Sen. Cynthia Villar said the Department of Agriculture (DA) has two rice programs that could help boost the country’s rice sufficiency and augment the income of farmers and other stakeholders in the agricultural sector.
Villar, chairperson of the senate committee on agriculture and food, said these programs are the National Rice Program and the Rice Competitiveness Enhancement Fund (RCEF). “The National Rice Program is one of the banner programs of the DA, which focused on rice farming under the Office of the Secretary. It has been there since 1986 under six presidents,” said Villar. She said DA classifies it as subsidy to accelerate the adoption of modern rice technology toward increased yield, increase income and disaster risk reduction.
THE FIRST RICE PROGRAM: THE NATIONAL RICE PROGRAM
For 2021, Villar said the National Rice Program has a budget of P15.5 billion to be spent as follows:
Hybrid Seeds – P6.2 B Inbred Seeds –P375 M Fertilizer – P4.4 B Others –P858.7 M Training – P998.2 M R & D – P658.7 M Equipment – P1 B Irrigation – P745.9 M ———————– TOTAL P15.5 B
“However, this computation of allocation for rice through the years should have included the budgets for the irrigation through the NIA, averaging P31 billion a year and that of NFA which is subsidized yearly by P7 billion for the Buffer Stocking Program in times of calamites, fortuitous events, or shortfall in production,” noted Villar.
She also pointed out that the poverty situation in rural areas has not significantly changed during the past 34 years. “The reduction was quite modest in comparison with that of other ASEAN countries. Thus, the strategic goal of the rice sector development program should be to increase total farm productivity and income rather than rice production alone, in order to optimize total farm income,” she added.
THE SECOND RICE PROGRAM: RICE COMPETITIVENESS ENHANCEMENT FUND
According to Villar, under the RCEF, which started in March 2019, the government removed the quota system on rice importation and replaced it with tariff through the passage of RA 11203, starting on March 5, 2019 until 2024.
She said the tariff is pegged at 35 percent if rice importation is from within ASEAN; to 180 percent, if above the MAV and from a non-ASEAN country. The law guaranteed a P10-billion funding for the program starting in 2019 with or without collection, and this is in addition to and separate from the budget for the National Rice Program.
This amount is allocated to assist rice farmers who will be negatively affected by the expected increase in the inflow of cheaper rice imports of similar quality into the country and make rice production in the country competitive.
The RCEF in 2021 has a budget P10 billion, to be spent as follows:
P5 billion for mechanization through PhilMech in the form of machineries and equipment to farmers’ cooperatives and associations or to the LGUs of rice-producing towns with at least 100 hectares of rice farm lands;
P3 billion in the form of quality inbred seeds given to farmers listed in the Registry System for Basic Sectors in Agriculture (RSBSA) by PhilRice; each shall receive a maximum of four bags at 20 kilograms per bag, depending on farm size, from 0.5 to two hectares;
P1 billion credit facility with minimal interest available to rice farmers and/or their cooperatives divided equally between Land Bank and DBP;
P1billion extension support implemented by PhilMech, PhilRice, ATI and TESDA for training rice farmers on quality inbred rice production, modern rice farming techniques, farm mechanization and technology transfer through the different accredited farm schools nationwide.
The senator said RCEF — every year until 2024 —is focused on the 55 rice producing provinces across the country, covering 947 municipalities. In 2020, the Bureau of Customs reported a tariff collection of P3 billion – represented taxes collected by from January to September 2020 in excess of the threshold set by the RTL which mandated the first P10 billion.
The law also provides that, collections in excess of P10 billion may be allocated to other programs on rice, including financial assistance to small rice farmers – during its first six years of implementation.
A joint resolution proposes to use all rice tariff collections beyond P10 billion as financial aid to the farmers owning one hectare and below numbering around 1 million rice farmers, the fixation on putting the blame on RCEF and tariffication for the failure of the National Rice Program to meet its goals is an attempt to muddle the issue and is being used by some vested interests who do not want to correct and empower the rice farmers. “The problem of rice farmers should not be blamed entirely on the RCEF. It has been just over a year for it to create such a huge impact, because the law was passed in February 2019 while the National Rice Program has been there since 1986,” Villar further stressed.
The British fashion group Arcadia has fallen into administration, leaving 13,000 jobs at risk. Arcadia’s market share slumped from around 4.5% in 2015, to 2.7% in 2020. The group’s extensive portfolio of high street stores, which includes British high street staples like Dorothy Perkins, Burton, and Miss Selfridge, has long felt outdated.
Arcadia’s hold on the high street has waned over the years with dozens of outlets closing nationwide. Many industry experts and past employees lay the blame at owner Philip Green’s feet, citing lack of investment in online retailing and outdated ways of sourcing product.
Topshop, a stalwart of teen and 20-something fashion, and the jewel in the Arcadia crown, has become the latest fatality of this crumbling empire and undoubtedly the one that has tipped it into administration.
The legacy of the Topshop women’s fashion chain started in Sheffield and London in 1964, in the basements of the Peter Robinson department stores. The aim was to sell fashion made by young British designers. Crucial to the brand’s early success was Topshop’s buyer Diane Wadey, who was known in the business for having a keen eye for young talent.
In 1974, parent company Burton Group made Topshop a standalone store. Within two years, the brand’s primary target market became 13- to 24-year-olds, it opened 55 standalone stores and garnered £1 million in profit. The brand was so successful that Burton launched its male equivalent, Topman, in 1978.
The 1980s and early 1990s saw a fragmentation of the UK mass market as the emergence of value retailers such as Matalan, New Look, and George at Asda put pressure on price reductions for fashion retailers. To maintain a competitive advantage, Topshop handed its reins over to a lady hailed as the “most influential person on the British high street” during the mid-1990s, Jane Shepherdson. Ms. Shepherdson has been credited with democratizing women’s style and changing the way they buy and wear fashion. Under her reign, the brand was transformed into a style mecca, creating well-designed, style-savvy clothing.
