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DoE studying RE, hydrogen, nuclear as alternatives to conventional fuels

ENERGY DEPARTMENT Spokesman Felix William B. Fuentebella said the agency is looking into adding more renewable energy (RE), nuclear, and hydrogen-based power in preparation for any possible supply crunch in conventional fuels.

“We are coming up with more options… We have to look into RE and the other fuels that are emerging such as hydrogen and the nuclear technology,” he said at the Department of Energy’s (DoE) year-end videoconference last week.

“There’s a possibility that conventional fuel can be (depleted)… Hindi lang national, pati international. (Not just on a national level, but international),” he added.

Mr. Fuentebella was responding to a question on whether oil and coal-fired generators will eventually be supplanted by RE.

He said the DoE is studying how RE can be connected to the grid and distribution system.

“Although meron tayong sufficient renewable energy sources, kailangan ikabit natin sa grid… ‘yung pagde-deliver natin ng continuous service 24/7 (Although we have sufficient renewable energy sources, we need to connect them to the grid… in a way that ensures 24/7 services). So these are very technical issues; that is why the DoE is (studying the issue more broadly),” he said.

Mr. Fuentebella also cited the need for further studies into nuclear and hydrogen power — both energy sources which were earlier endorsed by Energy Secretary Alfonso G. Cusi.

In December, Mr. Cusi said that the nuclear energy program inter-agency committee has submitted its recommendations to President Rodrigo R. Duterte. He said that the group “positively expected” that nuclear would be included in the country’s power mix.

Five months earlier, the President ordered the creation of the inter-agency body which was tasked to conduct a study on adopting a national position on a nuclear energy program.

In December, Mr. Cusi also announced that the department is looking into the viability of harnessing power from hydrogen.

“I have recently formed a team to study its potential for the local industry given that hydrogen is seen as the fuel of the future,” Mr. Cusi said in his message at the DoE’s virtual celebration of National Energy Consciousness Month.

In October, the DoE issued a ban on new coal-fired projects after its recent assessment showed the need to shift to a more flexible power supply mix. — Angelica Y. Yang

DTI says success of pitch to investors hinges on CREATE passage

THE Trade department said the passage of a key tax reform bill, known as the Corporate Recovery and Tax Incentives for Enterprises (CREATE), forms a major part of its investment promotion message.

Trade Undersecretary Ceferino S. Rodolfo in an online briefing last month said that he is hoping for uncertainties over CREATE to be resolved in January, in time for companies to reap the retroactive benefits of the bill by the income tax deadline in April.

Sana lang mabilis. Kasi actually pino-promote na natin ‘yung CREATE eh. (I hope for a speedy passage because we are promoting CREATE to investors) Sinasabi na lang natin sa mga investors (We are telling investors) that we believe that the CREATE bill as passed by the Senate will be the baseline in terms of incentives,” he said.

Legislators will go into a bicameral conference committee to reconcile clashing provisions in the two chambers’ bills. The Senate passed its bill in November, while the House approved its version in 2019.

The Senate bill reduces corporate income tax to 25% from 30% starting July 2020, and then by one percentage point each year between 2023 and 2027. The rate falls to 20% for domestic companies with net taxable income of P5 million or lower and total assets less than P100 million.

CREATE also streamlines the tax incentives system to make it more time-bound and performance-based.

“By February siguro ‘yan, March, nagpre-prepare na ng mga income tax applications ‘yung mga kumpanya (Companies will be preparing their tax returns by February or March)… ‘yun ‘yung window (that’s the window) not just for those with incentives but in general for all establishments,” Mr. Rodolfo said.

Mr. Rodolfo hopes that the provisions on incentives in CREATE, which he said balance the ability to attract investment and generate fiscal revenues, will be carried forward in the bicameral process.

“We trust the legislative wisdom of both houses to merge, consolidate, work on the whatever provisions of CREATE and CITIRA they deemed divergent,” he said, referring to a previous incarnation of the tax reform bill, the proposed Corporate Income Tax and Incentives Rationalization Act. CITIRA was repositioned as an economic recovery measure, CREATE, following the damage done to the economy by the pandemic.

The Finance department has said that CREATE will cost the government P250 billion in foregone revenue over the next two years after the corporate income tax cut was accelerated for small businesses. — Jenina P. Ibañez

Philippines to receive assistance from India in setting up National ID, broadband systems

INDIA has pledged aid to the Philippines as it sets up its national ID system, and also promised assistance in organizing a broadband network to fast-track its digital transformation, the Department of Finance (DoF) said.

In a statement over the weekend, the DoF said Indian Ambassador Shambhu S. Kumaran put forward the offers at a recent virtual meeting with Finance Secretary Carlos G. Dominguez III.

The national ID system program and the development of the broadband network are expected to support broader use of financial technology (fintech) and widen financial inclusion.

India launched a pioneering national ID system in 2009 known as Adhaar, which provided a unique 12-digit identifier to each of the country’s citizens across a population more than 1 billion strong.

Mr. Dominguez also told Mr. Kumaran that Indian private companies can participate in the government’s plan to improve cyber security at government banks and their subsidiaries.

The national ID system seeks to provide a single identification card to all Filipinos and reduce dependence on multiple government-issued IDs. The broadband network hopes to boost adoption of fiber optic networks and wireless technology, while allowing smaller telecommunication companies to enter the market.

