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LANDBANK’s agricultural loans hit P238B

STATE-RUN Land Bank of the Philippines (LANDBANK) saw its loans to the agriculture sector increase by 0.55% to P237.62 billion last year.

The bank said in a statement on Thursday that loans to the sector went up from the P236.31 billion disbursed in 2019.

Of last year’s total, 60% or P142.75 billion was lent to small, medium, and large agribusiness enterprises, 21% or P50.89 billion went to local government units (LGUs) and government-owned and -controlled corporations for their agriculture projects, and 19% or P43.98 billion assisted small farmers and fishers, cooperatives and farmers’ associations, rural financial institutions and other conduits.

The loans reached 2.67 million farmers and fisherfolk nationwide, beating the bank’s 2020 target of two million.

“The year 2020 was undoubtedly a challenging one, but LANDBANK remained steadfast in its commitment of delivering intensified support to the country’s agriculture sector. We will continue to address the specific requirements of more farmers, fishers, and other players in the local agribusiness value chain amid the pandemic and beyond,” LANDBANK President and CEO Cecilia C. Borromeo was quoted as saying. 

The bank served as conduit for the lending programs of the Department of Agriculture (DA) and the Department of Agrarian Reform (DAR) for farmers and fisherfolk.

As of end-2020, it released P8.36 billion for the credit financing programs of the DA, such as the Agricultural Competitiveness Enhancement Fund, the Socialized Credit Program under the Sugarcane Industry Development Act, the Expanded Rice Credit Assistance under the Rice Competitiveness Enhancement Fund, and the Survival and Recovery Assistance Program for Rice Farmers.

Meanwhile, P600 million was disbursed under the DAR’s Credit Assistance Program for Program Beneficiaries Development.

LANDBANK mainly provides credit to the agriculture and fisheries sector, micro, small and medium businesses, countryside financial institutions, LGUs, and government institutions.

Republic Act 10000 or the Agri-Agra Reform Credit Act of 2009 mandates banks to set aside 15% of their loanable funds to the agriculture sector and 10% for agrarian reform-related projects.

Bangko Sentral ng Pilipinas data showed banks once again failed to comply with the minimum lending requirement for these two sectors in the third quarter of 2020. Lenders only released a combined P662.62 billion from July to September 2020 against the required agri-agra credit allocation of P1.627 trillion. — B.M. Laforga

Seeking the approval of a difficult, toxic boss

I’m a manager. Over the past three months, I have observed how difficult it has become to obtain my department vice-president’s approval for my proposals, including an important but inexpensive training program for my team. Even a waste reduction proposal has been ignored. Most of the time, my ideas fall on deaf ears, and often elicit irrelevant questions even for a simple proposal. Last week, he was even somewhat combative when I allowed two of my workers to go on leave for a week. Can you help me decipher what’s happening? How do I manage the situation? — White Horse.

A man was perplexed by his wife’s refusal to admit her hearing problem. Speaking with a company physician, he asked: “How can I get my wife to admit that she is hard of hearing?” The doctor replied: “I’ll tell you what to do. When you arrive home this evening, peek your head through the door and ask — ‘Honey, what’s for dinner tonight?’ If she doesn’t answer, go into the living room and repeat the question.”

“If she still does not answer, walk into the kitchen and ask: ‘Honey, what’s for dinner?’ If she still does not hear you, then walk right up behind her and speak directly into her ear: ‘Honey, what’s for dinner?’ And if she still doesn’t reply, then convince her to see a specialist for her hearing troubles.”

That evening, the man arrived home from work. Just as instructed, he opened the front door and called out: “Honey, what’s for dinner tonight?” He listened carefully but there was no reply. He walked into the living room and repeated: “Honey, what’s for dinner?” No answer. He then walked into the kitchen and asked the same question. Still no answer.

The man walked right up behind his wife and spoke directly into her ear: “Honey, what’s for dinner?” The wife turned around and replied: “My goodness, for the fourth time, I said, we’re having spaghetti!”

The lesson of this story is that you need to take a good look at yourself and your work performance, and not simply define the problem as one being caused by your boss. What most people, even seasoned managers, tend to forget is that dealing with the boss’s individual personality and management style is less than half of the problem.