By the early 2000s, the retail landscape was changing. The advent of the Internet meant that designer catwalk collections, which had previously been a closely guarded secret, now became readily available at the touch of a button. Clever high street design and buying teams were able to use these catwalk images, interpret them swiftly for production, and cut the six-month wait for high street “versions” of much-desired designs. Ms. Shepherdson and her team excelled in exploiting this opportunity by delivering up-to-the-minute and competitively priced fashion to the masses in a matter of eight weeks.
After 20 successful years at the helm, and with turnover more than £100 million a year, Ms. Shepherdson dramatically departed Topshop. The press blamed a fallout between her and Mr. Green over decisions to allow the supermodel Kate Moss to design lines for the chain. However, industry insiders and Ms. Shepherdson herself deny this. From this moment on, the road ahead for Topshop under new management was a tough one.
Ironically, Topshop’s unique selling point as “the closest a high street shopper got to catwalk fashion” was its demise. The more fashion lines the retailer gave to its consumers, the more demanding they became. The competition was also becoming fierce as the high street exploded with world-class international retailers, including online upstarts like Boohoo and Asos, and extra value retailers like Primark, which combined low prices and savvy digital marketing techniques.
As more people started to shop online, Mr. Green failed to invest in digital retail channels leaving them unable to compete with competitors. Online sales are increasing year on year, driven by Topshop’s key demographic—the 14-to-24-year-old market.
While people shop online more, footfall on local high streets has massively decreased in the last ten years and dropped massively during the pandemic, with a whopping 80% drop nationwide in April. Topshop’s fixation on physical retail and unwillingness to let go of high street shops was also a setback. Arcadia’s rival Intidex, for example, has 107 stores in the UK—this includes Zara, Primark, Pull and Bear, among several other brands. By contrast, Topshop alone has more than 300 physical locations across the UK.
While under Ms. Shepherdson, Topshop had been nimble in its reaction to catwalk styles they lost this ability after her departure. Fashion companies need to react quickly to emerging trends. Bringing suppliers of products closer to home ensures that companies can capitalize on what’s “hot” in a speedy manner. The closer the supplier, the shorter the lead time, making a retailer more flexible in its stock turnover. However, Mr. Green’s lack of strategic supplier relationships and his proclivity for buying from Asia meant that it took a long time to get a product from concept to shop floor.
Sales also took a hit in 2018 when shoppers boycotted Topshop after Mr. Green was accused of sexually harassing and racially abusing staff. Activists also pressured the pop star Beyoncé, who had launched her popular activewear brand IvyPark under Topshop in 2016, to cut ties with Mr. Green and Arcadia.
The collapse of the Arcadia group marks the UK’s largest corporate casualty of the pandemic so far. However, Topshop’s is unlikely to disappear all together. Strong heritage and high brand awareness in the UK means it will probably continue to exist, even if that means only online. — The Conversation
A metallic monolith discovered by the Utah Department of Public Safety (pictured) in Red Rock Country in Utah was removed by a group of men. Screenshot via Utah Department of Public Safety
The mysterious metal column found standing inexplicably in a remote part of Utah’s desert last month was knocked down and dismantled by a group of men who considered it “trash,” according to a photographer who documented the object’s demise.
As images of the object gleaming amid dusty red rocks spread online, many noted a vague resemblance to the so-called “monoliths” in Stanley Kubrick’s 1968 film 2001: A Space Odyssey, prompting strained jokes about a possibly extraterrestrial origin.
But photographer Ross Bernards posted images to Instagram on Monday of what he said were the object’s final moments that show there is nothing especially alien about the technology behind the sculpture: it appeared to be sheets of metal riveted to a hollow wooden scaffold.
In a caption accompanying a series of pictures of the object, Mr. Bernards described driving six hours on Friday with three friends to take some evocative pictures of the object by moonlight.
After getting some shots, he said he heard some voices coming up the canyon, and four men appeared. Mr. Bernards wrote that he stepped away so the new group could also enjoy some time alone with the object, only to watch as they began shoving it.
“They gave a couple of pushes on the monolith and one of them said, ‘You better have got your pictures,’” Mr. Bernards wrote. “He then gave it a big push, and it went over, leaning to one side. He yelled back to his other friends that they didn’t need the tools. The other guy with him at the monolith then said ‘this is why you don’t leave trash in the desert.’”
The object soon fell with a loud bang, and the men made quick work of breaking it apart and carting it off in wheelbarrows, Mr. Bernards wrote.
“Leave no trace,” one of the men told Mr. Bernards and his friends.
The US Bureau of Land Management, which oversees the desert where the object was found, said last week it was not investigating because it considered the object private property, and so a matter for the local sheriff.
The San Juan County Sheriff’s office did not respond to questions on Tuesday, but said in a statement earlier this week it “did not have the proper resources to devote much time” to the object’s arrival or disappearance. — Reuters
Organizers of the Games, which were pushed back by a year in March because of the pandemic, had sold nearly 1 million tickets overseas, the paper said, compared with 4.5 million in Japan.
TOKYO — Japan aims to allow “large-scale” numbers of overseas visitors to attend next year’s Tokyo Olympics without mandatory vaccinations or quarantine provided they submit negative COVID-19 test results and download tracking apps, the Nikkei business daily reported on Wednesday.
The report, which did not identify the source of the information or detail how many visitors would be allowed, also said Japan would not restrict tourists from using public transportation systems.
Under current restrictions imposed to curb the spread of the novel coronavirus, travelers are required to self-isolate for 14 days on arrival as well as sign up for contact-tracing apps.
Tokyo organizers were not immediately available for comment when contacted by Reuters.
Organizers of the Games, which were pushed back by a year in March because of the pandemic, had sold nearly 1 million tickets overseas, the paper said, compared with 4.5 million in Japan.
Last month, senior International Olympic Committee official John Coates said the number of athletes participating in the Games would not be reduced and it was down to organizers to make them feel safe.
Over 11,000 athletes are expected in Tokyo for the Olympics and thousands more will come for the subsequent Paralympics.
The plan to allow large numbers of visitors from overseas would underscore Prime Minister Yoshihide Suga’s pledge to revitalize Japan’s battered economy by boosting tourism—a pillar of the nation’s economic measures also supported by his predecessor.
Mr. Suga has been promoting domestic travel campaigns despite a surge in novel coronavirus infections that is quickly filling hospital beds.
