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Smokestacks in a storm

The appalling human and economic toll of the recent typhoons has led to ritual finger-pointing and recrimination among government agencies. A prominent example is the argument over the role played by the release of dam water, particularly from Magat Dam, in exacerbating the floods experienced in Cagayan and Isabela. The provincial government of Cagayan has now threatened to sue the National Irrigation Administration (NIA), which operates Magat Dam, for the damage the flooding has caused.

And — as called for in the usual script — a congressional fact-finding investigation is also in the offing.

In their own defense, the dam operators point out that not being able to relieve the pressure on the dam would have led to a dam break and an even worse catastrophe. In a possible court case, the province would need to argue that the dam operator’s behavior rose to a threshold of negligence that led to a strict liability. Against this, the dam operator will likely contrapose a defense of statutory privilege (Magat was ordered built by the dictator Marcos in 1978), force majeure (the fact of the typhoon itself), and processes beyond the dam owner’s control (e.g., watershed denudation owing to logging, mining, and the river’s meander).

On the narrow issue of negligence, the dam operators’ main argument is that they followed the letter of the existing protocol for releasing dam water, that is, providing sufficiently early warning about the timing and volume of water about to be released (it is said, via e-mail, text messages, and hard copy). This, after all, was all that was required under their “mandate.”

All these narrow legal points however obscure a larger problem. This much became evident in an Inquirer interview with the Cagayan governor, Manuel Mamba, who was quoted as saying, “Sa amin, we don’t know the extent of the effect on the flooding itself. Kahit na sabihin mo sa aming 6,000 [cubic meters per second of water], kahit sabihin mo sa aming apat na swimming pool per second ang mailalabas niya… ’Di naman [kami] sinabihan na magpa-evacuate na kayo dahil mag-release kami ng ganito, ganito kasi ang mangyayari, they do not even tell us dahil hindi nila alam kung gaano kalalim. ‘Di nila alam kung anong epekto ng binibitawan nila.” (Even if you tell us 6,000 [cubic meters per second of water], even if you say you will release four swimming pools per second… They did not tell us to start evacuating because we will release this much because this will happen, they did not even tell us because they did not know how deep. They did not know what the effect of what they released would be.) The newspaper report then goes on to speculate that the tragedy in question was due to “unclear communication” from the dam operators. But, really, it was more — and worse — than that.

The first and obvious failure was one of science — both its production and use. The governor was complaining that the factual and scientific information provided (i.e., cubic meters of dam water released per second) was insufficient data to act on. The dam operators provided an input into how much they were about to contribute to the river’s flow. But the single crucial variable was the predicted overall rise in the river’s flood level taking everything into account, i.e., not just the dam’s contribution but also how much rainfall there had been, the river’s present carrying capacity, the level of ground saturation, its meander, etc. — all of which in turn depended on longer-term processes such as siltation, changing forest cover, land use especially in the watersheds, and climate change (yes, Nonoy, that too).

A second piece of useful knowledge would have been the areas of settlement at various elevations that were at risk of, say, inundation or landslides given varying levels of rainfall and flood. None of these data were apparently readily available — not even now. Producing the data and making them available, but more importantly piecing them together in actionable form, was a task that fell between chairs: it was viewed as the responsibility of neither the dam operator NIA, nor the local government, nor PAGASA (Philippine Atmospheric, Geophysical and Astronomical Services Administration), nor DENR (Department of Environment and Natural Resources), nor of any single government agency for that matter.

Joel Mokyr, the doyen of the history of technological change, draws a distinction between “propositional knowledge” (episteme) and “prescriptive knowledge” (techne), i.e., the “what” as distinct from the “how.” Propositional knowledge is knowledge of natural laws and of cause-and-effect relations in the abstract — say, that wind loads and wind uplift of a certain force will threaten the integrity of buildings of certain types. Elements of prescriptive knowledge, on the other hand, “consist of ‘do-loops’ replete with ‘if-then’ statements instructing one how to carry out activities…” [Mokyr 2002: 10]. In the case of typhoons, which occur frequently, both types of knowledge are by now established and well-known. The propositional fact that winds of 100-185 kph will rip the roofs off most houses of light materials is coupled with the technological “routine” or prescription that tells people to take shelter in stronger structures once Signal No. 3 is raised in their area.

In the case of the Cagayan-Isabela floods, however, this type of science and technology — particularly the codification of propositional knowledge into prescriptive signals and routines — was clearly absent. There is still a gap in the country’s warning system in that it fails to translate expected rainfall — particularly when typhoon signals are down, as they were in Cagayan — into predicted flood levels on which local governments can base actionable routines.

The type of integrative science required is not unknown, however, and was already exemplified by the late-lamented Project NOAH. That multidisciplinary project under the Aquino administration, led by UP’s Mahar Lagmay and C.P. David and using LIDAR, produced ground-breaking disaster maps under various scenarios for 16 provinces, down to the barangay level. Among its achievements was the establishment of a storm-surge warning system (learning from Yolanda) apart from flood-, wind force-, and landslide-warnings. Unfortunately the program could not be expanded — and therefore did not include Cagayan and Isabela — before its funding support was cut by the incoming Duterte administration in 2017. (The current presidential spokesman cannot now even recall that it existed. Oh, well.)

The second and deeper failure however is one of governance. The government’s typical disjointed approach to preparing for and mitigating disasters and other novel challenges reflects the widespread “silo mentality” or “smokestack syndrome” among its agencies. This refers to the inability or unwillingness of agencies to share information and responsibility. Instead, each entity routinely spews out its customary information or follows an inflexible routine as listed in its “mandate” — in the worst sense of the word bureaucratic — without much regard for whether these are still relevant or adequate to the tasks at hand.

While more or less present in all complex organizations with a division of functions, the smokestack syndrome is particularly acute in the Philippines owing to the deep politicization of the civil service. At the beginning of his term, the president personally appoints thousands of his erstwhile supporters into the bureaucracy — from cabinet secretaries down to bureau directors, a global idiosyncrasy — each claiming to have a more or less direct line to the chief and therefore entitled to their own autonomy and discretion in their own larger or smaller domains. Much like the Holy Roman Empire (i.e., medieval Germany), each prince, whether petty or great, has a direct franchise from the emperor which makes others loath to intervene or cooperate — for good or ill. No surprise therefore that in this environment, any initiative for a joint effort will be in short supply and always dependent on prior clearance from ever-higher-ups — and ultimately the president. More importantly, lower subordinates come to develop a parochial patriotism and servile loyalty towards their specific bosses that kills all initiative and makes cooperation and coordination tedious and long-winded.