Mr. Kumaran was quoted as saying that Indian firms are also seeking to participate more in the country’s “Build, Build, Build” infrastructure program.

The two sides will discuss more possible project partnerships, according to the DoF.

Mr. Dominguez said India’s GMR Infrastructure Ltd. is already involved in infrastructure projects like the Mactan Cebu International Airport project and expansion of the Clark International Airport.

President Rodrigo R. Duterte made official visits to India in 2017 and 2018, and Indian President Ram Nath Kovind paid a state visit to the Philippines in 2019. — Beatrice M. Laforga

Biomass industry lobbying for more FiT-subsidized capacity

THE biomass industry is seeking a larger allocation of renewable-energy capacity eligible for subsidized feed-in tariff (FiT) rates, to broaden participation in the biomass and hydro power segments, a developer said.

Dapat i-increase iyon (the installation capacity) eh…Kasi once you allow them, there will be more players. The difficulty lang is ‘yung development time, matagal ang hydro eh (We should increase the installation capacity eligible for FiT. Once you allow it, there will be more players. The difficulty lies in the development time for hydro, which takes a long time),” Don Mario Y. Dia, president of Biomass Renewable Energy Alliance, Inc. (BREA), told BusinessWorld in a phone interview on Dec. 29.

The Department of Energy (DoE) extended the deadline once more for FiT applications by developers of run-of-river hydropower projects. It did not set a date, but will declare applications closed once the 250-megawatt  (MW) capacity quota is reached.

He said that the government should let finished hydro projects that exceed the installation capacity subscribe for the FiT program.

Dapat i-allow na iyon…Sunk in na ‘yung cost mo. ‘Yung building, biglang lalampas ka dun sa capacities ng target, papaano iyon, we’ll stop them? Hindi dapat ganun, hindi developmental eh (It should be allowed. These are sunk costs. If the project exceeds the quota, you can’t just bar them? That doesn’t promote the industry’s development),” he said.

He said the industry is requesting an increase of 100 MW on top of the 250-MW installation capacity for biomass projects eligible to apply for FiT.

Kasi ‘yung mga nakatapos exceeded 250 eh, and sana dapat pinapasok na lang iyon. (The finished projects that went over the required 250-megawatt installed capacity should have been allowed),” Mr. Dia said.

In a text message Sunday, National Renewable Energy Board Chairperson Monalisa C. Dimalanta said that the DoE has been adopting the “rule of indivisibility” in its other RE projects.

Should finished output go over the installed capacity, “the entire capacity of the project would be deemed FiT-eligible even if there is a portion that exceeds the 250 MW limit,” Ms. Dimalanta told BusinessWorld.

“That’s how it has been applied to other technologies. We are expecting (the) same treatment for river hydro if and when it happens,” she said.

DoE Spokesman Felix William B. Fuentebella said that the department will adhere to the rule of indivisibility once run-of-river projects exceed the quota.

“If there are 245 MW subscribed already and the last plant is 10 MW, which will go beyond 250 MW, the last plant is given FiT on the whole 10 MW,” he told BusinessWorld in a Viber message Sunday.

He said the adjustment is appropriate for river hydro plants since they are “more challenging to construct and require more permits.”

In a department circular issued in 2015, the installation targets for solar photovoltaic (PV) and wind were raised to 500 MW and 400 MW, respectively.

The DoE has committed to raise the share of RE in the power mix to at least 30%, aided by the FiT incentives and other provisions of the RE Act of 2008. — Angelica Y. Yang

Leading Now, Next and Beyond COVID-19

The lessons we learned in 2020 were undoubtedly challenging, demanding and somewhat painful. The pandemic was indiscriminate, affecting people, businesses and governments the world over. It taught us to address accelerated change and uncertainty with forethought and equanimity. It compelled us to embrace technology with necessary urgency. And it made us rethink, reframe and reimagine the future in a post-pandemic world. As we begin the New Year, we Now have the opportunity to reflect upon the one that just passed, look to the Next year armed with the lessons the pandemic imparted, and plan for recovery Beyond.

The New Normal dictated that we learn to manage our lives safely knowing that the virus will likely be with us for the foreseeable future. Leaders are called upon, more than ever, to lead their organizations with empathy and protect the well-being of their people. This is all while developing proactive measures to resume business operations and to contribute to economic recovery.

Before the government imposed the lockdown, SGV leadership had been preparing for potentially bigger disruptions, partly due to the earlier experience we had when Taal Volcano erupted. Our Business Continuity Management program included a Crisis Management Team (CMT) in place, and it was promptly activated in early March. This team comprises members from critical groups within the firm, including risk management, IT, finance, legal, support services, communications and talent. The CMT was able to project potential problems, address unforeseen ones and anticipate others, all with the goal of protecting the overall health and security of our people, their families, our clients, and all our other stakeholders. This was not an easy task, as there were no precedents to provide guidance nor best practices to speak of — the team continued to rely on evolving government directives and scientific pronouncements while confronting an unseen and unknown enemy.

NOW: LEADING WITH EMPATHY AND PROTECTING OUR PEOPLE
The beginning of the community quarantine saw everyone adjusting to what would become the New Normal, with new risks and challenges arising. This was especially true when several members of the workforce found themselves stranded, mobility severely impeded and some becoming completely unable to work. The situation necessitated that leaders be emphatic in understanding the unique challenges facing their people. Leaders needed to find ways not only to keep people motivated and engaged, but also ways to nurture their strengths and support their continuing development. Sincere empathy also builds trust among an organization’s people, and this trust in turn, builds confidence in leadership. The key is to communicate clearly, constantly and concretely for both internal and external audiences. One needs to be transparent, express understanding, and always speak with confidence.