BASIC APPROACHES
You only have to look in the mirror to possibly discover the real issue. Is it about your performance or your credibility with the boss, or both? Since you mentioned that your boss changed his attitude towards you three months ago, then it could have something to do with what you did or failed to do prior to those months.

How loyal are you to your boss? Did you at one time criticize your boss to a trusted work colleague? Maybe you’ve created a situation that put your boss in a bad light. We don’t know. And yet, there could be many explanations for his attitude towards you. Therefore, getting your boss to appreciate your efforts can’t be achieved overnight. It takes time to regain your boss’s confidence. In that case, we have to explore the following tactics:

One, talk to your boss and rediscover his unspoken expectations. Does he want you to inform him about almost everything, including minor administrative tasks like approving leave applications? He may have changed his style to become detail-oriented, unlike before. To understand his “new” style, make a conscious effort to do things in terms of his “new” expectations.

Two, avoid being argumentative even if you think you’re correct. You may have been comfortable dealing with him before, but you need to adjust to the circumstances. Before you open your mouth, consider whether your ideas are not directly opposed to the boss’s ideas, your input is solicited. Be courteous. Instead of making point-blank statements expressing your doubts about his ideas, say something like: “If you don’t mind, would you like to hear another option?”

Three, make your boss look good in the eyes of his boss and other people. Even if he’s the worst credit-grabber, accept it. The fact remains that he’s still your boss. You may feel cheated that your boss is getting the credit for your direct accomplishments, but that’s nothing if you really want to grow in that company. He controls your career path and it should work to your advantage if he keeps on getting all the credit for all your hard work.

Last, protect your boss when something goes wrong in your department. If your boss has committed a mistake, you can regain his trust by displaying your loyalty to him. Take the blame if necessary, unless your boss has clearly violated a major company regulation or even the law of the land. If it’s not a serious blunder, consider helping your boss cope with the situation.

CHAIN OF COMMAND
Whatever happens, don’t bypass your boss. Follow the chain of command even if you’re not in the military. It is a standard practice for all organizations that everything must have your boss’s prior approval. This includes post facto “for-your-information” notifications that may be important to your boss. Assume you don’t know many of the things that could adversely affect your work relationship.

Working for a long-time boss isn’t not necessarily better or worse than establishing a new relationship with a new boss. Many times, the differences may be subtle, if not invisible if you don’t know how to read body language. Therefore, it’s crucial to keep your eyes open and your ears on the ground to avoid surprises.

Otherwise, you may find yourself on the losing end.

 

Send anonymous questions to elbonomics@gmail.com or via https://reyelbo.consulting

Villar group orders COVID-19 vaccine for employees, commits to donate

THE VILLAR group, via AllHome Corp., has signed a deal with biopharmaceutical firm AstraZeneca to procure coronavirus disease 2019 (COVID-19) vaccines for its employees and for donation to the public.

In a statement on Thursday, the company said it had signed an agreement, together with the Philippine government, local government units, private sector donors, and AstraZeneca to bring another 17 million doses of COVID-19 vaccine to the country.

AllHome Chairman Manuel B. Villar, Jr. said the vaccine aims to not only save lives, but also jobs and businesses.

“The vaccine will not only provide protection from the virus, but it will help boost consumer confidence to go out again. It is by helping each other during this time that we can start our journey to economic recovery,” Mr. Villar was quoted as saying.

AllHome said the donation has been made possible through Go Negosyo’s “A Dose of Hope Program”.

Meanwhile, AllHome Vice Chair Camille A. Villar said the company continues to find ways to help Filipinos amid the pandemic.

“We continue to find more ways of extending help to even more Filipinos through advocating for safe shopping in-store and providing contactless shopping options to consumers, donating learning tools to aid in distance-learning program, and most recently, the procurement of COVID-19 vaccines for AllHome employees and the public,” Ms. Villar was quoted as saying.

By the end of 2020, AllHome said it had a network of 50 stores across the country.

During the third quarter of 2020, the company posted an attributable net income of P312 million, higher than the P5 million it posted in the previous quarter. Its revenues during the period reached P3.47 billion, higher by 11% than in 2019.

Separately, Villar-led Golden Bria Holdings, Inc. said the Securities and Exchange Commission had approved its petition to change its corporate name to Golden MV Holdings, Inc.