The surge has dented Mr. Suga’s approval rating, with many saying his reluctance to put the brakes on domestic travel has contributed to the rising number of infections.
Japan has avoided the high numbers of infections and deaths from the virus seen in Europe and the United States but with the cold season approaching the country has posted record numbers of daily cases in recent weeks.
The Nikkei report provoked a strong reaction online, with some saying the government was putting people’s lives at risk.
“I wonder why the government wants to hold the Games in this situation. They must be crazy,” one social media user with the handle @nuna-13 tweeted. “Are they going to kill Japanese citizens?” — Reuters
Hesitation about taking a COVID-19 vaccine decreases as people learn more about vaccine safety testing, so these conversations are important to make informed choices about public health.
As the second wave of COVID-19 escalates in Canada and around the world, pharmaceutical companies have been announcing vaccine trial results that promise to help ease restrictions and return us to pre-pandemic routines next year.
However, there is also a lot of vaccine skepticism, as well as questions about how much confidence should be placed in these announcements. Hesitation about taking a COVID-19 vaccine decreases as people learn more about vaccine safety testing, so these conversations are important to make informed choices about public health. Here are some questions to keep in mind about these vaccine study announcements.
WHAT DID THE STUDY LOOK FOR? The 11 different Phase 3 clinical trials for COVID-19 vaccine candidates each involve thousands of people getting either a vaccine or a placebo, but not knowing which they received. When some of the participants get COVID-19, researchers compare the number of sick people who had received the vaccine to the number who received the placebo.
The first results announced came from Pfizer/BioNtech and Moderna, companies that produced vaccines based on a new technology that uses a piece of genetic instructions in a fatty nanoparticle to infiltrate living cells. Cells use a snippet of the SARS-CoV-2 spike protein as a blueprint to make virus fragments the immune system learns to destroy. If approved, these will be the first licensed mRNA vaccines.
WHO PARTICIPATED IN THE STUDY? An effective vaccine needs to reduce the risk of infection in populations who are most vulnerable. COVID-19 has shown higher rates of complications and death in racialized groups, particularly Indigenous, Black, and Latinx populations; people older than 65; and people with medical conditions such as diabetes, kidney disease, and obesity. Lack of representation in clinical trials has been an issue for years, particularly for historically marginalized and exploited groups.
In the Pfizer/BioNTech vaccine study of 43,000 participants in six countries, 42% of participants are Asian, Black, Hispanic/Latinx, or Native American. Of the 30,000 participants in the Moderna trial, 37% are from racialized and ethnic minority groups, and the study included significant representation of people over 65 and people with higher risk medical conditions.
DID THE VACCINE REDUCE INFECTIONS? The best vaccines protect against infection in 95% of people, such as vaccines for measles. Influenza vaccine reduces the risk of infection by about 50%, which is the threshold the United States Food and Drug Administration (FDA) set to consider licensing a vaccine.
Pfizer/BioNTech announced a 90% reduction after the first 94 cases. The trial finished after 170 cases with a 95% reduction for people who received the vaccine, including 94% in people over the age of 65. The Moderna vaccine showed 94.5% reduction. Of their 95 symptomatic cases, only five occurred in participants who had been vaccinated.
Like the Pfizer/BioNTech and Moderna vaccines, the Oxford/AstraZeneca vaccine uses an initial dose and a booster. There were 23,000 participants expected to get either a non-COVID control vaccine or a COVID vaccine and booster. Due to a miscalculation, one-quarter of participants who received the COVID vaccine got a half dose followed by a full-dose booster. Participants who got two full doses showed 62% reduction in COVID cases, while participants who received a half dose before the booster showed a 90% reduction.
Because this accidental group is smaller and was a bit younger, this number may not be an accurate reflection of how effective the vaccine is. Of the 131 cases observed in the Oxford/AstraZeneca trial, there was a 70% reduction in people who received either quantity of the COVID vaccine.
The Pfizer/BioNTech and Moderna studies relied on participants having symptoms and getting tested for the virus. The Oxford/AstraZeneca trial had some participants regularly screened for asymptomatic infection. The different study design means it is not entirely fair to compare the percentages between trials. More information is needed before we can say anything about how these vaccines affect asymptomatic infections or transmission.
DID THE VACCINE REDUCE SEVERE INFECTIONS? It is difficult for a COVID-19 clinical trial to demonstrate a reduction in severe illness because severe cases are less common and participants in clinical trials are generally healthy.
Pfizer/BioNTech have not yet reported any information about the severity of cases. There were 11 serious infections during the Moderna trial which occurred in people who had not received the vaccine. In the Oxford/AstraZeneca vaccine, none of the 131 reported cases was severe. Even once these trials are complete, the numbers remain too small to absolutely say if any of the vaccines prevent severe complications.
IS THE VACCINE SAFE? Any vaccine that caused severe side-effects in more than 10% of the hundreds of Phase 2 participants would not be allowed to progress to Phase 3. This means that the most common severe side effects, such as allergic reactions that require hospitalization, are unlikely.
Most vaccines, including many COVID-19 vaccine candidates, include additives called adjuvants that produce a stronger immune response linked to more effective, longer-lasting protection. However, their stronger immune response also means vaccines containing adjuvants may be more likely to induce reactions like swelling at the injection site and fever.
WHAT ARE THE OTHER PRACTICAL CONSIDERATIONS? If several vaccines are safe and effective, we can consider other factors affecting distribution and vaccination access. The clinical trials reporting results use two doses per person, requiring more vaccine production and follow-up appointments, creating further barriers for the economically disadvantaged.
Some vaccines have different requirements for shipping and storage. The Pfizer/BioNTech vaccine must be kept at -70 degrees Celsius, which is colder storage than most clinics and pharmacies have. It lasts up to five days in a refrigerator. The Moderna vaccine is stable for six months at -20 degrees Celsius, a month in a refrigerator, and up to 12 hours at room temperature. The Oxford/AstraZeneca vaccine, a modified common cold adenovirus, is stable in a refrigerator for at least six months.