Most importantly, the organization’s Purpose should be the overarching and guiding principle in overcoming challenges. Our own Purpose “to nurture leaders and enable businesses for a better Philippines” was like a mantra for all of us and which, I believe, continues to unify us in thought and action during this pandemic.

When our offices closed and the need for remote working became crucial, alternative work arrangements were swiftly carried out. IT and technology security policies were updated to address potential risks as well as ease the adjustment to remote working. Assistance was also provided to employees who were stranded or needed additional arrangements to continue working.

At the same time, the firm provided medical support for employees and maintained salaries and benefits. Health policies were reissued to heighten the awareness on how best to address the pandemic. Mental and emotional health programs were implemented as added support, with webinars and activities held virtually on various platforms to raise morale and foster a stronger sense of camaraderie. We had masses and monthly bible studies as well as daily bible verses to address the spiritual well-being of our people. It was very important to keep our people engaged.

The key takeaway is that organizations need to imagine and prepare for every eventuality. By anticipating possible issues and risks through scenario-planning and business continuity preparation, we became more agile and better prepared to protect our people.

NEXT: PROACTIVE MEASURES TO REOPEN BUSINESS
Understanding that life and business will need to go on during, and after, the pandemic, SGV developed proactive measures on how to safely maneuver in this new working world. Best practices from other EY member firms were consulted and adopted, and the strict compliance with SGV and government policies was enforced.

The firm mandated the regular sanitation and disinfection of all offices as well as provided masks and sanitizers to all employees. SGV also made use of daily health and work location monitoring reports for its workforce and health screening forms for guests. Reminders on how to stay safe were continuously communicated, such as when needing to leave one’s home to work or when working in other locations as potentially required by clients. As an example of one such communication, these practices were all highlighted in a complete guide called A Day in the Life of an SGVean in the New Normal which provided easy-to-understand and engaging guidance on important day-to-day health protocols.

BEYOND: DOING ONE’S PART TO CONTRIBUTE TO ECONOMIC RECOVERY
As part of SGV’s Purpose to enable businesses, the firm actively seeks ways to help companies plan for future recovery. We made it a point to help our clients build resiliency plans, and continuously provided thought leadership to both the private and public sectors. We share our knowledge regularly through webinars and virtual speaking engagements. CSR efforts continued in support of the greater community. They were coursed through the SGV Foundation, which oversaw donations to those deeply affected by the crisis, as well as calamities such as the Taal eruption and the powerful typhoons that hit the country.

In order to look forward, leaders must identify and address weaknesses in their current business models. Our previous articles encouraged C-Suites to urgently reinvent and streamline business practices in light of the pandemic, as well as to take a hard look at revenues and costs with the goal of identifying ways to make them more efficient. Leaders must also explore how technology and digital transformation can be utilized to strengthen businesses.

Furthermore, we encourage leaders to take the time to connect more with the people in their respective organizations. Embody your organization’s Purpose, and let it be the anchor that keeps everyone grounded.

Let us welcome the New Year filled with hope, optimism and faith.

This article is for general information only and is not a substitute for professional advice where the facts and circumstances warrant. The views and opinions expressed above are those of the author and do not necessarily represent the views of SGV & Co.

 

Wilson P. Tan is the Country Managing Partner of SGV & Co.

Vaccine ethics

Even with the hopeful news of successive vaccines being approved for use in various countries, a major issue confronting many societies is who should get vaccinated first. The problem exists since it will be months — and in poorer countries, perhaps years — before the supply of vaccines is actually enough to meet demand.

Even rich countries struggle with the issue. While there is a consensus that healthcare personnel ought to be among the first priorities, a good deal of debate and difference follows over who should be next. A good model of careful thinking however is set by the permanent commission on vaccination of Germany’s Robert Koch Institute.* It first lays down the social objectives, namely: to minimize death and hospitalizations; to protect people who are professionally exposed to the disease; to minimize further transmission; and to sustain public life and the continuity of government functions. (Note that if the desired objectives had been different, e.g., minimizing economic disruption, the corresponding vaccination priorities would also have differed.)

In the event, with social objectives set, vaccination priorities consistent with them can be determined. These are roughly as follows: first in line are the elderly, with diminishing priority as age declines to 60; second in line are personnel in medical institutions with priority based on the risk of exposure (e.g., frontline doctors and nurses in hospitals ahead of those in private clinical practice or administration); third, persons with underlying conditions carrying a risk of serious illness, e.g., cancer, diabetes, cardiovascular disease; fourth, teachers, school personnel, and persons doing precarious work; fifth — note only the fifth — are key government personnel at national and local levels; and finally all other persons less than 60 years old.