It said the name change is meant to provide flexibility in the expansion of its business. The required written assent from its stockholders to approve the amendment was received on Dec. 12 last year, it added.

On Thursday, AllHome and Golden Bria shares at the stock exchange were both flat at P8.70 and P450 apiece, respectively. — Revin Mikhael D. Ochave

The leasing alternative

DOING business in today’s world has never been more challenging and unpredictable than ever before. Companies need to manage resources very carefully and expanding the business via investment in durable equipment needs to be done in the most efficient manner. While outright cash purchase, bank loans or supplier credit may be the most common alternatives, the prudent businessman or chief financial officer (CFO) will look at leasing as a viable option as it can provide the best leverage for asset acquisition where 95% of total cost can be financed, as provided for under Republic Act 8556.

A lease is a contractual arrangement where the owner or lessor of an asset allows the user or lessee to use an asset/equipment based on a mutually-agreed monthly lease payments. It gives an avenue for business owners to make use of assets at a low initial cash outlay and match monthly payments with economic benefits, income or savings derived from the acquired equipment.

All businesses require asset acquisition: vehicles, racking systems, capital equipment for IT and office, medical and hospital, industrial and heavy equipment, trucks, and the like. A lease can be structured as short or long term, depending on the economic life of the leased asset based on usage and the nature of the business. Leasing companies have also become creative over time as they can now offer various end of term options, lease structures on guaranty deposits, residual values and add-on services.

There are different types of leasing arrangements and various considerations that business owners can identify with their preferred leasing partners. Reputable leasing companies are mostly joint ventures with global players from Japan, including Orix Metro Leasing & Finance Corp., BPI Century Tokyo Lease & Finance Corp., BDO Finance Corp., RCBC Leasing & Finance Corp. and PNB-Mizuho Leasing & Finance Corp.

FINANCE LEASE
Finance lease, also known as a full-payout lease, capital lease or lease-to-own, is a non-cancelable type of lease that obligates the lessee to make periodic lease payments during the lease term. This type of lease is popular across various industries for the acquisition of specialized and non-specialized equipment.

A finance lease generally works like a loan but involves a lower initial cash outlay, with no collateral required and no chattel mortgage fees.  The asset, which is owned by the lessor, will serve as the security for the financing.

OPERATING LEASE
Meanwhile, a lease is classified as an operating lease if it does not transfer substantially all the risks and rewards incidental to ownership. The most valuable characteristics of an operating lease are its end of the lease term options: (1) renew the lease if the economic benefits from the asset can still be recognized by the lessee, (2) purchase the equipment at a mutually agreed price, or (3) return the equipment eliminating the costs associated with obsolescence or disposal.

An operating lease also provides low initial cash outlay with no collateral required, similar to a finance lease. Also, since it is essentially a rental contract, there will be no documentary stamp tax nor chattel mortgage fees. If you are a VAT-registered company, the rental payments provide input VAT to the company. All these end of term options and tax benefits become significant for companies that manage a large fleet of non-specialized assets, such as vehicles, which are usually periodically updated or upgraded. This can also be packaged to support company car plan programs, which may allow an employee to purchase the assigned vehicles at the end of the lease term.

Most advanced economies in the world like Japan, US and Europe use leasing as a standard mode of acquisition for various equipment and long-term vehicle rentals are commonplace. So if you are contemplating on buying capital equipment for your industrial, manufacturing, warehouse operations, refleeting your pool of trucks or employee vehicles, upgrading or acquiring new hospital equipment, consider leasing a primary option to leverage on the asset and generate substantial savings.

Thank you to Christine Bandol, president of PNB-Mizuho Leasing, for the inputs in this article.

 

Flor Gozon Tarriela is chairman of the Philippine National Bank, PNB Capital and PNB Mizuho Leasing & Finance Corporation.   She is a former Undersecretary of Finance and the first Filipina vice-president of Citibank N.A.  She is a trustee of FINEX and an Institute of Corporate Directors fellow

How PSEi member stocks performed — January 28, 2021

Here’s a quick glance at how PSEi stocks fared on Thursday, January 28, 2021.

Shares extend decline on 2020 GDP contraction

STOCKS closed lower on Thursday following the release of data showing the Philippine economy continued to shrink in the fourth quarter, resulting in a full-year contraction in gross domestic product (GDP).