Proof that this happens will be seen in the strange penchant among departments and agencies for signing MoAs (memorandum of agreement) not only with non-government entities but revealingly even with each other to accomplish some common function that should have been part of their duties anyway. MoA signings — the obligatory pomp and photo-ops are testimony to the arduous effort required to reach agreement — are homologous to treaties between sovereign states. Hundreds of these exist, e.g., between the NIA and the DENR; between the NIA and PAGASA; between the Department of Finance (DoF) and the money laundering council; the DoF and the Philippine Competition Commission (PCC); the Department of Trade and Industry (DTI) and the PCC; the DTI and the Department of Energy (DoE); the DTI and the telecoms commission, and so forth and so on, with even more for lower-level agencies. And here’s one for the books: there are actually MoAs signed between a department and its own subordinate bureaus! One example is a MoA between the DoF, the Bureau of Customs and the Bureau of Internal Revenue — suggesting that the latter two are virtually independent kingdoms (which they are).

Apply this to the disaster at hand and view it from the vantage of a local mayor. The NIA operates the dam and has a MoA with PAGASA and the DENR but is concerned only with conditions affecting the structural integrity of its dams — not the total runoff and flooding of the local communities. There is a big data hole when it comes to the effects on a mayor’s particular jurisdiction. Of course, local politicians are not blameless, either — they could have pushed politically for the information needed and shown initiative by themselves funding the studies required.

A rare exception that has made the rounds of social media is the case of Mayor Cristina Antonio of Alcala, Cagayan, who earlier on took the initiative to commission a study by UP scientists of the flooding hazards in her town. As even this exemplary case shows, however, although expert advice may exist, implementing it frequently requires powers that challenge the financial and logistical capacities of local governments, as well exceed their jurisdictional authority. The mayor’s plea in her social media post in the midst of desperate flooding contained a gem of wisdom: “The problem being complex, the solution is also a combination of interventions that should be anchored on science and drawn after scientists have studied the Cagayan River itself” (my emphasis). Under the current system, if the mayor had to solve this problem on her own, apart from finding the finance to do it, she would probably have to work for and sign separate MoAs with PAGASA, the DENR, the Department of Public Works and Highways, the NIA, the Department of Agriculture, among others — not leaving much time till the next typhoon.

In any event, the government’s solution to the complex multifaceted problem posed by the recent calamities thus far has been its other favourite response besides MoAs — forming a “task force.” BAYAN’s Rep. Carlos Zarate counts 15 task forces already in existence (the Inquirer counts 18). The so-called “Build Back Better” (actually a post-Yolanda slogan borrowed from the Aquino administration) task force has 24 members — which almost qualifies it to be the entire government. Other observers have rightly observed that the ad hoc, time-bound nature and propaganda imperatives of task forces gives little opportunity for carefully considered solutions to what are in reality complex problems tractable only by well-founded science. The real impact (and danger) of including many agencies in a task force, however, is that it allows a reallocation of budgets to other priorities the task force may decide on. For good or ill, it overrides the priorities these agencies have set and substitutes for them the task force’s own judgement.

In the worst case, a task force will choose and implement priorities that are haphazard and misplaced. As the mayor of Alcala warns, “It is not dredging every which way, it is not putting up a dike here and there. It is knowing, based on sound science, what to do and what not to do…” In the best case, a task force may indeed choose the right priorities for the moment. But task forces will ultimately disband, and once the crisis has passed or media attention dies, the various agencies will go back to emitting their own varicolored smoke — or resting under their own kulambô (mosquito net) — until roused by the next catastrophe. This is no way to build lasting institutions.

 

Emmanuel S. De Dios is professor emeritus at the University of the Philippines School of Economics. He has no interest in where the president was or what he was doing. Only in things that matter.

Housing as stimulus

“Build, Build, Build” has been the mantra of the Rodrigo Duterte administration, which undoubtedly was instrumental in the high economic growth before the pandemic. “Build, Build, Build” is associated with infrastructure. But “Build, Build, Build” should likewise have been an exhortation to build, build, build homes for the masses, the working classes.

Inexplicably, housing has not been a pillar of “Build, Build, Build,” which has been mainly about road, air, water and rail transport, water resources, and power and energy. Not much attention has been given to the housing sector as an engine of the economy.

To quote Jeffrey Ng, the former chair of the Subdivision and Housing Developers Association (SHDA): “Housing should be considered as important as Build, Build, Build.” Housing programs are quicker and less burdensome to undertake. There are no right of way issues and no procurement processes to contend with.

The housing sector has a huge potential to contribute to create jobs and build homes for the lower and middle classes. According to both government and industry sources — the Board of Investments and SHDA, respectively — the housing backlog by 2030 will reach more than 6.5 million units, assuming no special programs are put in place. The backlog is in economic, low-cost, or socialized housing.

Giving priority to the housing industry has become an imperative in light of the pandemic. It is a good economic stimulus, which will mainly benefit the working classes. The housing sector accounts for 5% of total employment and is linked to 80 allied industries. According to the SHDA, the value creation multiplier from housing is 3.44. That is to say that for every peso spent or invested in housing, the changes in output result in a value of P3.44. That translates into more income and consumption for the people whose work is directly or indirectly associated with housing.

Further, the SHDA forecasts that for the post-pandemic period, the demand for housing remains strong. Thus, the housing industry should be seen as a leading factor in pump-priming the economy.

Housing, as part of a stimulus program, is not just a short-term stabilizer to create jobs and incomes. As society prepares for the post-pandemic world and envisions a better new normal, housing development needs a new direction and orientation. New public housing has to address the high density of population and poor living conditions, making it difficult to meet minimum public health standards, such as social distancing and proper sanitation.

We also need to reaffirm our commitment to the 11th Sustainable Development Goal (SDG) of “Sustainable Cities and Communities,” which aims to ensure access for all to adequate, safe, and affordable housing and basic services and upgrade slums. Securing safe and affordable housing is a way of protecting the population from future pandemics and calamities.