WHAT WE STILL WON’T KNOW A six-month study cannot tell us how long a vaccine will provide protection from the virus. This would be a question with any new vaccine, but mRNA vaccines are a new technology, creating more uncertainty. The Pfizer/BioNTech trial was the largest, with 43,000 participants, but we cannot know about side-effects occurring as infrequently as one in 100,000 people. Based on the severity of side-effects, that could change whether the vaccine benefits are worth the risks.
These trials also cannot tell us how willing people will be to accept a vaccine once it is approved. A vaccine’s effectiveness in improving public health depends on people taking it, which they are more likely to do when they understand the vaccine trial process. — The Conversation
SINGAPORE — Singapore has given US startup Eat Just the greenlight to sell its lab-grown chicken meat, in what the firm says is the world’s first regulatory approval for so-called clean meat that does not come from slaughtered animals.
Demand for alternatives to regular meat is surging due to consumer concerns about health, animal welfare, and the environment. Plant-based meat options, popularized by Beyond Meat Inc. and Impossible Foods, increasingly feature on supermarket shelves and restaurant menus.
But so-called clean or cultured meat, which is grown from animal muscle cells in a lab, is still at a nascent stage given high production costs.
“The first-in-the-world regulatory allowance of real, high-quality meat created directly from animal cells for safe human consumption paves the way for a forthcoming small-scale commercial launch in Singapore,” Eat Just said on Wednesday.
The firm said the meat will be sold as nuggets and had previously pegged their cost at $50 each.
But co-founder and CEO Josh Tetrick said the cost has since come down and the meat would be priced at parity to premium chicken when it first launches in a restaurant in Singapore “in the very near term.” He declined to give exact details or costs.
The company is targeting operating profitability before the end of 2021, and hopes to go public soon after, Mr. Tetrick added.
Globally more than two dozen firms are testing lab-grown fish, beef, and chicken, hoping to break into an unproven segment of the alternative meat market, which Barclays estimates could be worth $140 billion by 2029. — Anshuman Daga and Aradhana Aravindan/Reuters
The novel coronavirus has been the biggest driver of innovation this year, with companies fast-tracking their information technology (IT) investments and architecture decisions. “If you had a plan for the next three years,” said Varghese Mathew, Hitachi Vantara’s business development director for the Philippines, “the suggestion is to get out of the three-year plan and make it happen now.”
Hitachi Vantara, the digital infrastructure and solutions subsidiary of Hitachi, Ltd., recently announced that its Unified Compute Platform (UCP) HC solution is part of a new category of hyperconverged infrastructure options called VMware vSAN Global Partner Appliance.
These types of technologies enable customers to use private, public, or hybrid cloud strategies based on what their businesses demand, resulting in faster time to market, pay-as-you-go economics, hardened security against data breaches, and greater levels of automation.
Converged infrastructure solutions can reduce operational expenses by minimizing an administrator’s time with supplying resources, managing, monitoring, and troubleshooting the data center infrastructure with centralized management.
Hyperconverged infrastructure (HCI) is its more agile cousin. HCI is useful for developing and running applications that require a more flexible, more maneuverable, and less expensive infrastructure option but still has the benefits of integrated storage, servers, and networks.
“This solution will reduce spend because complexity is also reduced,” said Mr. Mathew. Hitachi Vantara’s UCP HC collapses the traditional IT operational model into a single layer through VMware’s technology.
Sudharsan Aravamuthan, Hitachi Vantara’s APAC solution lead for business-critical applications and converged solutions, added that VMware’s cloud foundation solution has an intrinsic security built into every layer of the technology. “The vast majority of security issues are caused by human error,” he said. “Cloud management capabilities include automating manual tasks and system auditing, which significantly increases security.”
Because of their sectors’ needs, the banking and telecommunications industries are leading the pack in the adaptation of these technologies.
“The past eight months have been a petri dish of sorts of digitalization and adapting,” said Walter So, country manager of VMware Philippines, a cloud computing and virtualization software provider. “Before, a single store terminal processed a thousand transactions individually. Now, these one thousand transactions are processed concurrently, giving stress to the current IT infrastructure. Payments are digital [nowadays], so there is a need for seamless integration among enterprises.”
Added Mr. So: “Enterprises are using this opportunity to clean their houses so when things start to get normal, they’re ready to compete and get back lost revenues. That’s what’s going to happen down the road.” — P. B. Mirasol
Optimism for adopting renewable energy in the country shared in the last leg of BusinessWorld Insights Sustainability Series
By Adrian Paul B. Conoza, Special Features Writer
Addressing the global issues of sustainability involves the further adoption of renewable energy (RE). The shift to RE, which has gradually emerged in many countries including the Philippines, will help achieve mainly United Nations’ Sustainable Development Goals of affordable and clean energy and of climate action. Now, as the current pandemic accelerates several transitions, the call for a transition to renewables is likewise ringing louder.
Last Nov. 11, the panel in the final leg of BusinessWorld Insights Sustainability Series agreed that adopting RE is more crucial and necessary for the country as it moves forward from the present crisis. Each shared their perspectives on what are the next steps the government, the sectors, and other stakeholders should take for a successful shift to RE.
Changes in RE
Atty. Monalisa C. Dimalanta, chair of National Renewable Energy Board (NREB), noted the changes she has observed in the renewable energy sector, saying that “the RE cheese has moved” in various ways.
First of these changes is the significant drop in the cost of RE over the last 10 years. In solar, she explained, from $300 per megawatt hour (MWh) in 2010, cost has gone down to $30 per MWh in 2019.
NREB’s chair also observed that the ‘RE cheese’ has moved up in terms of technology deployment and efficiency. Specifically, the capacities of solar are now more than third of what they have started out over the last decade; while wind turbines can double their capacities at present.
The biggest chunk of the ‘RE cheese’, however, has “moved out of the box”, with the radical pervasive shift from conventional fuels and renewable among key funders such as funders, policy makers, and big businesses. “This is, in large part, affected by the reduction in cost, the increase in efficiencies, the movement in technologies,” Ms. Dimalanta said.
For the NREB chair, the next steps for RE in the Philippines involves updating the National Renewable Energy Program (NREP) for 2021 to 2040; giving customers the power to choose RE; integrating transition enablers into regulation; and ensuring effective implementation of Renewable Portfolio Standards for both on-grid and off-grid sectors.