The bellwether Philippine Stock Exchange index (PSEi) declined 11.77 points or 0.17% to close at 6,851.84 yesterday, while the broader all shares index fell 22.98 points or 0.55% to end at 4,108.34.

Timson Securities, Inc. Head of Online Trading Darren Blaine T. Pangan said in a mobile phone message that the local market closed lower as investors took their cue from the GDP data released yesterday.

The Philippine Statistics Authority reported that GDP shrank by 9.5% in 2020, the worst contraction on record. This, after the economy contracted by 8.3% in the fourth quarter.

Socioeconomic Planning Secretary Karl Kendrick T. Chua attributed the economy’s slump to weak private consumption, saying in a briefing that continued restrictions on mobility hampered spending.

Philstocks Financial, Inc. Senior Research Analyst Japhet Louis O. Tantiangco meanwhile said the market ended in negative territory as investors continued to worry about the country’s coronavirus disease 2019 (COVID-19) cases.

“Bargain hunting was seen in Thursday’s trading, bringing the PSEi to as high as 6,918.30 intraday,” Mr. Tantiangco said in a mobile phone message.

“Selling pressure eventually took over however backed by worries over the country’s COVID-19 situation and how it may slow down or delay our economic recovery,” he added.

The Department of Health reported 1,169 new COVID-19 cases on Thursday, which brought the country’s tally to 519,575.

Quezon City recorded the highest number of new cases at 57, followed by Isabela at 54, and Manila City, Davao City and Rizal at 42 each.

Majority of sectoral indices closed lower on Thursday. Mining and oil retreated by 189.85 points or 2.16% to 8,577.98; services went down 21.54 points or 1.42% to 1,489; industrials shrank 42.86 points or 0.48% to 8,876.44; and financials lost 5.45 points or 0.38% to 1,410.91.

Meanwhile, holding firms rose 6.48 points or 0.09% to 7,024.45 and property improved by 2.94 points or 0.08% to 3,478.04.

Value turnover amounted to P8.80 billion on Thursday with 56.22 billion issues switching hands, lower than the P10.68 billion with 98.96 billion shares seen in the previous session.

Decliners beat advancers, 136 versus 73, while 53 names ended unchanged.

Net foreign selling meanwhile declined to P1.31 billion yesterday from the P1.37 billion in net outflows logged on Wednesday.

“6,700 may be considered the nearest support area, while 7,300 is where resistance may be pegged at,” Timson Securities’ Mr. Pangan said. — Revin Mikhael D. Ochave

Peso retreats on record GDP decline

THE peso weakened versus the dollar on Thursday as the country logged its worst recession on record.

The local unit closed at P48.11 per dollar on Thursday, shedding 3.5 centavos from its P48.075 finish on Wednesday, data from the Bankers Association of the Philippines showed.

The peso opened Thursday’s session lower at P48.115 per dollar. Its intraday low was at P48.145, while its best showing for the session was at P48.097 against the greenback.

Dollars exchanged increased to $1.188 billion on Thursday from $1.123 billion on Wednesday.

The record gross domestic product (GDP) contraction last year caused the peso to decline versus the dollar, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said. 

GDP shrank 8.3% in the fourth quarter to bring the full-year contraction to 9.5%, the Philippine Statistics Authority reported yesterday. The 2020 figure matched the worse end of the government’s -8.5 to -9.5% estimate and was a turnaround from the six percent GDP growth logged in 2019.

Meanwhile, a trader said the peso depreciated following dovish hints from the US Federal Reserve.

The Fed on Wednesday kept benchmark rates near zero and made no change to its monthly bond purchases, Reuters reported.

Fed Chairman Jerome Powell said their efforts to support the economy until Americans in sectors that have lost jobs come back to the workforce.

“The risks are in the near term, frankly,” amid the new strain of the virus, Mr. Powell said. “There is good evidence to support a stronger economy in the second half of this year.”

For today, Mr. Ricafort gave a forecast range of P48.09 to P48.14 per dollar while the trader sees the peso moving within the P48.05 to P48.25 band. – L.W.T. Noble with Reuters

US vows to help Manila in case of war vs China

THE US under President Joseph R. Biden, Jr. has affirmed its commitment to help the Philippines in case its naval ships are attacked by China amid growing tensions in the South China Sea.

