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Warriors’ Thompson undergoes surgery, expected to make full recovery

LOS ANGELES — Golden State Warriors’ All-Star shooting guard Klay Thompson underwent season-ending surgery to repair his torn Achilles on Wednesday and is expected to make a full recovery, the team said.

“Klay Thompson underwent successful surgery earlier this morning to repair a torn right Achilles,” the team said in a statement.

“The surgery, performed by Dr. Richard Ferkel in Los Angeles, is expected to keep Klay sidelined for the entire 2020-21 NBA season. He is expected to make a full recovery.”

The three-time NBA champion suffered the injury a week ago while playing in a practice game in his native Southern California. The 30-year-old will miss his second consecutive season after being forced to sit out last season with a torn left anterior cruciate ligament.

Thompson is a five-time All-Star and is widely considered one of the greatest shooters ever to play the game.

He holds the record for most points scored in a single quarter (37), most three pointers made in a regular-season game (14) and most three pointers made in a playoff game (11), and is an elite defender.

After making the NBA Finals five years in a row, the Warriors posted the worst record in the league last season as Thompson and fellow sharp-shooting “Splash Brother” Stephen Curry were sidelined by injuries.

Curry offered words of encouragement to Thompson this week.

“Klay can come back strong,” he said. “He’s a guy that loves the game so much. He is going to do whatever it takes to get back out there on the floor and be himself.”

In light of Thompson’s injury, the Warriors recently signed small forward Kelly Oubre Jr.

The NBA regular season kicks off on Dec. 22. — Reuters

Bogdanovic misstep

It’s easy to see why the Bucks wanted to load up in the offseason. For the second straight campaign, they headed into the playoffs as the league leaders, only to find themselves falling short of expectations. Last year, they fell to the rampaging Raptors in six games despite having claimed the first two of the East Finals. And then, in early September, they were pilloried by the upstart Heat, who needed just five contests to advance to the conference finals. That they bowed to achievers was of no consequence to them. There could be no downplaying the extent of their disappointment; after all, they had reigning Most Valuable Player Giannis Antetokounmpo heading their cause, and, moving forward, they needed to meet expectations.

In assessing all possible options, the Bucks knew the value of moving fast. As things turned out, they did so too quickly for comfort. Free agency hadn’t yet begun when practically every observer in every nook and cranny of the National Basketball Association got wind of their deal with the Kings for Bogdan Bogdanovic. It was a coup, to be sure; the shooting guard was personally close to — and, more importantly, figured to be a stylistic fit with — Antetokounmpo. Strong on both sides of the court, the would-be addition was seen to a vital cog alongside All-Star Khrushchev Middleton and new acquisition Jrue Holiday. Unfortunately, the undue haste with which they acted prompted the league to launch an investigation, thereby turning off their target.

That the Bucks’ failure to nab Bogdanovic dealt them a heavy blow is an understatement. They were wise to pivot as much as they could, but the damage had been done. They managed to bring back rotation regular Pat Connaughton and welcome to the fold solid bench contributors D.J. Augustin, Torrey Craig, Bryn Forbes, and Bobby Portis. Still, the impression they left following their scrambling to recover from their faux pas was that they hadn’t done enough to shore up their cause, especially with the champion Lakers and other threats in the East becoming even better. In short, the question being asked when the free agency battlesmoke cleared wasn’t if they improved. It was if they improved, only to find that they failed to even keep pace with the best of the best.

The Bucks will, no doubt, remain in the thick of things. It’s what the presence of Antetokounmpo guarantees. That said, relevancy is not their goal; it’s success. And, precisely because they have the owner of the Maurice Podoloff Trophy on tap, success means claiming the title and nothing less. And, certainly, their position becomes even more precarious given the ticking clock. The upcoming season will be the Greek Freak’s last under his current contract, and if he doesn’t opt to sign a supermax extension prior to its culmination, he’ll be heading into free agency unencumbered in his quest to find a landing spot that puts him closer to a title.

And so the Bucks are left to look to the future with no small measure of trepidation. They’ll have a full, if shortened, season’s worth of reckoning. And unless and until Antetokounmpo signs on the dotted line, they’ll keep casting a moist eye on the immediate past and ruminate on the myriad What Ifs emanating from the Bogdanovic misstep.