The science and ethics behind these priorities are clear. If the aim is to minimize deaths and hospitalization, immunizing the elderly is the most direct route, since the effects of infection are known to be most severe among the elderly. (In the Philippines, three-fourths of all infections are among the below-50 age group, but roughly 60% of hospitalizations and 80% of deaths occur in the 50 to 89-year-old age bracket.) The same logic holds for prioritizing frontline health care personnel, who must immediately be protected against the disease if they are to continue working and not infect the people they attend to. On the other hand the lower priority given to teachers is also understandable, since their risk of exposure is lower and contingent on the mode of instruction to begin with. Of course, a diabetic 60-year-old teacher might still get higher priority, not because she is a teacher but because of her age and underlying medical condition.  The fifth priority accorded to high government officials — quite apart from delicadeza — stems from their greater ability to avoid risk and their easier access to quality healthcare if they do get infected. Germany’s chancellor Angela Merkel set an example in this regard during her New Year’s address when she said: “I too will be vaccinated — when it is my turn.”

Here at home, one must wonder whether the same thoughtful science guided by ethics and local conditions has gone into the government’s own vaccine program. News reports thus far fail to give the impression of a well-thought-out plan. The public is presented instead with a hodge-podge enumeration of supposed priority groups with no detail regarding their relative importance or the sequence of the rollout. Beyond the clear case of medical frontliners, the list seems more attuned to a prioritization not of the civilian population but of government agencies and employees. Hence it first enumerates “personnel” from departments of education, social welfare, jail management, and customs (!) without distinction as to function. But seniors and the poor “will also” be among the first, and — “based on President Duterte’s wishes” — the police and the military as well. Where almost everyone is a priority, one wonders if anyone really is.

One wonders exactly how such priorities will be implemented in practice. Would an able-bodied soldier or policeman get the vaccine ahead of a 65-year-old with diabetes? Would a customs inspector be inoculated before a factory or transport worker? Or a school principal before an elderly urban poor person? More important than one or the other answer is: why or why not?

This need for a painstaking delineation of vaccine-priorities is based on an economic reality: for an extended period, the supply of vaccines will be inelastic and must be quantitatively rationed to those who are most in need. The invisible hand of the market fails to work its wonders in these cases, since even an above-normal price would do nothing to increase supply, nor is a suppression of demand acceptable on humanitarian grounds. For the same reason (i.e., one that should be taught more in Econ 11), price-controls in areas cut off by natural disasters are a justifiable departure from the otherwise reliable course of letting market forces decide the allocation of scarce resources. In such crises, the limited supply of life-preserving means must be allocated based on humanitarian need and explicit social-welfare criteria, rather than through accustomed privilege and buying power. Flouting social priorities during such times of national crisis, e.g., through hoarding or price-gouging, amounts to a crime.

Now zero in on recent events. A slowly-mushrooming scandal is the revelation that members of the President Duterte’s innermost circle — including some cabinet members, his own close-in Presidential Security Group (PSG), and some allege even Duterte himself — had surreptitiously secured the Chinese Sinopharm/CNBG vaccine and had themselves secretly inoculated. Various administration officials have since twisted and turned to play down the incident, seeking to limit the damage by painting it as a purely private matter, where: (a.) the drug was just “donated” (later revised to “smuggled” so its origin is presumably no longer traceable); (b.) the vaccine was “self-administered” by the soldiers themselves (so no physician or other accomplice can be called to account); (c.) the vaccination was “purely voluntary” on the part of the soldiers (to pre-empt the obvious human-rights violation of coercing subordinates to be vaccinated with an unapproved drug); and, (d.) that neither the president nor any of the PSG’s higher-ups knew anything about the matter until after the fact (which strains credulity given the president’s vaunted omniscience and ₱4.5-billion intelligence fund). This leaves the PSG head to take sole responsibility and fall on his sword. (But not to worry, there’s always a safety net and reward for the steadfast. Main thing is to stop the contagion of scandal right there.)

Much of the criticism of these actions has thus far centered on how the vaccine was still FDA-unapproved and therefore possibly unsafe or ineffective. Such criticisms miss the point however. It is precisely because the Chinese vaccine is possibly or likely to be effective that its hoarding, misappropriation, and private use — particularly by key officials — is objectionable. At a minimum, the proper action should have been to entrust the vaccine supply — approved or unapproved, donated, smuggled or otherwise — to the health department for possible future distribution. (As an aside, the Chinese government has since approved the Sinopharm vaccine for general public use; and there is little doubt it will ultimately be approved by the FDA here as well.)

The incident is a scandal because it is a big slap in the face of a government that pretends to any attempt at a fair social prioritization and orderly distribution of scarce, life-saving vaccines. It is specious to reduce the matter to a private action that harms only the participants themselves: in the midst of dire scarcity, each private action has palpable social repercussions; every act of misappropriation is a deprivation of someone more deserving. The most cogent observation that goes to the heart of the matter came from a nurse who said: “Parang inapi naman nila ‘yung health workers. Talagang ipinakita nila na hindi priority. (It is like they abused the health workers. They really showed that they are not a priority.)” To extend the metaphor of a calamity, these actions are tantamount to government workers hoarding and gorging on donated relief goods instead of distributing them to those most in need.

Unless the full truth is revealed and those truly responsible are held to account, this sordid event bodes ill for popular trust in the seriousness of the government’s vaccine distribution plan. It is cold comfort that the plan itself to date is still murky in its principles, priorities, and operational implementation. Even before these details can be sorted out, however, the plan’s credibility has already been tainted. The red flag has been raised that not only may safety protocols be breached, but that the orderly and fair vaccine distribution may be corrupted by queue-jumping, supply-diversion, patronage, deceit, and bribery, with priority given to the highest bidder — or the most connected to the center of power.