The US would help its former colony and other claimant countries stand up against Chinese aggression in the disputed waterway, Antony J. Blinken, whom the US Senate confirmed as secretary of state this week, told Philippine Foreign Affairs Secretary Teodoro L. Locsin, Jr.  during a call on Thursday.

“Secretary Blinken stressed the importance of the Mutual Defense Treaty for the security of both nations, and its clear application to armed attacks against the Philippine Armed Forces, public vessels or aircraft in the Pacific, which includes the South China Sea,” US Department of State spokesman Edward Price said in an e-mailed statement.

He also said the US rejects China’s maritime claims in the major waterway. China claims more than 80% of the sea based on a nine-dash line drawn on a 1940s map.

Philippine Senator Panfilo M. Lacson, who heads the defense committee, said the Philippines should consider keeping the defense pact in light of the US position.

“The Mutual Defense Treaty is one yet untapped weapon in our arsenal,” he tweeted. “I certainly hope we do not draw that weapon. Meantime, we might as well keep it there.”

Mr. Blinken, a graduate of Harvard University and Columbia Law School, joined the State Department in 1993. He later took posts in the Clinton White House and on the staff of the US Senate foreign relations committee, where he worked closely with Mr. Biden, then a senator from Delaware.

The Philippines this week filed a diplomatic protest against China after it passed a law allowing its coast guard to fire at foreign vessels in the South China Sea.

While enacting law is a sovereign prerogative, China’s latest law is a verbal threat of war to any country that defies it, Mr. Locsin tweeted on Wednesday.

The presidential palace Malacañang on Thursday welcomed the country’s diplomatic protest filed against China over a newly passed law that allows its maritime forces to resort to violent means against foreign vessels.

Secretary Teodoro L. Locsin, Jr. on Wednesday filed a diplomatic protest against the said law, saying it is “verbal threat of war to any country that defies the law.”

Presidential spokesman Harry L. Roque, Jr. said the protest proves that the Philippines is committed to domestic and international laws.

“This will prove that the Philippines is fully committed to the rule of law and will assert all its rights available under existing principles of international law to defend its interests,” he said in a televised press briefing.

Mr. Roque remained firm that Beijing must follow obligations under the United Nations (UN) Convention on the Law of the Sea, which only permits the use of force in “well-defined exceptions” pending the authorization of the UN Security Council.

The new China law allows the Chinese Coast Guard to “take all necessary measures, including the use of weapons when national sovereignty, sovereign rights, and jurisdiction are being illegally infringed upon by foreign organizations or individuals at sea.”

The country will remain “friendly” to Beijing even after the foreign superpower has allowed its maritime forces to fire on foreign vessels, Mr. Roque said. “Our independent foreign policies intend to be friendly with anyone and enemy to no one, but we will protect our national interest.”

Mr. Roque said the diplomatic protest won’t affect the country’s procurement of coronavirus vaccines from China.

The Philippine government has already sealed deals with China’s Sinovac BioTech Ltd. for 25 million COVID-19 vaccine doses.The Chinese government also donated 500,000 vaccine doses to the country.

“That has no effect on vaccine procurement because it is a different issue. A vaccine is actually a humanitarian act of the entire planet earth in response to a humanitarian disaster,” he said in mixed English and Filipino.

President Rodrigo R. Duterte, known for his strong ties with China, had long shown preference for the vaccines developed by the Chinese drug maker and Russia’s Gamaleya National Center of Epidemiology and Microbiology.

Malacañang Palace on Monday said the use of force is prohibited under international law. States may use force in self-defense or when authorized by the United Nations Security Council, presidential spokesman Harry L. Roque told an online news briefing.

Any laws passed by nations must be according to the UN Convention on the Law of the Sea, which China had agreed to, he added.

CODE OF CONDUCT
Mr. Roque said President Rodrigo R. Duterte want claimants to disputed areas in the South China Sea to finish a proposed code of conduct and adhere to it to ease tensions.

Mr. Locsin on Monday urged “self-restraint” after opposition Senator Risa N. Hontiveros-Baraquel said the Chinese law was a negative development.