What then can be done? Below, we summarize our main recommendations for the development of the housing sector at this juncture.

1. As part and parcel of a temporary economic stimulus, a suspension of the value-added tax (VAT) for low cost social housing with a cap on values can be accommodated. This is better than the proposal of Senator Ralph Recto to have a permanent VAT exemption for social housing. VAT exemption incurs economic costs. It results in forgone revenues, which otherwise could finance development programs, including housing. The Department of Finance estimates that the revenue impact of a VAT exemption that Senator Recto proposes would amount to P32.5 billion between 2021 and 2024 alone. To repeat, as a temporary measure to serve the stimulus (say, for the duration of the pandemic), an exemption can be tolerated. But it cannot be forever.

Building safe and secure communities should not primarily depend on tax incentives, unless there is a market failure that discourages private investments. The granting of tax incentives has to be subject to rigorous economic criteria, including a cost-benefit analysis.

2. The main form of fiscal support is through a direct subsidy to the eligible social housing beneficiaries through a voucher system. Putting this in place requires a data-driven approach to correctly identify those who are eligible, and match their needs — not just as households, but as communities.

3. The comprehensive land use plan (CLUP), which is determined by the National Land Use Policy, needs swift action from Congress to be enacted. It must integrate transparency and monitoring mechanisms to evaluate the social housing program.

4.  Simplify the permits process for housing, and shorten the process within six to 12 months to address critical bottlenecks.

In closing, we call on the government to include housing as a driver of the economic stimulus. To support the housing sector, the government employs a variety of policy tools, which will include fiscal interventions, but not the type that will lead to fiscal recklessness.

 

Viviane Apostol is a researcher and Filomeno S. Sta. Ana III is the coordinator of Action for Economic Reforms.

www.aer.ph

Government’s digital migration

I recently met Andrés Ortola, the general manager of Microsoft Philippines. Over lunch, we spoke about how he is adjusting to life in the country and his plans for Microsoft. The Philippines is an important market for the software giant given the size of our population and the country’s rapid pace of economic development. Although Microsoft Philippines has an annual turnover that is slightly lower than its Indonesian and Malaysian counterparts, the prospects for growth are higher here given the wave of digital migrations that is underway in government.

Digitization across all units of government was made a national priority by President Rodrigo Duterte when he assumed office in 2016. This is precisely why the Department of Information and Communications Technology (DICT) was created. Without fail, the President has spoken of the need to hasten government’s digital migration in every state of the nation address.

The pandemic underscored the need to accelerate the digitization process. It will be recalled that the lack of shared data, interoperability, and connectivity between the national government and local government units (LGUs) were among the reasons why the anti-virus response was uncoordinated in many parts. Malacañang has since endorsed the largest budget appropriation to fast-track the digitization program.

Back to Andrés, Microsoft’s head honcho is a native Argentine whose experience in IT spans two decades. Prior to his posting in Manila, he led the commercial business unit of Microsoft Singapore. While his career has taken him to many parts of the world, no other place feels more like home than the Philippines, he intimated. Our people (Argentines and Filipinos) have been through so many trials, be it in the form of natural disasters, political unrest, or economic crisis. Each time, we emerge better and wiser. Our people are resilient, creative and generally optimistic. Andrés proudly declares that the human capital of Argentina and the Philippines assures both nations of a place in tomorrow’s world.

Andrés’ deep concern for the Philippines is palpable. He counts Manila as his home and as such, has made a commitment to contribute to nation building. Giving back to the country is one of the three pillars of Microsoft’s corporate mission under Andrés’ leadership. The other pillars include expanding Microsoft’s business footprint in the country and making sure that its employees are well looked after.

Studies show that for every one dollar invested in digitization, eight dollars worth of productivity is generated. To this end, the Microsoft team has been working closely with the government by providing both engineering counsel and software platforms to help it along its digital journey.

At the heart of Microsoft’s collaboration with the state is a program called “Microsoft para sa Bayan” (Microsoft for the Country). The program aims to up-skill some 25 million government workers and stakeholders on the operations of various software platforms. Done in partnership with the DICT, the program is the first step towards achieving interoperability between national government agencies and LGUs. All these are powered by Microsoft’s cloud platform called Azure.

With government database operating through the cloud, access to data across all governmental units will become immediate. For us citizens, it means no more duplicities in applying for passports, drivers licenses, business permits, tax declarations, and other government-issued certifications. For law enforcement and the justice system, it means quick access to records and historical data. For our economic managers, it means real time information on critical numbers such as trades statistics, poverty rates, and the like. The benefits are enormous. Not only will it make overall governance more efficient, it will also cut red tape and contribute to the economy’s competitiveness.

As I write this, Microsoft is already working with the departments of Education, Justice, Science and Technology, and Finance, the Central Bank, the Social Security System, the Bureau of Internal Revenue, and nearly 400 cities and municipalities on various digital programs, all of which are powered by Azure.

Azure is used by 95% of Fortune 500 companies and numerous governments around the world. It is the world’s preferred platform since its security features are unparalleled. In fact, various software rating agencies have ranked Azure as superior to its competitors in the realms of security, privacy, and compliance with legal requirements. Even the world’s most secretive agency, the US Department of Defense, uses Azure.

The Philippine government has come to appreciate Azure for its scalability. Government agencies or any private user, for that matter, can subscribe according to their required cloud capacity. This makes it cost efficient, especially for smaller LGUs or startup businesses. Above all, it works beautifully with Microsoft 365, although not exclusively. (For those unaware, Microsoft 365 is the world’s leading collection of software that includes Microsoft Excel, Word and Powerpoint, among others.)

During the quarantine, numerous government agencies were rendered paralyzed since their operations required face to face interaction. Among them was the Department of Education (DepEd). The threat of infections caused the government to cancel classes until such time as a viable remote learning system is put in place, especially in far flung provinces.

Without a formal engagement contract, Microsoft took the initiative to assist DepEd. The company provided Microsoft 365 programs to schools all over the country for which remote learning is now enabled by a program called Microsoft Teams. Teams is a platform where people can chat, meet, share files and work from different locations. Two million children are learning remotely through Teams today.

Andrés’ also noted that court cases were piling-up in the Supreme Court, given the prohibition of mass gatherings. Again, upon Microsoft’s initiative, the company introduced the high tribunal to the idea of conducting remote hearings using Microsoft Teams. The Supreme Court has since embraced remote hearings and its caseload has eased.