Rather than take this credibility issue dead-seriously, however, administration officials have pooh-poohed the matter and addressed it instead by: first covering up the incident and denying it even happened. Second, when that failed, disavowing any knowledge of it and shifting the responsibility entirely upon the lowly soldiers themselves. And finally, deflecting attention away from the embarrassing issue by throwing a smoke bomb regarding corrupt public engineers and congressmen (all noise, with little evidence anyway) meant to crowd out news of the matter.

Oh, well, at least now we know what “Mask, Hugas, Iwas” (Mask, Wash, Avoid) really means.

*“STIKO-Empfehlung zur COVID-19 Impfung.” Advance copy of Epidemiologisches Bulletin dated Jan. 14, 2021.

 

Emmanuel S. De Dios is professor emeritus at the University of the Philippines School of Economics.

Pinoy vaccination

An otherwise comedic story if not for its disastrous effect could have well happened in the Philippines.

A clinic in West Virginia blundered and injected 42 people not with a COVID-19 vaccine but with an experimental antibody cocktail. (Also, the procedure for the use of the antibody treatment was wrong. It is administered through infusion, not inoculation.)  This tragedy was attributed to a “breakdown in the process” and to “human errors.”

And across the United States, the vaccine distribution is plagued by the lack of resources and logistical complications. A typical story is that the vaccines are available but are stored in hospitals and not given to the most vulnerable people. Worse are accounts of health workers who have refused vaccination.

As a consequence of all this, the US government sorely missed the goal of having 20 million people vaccinated by end-2020. By year end, the Centers for Disease Control and Prevention reported that 2.8 million people received the first dose of the vaccine. Even assuming that this was a conservative report, we would still conclude that the performance was way below the target.

It goes without saying that such problems pertaining to disorganization, inefficiency, and incompetence are more pronounced in the Philippines.

So, is it a blessing in disguise that Philippine vaccination is not right out of the gate? Not really.  The point though is that we must learn the lessons from the front-runners. But more importantly, we need to internalize lessons from our own experiences in fighting COVID-19, especially our failings.

Many lessons have to be learned in rolling out our vaccination program. I emphasize a few, namely:

First, do not treat the first-generation vaccines as silver bullets. The efficacy of the first vaccines has been established in clinical trials, but the real world is different. By all means, have the approved vaccines, but be prepared for twists and turns. The ultimate success of the vaccine depends on factors that we cannot predict like the actual and long-term effectiveness of the vaccines.

A fine difference exists between efficacy and effectiveness. Here’s a relevant passage from Carl Zimmer, “2 Companies Say Their Vaccines are 95% Effective. What Does That Mean?” This was published in The New York Times on Nov. 20, 2020 and updated on Dec. 4, 2020:

“Efficacy is just a measurement made during a clinical trial. ‘Effectiveness is how well the vaccine works out in the real world,’ said Naor Bar-Zeev, an epidemiologist at the Johns Hopkins Bloomberg School of Public Health.

“It’s possible that the effectiveness of coronavirus vaccines will match their impressive efficacy in clinical trials. But if previous vaccines are any guide, effectiveness may prove somewhat lower.”

The second lesson, which follows from avoiding the temptation to devote all efforts and resources to the vaccination program, is to do well in previous tasks. The truth is, much still has to be done to improve the Philippine capacity for case finding, testing, screening, quarantining the infected and those with symptoms, and contact tracing. The vaccination program must go hand in hand with the above interventions.

The third lesson is to have effective strategic communication. Strategic communication — one that is clear, accurate, transparent, and persuasive — is in fact the strategy.

Again, the Philippines is wanting in this area. Different authorities contradict one another. Worse, some officials are the carriers of fake news. Remember the statement of President Rodrigo Duterte that gasoline can be used as a disinfectant against COVID-19? He was probably joking, but it was a bad joke. Some folks take his every utterance seriously.

Moreover, effective communication must convince the population to get the COVID-19 vaccine. We have to contend with the sad reality that a significant number of our people fear vaccination, borne out of experience. Thousands of families, especially their schoolchildren, suffered from what is known as the Dengvaxia controversy.

Despite the advance warning from some quarters from the scientific and health community, the Department of Health in the previous administration swiftly introduced Sanofi Pasteur’s questionable Dengvaxia vaccine against dengue. Eventually, but with the damage already done, Sanofi warned that the vaccine posed a higher risk of a severe case of dengue for previously uninfected persons.

Fourth, recognizing that the virus cannot be annihilated soon despite the introduction of the vaccine, we have to continue adhering to the protocols of self-protection, especially physical distancing. But social compliance depends to a significant extent on how leaders themselves follow the rules.

A survey and study done by the University College London showed a decrease in social compliance (and Brits typically abide by rules!) when the public found out that their leaders avoided or violated the rules. Making excuses and using loopholes make things worse in gaining trust.

The administration thus should no longer tolerate and should condemn actions such as the Chief of the Philippine National Police having a mañanita (early morning party) and the President’s Spokesperson enjoying the company of dolphins during a strict lockdown or singing loudly in a bar during community quarantine. Pinoys also follow their leaders’ example.

Last but not least, we must recognize that the vaccination program must be a whole-of-society approach. The government, the private sector, and the civil society organizations must coordinate efforts and unite in common strategies for the transparent acquisition and equitable distribution of the vaccine.

