday morning, when he touted his administration’s record. He then boarded Air Force One for the last time and flew to his Mar-a-Lago retreat in Florida.

Top Republicans, including Vice President Mike Pence and the party’s congressional leaders, skipped Trump’s send-off and attended Biden’s inauguration instead.

Biden takes office at a time of deep national unease, with the country facing what his advisers have described as four compounding crises: the pandemic, the economic downturn, climate change and racial inequality.

After a bitter campaign marked by Trump’s baseless allegations of election fraud, Biden’s speech struck a conciliatory tone rarely heard from Trump. He asked Americans who did not vote for him to give him a chance.

“I pledge this to you: I will be a president for all Americans,” he said. “And I promise you I will fight as hard for those who did not support me as for those who did.”

Although his remarks were directed primarily at domestic problems, Biden also delivered a message to the rest of the world. He promised to repair alliances frayed by Trump and act as a strong partner for peace, progress and security. He made no specific mention of high-stakes disputes with North Korea, Iran and China.

World leaders issued congratulatory statements, with several U.S. allies expressing relief at Biden’s inauguration after Trump’s unpredictable tenure that was focused on an “America First” agenda.

BACK TO WHITE HOUSE

Biden took the presidential oath, administered by U.S. Chief Justice John Roberts, with his left hand resting atop a 5-inch heirloom Bible that has been in his family for a century.

Later in the day, Biden attended a wreath-laying ceremony at the Tomb of the Unknown Soldier in Arlington National Cemetery in Virginia, accompanied by Obama, Bush and Clinton.

Afterward, his motorcade joined an abbreviated parade on his way to the White House. Biden and his family left their limousines on Pennsylvania Avenue to walk the final few hundred yards to their new home.

“It feels like I’m going home,” Biden said when asked about returning to the White House.

In her first briefing for reporters, White House spokeswoman Jen Psaki said Biden’s first telephone conversation with a foreign leader would be with Canadian Prime Minister Justin Trudeau on Friday. They will discuss Biden’s decision to revoke the permit needed to build the Keystone XL oil pipeline and other bilateral issues, she said.

Biden’s inauguration as the 46th president was the zenith of a five-decade career in public service that included more than three decades in the U.S. Senate and two terms as vice president under Obama. At 78, he is the oldest U.S. president in history.

He faces calamities that would challenge even the most experienced politician.

The pandemic reached a pair of grim milestones on Trump’s final full day in office on Tuesday, reaching 400,000 U.S. deaths and 24 million infections – the highest of any country. Millions of Americans are out of work because of pandemic-related shutdowns and restrictions.

Biden’s top priority is a $1.9 trillion plan that would enhance jobless benefits and provide direct cash payments to households to alleviate the financial pain from coronavirus.

But it will require approval from a divided Congress, where Democrats hold slim advantages in both the House and Senate.

The Senate on Wednesday approved Avril Haines to be director of national intelligence, the nation’s top intelligence job, the first confirmation of a Biden nominee. — Reuters

PHL likely to avoid FATF ‘gray list’

REUTERS/THOMAS WHITE/ILLUSTRATION

By Charmaine A. Tadalan, Reporter

THE Philippines is likely to avoid being “gray-listed” by the Financial Action Task Force (FATF) as it is on track to meet the Feb. 1 deadline to implement a stricter law against money laundering.

The amendments to the Anti-Money Laundering Act (AMLA) will immediately take effect once it is published, a legislator said after the Senate and the House of Representatives ratified the measure on Wednesday.

“In the interest of expeditious implementation of this law, and in order to meet the deadline as imposed by the FATF/APG (FATF Asia Pacific Group), the Panel has adopted the present Act’s immediate effectivity upon the completion of its publication,” Senator Grace S. Poe-Llamanzares said during Wednesday’s session.

The Senate on Wednesday ratified the Bicameral Conference Committee report that reconciled House Bill No. 7904 and Senate Bill No. 1945.

The measure includes real estate brokers and developers as covered persons for single cash transactions worth at least P7.5 million, up from the P5 million proposed in both bills.

Meanwhile, the bicameral panel agreed to delete the Senate’s proposal to increase the reporting threshold of the Land Registration Authority to P5 million from P500,000.

Philippine offshore gaming operators (POGOs) and service providers will also be included provided they engage in transactions in excess of P500,000.

The panel also agreed to limit the tax crimes covered to only tax evasion with a threshold worth at least P25 million, higher than the P20 million proposed by the House and President Rodrigo R. Duterte.