Microsoft has also assisted the government in its contact tracing efforts as well the Philippine National Police (PNP) for its COVID-19 response requirements.

Curiously enough, despite having provided the DepEd, the justice department, and the PNP with software and training, it is not clear if Microsoft got paid for it. While Andrés hopes that this will lead to deeper collaboration between his company and the government, the fact remains that Microsoft stepped-up and took the initiative to help when no one asked them to. To Microsoft, it is their way of giving back. It is their way of living up to the pillars of their corporate mission.

 

Andrew J. Masigan is an economist

andrew_rs6@yahoo.com

Twitter @aj_masigan

A poverty beyond Poverty

“How are you doing, my friend? I was worried about you there in Naga, in this terrible Typhoon Rolly — hope you are OK?”

“Almost a week without electricity and no drinking water, but I am OK,” she says. In its wake Rolly swept away the houses of the poor in Catanduanes, Albay, Quezon, and Batangas. Trashed the fields that would have given a good harvest for farmers looking forward to Christmas. Shuttered the small businesses and all economic activity; P17.9 billion in estimated damages. Killed at least 25 people, with 399 injured and six missing.

“You crazy-rich in Manila sit in your cozy homes and condos, aircons run by monster generators, watching all this on uninterrupted television. No problem with water or food — there’s always delivery orders. Everything is online — the shopping never ends. The only ‘slight’ discomfort is having to self-restrict venturing outside the home because of this coronavirus scare.”

She could have said, “shame on you!,” but I knew what my friend meant. And as if to drive home the point, Typhoon Ulysses came lashing in on Nov. 8, a week after Rolly had blown away. Ulysses wreaked havoc on Quezon province, Batangas, and, again, the Bicol region was affected. The storm deluged the low areas as its downpour filled the rivers and dams and overflowed to cover rooftops in Cagayan and Batangas and even the Marikina Valley in Metro Manila.

At least three million individuals were affected by the typhoon’s onslaught, the National Disaster Risk Reduction and Management Council — better known as NDRRMC — reported on Nov. 17. The poor are always the ones affected by disasters — that is what my friend in Naga was taunting me with. Do the non-poor feel enough for the poor?

But the US presidential elections on Nov. 3 were distracting. Yes, in the comfort of home for those who were not directly affected by the twin storms Rolly and Ulysses, it was probably more interesting to watch the close fight for the US presidency between the incumbent, Republican Donald Trump and the Democrat contender Joe Biden. The two were stark contrast to each other in demeanor and in what was perceived to be the principles they stood for — yet public favor seemed so hotly and jealously equal for one and against the other.

Perhaps there is that urgency, after all, for America — an intuition to curb the uneasy compromise of some basic principles and values that had been brought in by a radical strong-man leader who — maybe with good intentions, maybe with not so good intentions — wanted to do things his way. For those who unshakably believed in Trump, they condoned his ways. For the paranoid who feared where he might bring America by his “juvenile delinquency,” they opposed his re-election to a second term.

Social scientists say juvenile delinquents are in “moral poverty” because they lack a grasp on social and moral values from a wrong upbringing or a bad environment. And in the genre of the bad-guy/good guy scenarios prevalent in the movies and entertainment, Trump seems to have lived out in real-life the “bad-ass” way of getting things done and being applauded for it. Some other country leaders are noticeably mimicking (or are natural clones of) Trump for effective control of their nations towards strategic goals in global competitiveness.

But my friend in typhoon-devastated Albay is right. Before political global competitiveness can even be thought of, poverty in the country must be addressed. After Typhoon Rolly, the international poverty watch group Oxfam assessed that at least two million Filipinos or 400,000 families have been affected, with thousands of homes damaged or destroyed, and an estimated 20,000 farmers impacted with the loss of crops.

“The Philippines is a country where 17 million people live below the poverty line. It has persistent high levels of inequality and vulnerability. Further, it is one of the most highly at-risk countries from disasters, with pockets of fragility that threaten its stability and development. (Moreover,) the Philippines is also classified as a lower middle-income country,” Oxfam writes.

The World Bank Poverty and Shared Prosperity Report 2020 reported that COVID-19 was likely to push between 88 and 115 million people into extreme poverty — those living under $1.90-a-day — around the globe in 2020. The United Nations World Food Programme predicts that 200 million people worldwide will lose access to basic food and nutrition in the coming months because of the pandemic. This is on top of the more than 800 million people who experienced food insecurity before the crisis.

According to a Social Weather Station survey, the percentage of Filipinos who were involuntarily hungry in May 2020 (16.7% or 4.2 million families) almost doubled from December 2019 (8.8% or around 2.1 million families). This is the highest percentage since September 2014 (22.8% or 4.8 million families).

A 2009 Asian Development Bank report on chronic poverty in the Philippines notes that economic growth did not translate into poverty reduction in recent years because of deficient targeting and weak implementation of government in various poverty programs, constrained by regional disparity in the concentration of the poor, who usually have large families, with six or more members. Not only the very poor, but Filipino families in the large lower middle class are vulnerable to recurrent shocks and exposure to risks such as economic crisis, conflicts, natural disasters, and “environmental poverty” (e.g., climate change) shocks and risks. Slow government response to alleviate these shocks has exacerbated poverty in this country.

It is the sacrosanct and foremost responsibility of the government to take care of its poor. However, “countries experiencing chronic poverty are seen as natural breeding grounds for systemic corruption due to social and income inequalities and perverse economic incentives,” USAID warned in a November 2003 report, “Corruption and Poverty.” It pointed out that the poor suffered most from corruption in government because of unfair distribution and reduced or lower-quality services and infrastructure decimated by rent-taking and bribes of government functionaries.

But the poor have little choice — “Beggars can’t be choosers.” And the patronage system of politics in the Philippines has exaggerated the dependence of the poor (the “masa”) on individuals in power (rather than on symbolic “government”) who can deliver their needs for survival. As a relevant aside: in this time of the coronavirus crisis, why must government help and support be called “ayuda” — a Spanish term for the Tagalog “tulong” (help)? “Ayuda” reeks of the feudal patronage system that made the peasants (the poor) forever dependent and grateful to the lord of the hacienda for dole-outs for their subsistence and survival.