Up to now, apart from receiving general pronouncements, the public is not fully informed about the framework, goals, and strategies for vaccine allocation and distribution. We need a bipartisan effort and a broad coalition that will rally around transparency, accountability, equity, and efficiency in the formulation and implementation of the vaccination program. 

 

Filomeno S. Sta. Ana III coordinates the Action for Economic Reforms.

www.aer.ph

2020: Fintech’s most challenging year

2020 was the most difficult year in our lifetime yet. Amidst the maelstrom of this health crisis, a new global order emerged.

The fintech industry found itself at the forefront as people navigate this new way of life. Industry players worked double time to thrive and survive. The primary goal is to ease the Filipinos’ quick migration to and adoption of digital.

Digital payments technology has been in existence for 15 years. In fact, the Philippines pioneered it globally. But it was only during this health crisis that it reached a critical mass. The proliferation of mobile phones triggered this evolution in social behavior. This came with the emergence of e-commerce growing at a rate of 32%. About three years ago, online business mushroomed. Now, it is experiencing exponential growth. We have seen an era of apps surplus globally with over four million. And there are more to come, catering to all sorts of conceivable human interface.

The government’s digital disbursements of social amelioration was one of the highlights this year. Scaling electronic transactions across segments will result in achieving a digital economy. Limited mobility and less physical interaction are primary to pushing digital. Even post-COVID, digital would see more traction.

The Bangko Sentral ng Pilipinas (BSP) released a record number of enabling regulations. This has been an unprecedented move to realize its twin goals: one is shifting 50% of financial transactions to digital, and the other is moving 70% of adult Filipinos into the formal financial system.

Among these milestone regulations are the digital bank and open finance frameworks. BSP Governor Benjamin Diokno underscores digital banks’ relevance in the financial ecosystem.

The FinTech Alliance has remained a thought leader in the industry. It has submitted several position papers to regulators BSP, the Securities and Exchange Commission, the National Privacy Commission, and Congress. It covered subjects on various pieces of legislations and draft regulations. These include digital tax, Bayanihan Acts I and II, and interest capping, among others. It also covered topics on green finance and loan payment moratorium. And issues on personal data processing for loan-related transactions. This includes supporting the government’s push for the full implementation of the national ID.

With the growing digital adoption, it is crucial to ensure its security and the users. Massive cybersecurity awareness amongst consumers has been a primary thrust. Unlocking the potential of green finance technologies will be a 2021 priority. Well aligned with the Paris Agreement and the Sustainable Development Goals (SDG). It will also play a big role in the collection of climate-related data. As there is a need to quantify the cost of climate-related risks. Climate change will be top of our agenda. We have seen a series of typhoons with severe flooding in the country. And this has reached an alarming state. Reducing the carbon footprint must be a universal commitment amongst industry players.

The Alliance was among the signatories of the manifesto for shared prosperity. This initiative was done with 25 Philippine Business Groups. It is a collective long-term aspiration amongst Filipinos on what they want for themselves, and for the country in the next 25 years. It is the result of a long-term visioning process that began in 2015. This was in collaboration with the National Economic Development Authority, and an advisory committee composed of government, private sector, academe and civil society.

 

Lito Villanueva is the founding chairman of the FinTech Alliance.ph. He is the Executive Vice-President and Chief Innovation and Inclusion Officer of RCBC and concurrently the Chief Digital Transformation Advisor for the Yuchengco Group of Companies. He is also a prime mover in the Philippine fintech industry, with over 60 global and regional accolades for digital innovations.

Understanding the new COVID-19 strain

Paranoia is sweeping the land again as a new strain of the coronavirus has emerged.

Last month, a single passenger from the United Kingdom tested positive for the mutated strain. Since then, the Philippine government has declared a travel ban on all flights coming in from the UK until mid-January. In addition, a travel ban and a mandatory 14-day quarantine has been imposed for all those arriving from countries that reported to have the new strain, including Singapore, Australia, Japan, and 17 other countries. The quarantine shall be imposed regardless of the results of a polymerase chain reaction (PCR) test.

In Mindanao, inter-island travel to and from Sabah and Sulu has been prohibited and a naval blockade installed as the mutated virus was recently detected in Sabah.

The new virus strain is said to be 70% more transmissible than the original Wuhan strain. It is also said to result in more serious symptoms, especially among the immunocompromised. The infectiousness of the virus, coupled with its lethality, has made this new strain a more fatal one. It has made this pandemic harder to manage.

But before panic overcomes reason, we must understand the dynamics of this new strain.

The genetic code of the coronavirus is written in its RNA. RNA naturally mutates when it replicates. Some mutations make the virus weaker leading it to die, while others become stronger. In fact, the strain that arrived in Europe earlier this year was already a mutated version of the original Wuhan strain. The coronavirus is similar to the influenza virus in that it is constantly changing. Hence, the need to have new flu shots every year.

Two characteristics make the new strain from the UK more lethal. First, its spike protein allows it to be more effective in binding, entering, and reproducing in human cells. This is why it is more infectious than the original Wuhan strain. (Although it’s been said that this new strain is 70% more transmittable, this is only an inferred estimate, not a proven fact.) Second, its spike protein allows it to be more resistant to antibodies. In other words, it is more robust, more persistent and results in more serious symptoms. Note, a similar strain of the virus was also detected in South Africa where it mutated independently from that of the UK. This tells us that the virus can mutate anywhere on its own, without transmission from a foreigner.