Once enacted, the Anti-Money Laundering Council (AMLC) will be given additional but limited investigative powers, such as the power to apply before a competent court for a search and seizure warrant, and a subpoena.

“This is in adherence to the key recommendation of the FATF/APG while at the same time still maintaining the integrity of the Constitution and our laws,” Ms. Poe-Llamanzares said.

The bill will take effect immediately after its publication in the Official Gazette or in a newspaper of general circulation to allow the AMLC to implement the law before Feb. 1.

AMLC Executive Director Mel Georgie B. Racela said the council has already drafted the implementing rules and regulations (IRR) while the AMLA amendments were being finalized. 

“We have drafted the amendments to the IRR and will submit this to the AMLC for their approval by end of this week,” Mr. Racela said over phone message.  

“Once signed by President Duterte and published in the Official Gazette, we will also publish the IRR. In short, we are taking parallel moves already to beat the February 1, 2021 deadline.”

He noted the AMLC is closely monitoring the measure and has coordinated with the Office of Deputy Secretary for Legal Affairs to ensure it is sent to President Duterte and Executive Secretary Salvador C. Medialdea as soon as possible.

The FATF gave the Philippine government until Feb. 1 this year to enact and implement the changes to the AMLA to address gaps in countering money laundering and terrorist financing. The initial deadline was originally set in October 2020, but was extended due to the coronavirus pandemic.

“Bills pertaining to the amendment of the AMLA have always had a difficult time… because of two seemingly clashing ideals: the virtue of adopting provisions recommended by an international body… and the virtue of preserving our own set of laws and rules,” Ms. Poe-Llamanzares said.

“The present set of amendments show us that it is possible — as it has always been — to find a middle ground.”

The measure also gives AMLC the authority to preserve, manage or dispose of assets pursuant to a freeze order, preservation order or judgment of forfeiture. The AMLC may also implement targeted financial sanctions against the proliferation of weapons of mass destruction and its financing.

The amendment also introduced a new sentence in the “non-intervention of the BIR (Bureau of Internal Revenue)” that will allow AMLC to coordinate with BIR on investigations relating to tax evasion.

“This amended provision aptly provides for AMLC’s ability to pursue investigations in coordination with BIR, while also maintaining AMLC’s independence from BIR and vice versa,” Ms. Poe-Llamanzares said.

The bicameral panel also agreed to include a section on information security and confidentiality to prevent leakage and misuse of information; but deleted the provision that will establish an incentives and rewards system for the informant and the agency.

Trade dep’t revises export targets for 2021, 2022

THE TRADE department revised its export targets for this year and 2022 to reflect the extent of the impact of the coronavirus pandemic and sluggish global demand.

“In this revised set of targets, we will reach $105 billion by 2022, but still growing from $91.7 billion in 2021,” Trade Secretary Ramon M. Lopez said in a statement.

The $105-billion target by 2022 is slightly higher than the $103.9-billion target the Trade department announced on Jan. 3.

Asked why the department revised its targets anew, Mr. Lopez told reporters via Viber: “Lumabas na kasi ’yung January to November. That pushed up the 2020 base year (The January to November data pushed up the 2020 base year).”

He noted the exports decline for 2020 is estimated at 13.5%, as economic activities were halted during the strict lockdown from mid-March to end-May.

“The positive growth of 2% in September and 3% in November last year was not enough to totally offset the decline in the first half of 2020 which was the height of the lockdown. But export numbers continued to improve month on month reaching positive growth by September and November versus their same month previous year numbers,” Mr. Lopez explained.

“We can write off the 2020 numbers, so to speak, but the rebound is expected this year 2021, where we expect to bounce back to a +12.5% in 2021 and +14.8% in 2022,” he added.

The Trade department considers the targets as “fighting targets,” Mr. Lopez said, noting it had “intensive consultations” with each export sector and stakeholder.

“This also means that we shall exert all efforts in terms of policies and support programs to assist the export sector and help them achieve these fighting targets,” he added.

Under the Philippine Export Development Plan (PEDP) 2018-2022 roadmap, goods and services export revenues were earlier projected to reach $122 billion-$130.8 billion by 2022 after a compound annual growth rate of 8.89-9.96%.

The department expects the proposed economic reform legislations, infrastructure, and digitalization programs to boost the country’s export capacities.