“The big thing with this NREP is we have hard-coded our RE targets with the demand-supply projections. Our recommendation would be: ‘It’s not going to be an aspirational target anymore; it is going to be an imperative.’ We have the targets and we will work towards how we get to that target in the next 10 and 20 years,” Ms. Dimalanta shared about updating the NREP.
She also shared that the board is in the process of launching the Green Energy Option Program, which is seen to greatly benefit micro, small, and medium enterprises (MSMEs). “[W]e’ve done the numbers at NREB and we can see that there will be savings for MSMEs if they avail of this option,” Ms. Dimalanta noted. “We’re very fortunate that we have the support of both the DoE (Department of Energy) and DTI (Department of Trade and Industry) for this endeavor, and also of DoST (Department of Science and Technology) in enabling energy startups, because what will fuel RE will be innovation.”
With much work left to be done in the RE shift, the chair encourages stakeholders to actively contribute. “From a culture of compliance, thinking about ‘Is this going to get me in trouble if I do this or don’t?’, let’s move towards an environment of engagement, where everyone will really be involved and everyone is contributing to a vision that we all share.”
Apparent accelerators
Richard B. Tantoco, president and chief operating officer of Energy Development Corporation (EDC), recognized that energy transition is given more attention globally, and this was driven by several factors.
One of these is the global recognition that human-based activities have contributed to the warming of the planet, which in turn has led to policy shifts and financial incentives for RE, such as tax rebates in US and the broad use of feed in tariffs in Europe.
The EDC executive also observed that the transition is driven by the vital shift in the governance and preference of large companies, as seen in reinsurance company Munich Re stopping insurance for coal plants and global technology powerhouse Siemens no longer participating in bids for coal-fired plants.
The same is also seen among banks, with the Institute for Energy Economics and Financial Analysis finding last year that 100 financial institutions — including 40 of the top global banks and 20 significant insurers — have divested from thermal coal. “Momentum is building. If no one’s going to finance, engineer, and manufacture equipment [for such sources], then the direction is quite clear,” Mr. Tantoco stressed.
What also makes the RE transition imminent and beneficial is the country’s richness in renewable resources. “From January to June, we get maximum sunshine. From July to January, we get maximum wind,” Mr. Tantoco observed, adding that the country also has capabilities in geothermal and biomass.
Furthermore, the EDC executive stressed that the country’s geothermal potential can be further maximized in the coming decades. However, he finds that science has not yet advanced to the point where it has cracked what he calls “the holy grail of geothermal.”
“All the technology we have today can tell whether there are geothermal fluids from the ground… but one thing we cannot tell: After we drill, will the earth be permeable?” he asked. “Will there be pores on the ground that will allow the fluid to flow freely and up out of the earth and into the infrastructure?”
Until that ‘holy grail’ is found and cracked, Mr. Tantoco continued, geothermal energy will need much government support, either by absorbing the risk of the first few wells or compelling the national grid to build the transmission line.
Imminent imperatives
Meanwhile, Naderev Saño, executive director of Greenpeace Southeast Asia, shared four imperatives setting the acceleration of RE adoption.
First, he finds that there is a socioeconomic development imperative that presents an opportunity to devise a program that pair economic recovery with transforming the energy system. “Investment in renewables impacts job creation and other baseline indicators positively, as well as the transformation of energy systems,” Mr. Saño said.
There is also a climate imperative that inevitably pushes for reallocating capital toward low-carbon technologies; and an ethical imperative emerges as well, with climate change partly attributable to the burning of fossil fuel.
“[There’s a] clout of doubt regarding the practices… across the supply chain of fossil-based power generation, [as well as regarding] the social and environmental toll of continued extraction and utilization of oil and coal gas,” Mr. Sano stressed, “The ethical question is clear. And the answers are, without doubt, in front of us.”
Lastly, there is a common sense imperative that shows that RE is the logical, reasonable, and sensible choice, with the movement towards clean energy apparent among institutions, industries, and governments.
“Confronting the climate crisis, as well as the coronavirus crisis, by abandoning dirty energy and the old normal does not mean stepping on the brake pedals of our economic development. It is about taking a path, but one that leads to a sustainable future,” the Greenpeace director added.
RE access for all
For Atty. Angela C. Ibay, Climate and Energy Programme head of World Wildlife Fund (WWF) Philippines, energy resources are involved in enabling an “equitable and just transition” that limits global warming, protects people and nature, and builds a climate-resilient future — a goal that WWF aims to reach by 2030.
The shift RE, she continued, will be possible if stakeholders work together by supporting research and development, upscaling innovative projects, integrating RE appreciation with conservation, and implementing efficiency measures.
“Renewable energy, while it is a resource that is very much indigenous, [should be integrated] into how our nature is moving,” Ms. Ibay stressed. “[In our] ‘Living Planet’ report, we’ve seen that in the last 15 years, the decline in our biodiversity has really sharpened — as much as 68% — and we don’t want that to be… further decreased, even as we’re seeking renewable energy resources that we would tap in the near future.”
Furthermore, the WWF executive emphasized that access to clean energy should be ensured for everyone. “For our country, which is archipelagic in nature, we know that many of our countrymen do not enjoy the benefits of electrification,” Ms. Ibay noted. “Even the DoE said that based on their data in December 2019, there are still 1.6 million households which are unserved in terms of electricity. That amounts to 92% of all households in the country. That’s really big and staggering”.
New realizations
The pandemic has realized several unimaginable things for the energy sector, which now serves as signals to further accelerate RE transition, Senator Sherwin T. Gatchalian shared during the panel.
Mr. Gatchalian first shared that global oil prices have gone down below zero, showing that big oil prices or firms are not always beautiful under extreme stress, especially during the pandemic.
The senator also noticed that big oil firms, such as Shell, BP, and ExxonMobil, are moving to RE. For him, this weakens the notion that big oil companies will continue to grow as they invest in oil fields and oil-related exploration activities.
On the local end, a sudden drop in demand was observed during the lockdown, when many stayed at home and establishments either closed or reduced operating capacity. For Mr. Gatchalian, this was contrary to the perception that the country’s electricity demand will always grow.