And we go back to the distraction that a personality like Trump has been, in this world economic crisis and health pandemic. The strongman, bad guy image that he purposely employed garnered near victory for a second term, in what would have been a ratification by the people of what might be compromises towards good governance, even good manners and right conduct. But no more lies, Americans declared on Nov. 3.

Perhaps some might see risqué attraction to certain similar personalities in power in our small, developing country. We must address the poverty situation first, but should the end justify the means? Should patronage and corruption be ever an acceptable compromise to getting things done?

The Transparency International Corruption Perception Index 2019 ranks the Philippines a low 113th of 198 countries, so close to the bottom with the most corrupt. The “cleanliness” score is a pitiful 34/100, shameful against Singapore’s 85/100, who ranks a proud 4th of 198 countries listed from little corruption to heavy corruption.

We must stem the rising moral poverty to truly address economic poverty.

 

Amelia H. C. Ylagan is a Doctor of Business Administration from the University of the Philippines.

ahcylagan@yahoo.com

G20 seeks to help poorest nations in post-COVID world

BEIJING/DUBAI/WASHINGTON — Leaders of the 20 biggest economies on Saturday vowed to ensure a fair distribution of coronavirus disease 2019 (COVID-19) vaccines, drugs and tests around the world and do what was needed to support poorer countries struggling to recover from the coronavirus pandemic.

“We will spare no effort to ensure their affordable and equitable access for all people, consistent with members’ commitments to incentivize innovation,” the leaders said in a draft G20 (Group of 20) communique seen by Reuters. “We recognize the role of extensive immunization as a global public good.”

The twin crises of the pandemic and an uneven, uncertain global recovery dominated the first day of a two-day summit under the chairmanship of Saudi Arabia, which hands off the rotating presidency of the G20 to Italy next month.

The COVID-19 pandemic, which has thrown the global economy into a deep recession this year, and efforts needed to underpin an economic rebound in 2021, were at the top of the agenda.

“We must work to create the conditions for affordable and equitable access to these tools for all peoples,” Saudi Arabia’s King Salman bin Abdulaziz said in his opening remarks.

G20 leaders are concerned that the pandemic might further deepen global divisions between the rich and the poor.

“We need to avoid at all costs a scenario of a two-speed world where only the richer can protect themselves against the virus and restart normal lives,” French President Emmanuel Macron told the summit.

To do that, the European Union (EU) urged G20 leaders quickly to put more money into a global project for vaccines, tests and therapeutics — called Access to COVID-19 Tools (ACT) Accelerator — and its COVAX facility to distribute vaccines.

“At the G20 Summit I called for $4.5 billion to be invested in ACT Accelerator by the end of 2020, for procurement & delivery of COVID-19 tests, treatments and vaccines everywhere,” European Commission head Ursula von der Leyen said on Twitter.

“We need to show global solidarity,” she said.

Germany was contributing more than €500 million ($592.65 million) to the effort, Chancellor Angela Merkel told the G20, urging other countries to do their part, according to a text of her remarks.

Russian President Vladimir Putin offered to provide Russia’s Sputnik V coronavirus vaccine to other countries and said Moscow was also preparing a second and third vaccine.

China, where the pandemic originated a year ago, also offered to cooperate on vaccines. China has five home-grown candidates for a vaccine undergoing the last phase of trials.

“China is willing to strengthen cooperation with other countries in the research and development, production, and distribution of vaccines,” President Xi Jinping told the G20 Summit.

“We will … offer help and support to other developing countries, and work hard to make vaccines a public good that citizens of all countries can use and can afford,” he said.

US President Donald Trump, who lost the US presidential election but has refused to concede to former Vice President Joe Biden, addressed G20 leaders briefly before going golfing. He discussed the need to work together to restore economic growth, White House Press Secretary Kayleigh McEnany said in a summary released late on Saturday.

She made no mention of any US pledge to support the global vaccine distribution effort. One European source said Mr. Trump’s remarks were focused on what he described as an unprecedented US recovery and the US drive to develop its own vaccines.

PREPARE FOR THE FUTURE
To prepare for future outbreaks, the EU is proposing a treaty on pandemics. “An international treaty would help us respond more quickly and in a more coordinated manner,” European Council President Charles Michel told the G20.

While the global economy is recovering from the depths of the crisis, momentum is slowing in countries with resurgent infection rates and the pandemic is likely to leave deep scars, the International Monetary Fund (IMF) said in a report for the summit.

Especially vulnerable are poor and highly indebted countries, which are “on the precipice of financial ruin and escalating poverty, hunger and untold suffering,” United Nations Secretary-General Antonio Guterres said on Friday.

To address this, the G20 will endorse a plan to extend a freeze in debt service payments by the poorest countries to mid-2021 and endorse a common approach for dealing with debt problems beyond that, the draft communique said.

World Bank President David Malpass warned the G20 that failing to provide more permanent debt relief to some countries now could lead to increased poverty and a repeat of the disorderly defaults of the 1980s.

The G20 debt relief initiative has helped 46 countries defer $5.7 billion in debt service payments, but that is far short of the 73 countries that were eligible, and promised savings of around $12 billion. Private sector participation is seen as critical to ensuring broader use of the initiative.

Debt relief for Africa will be an important theme of the Italian presidency of the G20 in 2021. — Reuters

Moderna to charge gov’ts $25-$37 for COVID-19 vaccine — chief executive

FRANKFURT — Moderna will charge governments between $25 and $37 per dose of its coronavirus disease 2019 (COVID-19) vaccine candidate, depending on the amount ordered, Chief Executive Stephane Bancel told German weekly Welt am Sonntag (WamS).

“Our vaccine therefore costs about the same as a flu shot, which is between $10 and $50,” he was quoted as saying. On Monday, an EU official involved in the talks said the European Commission wanted to reach a deal with Moderna for the supply of millions of doses of its vaccine candidate for a price below $25 per dose.

“Nothing is signed yet, but we’re close to a deal with the EU Commission. We want to deliver to Europe and are in constructive talks,” Mr. Bancel told WamS, adding it was just a “matter of days” until a contract would be ready.

Moderna has said its experimental vaccine is 94.5% effective in preventing COVID-19, based on interim data from a late-stage clinical trial, becoming the second developer to report results that far exceeded expectations after Pfizer and its partner BioNTech.