The reforms should also “unleash our potential in higher value sectors such as in electronics, automotive, aerospace, IT BPM, copper and the creative industries, plus the potential in halal exports,” Mr. Lopez said. — Arjay L. Balinbin

Consumer firms prepare for recovery this year, but challenges still remain

BUSINESSES are preparing for recovery this year on hopes of a further easing of lockdown restrictions and the rollout of the coronavirus disease 2019 (COVID-19) vaccine, but restoring consumer confidence remains a challenge.

SM Supermalls President Steven Tan said 2021 is expected to be a “year of recovery” after the pandemic battered the retail industry last year.

“Malls are open again but consumer confidence is not yet 100% back to normal. Spending is muted. We are hoping 2021 would be a better year for everyone,” he said at the BusinessWorld Insights online forum on Wednesday.

“The first half would still slowly grow but the second half of the year, when the vaccine comes out, it will slowly go back to normal. We think we will be back to 2019 level by the last quarter of the year,” Mr. Tan said.

Malls were forced to shut down for nearly two months when the government placed Luzon under an enhanced community quarantine (ECQ) in mid-March.

SM Prime Holdings’ rental revenues dropped by nearly half in the first nine months of 2020, due to the mall closures. The listed firm said in a regulatory filing that it waived a total of P17.28 billion in rentals and other charges throughout ECQ.

The strict lockdown restrictions also hurt the fastfood business, which relied mostly on dine-in customers before the pandemic.

“Our business was one of the most impacted business sectors last year and continues (to be impacted) this year. The restrictions and lockdowns as well as age restrictions, prevention of mass gathering are a hindrance to recovering the whole potential of the business,” Golden Arches Development Corp. (GADC) President and Chief Executive Officer Kenneth S. Yang said during the same forum.

GADC, which operates the McDonald’s franchise in the Philippines, expects to see an improvement over last year’s financials as lockdown restrictions are slowly eased and the vaccination program likely to begin in the first half.

“I think with the emergence of the vaccine, this will become helpful and add to consumer confidence to go out. At this time, consumer confidence while improving is still quite low,” Mr. Yang said.

DIGITAL PIVOT
For Mr. Yang, businesses must adapt to how customer behavior changed during the pandemic.

“We have to also modify our businesses, our operations, our channels to satisfy their new expectations,” he said. “If safety is their topmost priority, then you have to have safety solutions so that visits to your restaurant or consumption of your products are reassured.”

Mr. Yang said digital measures are critical for all industries to ensure convenient access for customers.

GADC had already been working on its digital transformation pre-pandemic, which was then accelerated last year.

“What was planned for five years was accelerated all into 2020,” Mr. Yang said, adding that internal operations also had to be connected online for work-from-home measures.

SM Supermalls also had to accelerate the digital transformation. Mr. Tan said SM malls have launched online selling tools and personal shopper assistance services to attract consumers who are stuck at home.

These digital measures mirror the China-style mixed retail method the company is adopting, as SM looks to its counterparts in the region for potential recovery measures.

“(China) has innovated, used technology to rebuild better and become omni-channel very early. A brand has to be shoppable and shippable,” Mr. Tan said.

Companies have accelerated the frequency of managing their cash flow, KPMG Philippines Chief Operating Officer Emmanuel P. Bonoan said at the same event.

“We now review cash flows on a daily basis… we have consultations based on what our cash flows look like. At this time, cash flow is even more important than ever,” he said.

The company’s cybersecurity and digital transformation services have started to pick up, he said.

Mr. Bonoan added that the professional services firm scaled up crisis management meetings, and is investing in training employees.

“Our people have to learn new things and have to get better at the things that they’re doing so you have to make investments in continuous training. While this might last a long time, this situation will pass and you have come out on top of it better than you were when you entered into it.” — J.P.Ibañez

PHL banks continue to face credit risks — S&P

By Luz Wendy T. Noble, Reporter

EMERGING MARKETS such as the Philippines will continue to face credit risks this year, as the central bank is likely to lift regulatory relief measures and the loan payment moratorium expires,  S&P Global Ratings said.

At the same time, Bangko Sentral ng Pilipinas (BSP) Deputy Governor Chuchi G. Fonacier said they are still looking into asset quality developments to gauge when to lift relief measures implemented at the height of the lockdown last year.

“NPLs (nonperforming loans) and restructured loans will continue to increase over the next few quarters as the true impact of the COVID-19 (coronavirus disease 2019) shock on the banks’ borrowers unfolds,” Nikita Anand, an analyst at S&P Global Ratings, said in an e-mail.

“We believe NPL ratio could further climb to about 6%-6.5% by the end of 2021,” she added. The global debt watcher projects the ratio may have risen by 4-5% in 2020 from the 2019 level.