So the next question is — if a virus can mutate the functionality of its spike protein over time, can it mutate to a point where it becomes strong enough to resist the vaccine (also called immunological escape or vaccine escape)? Yes it can. But this does not happen overnight. It takes a series of mutations for a virus to develop enough changes in its spike protein to achieve vaccine escape.

The new mRNA vaccines, particularly those from Pfizer and Moderna, produce a purified spike protein that causes immune responses like fever, muscle aches, and headaches. All these are indicative of our immune system revving-up in response to the vaccine. These antibodies have a neutralizing effect that can knock-out the virus through mass attack. The virus must mutate quite a bit to evade it. Studies suggest that it will take five years for the virus to achieve this mutation. Hence, from what we know today, there is no immediate danger of vaccine escape. The vaccines are strong enough to overcome even the more robust mutated strain of the COVID-19 virus, for now.

So, how do you prevent the virus from mutating into one that can resist the vaccine? By preventing the virus from replicating. In this regard, governments around the world must vaccinate as many people as they can, as quickly as they can. It is also important to remain fastidious about safety protocols like social distancing, hand washing, and mask wearing to suppress viral replication.

The fact that the vaccines are strong enough to resist even the new strain of the virus should not lead us to complacency. We still need to be vigilant since there is no telling how the virus will mutate in the future.

We hope that this time around, the IATF-EID has learned its lesson and will not make the same mistakes as it did before. First of all, it should raise travel bans as quickly as possible and not pussyfoot around China (curiously, mainland China is not included in the list of countries affected by our travel ban, as of this writing). It must establish nationwide testing and genotyping facilities to monitor the spread of the virus and how it is mutating.

Above all, it must not impose a militaristic lockdown, like the ECQ, which the world now recognizes and calls “the dumb bomb.” It is referred to as such for how it uselessly causes severe economic consequences without curtailing the virus’ spread. Rather, it must utilize the “smart bomb,” like South Korea and Vietnam did, which involves aggressive testing, tracking, treatment of the infected and the isolation carriers.

It is also important that the government not be a fear monger since fear is what killed our consumer driven economy in the first place.

As for the rest of the citizenry, let us be informed and vigilant, not afraid.

 

Andrew J. Masigan is an economist

andrew_rs6@yahoo.com

Twitter @aj_masigan

India approves AstraZeneca, local COVID vaccines

NEW DELHI — India’s drugs regulator on Sunday gave final approval for the emergency-use of two coronavirus vaccines, one developed by AstraZeneca and Oxford University and the other by local company Bharat Biotech and a state-run institute.

The decisions mark the first vaccine approvals for the world’s second-most populous country, which after the United States, has recorded the most infections of the coronavirus disease.

It is now expected to start a massive immunization programme within about a week, a government official said, and hopes to inoculate 300 million of its 1.35 billion people free of charge in the first six to eight months of this year.

The AstraZeneca/Oxford shot, already approved in Britain, Argentina and El Salvador, will take the lead and Bharat Biotech’s COVAXIN will be administered under stricter conditions given no efficacy data has been released for it.

“It’s now time to reap the benefits of the robust supply chain infrastructure we’ve put in place for quick and equitable distribution of the vaccine,” said Harsh Vardhan, the health minister of India, which is the world’s biggest vaccine producer and exporter.

“Urge all citizens to entrust the stringent protocols followed for ensuring safety, efficacy and immunogenicity of the approved vaccines.”

Drugs Controller General of India V.G. Somani said the overall efficacy of the AstraZeneca/Oxford vaccine was 70.42%, while Bharat Biotech’s COVAXIN was “safe and provides a robust immune response”.

The British-developed AstraZeneca/Oxford shot is being made locally by the Serum Institute of India (SII) and will be branded COVISHIELD, while Bharat Biotech has teamed up with the government-run Indian Council of Medical Research.

A lawmaker from Prime Minister Narendra Modi’s nationalist party had earlier complained about the apparent preference for the foreign-made vaccine instead of the local one, whose approval has also raised questions about a lack of transparency in the process.

“Vaccines of M/s Serum and M/s Bharat Biotech are being approved for restricted use in emergency situations,” Mr. Somani, the head of the Central Drugs Standards Control Organization, said at a news conference, reading from a written statement. Mr. Somani did not take questions.

Both vaccines will be administered in two doses and stored at 2-8° degrees Celsius (36 to 48°F), he said, without clarifying what intervals between shots were being recommended. Sources said on Saturday the doses would have to be given four weeks apart.

Mr. Somani said the Bharat Biotech vaccine had been approved “in public interest as an abundant precaution, in clinical trial mode, to have more options for vaccinations, especially in case of infection by mutant strains.”

Prime Minister Narendra Modi welcomed the approvals.

“It would make every Indian proud that the two vaccines that have been given emergency use approval are made in India!” he said on Twitter, calling it a sign of a “self-reliant” country.

SII, the world’s biggest vaccine producer, has already stockpiled more than 50 million doses of the AstraZeneca/Oxford vaccine even before securing a formal supply deal with the government.

“All the risks @SerumInstIndia took with stockpiling the vaccine, have finally paid off,” CEO Adar Poonawalla said on Twitter. “COVISHIELD, India’s first COVID-19 vaccine, is approved, safe, effective and ready to roll-out in the coming weeks.”