“It’s none of our business,” he tweeted then. “It is China’s business what laws it passes, so please, a little self-restraint.”

“I devised a visa rubber stamp that stamps most of the South China Sea and parts of North Borneo as our national territory and no one has complained,” Mr. Locsin had said.

Ms. Baraquel noted that while China peddles coronavirus vaccines as a global public good, it trashes the remaining peace in the disputed waterway.

The National People’s Congress standing committee of China passed the Coast Guard Law that will allow its coast guard to use “all necessary means” against foreign vessels that threaten them, according to the South China Morning Post.

Ms. Baraquel said the measure would escalate tensions at sea. She urged the Philippine military to plan a strategy should there be threats to the Philippines.

The Permanent Court of Arbitration in 2016 favored the Philippines in a lawsuit that rejected China’s claim to more than 80% of the South China Sea. China has rejected the ruling but continues to negotiate with the Philippines and other Southeast Asian nations to come up with a code of conduct.

China has been building artificial islands in the disputed Spratly Islands and setting up installations including several runways.

The Philippine Foreign Affairs department last year filed several diplomatic protests against China over a naval weapon-pointing incident and an attempt to set up two new districts within Philippine territory in the South China Sea.

Ms. Baraquel last week said China’s vaccine diplomacy might be in exchange for the Philippines’ interest in the South China Sea.

Three American aircraft carriers patroled the Indo-Pacific waters for the first time in nearly three years in June, a massive show of naval force in a region roiled by spiking tensions between the US and China.

The patrol of the three warships, accompanied by Navy cruisers, destroyers, fighter jets and other aircraft came as the US escalated criticism of China’s response to the coronavirus pandemic, its moves to impose greater control over Hong Kong and its island-building activities in the waterway.  — Charmaine A. Tadalan

Gov’t approves emergency use of AstraZeneca COVID vaccine

THE LOCAL Food and Drug Administration (FDA) has approved the emergency use of AstraZeneca Plc’s coronavirus vaccine in the Philippines, the second approval after Pfizer, Inc.

Evidence and data show it is reasonable to believe that the vaccine might be effective against the coronavirus disease 2019 (COVID-19) virus, FDA Director General Rolando Enrique D. Domingo told an online news briefing on Thursday. The benefits outweigh potential risks, he added.

The vaccine had no safety concerns and its adverse effects were “transient and mostly mild to moderate, similar to common vaccine reactions,” he said.

AstraZeneca’s vaccine has an efficacy of 70% after the first dose and requires a second dose after four to 12 weeks, Mr. Domingo said.

In a statement, the British drug maker said the vaccine could be given to people 18 years old and above. 

It can be stored and handled at normal refrigerated conditions at 2 to 8 degrees Celsius for at least six months.

“This emergency use authorization (EUA) will give millions of Filipinos access to AstraZeneca’s effective, well-tolerated and simple-to-administer vaccine once supply becomes available,” AstraZeneca Philippines Country President Lotis Ramin said in the statement.

“We will continue to fulfill our commitment to provide broad and equitable access at no profit as we work with the Philippine government to pave the way for a return to normalcy and the country’s full economic recovery,” she added.

The National government, local government units (LGUs) and private sector signed an agreement to buy 17 million doses of Astrazeneca vaccines this month.

Russia’s Gamaleya Research Institute of Epidemiology and Microbiology, China’s Sinovac Biotech Ltd. and India’s Bharat Biotech also have pending applications for emergency use in the Philippines. — Vann Marlo M. Villegas

Nationwide round-up (01/28/21)

Palace says 3rd stimulus package not needed for now

A third round of assistance programs to cushion the economic impact of the coronavirus pandemic is not necessary for now, Malacañang said on Thursday.

“We call our 2021 budget a stimulus package. It includes a trillion for Build-Build-Build, which will provide millions of jobs for our countrymen. For now, we will use our budget as a stimulus. Let’s see first if the (budget) will be effective, otherwise that will be right that we will have a Bayanihan III,” Presidential Spokesperson Harry L. Roque, Jr. said in mixed English and Filipino during a televised news briefing.

He also said the President is set to issue a price ceiling on food items to alleviate rising costs.