“Because of this drop, a lot of cracks were exposed in the operations of our fossil fuel plants,” he said. “The exposure here is that such plants have difficulty operating under a very stressful environment such as very volatile demand.”
Pricing was also quite volatile and below the marginal cost of selling electricity, causing coal-fired plants to sell at a loss, the senator continued. With prices in solar and onshore wind found to be dropping quite rapidly, Mr. Gatchalian finds RE more competitive than putting up new coal-fired plants. “It’s more expensive to put new coal compared to existing utility-scale solar power plants and also wind. This is actually the primary reason why a lot of the big oil companies are transitioning to new energy,” he said.
Mr. Gatchalian also noted the recent pronouncement of the DoE on the moratorium on new coal-fired plants, regarding it as “a wake-up call that the system is changing and the systems should change in the future”.
Aside from these signals favoring the RE transition, the senator sees great potential from the various forms of RE available in the country. He cited data from the DoE indicating that the potential capacity of various RE sources, primarily from hydro and solar, amounting to 31,000 MW. “This 31,000 is enough to power our economy for the next 10 years. This is a potential we should harness, because instead of importing diesel or coal, we could just harness 31,000 megawatts of renewable energy.”
To harness this potential, Mr. Gatchalian stressed, policy reforms and legislation are necessary. Among such legislation, the Energy Virtual One-Stop Shop Act and the Energy Efficiency and Conservation Act are already passed. Both were advocated by the senator. Senate Bills on electric vehicles and charging stations, microgrid systems, and midstream natural gas industry development are continuously being discussed.
BusinessWorld Insights Sustainability Series is made possible by Globe, Energy Development Corporation, First Gen Corporation, Meralco, media partner The Philippine STAR and e-learning platform partner Olern; with the support of the Bank Marketing Association of the Philippines, British Chamber of Commerce Philippines, Financial Executives Institute of the Philippines, Management Association of the Philippines, and Philippine Chamber of Commerce and Industry.
LOCAL governments must first pass an ordinance containing guidelines before minors will be allowed to go to shopping malls, Interior and Local Government Secretary Eduardo Año said on Tuesday.
The national government has given the go signal for a gradual expansion of the age group allowed to leave their homes in the spirit of the Christmas season and help boost the economy battered by the coronavirus disease 2019 (COVID-19) pandemic.
In Metro Manila, Mr. Año said the capital region’s 17 mayors must come up with a unified decision on whether to allow minors in malls.
“For the National Capital Region, they will come up with a uniform implementation through a resolution to be backed up with ordinances,” he said in a Viber message to The Star.
If approved by the mayors, those below 15 years old can go malling with their parents or guardians.
Mr. Año also reiterated that parties and caroling are still not allowed, while Christmas celebrations should be limited to immediate family members and still with the observance of minimum health standards.
Researchers have warned of a potential “holiday surge” in COVID-19 cases, which would warrant a return to a stricter lockdown at the start of the new year.
“There is a strong possibility given the opening of the economy and the deterioration of the public’s discipline in following the health standards but it does not mean this will lead to a surge… it’s okay for cases to go up slowly and it’s inevitable. But the surge is not automatic, but the surge will be automatic if we do not follow health standards,” OCTA Research Group Researcher Ranjit Singh Rye, speaking in a mix of English and Filipino, said during a briefing on Tuesday. — Gillian M. Cortez and Emmanuel Tupas/PHILSTAR
FACTORY ACTIVITY in the Philippines inched closer to stabilization in November, after output rose for the first time in five months and the rate of job losses slowed, a survey conducted by IHS Markit showed. Read the full story.
Employees work at an electronics factory in Malvar, Batangas, Aug. 10, 2018. — REUTERS/ERIK DE CASTRO
By Beatrice M. Laforga, Reporter
FACTORY ACTIVITY in the Philippines inched closer to stabilization in November, after output rose for the first time in five months and the rate of job losses slowed, a survey conducted by IHS Markit showed.
The IHS Markit Philippines Manufacturing PMI improved to 49.9 last month from 48.5 in October to post the second straight month of deterioration, nearing the 50-neutral mark that separates it from expansion.
“The latest reading signalled a movement towards stability and was the highest since September,” IHS Markit said in a press release on Tuesday.
This marked the eighth month this year the country saw worsening conditions for its manufacturing sector due to the pandemic.
The Philippines joined the broad improvement across the Association of Southeast Asian Nations (ASEAN) region after most countries either continued to record expansion or inched up closer to the stability, bringing the regional average to 50.
The Philippines and Vietnam recorded the third-lowest reading among the six countries tracked, with Indonesia claiming the top spot (50.6) followed by Thailand (50.4). Myanmar was in last spot (43.2).
The Purchasing Managers’ Index (PMI) is the weighted average of five sub-indices, namely: new orders (30%), output (25%), employment (20%), suppliers’ delivery times (15%) and stocks of purchases (10%). Overall readings above 50 signal expansion on a monthly basis while those below that mark denote contraction
The improvement in Philippine factory activity was mainly attributed to the rise in output levels for the first time since June as more businesses reopened and the decline in new orders slowed.
“The Filipino manufacturing sector showed promising signs of renewed recovery momentum in November as the headline PMI figure neared stabilization. Production rose for the first time since June as foreign demand improved notably from that seen in October,” Shreeya Patel, economist at IHS Markit, said in the statement.
Overall demand improved in November, even as there was a continued reduction in new orders.
“Firms recorded only a fractional contraction in the number of new orders placed, as new orders from overseas markets rose moderately, helped by relaxed border restrictions,” IHS Markit said.
However, Philippine firms continued to lay off workers despite the higher output, the survey showed, although it “eased considerably” from October.
“Anecdotal evidence suggested firms had sufficient capacity to meet incoming new orders, and cost saving pressures led to further cuts in workforces… Further signs of unused capacity at factory plants were reflected in the fourth quickest contraction in backlogs in November,” IHS Markit said.
Manufacturers also trimmed inventory in November as their stocks are enough for new orders and future demand remains uncertain.
Despite looser mobility restrictions in the country and abroad, firms continued to see supply chain disruptions midway through the fourth quarter, reporting longer delivery time of inputs every month since August 2018.