CONTROVERSY
The AstraZeneca/Oxford vaccine, granted its first approval by Britain last week, is cheaper and easier to use than some rival shots, such as one from Pfizer, Inc. — a major advantage in tackling a pandemic that has claimed more than 1.8 million lives worldwide.

The British shot, however, has been plagued by uncertainty about its most effective dosage ever since data published in November showed a half dose followed by a full dose had a 90% success rate, while two full shots were 62% effective.

The efficacy of the Indian vaccine could “go up much more” than 60% after two doses are given, a source with knowledge of the matter told Reuters. Bharat Biotech earlier said they could produce up to 300 million doses a year.

“While this vaccine addresses an unmet medical need during this pandemic, our goal is to provide global access to populations that need it the most,” the company’s chairman, Krishna Ella, said. “COVAXIN has generated excellent safety data with robust immune responses.”

An opposition lawmaker and former minister, however, questioned the approval process for COVAXIN.

“Bharat Biotech is a first-rate enterprise, but it is puzzling that internationally accepted protocols relating to phase 3 trials are being modified for Covaxin,” Jairam Ramesh wrote on Twitter.

India’s regulator has also received an emergency-use application for the COVID-19 vaccine made by Pfizer and Germany’s BioNTech — the first shot to secure regulatory approval in the West.

India has reported more than 10.3 million COVID-19 cases and around 150,000 deaths, though its infection rate has come down significantly from a mid-September peak.

SII plans to sell the AstraZeneca/Oxford vaccine to the Indian government at about 250 rupees ($3.42) per dose and 1,000 rupees on the private market.

The regulator on Sunday also gave permission to Cadila Healthcare Ltd. to conduct Phase-III clinical trials on 26,000 Indian participants for its DNA-platform vaccine candidate, saying the interim trial data had shown it was “safe” and prompted an immune response under a three-dose regimen. — Reuters

Britain will allow mixing of vaccines on rare occasions

A test tube labeled with the vaccine is seen in front of AstraZeneca logo in this illustration taken, Sept. 9, 2020. — REUTERS/DADO RUVIC

LONDON — Britain will allow people to be given shots of different coronavirus disease 2019 (COVID-19) vaccines on rare occasions, despite a lack of evidence about the extent of immunity offered by mixing doses.

In a departure from other strategies globally, the government said people could be given a mix-and-match of two COVID-19 shots, for example if the same vaccine dose was out of stock, according to guidelines published on New Year’s Eve.

“(If) the same vaccine is not available, or if the first product received is unknown, it is reasonable to offer one dose of the locally available product to complete the schedule,” according to the guidelines.

Mary Ramsay, head of immunizations at Public Health England (PHE), said this would only happen on extremely rare occasions, and that the government was not recommending the mixing of vaccines, which require at least two doses given several weeks apart.

“Every effort should be made to give them the same vaccine, but where this is not possible it is better to give a second dose of another vaccine than not at all,” she said.

COVID-19 has killed more 74,000 people in Britain — the second-highest death toll in Europe, and health officials are racing to deliver doses to help end the pandemic as fears grow that the health service could be overwhelmed.

Earlier this week, the government reactivated emergency hospitals built at the start of the outbreak as wards fill up with COVID-19 patients.

Britain has been at the forefront of approving the new coronavirus vaccines, becoming the first country to give emergency authorization to the Pfizer/BioNTech and the AstraZeneca/University of Oxford vaccines last month.

Both vaccines are meant to be administered as two shots, given several weeks apart, but they were not designed to be mixed together.

The government’s new guidelines said there “is no evidence on the interchangeability of the COVID-19 vaccines although studies are underway.”

However, the advice said that while every effort should be made to complete the dosing regimen with the same vaccine, if the patient is at “immediate high risk” or is considered “unlikely to attend again” they can be given different vaccines. 

Britain sparked controversy earlier this week by announcing plans to delay giving the coronavirus vaccine booster shot in an attempt to ensure more people could be given the more limited protection conferred by a single dose.

The top US infectious diseases expert, Anthony Fauci, said on Friday he did not agree with the British approach of delaying the second dose up to 12 weeks.

“I would not be in favour of that,” he told CNN. “We’re going to keep doing what we’re doing.” — Reuters

Russia inoculates over 800,000 people against coronavirus

MOSCOW — More than 800,000 people in Russia have been inoculated so far against the new coronavirus and more than 1.5 million vaccine doses have been dispatched, Health Minister Mikhail Murashko said on Saturday.

Russia, which began rolling out its Sputnik V vaccine in early December, has the world’s fourth higher number of coronavirus disease 2019 (COVID-19) cases and is putting high hopes on several vaccines it plans to produce.

From Jan. 1, people who are inoculated in Russia will get an electronic vaccination certificate, the TASS news agency quoted Mr. Murashko as saying. The ministry is keeping a database of Russians who have been vaccinated, TASS reported.

The Sputnik V vaccine, which Russia already started supplying to other countries, is administered in two doses, which use different components, 21 days apart.

Russia sent 300,000 doses of the vaccine to Argentina last week, causing frustration at home, with some people arguing that more shots should be made available at home.

On Saturday, Russia reported 26,301 new coronavirus cases in the last 24 hours, taking its total caseload to 3,212,637.

Authorities said 447 people had died in the past 24 hours, taking the official death toll to 58,002. — Reuters