Emmanuel J. Lopez, dean of the Graduate School of Colegio de San Juan de Letran, disagrees saying, “The government cannot just impose price control on food items considering that it is supply-based. The least that the government can do is stimulate the economy by providing stimulus package through increase consumer spending to activate all sectors of the economy, inducing production of now stagnant agriculture sector,” he told BusinessWorld in a Viber message.

The country’s gross domestic product (GDP) contracted by 9.5% in the last quarter of 2020, according to latest data of the state statistics agency. While government expenditure grew 4.4% year-on-year in the same quarter, household spending declined by 7.2%.

“Rising food prices amid high unemployment and collapsing family incomes just makes a real stimulus package all the more urgent. And even more so with today’s report that the economy contracted 9.5% last year,” IBON Foundation Executive Director Sonny A. Africa told BusinessWorld in a Viber message on Wednesday.

Two laws were passed last year — the Bayanihan to Heal as One Act, also known as the Bayanihan 1 under Republic Act No. 11469, and the Bayanihan to Recover as One Act or Bayanihan II under Republic Act No. 11494 — providing funding for coronavirus response measures. Bayanihan 1 reallocated about P275 billion of the 2020 budget for the emergency subsidy program, while Bayanihan II provided P165.5 billion for measures to boost the economy.

A Bayanihan III law under House Bill No. 8031, which provides for an additional P400-billion stimulus package, has been filed by Marikina Rep. Stella Luz A. Quimbo. It is intended to respond to the challenges brought about by the pandemic along with the onslaught of several typhoons late last year.

“I urge the economic managers to take a second look at the Bayanihan III bills pending in Congress. My version proposes a 400-billion-peso spending, P330 billion as COVID response and P70 billion as disaster response,” she told BusinessWorld in a Viber message. — Kyle Aristophere T. Atienza

LTO to be probed over failure to implement bigger motorcycle plates

THE Land Transportation Office (LTO) will be investigated by the Senate for the slow implementation of the Motorcycle Crime Prevention Act, which Senator Richard J. Gordon said was a reflection of the agency’s “incompetence.”

LTO officials reported before the Senate justice committee hearing on Thursday that they have produced just one million new motorcycle plates out of its 13 million target by 2022.

“I will now call a formal hearing of the Blue-Ribbon committee motu proprio,” Mr. Gordon said during the hearing on the spate of killings in the country.

“We will now call you to answer why you must not be charged for malfeasance, misfeasance and nonfeasance, all the way to the secretary of transportation to the LTO commissioner.”

The law, enacted in 2019, is intended to prevent the killings by riding-in-tandem gunmen through the issuance of bigger, more readable and color-coded number plates.

LTO Operations Division Chief Mercy Jane Paras-Leynes initially told the committee that the supplier has so far produced 1,000 plates that were distributed in Metro Manila, then later clarified the LTO has produced one million upon verification.

On this note, Mr. Gordon questioned the competence of the agency.

“It’s called incompetence. You do not come here and tell us 1,000 then when threatened with a Blue-Ribbon investigation, it will become million,” the senator said, partly in Filipino.

“You think we’re fools here? You’re insulting the intelligence of the Senate… you better prove that you have one million.” — Charmaine A. Tadalan 

Regional Updates (01/28/21)

Volcanologists, local officials allay fears over Pinatubo earthquakes

GOVERNMENT scientists said on Thursday that Mt. Pinatubo remains inactive despite the series of earthquakes recently recorded around the volcano, but at the same time stressed the need for communities to always be on alert for disaster warnings from authorities. “DOST-PHIVOLCS would like to assure the public that Pinatubo Volcano remains at Alert Level 0 and remains in quiescent condition,” said the Philippine Institute of Volcanology and Seismology (PHIVOLCS) in a January 27 advisory. PHIVOLCS, which is under the Department of Science and Technology (DoST), said the earthquakes serve as a reminder “that several faults occur around the volcano and that these can generate earthquake activity that can be sometimes imperceptible and harmless but that can also sometimes be damaging.” From January 20 to 27, the agency recorded 826 “imperceptible earthquakes east-northeast of Pinatubo,” with strongest at magnitude 2.5 on Jan. 25. “Based on the general distribution of located events, these earthquakes were generated along a segment of the Sacobia Lineament, a fault that was last active during the post-eruption period of 1991,” PHIVOLCS said.