“Port congestions and traffic delays were often linked to the steep deterioration in vendor performance,” IHS Markit said.
Overall costs went up due to higher prices of raw material and transportation, with some firms increasing their selling prices. Other firms sold their products at a discount to attract more customers while demand remains weak.
The companies surveyed were fairly optimistic for the next 12 months.
“Nevertheless, the path to recovery may not be smooth. The health of the sector rests on the number of COVID-19 (coronavirus disease 2019) cases and the impact the virus has on the global economy. Whilst vaccine developments look promising, it is still unclear when restrictions will come to a complete end,” Ms. Patel said.
Any sign of improving conditions for the manufacturing sector is good but it would need to be sustained in order to see a clearer picture of recovery, said Filomeno S. Sta. Ana III, the coordinator at the nongovernment organization Action for Economic Reforms (AER).
Mr. Sta Ana said factory activity may further improve ahead of the holiday season, but containing the virus will be key to a sustainable economic recovery.
“We have to keep focusing on how we contain COVID-19. That’s the lesson from countries that have been able to flatten the curve. Flatten the curve and economic recovery will follow,” he said in a Viber message Tuesday.
Across Emerging Asia, latest PMI readings showed broad improvement in manufacturing conditions last month and uptick in global demand for electronics should support further improvements in the coming months, said Alex Holmes, an economist at the think tank Capital Economics.
“Buoyant global demand for electronics and further gradual improvements in domestic demand should continue to support decent industrial growth. Overall, it looks likely that Asian industry will remain strong over the coming months, helping economic recoveries to stay on track,” Mr. Holmes said in a note Tuesday.
The Philippines is hoping to benefit from the Regional Comprehensive Economic Partnership, a trade pact that includes China, Australia, New Zealand, Japan, South Korea and member countries of the Association of Southeast Asian Nations. — PHILIPPINE STAR/MICHAEL VARCAS
By Jenina P. Ibañez, Reporter and Denise A. Valdez, Senior Reporter
THE recently signed 15-country mega trade deal could worsen a post-pandemic Philippine economy, some analysts said, as a potential surge in imports could upset the balance of trade.
A study done by United Nations Conference on Trade and Development Senior Economist Rashmi Banga found that imports could increase by around $600 million a year, while exports are only projected to increase by $4.3 million.
Products that may see a potential increase in imports include motorcycles, plastic, military weapons, and some types of motor vehicles and garments.
Signed on Nov. 15 after eight years of negotiations, the Regional Comprehensive Economic Partnership (RCEP) is a trade pact that includes China, Australia, New Zealand, Japan, South Korea and all 10 member countries of the Association of Southeast Asian Nations (ASEAN), which account for around a third of the global population and economy. India had opted out of the agreement, citing the risk posed by imports to its domestic industries.
The projected import surge is lower than Ms. Banga’s initial assessment of more than $900 million, after the Philippines placed several industries including rice, in a “sensitive list” that excludes them from tariff reduction commitments.
Ms. Banga, in an online video interview, pushed back against arguments that RCEP would significantly increase Philippine market access to other countries.
The Philippines already has free trade agreements with countries under RCEP. She said this means its market access would not likely increase unless all countries bring down their own sensitive lists, a move that would then cause import surges that could hurt Philippine industry.
“We are going through multiple crises right now — it’s a health crisis, economic crisis, climate change crisis. And then there’s going to be globalization. So this may not be the ideal time for a country to look for trade liberalization,” she said.
“I think the priority of the government should be to save their domestic financial resources, use tariffs to increase revenue and regulate the imports of luxury items. You need the resources for more productive investments, for taking care of your own citizens at this time of crisis.”
The Trade department has been promoting the deal as a market access advantage. Products like garments, automotive parts, and agricultural products such as canned food and preserved fruit stand to benefit, Trade Assistant Secretary Allan B. Gepty said in a recent statement.
But Ms. Banga said that China and Japan will likely benefit from the deal, while Southeast Asian economies like the Philippines, Indonesia, Thailand, and Vietnam could face negative balance of trade.
As the Philippines will share the same preferential trade access with China as it enters the deal, she said countries are more likely to favor efficient producers.
“Philippine exports are actually going down within ASEAN countries because they are importing more from China than from the Philippines. So the existing exports of the Philippines also decline. RCEP is not really increasing your market access,” Ms. Banga said.
“Exports to China actually goes down post-RCEP because China will then start importing from other more efficient producers like Japan and Australia.”
But Mr. Gepty said that a bulk of the goods that will be imported at reduced tariffs are raw materials and intermediate goods, which means that Philippine manufacturers will be able to buy them at cheaper rates.
“On exports, definitely, it will further increase because other than the fact that you now have enhanced market access to almost 50% of your export market, but also under very simplified rules, exporting products will become efficient,” he said in English and Filipino at a press conference.
‘MODERN’ TRADE Calling the deal a modern free trade agreement, the Trade department highlighted how the agreement would be unique from other deals, including an intellectual property chapter and a common “rules of origin,” which means it simplifies the regulations identifying if products are “made in” a country.
Supporters of equitable trade campaign Trade Justice Pilipinas, however, said in a press conference that stricter intellectual property (IP) rules could limit Philippine medicines access, although Focus on the Global South Philippine Head Joseph Purugganan later admitted in a television interview that the released rules are not as strict as they had anticipated.
Sentro ng mga Nagkakaisang Progresibong Manggagawa President Joshua Mata in the same press conference called on the Trade department to release their cost-benefit analysis and clarify potential risks to local jobs.
“We don’t believe that this (deal) can actually turn the tables around in terms of trade at a time where there is no global demand precisely because we are all still reeling from COVID-19,” he said in English and Filipino.
“Why not use the moment to talk about the possible implications openly?”
Ms. Banga also said that the unified rules of origin are hard to implement and likely to have minimal benefit.
The Trade department has said the intellectual property chapter assures flexibility andstreamlines IP protection procedures, which would benefit Filipino inventions.
Trade Secretary Ramon M. Lopez had said the deal will further broaden Philippine trade and investment, transparency, and regional supply chains. He has not yet responded to requests for their cost-benefit analysis.