The EU has been in talks with Moderna for its experimental COVID-19 vaccine at least since July. — Reuters

Trump’s bid to overturn election stumbles as judge tosses Pennsylvania lawsuit

WASHINGTON — President Donald Trump’s desperate bid to overturn the US election was dealt a new setback on Saturday when a federal judge threw out his campaign’s attempt to invalidate millions of votes in Pennsylvania.

US District Court Judge Matthew Brann ruled that the Trump campaign’s efforts to stop Pennsylvania officials from certifying Democrat Joe Biden as the winner in the state was “unsupported by evidence.”

“This Court has been presented with strained legal arguments without merit and speculative accusations,” Mr. Brann wrote.

“In the United States of America, this cannot justify the disenfranchisement of a single voter, let alone all the voters of its sixth most populated state,” he wrote.

The lawsuit sought to stop officials from certifying Mr. Biden’s victory in the state, arguing that some counties wrongly allowed voters to fix errors on their mail ballots.

Republican Senator Pat Toomey of Pennsylvania said Mr. Trump had “exhausted all plausible legal options” to challenge the result in Pennsylvania. He called on Mr. Trump to concede the election and congratulated Mr. Biden on his victory.

Few other Republicans in Congress have called on Mr. Trump to concede.

Mr. Trump’s lawyers said they would appeal the ruling, with the hopes of quickly reaching the US Supreme Court.

“We are disappointed we did not at least get the opportunity to present our evidence at a hearing. Unfortunately the censorship continues,” Rudy Giuliani and Jenna Ellis said in a statement.

For Mr. Trump to have any hope of overturning the election, he needs to reverse the outcome in Pennsylvania, which is scheduled to be certified by state officials on Monday.

Democrats said Saturday’s scathing verdict was further proof that Mr. Trump’s accusations of fraud are baseless.

“Our country will not tolerate Mr. Trump’s attempt to reverse the results of an election that he decisively lost,” Biden spokesman Michael Gwin said in a statement.

Mr. Giuliani, who made his first courtroom appearance in 30 years for a hearing in the case on Tuesday, has floated a variety of conspiracy theories as the Trump team alleged that the election was marred by widespread voter fraud.

Mr. Trump did not directly address the ruling as he re-aired familiar grievances on Twitter. “Fake ballots, dead people voting, no Republican Poll Watchers allowed, & more!” he wrote.

Election officials across the country say there was no widespread fraud, and Mr. Trump’s own administration has called the election “the most secure in American history.”

Mr. Trump’s campaign and its allies have filed dozens of lawsuits across the country challenging the results.

They have had little success so far, and time is running out to build a case as some states have started formalizing results. In Pennsylvania, counties are due to file official results on Monday to the secretary of state, who will then certify the tallies. Mr. Biden leads Mr. Trump by more than 81,000 votes in the state.

Benjamin Geffen of the Public Interest Law Center, who was involved in the case, said Saturday’s ruling showed Mr. Trump will not be able to overturn Mr. Biden’s Pennsylvania victory in court. “As far as litigation goes I believe this is the end of the line for them,” he said.

UNPRECEDENTED EFFORT
Mr. Trump is seeking to invalidate or change the election results through recounts and direct pressure on lawmakers in several states. He would need to prevail in at least three states to prevent Mr. Biden from being sworn in as president on Jan. 20 — an unprecedented action.

In Michigan, Republicans wrote to state authorities on Saturday asking them to wait 14 days to certify Mr. Biden’s victory to allow for an audit of ballots in Wayne County, which includes the majority-Black city of Detroit. The letter cited allegations of “irregularities” that have not been substantiated. Mr. Biden won 154,000 more votes than Mr. Trump in Michigan.

That effort faces long odds. A spokesperson for Michigan’s top election authority said state law does not allow for audits before the vote is certified, which is due to take place on Monday. Allegations of widespread fraud have been found to be baseless, the spokesperson said.

Two leading Republican Michigan lawmakers who came to Washington at Mr. Trump’s behest said after meeting him on Friday that they had no information that would change the outcome of the election in the state.

In Wisconsin, an official said poorly trained observers for the Trump campaign were slowing a partial recount by challenging every ballot and raising other objections.

“Observers are disruptive. They are asking question after question, telling the tabulators to stop, stop what they’re doing and that is out of line, that’s not acceptable,” Milwaukee County Clerk George Christianson told reporters.

A manual recount and audit in Georgia confirmed Mr. Biden on Friday as the winner in the southern state, the first Democratic presidential candidate to win Georgia in nearly three decades.

The Trump campaign has two business days to request a recount in Georgia. Mr. Trump’s legal team has also said it plans a lawsuit in the state, but has not provided specifics. Mr. Trump’s accusations have continued to inflame his hard-core Republican base.

Mr. Biden, who has denounced Mr. Trump’s attempt to reverse the election results as “totally irresponsible,” spent Saturday meeting with transition advisers and attending church. Mr. Trump took part in a virtual summit of the 20 biggest world economies and then went to play golf at his club in Sterling, Virginia. — Reuters

Fed faces ill political winds as Biden prepares for White House

THE US CONGRESS’ rapid response to the coronavirus pandemic in March was meant to unleash a $4 trillion fire hose of credit for a stricken economy, distributed broadly by the Federal Reserve to help firms and markets survive a once-in-a-century collapse.

But US Treasury Secretary Steven Mnuchin’s decision on Thursday to end some of the US central bank’s core pandemic programs at the end of this year marked a return to more longstanding concerns among Republicans about the Fed’s influence over and reach into the economy, just as Democratic President-elect Joe Biden prepares to move into the White House.

The emergency lending facilities slated for the scrap heap were among the most novel and controversial established last spring at the urging of lawmakers from both sides of the aisle in Washington.

The shuttering of the programs, which many analysts have credited for helping to blunt the economic pain of the pandemic, will push the Fed back behind a line many in the Republican party feel it never should have crossed.

And it’s a sign of the colder climate facing the central bank in the aftermath of the Nov. 3 presidential election, one that will test the relationships with lawmakers that Fed Chair Jerome Powell has worked hard to build in his first three years in the job.

“I expect there will now suddenly be Senate Republicans who suddenly criticize the Fed for credit market actions which both proved highly effective this year and had their support up until the election,” says Adam Posen, a former Bank of England policymaker who is now president of the Peterson Institute for International Economics in Washington.