Ms. Anand warned a “sharp rise” in NPL may occur after the second debt moratorium as provided for under Republic Act 11494 or the Bayanihan to Recover as One Act expired on Dec. 31, 2020. 

The Philippine banking industry’s NPL ratio reached 3.81% as of end-November, rising from the 3.72% in October as well as the 2.19% a year earlier, based on BSP data. Bad loans surged 73.6% to P404.687 billion in November from P233.064 billion a year ago.

The restructured loans ratio also increased to 1.31% of total loans as of end-November from 0.38% a year earlier. These loans soared 241% to P139.614 billion from P40.857 billion a year ago.

S&P in a note warned that bad loans will further pick up once regulatory relief measures employed by central banks in developing markets are lifted.

Ms. Fonacier said they “are still monitoring developments on asset quality.”

“Hence, we cannot yet determine the timeline on the lifting of the regulatory relief at this point,” she said in a Viber message.

BSP Governor Benjamin E. Diokno said they will carefully assess the timing of when they will unwind relief measures to ensure it will not cause risks or instability to the financial system.

The central bank said the bad loan ratio may have reached 4.6% as of end-2020. It peaked at 17.6% in 2002 in the aftermath of the Asian financial crisis.

Meanwhile, Ms. Anand said the rollout of COVID-19 vaccines will be used in assessing economic and credit risks of sovereigns.

“Widespread immunization, which certain countries might achieve by midyear, will help pave the way for a return to more normal levels of social and economic activity,” she said. “The improvement in asset quality will depend on economic recovery and stabilization of credit conditions.”

The BSP’s Ms. Fonacier said the country’s vaccination program is a welcome development, noting its “positive impact on business confidence.”

The Banking Sector Outlook Survey of the BSP released earlier this month showed majority of respondent banks expect the NPL ratio to go beyond 3% until 2022, while nearly half of banks see restructured loans to comprise 3-5% of their credit portfolio.

This uncertainty has led to a decline in bank lending growth, which stood at 0.3% in November, the slowest since the 1.9% in September 2006.

COVID-19 pandemic could be source of global crises for years — WEF

THE CORONAVIRUS has exposed the “catastrophic effects” of ignoring long-term risks such as pandemics, and the economic and political consequences could cause more crises for years to come, according to the World Economic Forum (WEF).

The WEF’s annual survey of global risks lists infectious disease and livelihood crises as the top “clear and present dangers” over the next two years. Knock-on effects such as asset bubbles and price instability lead concerns over 3-5 years.

The WEF said most countries struggled with crisis management during the pandemic, despite some remarkable examples of determination and cooperation. That highlights how leaders need to prepare better for whatever the next major shock turns out to be.

“The immediate human and economic cost of COVID-19 is severe,” the WEF said in the report. “The ramifications — in the form of social unrest, political fragmentation and geopolitical tensions — will shape the effectiveness of our responses to the other key threats of the next decade.”

While the impact of the pandemic is dominant at the moment, other events will likely come to the fore, according to the survey. As in previous years, extreme weather is seen as the most-likely risk, just ahead of a failure in climate action. Infectious diseases make the top five for the first time in at least a decade.

Digital inequality and the concentration of digital power are also seen as major concerns, with WEF Managing Director Saadia Zahidi warning of a global “bifurcation in terms of growth and development.”

“There are parts of the world that have digital access and inclusivity and that is where some parts of the workforce — not all — are able to continue, are able to adapt,” she told Bloomberg Television on Tuesday. “But then there’s this other part of the world where we don’t even have basic internet access, basic electricity access, basic water access and that is where recovery and a return to growth will look very different.”

The WEF’s recommendations for boosting resilience include combating misinformation, especially as coronavirus vaccines are rolled out. It cited one example of false information — that ingesting highly concentrated alcohol kills COVID-19 — which caused more than 700 deaths and nearly 6,000 hospitalizations in Iran.

More broadly, it said post-truth politics are “amplifying hate speech, heightening the risk of conflict, violence and human rights violations, and threatening long-term prospects for advancing democracy.”

The forum also recommended “holistic” risk analysis, investing in “risk champions” to encourage international cooperation, and exploring new forms of risk management such as public-private partnerships.

“If lessons from this crisis only inform decision makers how to better prepare for the next pandemic — rather than enhancing risk processes capabilities and culture — the world will be again planning for the last crisis rather than anticipating the next,” the WEF said. — Bloomberg

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