POTENTIAL BENEFITS Yet for some, RCEP is good news, because it is seen as a way to recover from the Sino-US trade war and the economic slump brought by the coronavirus pandemic.
“Country of origin rules have been eased and simplified further under RCEP, from separate bilateral deals, allowing more goods to be eligible for much lower tariff rates even if inputs come from multiple sources from other RCEP member countries,” Michael L. Ricafort, chief economist at Rizal Commercial Banking Corp., said in a Nov. 18 text message to BusinessWorld.
While noting that RCEP is “really nothing new” for the Philippines in terms of trade agreements with some countries, such as China and Japan, Mr. Ricafort said there is still much to gain from the rest of the signatories.
“RCEP would still help strengthen further trade of the Philippines with the rest of the 15 other member countries in terms of increased exports and imports that lead to wider trade deficits, thereby helping increase economic growth,” he said.
He noted the inclusion of Japan, South Korea, Australia and New Zealand in the free trade agreement with ASEAN and China would lead to increased competition and imports, but the relatively lower costs of production and living in other ASEAN countries such as the Philippines may attract more investments.
“The improved economic and credit fundamentals of the Philippines with improved demographics, having the 12th biggest population in the world, would help make the country a compelling business destination and help attract more foreign investments into the Philippines,” Mr. Ricafort said.
Caesar B. Cororaton, research fellow at the Virginia Polytechnic Institute and State University, said that exports will increase every year, potentially reaching $214 million in four years. He added that gross domestic product (GDP) will rise as economic activity increases and consumer prices fall with the entry of cheaper goods.
“(China and Japan) will benefit, but the Philippines will not be left behind. We will be lifted as a group. If you’re not included, you’ll be left behind,” he said in an online interview.
“If you just focus on the Philippines, it’s small — income per capita is very small. How can your industry expand with a very minimum market?” he said.
According to Mr. Cororaton’s study, potential export growth will be seen in semiconductors, fruits and vegetables.
Electronics exporters believe that the deal will improve industry opportunities.
“It may not change much for top Philippine electronics export and import markets like China, Japan and South Korea, but I hope trade with Australia and New Zealand as well as some ASEAN countries increase,” Semiconductor and Electronics Industries in the Philippines, Inc. (SEIPI) President Danilo C. Lachica said in a mobile message.
Since the trade pact was signed, some companies can only surmise that RCEP will help their businesses, particularly those that either have operations overseas or are heavily engaged in exports and imports.
One of these is GT Capital Holdings, Inc., a Ty-led conglomerate which has interests in automotive through Toyota Motor Philippines (TMP), banking through Metropolitan Bank & Trust Co. (Metrobank), insurance through Philippine AXA Life Insurance Corp. (AXA Philippines) and property development through Federal Land, Inc.
“Upon our initial analysis of RCEP, we believe that several of its provisions benefit GT Capital’s automotive business, i.e. TMP, the most, as it is the subsidiary or component company that directly engages in international trade,” the investor relations department of GT Capital said in a Nov. 23 e-mail to BusinessWorld.
“However, Metrobank and AXA Philippines, which are our banking and insurance businesses respectively, may also benefit from RCEP’s new provisions on expanded access to financial services,” it added.
GT Capital cited that the “flow-through effects” of RCEP is expected to help its businesses through increased market demand. For example, it anticipates that lower import-export costs will drive up appetite for capital-building, therefore helping its Metrobank segment.
The company also does not fear any disruption in local production, noting it is “prepared to capitalize on expanded Philippine trade relations.”
“The tariffs provided in the RCEP are higher than other existing trade agreements like the ASEAN Trade in Goods Agreement, JPEPA (Japan-Philippines Economic Partnership Agreement) and ASEAN-China Free Trade Area,” Vince S. Socco, chairman of GT Capital Auto Dealership Holdings, said in the e-mail.
He noted that China-based automakers may introduce completely built-up cars because the previous trade agreement provides a 30% tariff on this category, against RCEPs 28% in five years.
“In general, the current market dynamics are not expected to be affected. The two models that Toyota assembles locally are the Vios, which has a displacement of 1.3 to 1.5 liters, and the Innova, which is not in the passenger car segment,” Mr. Socco said.
“Moreover, the Vios is registered under the CARS (Comprehensive Automotive Resurgence Strategy) program, enjoying additional production and investment incentives from the government,” he added.
Similarly, Aboitiz Equity Ventures, Inc. (AEV) focused on the positive effects of RCEP, particularly for its feeds business. AEV has interests in power, banking and food, among others.
“Our feeds business operates in nine countries with markets straddling both ASEAN and China. Our markets will surely benefit from modern, comprehensive, high-quality, and mutually beneficial economic partnerships, stimulating consumption in the region,” the company said in a Nov. 23 e-mail to BusinessWorld.
AEV’s feeds business has operations in the Philippines, Indonesia and Vietnam, and distributes products to Hong Kong, Vietnam, Myanmar, Thailand, Malaysia and Indonesia, based on the company’s 2019 annual report.
It also owns and controls the feeds company Gold Coin Management Holdings Ltd., which has subsidiaries in Singapore, China, Hong Kong, Indonesia, Malaysia, Vietnam, Thailand, Sri Lanka, Myanmar, Pakistan, Brunei and the Philippines.
“(RCEP) will certainly promote greater efficiencies in the sector, so it is good for all, especially for the consumer. However, there remain benefits to being close to your natural markets,” AEV said.
The agreement will be implemented after a ratification process, which could take up to two years.
For 2021, Villar said the National Rice Program has a budget of P15.5 billion to be spent as follows:
A joint resolution proposes to use all rice tariff collections beyond P10 billion as financial aid to the farmers owning one hectare and below numbering around 1 million rice farmers, the fixation on putting the blame on RCEF and tariffication for the failure of the National Rice Program to meet its goals is an attempt to muddle the issue and is being used by some vested interests who do not want to correct and empower the rice farmers. “The problem of rice farmers should not be blamed entirely on the RCEF. It has been just over a year for it to create such a huge impact, because the law was passed in February 2019 while the National Rice Program has been there since 1986,” Villar further stressed.
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