“I would expect attacking the Fed for doing its job will play into right-wing conspiracy theories and risk damage to the institution.”

OLD CONCERNS ANEW
During much of President Donald Trump’s administration, Powell’s assiduous attention to cementing relationships on Capitol Hill appeared to pay off, insulating him from a hot-tempered president who installed him and later regretted it.

Powell’s monthly meeting calendars showed him blitzing the offices of members from both parties, and those interactions continued in virtual fashion this year after the coronavirus outbreak sidelined face-to-face visits.

Criticism of the Fed from lawmakers was fairly muted, even as Trump lashed out repeatedly and publicly at the central bank’s “boneheads” for not easing monetary policy as fast as he wanted. The Fed earlier this year cut interest rates to near zero and ramped up its bond-buying to bolster the economy.

Republicans, who control the Senate, also declined to ratify a string of Trump’s controversial picks to fill vacant seats at the central bank’s policymaking table.

Once the coronavirus crisis hit, they seemed willing to defer their concerns about the Fed’s growing balance sheet — now well above $7 trillion, and much larger than during the Obama administration, when Republicans took the Fed to task over its bond-buying after the 2007-2009 Great Recession.

And they expressed little concern as Fed policymakers have flagged their plans to begin to incorporate climate change risks into the central bank’s supervisory and monetary policymaking, or when Powell in August announced a new policy strategy that would aim for an inclusive definition of full employment.

Since the election, things have taken a turn.

Earlier this week, Senate Majority Leader Mitch McConnell called for a vote that would have paved the way for confirming Judy Shelton, a frequent Fed critic who was an economic adviser to Trump’s 2016 presidential campaign, to a post on the central bank’s Board of Governors.

Though a few Republicans opposed her, the bid ultimately failed because of the absence of a pair of supportive Republican senators who had to go into quarantine due to exposure to COVID-19.

IRKED BY NEW PRIORITIES
Shelton’s confirmation now appears to be a long-shot. But the stage may be set for sharper criticism of the Fed by lawmakers, just as coronavirus cases and hospitalizations surge and cities and states impose new restrictions, potentially stalling the economic recovery or even sending it into a renewed downturn in coming months.

At the libertarian Cato Institute this week, former Republican lawmakers said it was time for Congress to review just what the Fed is up to in delving into areas beyond fighting inflation and too-high employment with interest rates.

“All of sudden now we have a Fed opining on climate change, we have a Fed opining on income inequality,” said Jeb Hensarling, a former chair of the House of Representatives Financial Services Committee who often sparred with Fed officials. “Each of these steps lead to a more politicized Fed, which means by definition it is a less independent Fed.”

James Dorn, Cato’s vice president for monetary studies, also warned about mission creep.

“Instead of engaging in pure monetary policy, now they are moving into these other areas and are allocating credit,” he said.

During the current crisis, Mnuchin worked closely with Powell to establish the Fed’s emergency lending facilities, at times speaking many times a day as the two men hammered out details.

Ultimately, the programs used only a fraction of the $454 billion given to Treasury, and Mnuchin now says ending them simply carried out lawmakers’ intent and is “not a political issue.”

The Fed felt the programs provided psychological support for markets, and that will now be tested in corporate bond and other markets. — Reuters

Coca-cola beverages delivery within a click’s reach

Coca-Cola Philippines has extensively scaled up its e-commerce presence to better respond to consumers whose needs and shopping behavior have altered due to the COVID-19 pandemic. With transportation and mobility affected, the Company has ensured that it can continue to serve people with its portfolio of beverages just a few clicks away.

Coca-Cola’s e-commerce website www.CokeBeverages.ph was first launched in 2015. To meet the constraints of the pandemic and to adapt to homebound Filipinos’ needs, the Company accelerated its digital and e-commerce roadmap—strengthening existing infrastructure and opening new channels to connect with the market. Thus, demonstrating agility as a total beverage company, with consumers always top of mind.

Coca-Cola products have been accessible online through its e-commerce website — www.CokeBeverages.ph — since 2015. With the constraints of the pandemic, the Company ensures that its products remain available within a click’s reach by strengthening its existing platform and partnering with food aggregators and other e-commerce partners such as Grab, Lazada, Great Deals, Metromart, and Lalamart.

“Shoppers of all ages are ordering via their phones and computers, out of necessity. They are now purchasing differently, given the increased need in convenience,” said Kichi Roxas-Chua, Digital Shopping Marketing Manager of Coca-Cola Philippines. The Company observed that lockdowns in many areas in the country have triggered a digital buying wave, with the emergence of contactless shopping options including “click-and-collect” or curbside pickup, takeout, and delivery for restaurants, e-grocery shipments, and more.

Along with strengthening the capabilities of www.CokeBeverages.ph, the company has also ramped up collaborations with food aggregators and other e-commerce partners such as Grab, Lazada, Great Deals, Metromart, and Lalamart—maximizing ways to offer products while offering better deals to consumers, as with new packaging options like convenient multipacks and combos.

“Digital commerce is a fast-evolving space, and as a company, we have to be agile and quick to adapt and evolve—to meet new variables affecting the market, and most importantly to cater to our customers,” said Katie Li, Commercial Digital Marketing Manager of Coca-Cola Beverages Philippines, Inc. (CCBPI), the bottling arm of Coca-Cola in the country. She added that Coca-Cola is exploring various business models to further push e-commerce in the business-to-business (B2B) space.

Coca-Cola’s partner distributors have harnessed the huge potential in the Happiness on Demand (HOD) market — and this has helped them further grow their business in an otherwise difficult time.

Happiness on Demand

Coca-Cola’s strengthened digitalization includes its expanded home delivery service called Happiness on Demand (HOD), which allows consumers spanning Nueva Ecija to Metro Manila to Batangas to order Coca-Cola products via call or SMS and have it delivered straight to their doorstep.

Happiness on Demand had catered to a good mix of households and office spaces—but, from the initial impositions of community quarantine, the Company saw a massive shift of HOD’s primary market to households. Distribution channels, which had primarily catered to water deliveries, also needed to widen their scope, as more products from the portfolio saw more significant demand in online platforms. Joseph Crisol, Senior Manager of Emerging Channels at CCBPI shares “This market shift necessitated a quick recalibration of our Happiness on Demand business model to service multiple drop-off points, as well as the improvement of the logistics capacity of delivery partners. We had to ensure that we adapted quickly so we could provide a better service model for our partners and customers”.