NO CURRENT THREAT
The most recent strong earthquake at magnitude 6.1 in the area was on April 22, 2019, which caused fatalities and significant damage to buildings, roads and other structures. “Although there is currently no threat from the above recent earthquake activity, communities and local government units (LGUs) surrounding the volcano, nonetheless, have to be reminded to be always prepared for both earthquake and volcanic hazards and to build on the lessons of what they have experienced in the past years,” PHIVOLCS said. The provincial government of Pampanga and several other local governments have issued statements citing PHIVOLCS to allay residents’ fears. They also assured that disaster preparedness systems are in place and emergency teams are ready to respond. “We are ready in terms of logistics in the event of a natural disaster. Ang Mt. Pinatubo eruption hindi bago sa atin. Mas handa tayo ngayon (is not new to us. We are more prepared now,)” said Angeles City Mayor Carmelo Lazatin, Jr. in a statement. Mt. Pinatubo’s eruption on June 15, 1991 was one of the largest in the 20th century, with some surrounding towns buried under lahar and gas cloud was dispersed around the globe. — MSJ

DA partners with state universities for agri sector data

THE Agriculture department is teaming up with 32 state universities and colleges for research activities aimed at improving and updating sector data and create a regional database on agricultural and rural development. Agriculture Secretary William D. Dar  signed the agreement on Jan. 26 with various institutions such as Batangas State University, University of the Philippines–National College of Public Administration and Governance, Pampanga State Agricultural University, and University of Eastern Philippines, among others. According to the Department of Agriculture (DA), the University of the Philippines (UP) will receive P3 million as budgetary support, while the other academic institutions will get P1.5 million each for the project. The fund will come from the DA’s P90-billion budget this year. “The agreement will enhance good governance, transparency, proper planning, designing, implementation of various programs and projects of DA,” Mr. Dar said. Under the partnership, the DA will fund SUCs (state universities and colleges) to gather information on the impact of the government’s programs on target communities and beneficiaries, do a survey on current sources of funding for activities of farmers and fisherfolk, analyze the utilization of technology in every region, and validate local farmers and fisherfolk databases. The University of the Philippines will spearhead the development of the sampling design and other research materials. — Revin Mikhael D. Ochave

DoLE says employers currently unable to meet wage demands

THE Department of Labor and Employment (DoLE) said Thursday that pandemic-weakened companies cannot as yet absorb a sharp rise in the minimum wage, as demanded by unions.

Labor Secretary Silvestre H. Bello III said in a televised briefing: “We have to consider so many things. We need to balance the interests of workers with that of the employers. What is important for workers right now is their status of employment. A P700 or P750 national minimum wage cannot be handled by employers right now.”

Labor groups called for an increase in the minimum wage in the wake of rising prices of basic goods.

Mr. Bello, speaking in English and Filipino, said micro, small and medium enterprises, which comprise nearly 99% of the registered businesses, will be the hardest hit by a wage hike. He said they are barely surviving due to the pandemic.

The P537 daily minimum wage in Metro Manila is equivalent to P434 when adjusted for inflation.

The nominal daily minimum wage outside the National Capital Region (NCR), on the hand, ranges from P310 to P420, falling to P234 and P333, respectively, when adjusted for inflation.

Kilusang Mayo Uno, a labor union, said it will refile its petition to increase the minimum wage in the NCR. An earlier petition had been set aside by the NCR wage board in June due to the pandemic.

A wage increase has become “more urgent” because of rising food prices, the group said.

“As of now the business community cannot afford to provide salary increases… Let the economy normalize before getting back to the bargaining table,” Emmanuel J. Lopez, dean of Colegio de San Juan de Letran Graduate School, told BusinessWorld in a Viber message Thursday.

Instead of increasing wages, he said the government should focus on properly utilizing the P4.5-trillion national budget this year to help pandemic-hit sectors bounce back.

At the briefing, Mr. Bello said more than 50,000 Filipino migrant workers have so far been inoculated against the coronavirus.

He said as many as 60,000 overseas Filipino workers (OFWs) withdrew their requests for repatriation after receiving vaccinations in their host countries.

“Of the 500,000 OFWs who asked for repatriation, some 60,000 backed out since they have already been vaccinated,” he said. — Kyle Aristophere T. Atienza

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