Part of Coca-Cola’s strengthened digitalization is its expanded home delivery service, Happiness on Demand (HOD). Household consumers, from Nueva Ecija to Metro Manila to Batangas, can order Coca-Cola products via call or SMS and have it delivered straight to their doorstep.

Integral to this new system was building up the ability of partner distributors to adapt not only in the context of a widespread change of market behavior but also concerning the need for public safety measures. This approach also saw Coca-Cola subsidizing personal protective equipment to delivery partners, among other initiatives, as it helped partners recalibrate their processes for the new normal.

Additionally, the beverage brand has been working together with partners to boost their capabilities to adapt to the new normal, expanding product knowledge through understanding current market information and data, and purchase patterns and trends. With this, Coca-Cola’s partner distributors have harnessed the huge potential in the HOD market—and this has helped them further grow their business in an otherwise difficult time

With the Company’s digitization timeline accelerated, Coca-Cola is making sure that more efficiencies will be developed, and business models will be expanded geographically to reach more consumers across the country in the long-term.

For more information, visit www.CokeBeverages.ph. For Happiness on Demand inquiries and orders, please contact +632 8 813-2653 or SMART/PLDT Toll-Free Hotline: 1-1800-1888-2635; GLOBE Toll-Free Hotline: 1-800-888-2635.

50% of Filipinos must be vaccinated to achieve herd immunity vs COVID-19

AT least half of the population needs to be vaccinated for the country to achieve herd immunity against the coronavirus disease 2019 (COVID-19), a health official said.

"If we are talking about herd immunity, we need to reach 50% to 60% across the population so it's really important we expand the coverage," Health Undersecretary Maria Rosario S. Vergeire said in an interview with ANC on Friday.

Herd immunity is when most of the population becomes immune from an infectious disease, either through vaccination or a previous infection, thus indirectly protecting those without immunization.

A Social Weather Stations survey released late Thursday indicates 66% of Filipinos are keen to get experimental COVID-19 vaccines.

The mobile phone survey, conducted September 17 to 20, shows that of the 66% Filipinos who are "willing to get the COVID-19 vaccine if it is available now” consists of 32% who would “definitely” get it and 34% who “probably would.”

Those unwilling are 31%.

Respondents of the non-commissioned survey were 1,249 adult Filipinos with data gathered through mobile phone and computer-assisted telephone interviewing.

The government earlier said it will procure 50 million doses, with priority to be given to frontline workers and indigents.

Food and Drug Administration (FDA) Director General Rolando Enrique D. Domingo said on Friday that the President’s approval of protocols for the emergency use of coronavirus vaccines would mean it will be distributed and administered faster.

Mr. Enriquez, in a virtual briefing Friday, explained that the emergency use authorization (EUA) means vaccines could be approved for use before the projected 2021 second quarter timeline.

"Once we are given the authority to issue the EUA, the FDA will come up with the guidelines, the process," he said. He added that other countries have already issued such approval on certain vaccines.

The Palace on Thursday said President Rodrigo R. Duterte has approved "in principle" the vaccine emergency use and will soon be issuing an executive order, which will cut the approval process of vaccines to 21 days from the usual six months.

The Department of Health (DoH) reported 1,639 new COVID-19 cases on Friday, bringing the total to 415,067, of which 31,805 or 7.7% are active cases.

The DoH also reported an additional 305 new recoveries, putting the tally at 375,237. Newly-reported deaths were 27 for a total of 8,025. Among the active cases, 84.7% were mild , 81.% asymptomatic, 4.5% critical, 2.4% severe, and 0.21% moderate. — Gillian M. Cortez

DICT seeks P2B emergency fund to fix digital infra damaged by typhoons

THE Department of Information and Communications Technology (DICT) has requested for an emergency fund of at least P2 billion to restore the country's digital infrastructure damaged by recent typhoons, a senator said on Friday.

“They have requested an emergency fund of P2 billion but it has not been acted upon yet. Maybe the national government is also waiting for the PDNA (Post-Disaster Needs Assessment) to be submitted,” Senator Panfilo M. Lacson said as he defended the DICT’s proposed budget for 2021 during Friday’s session.

Mr. Lacson said the department will provide the Senate with a copy of the PDNA.

“But as of now, there is no provision to reconstruct whatever damage is caused by the typhoons,” he said, responding to Sen. Franklin M. Drillon who called the situation “unusual” in his interpellation.

Meanwhile, the DICT proposed an increase in the penalties imposed on telecommunications companies that fail to deliver internet speeds at levels advertised.

Mr. Lacson said the DICT is recommending to increase the penalty to P2 million from P200 per day.

The DICT earlier requested an additional budget of P17 billion for its National Broadband Program, and another P3.6 billion for its free Wifi project. — Kyle Aristophere T. Atienza

Gov’t drops required isolation area within aircraft for domestic flights

AIRLINES will no longer be required to have an isolation area inside aircraft for domestic flights, the government’s task force against coronavirus said on Friday.

The latest resolution, signed Nov. 14, removed an earlier requirement for carriers to allot a portion for passengers who are suspected to be infected or sick due to the coronavirus disease 2019 (COVID-19).

Inter-Agency Task Force for the Management of Emerging Infectious Diseases Spokesperson Harry L. Roque, in a statement on Friday, said the “decision is based on the grounds that guidelines were issued based on available information at the time, and that more information is now available on how COVID-19 is transmitted in closed settings.

The latest resolution also directs local government units to relax entry protocols for airline crew such as test-upon-arrival requirements during layovers or positionings “due to emergency situations which include typhoons, volcanic activities, diversions and emergency landings, and other similar unforeseen and time-sensitive evacuations.”

Foreign nationals entering the Philippines for business purposes are now permitted to enter the country based on certain types of visas.

“Foreign nationals with visas issued by the Bureau of Immigration pursuant to Section 9(d) of Commonwealth Act No. 613, as amended; and those with visas issued by the Authority of the Freeport Area of Bataan, Cagayan Economic Zone Authority and Clark Development Corporation may be allowed entry into the Philippines beginning November 1, 2020,” Mr. Roque said. — Gillian M. Cortez