 

Anthony L. Cuaycong has been writing Courtside since BusinessWorld introduced a Sports section in 1994. He is a consultant on strategic planning, operations and Human  Resources management, corporate communications, and business development.

Airlines stir doubts with ‘flying is safe’ claim on virus

AIRLINES have loudly insisted that it’s safe to fly during the coronavirus pandemic, and US travel is surging before the Thanksgiving holiday despite a nationwide spike in virus cases.

Yet top US infectious disease experts say the findings underpinning the carriers’ safety claims aren’t that conclusive.

Concerned about the “misinterpretation” of their findings, researchers on a Defense Department study that has been widely cited by the industry added a cautionary revision. A senior expert in travel-health issues declined to participate in an airline trade group’s press conference, citing what he called their “bad math.” Prompted by the uncertainty, lawmakers on Wednesday called for more in-depth government research.

“The airline industry got a little ahead of itself trying to say the risk is zero,” said David Freedman, a University of Alabama at Birmingham professor emeritus who balked at appearing with an International Air Transport Association event that cited his work.

US airlines, hit with an unprecedented drop in demand since the virus began spreading widely in March, are enjoying their strongest week since then. Even as health officials warn against travel during the Thanksgiving holiday because of a surge in coronavirus disease 2019 (COVID-19) cases, more than 4.9 million people traversed airports between Friday and Tuesday.

The risk of being infected with the novel coronavirus on planes — which have highly effective filters that remove virus from the air and where mask usage is required — is probably fairly low, scientists say.

But the research is far from clear and some recent cases have documented transmission on flights even when passengers wore masks and sat far apart, according to a review of recent cases and interviews with academics and disease specialists.

“I definitely can say it’s premature to say that air travel is very safe,” said Qingyan Chen, an engineering professor at Purdue University in Indiana who’s written extensively on disease transmission on planes.

Airline officials, responding to the historic drop in passengers, have repeatedly defended the protections against infection on flights.

“Flying is safe,” Nicholas Calio, president of Airlines for America, a trade group for large carriers, said at a Nov. 12 briefing. “I will state that categorically.”

A4A declined to add additional comments. It has highlighted the efforts to force passengers to wear masks and to remain apart during boarding and exiting, and to disinfect aircraft. Montreal-based IATA defended its use of Freedman’s data on confirmed in-flight transmissions, saying it never characterized the results as definitive.

A4A has frequently cited a study by the Harvard T.H. Chan School of Public Health, which was funded by the trade group and other aviation industry sources, that concluded the risk of transmission on an airliner was “very low.” But authors cautioned that their projections depended on adherence to mask usage and they also urged airlines to improve ventilation while planes are parked at the gate.

Another study airlines point to was conducted by the Defense Department with the assistance of United Airlines Holdings, Inc. and Boeing Co. It attempted to measure how aerosol virus particles were exhaled by a simulated masked passenger.

United said in promotional materials released Oct. 15 the study “determined the risk is almost non-existent.”

However, after news coverage of the study, the authors added a revision, saying they were “concerned about the potential misinterpretation of the findings.” They also acknowledged they based their results on a person exhaling relatively few virus particles, an amount well below levels documented in some cases.

The airplane filters and mask usage “significantly reduces” exposure to infectious aerosols, they wrote. “However, the current established scientific understanding of SARS-CoV-2 transmission dynamics is not sufficient to calculate definitive SARS-CoV-2 transmission risk from these measurements of aerosol transport.”

United spokeswoman Leslie Scott responded in an email that “Throughout the pandemic, our top priority has been the health and safety of our customers and crew.”

“It’s why we supported military officials, medical experts and aviation engineers in their work demonstrating that aircraft cabins are among the safest of public indoor environments thanks to advanced air filtration systems, required mask-wearing and diligent cleaning protocols,” she added.

Overall, there are few confirmed reports of infections linked to flights. However, because of limited contact tracing in the US and the difficulty of finding transmission cases, it’s hard to say for sure what that means, researchers said.

“I haven’t seen any studies come out and say it’s highly risky,” said Byron Jones, an engineering professor at Kansas State University who has studied airliner cabin-air safety. “But I haven’t seen the study that says it’s definitively safe either.”

The US Centers for Disease Control summarizes the risks from air travel this way on its website: “Most viruses and other germs do not spread easily on flights because of how air circulates and is filtered on airplanes. However, keeping your distance is difficult on crowded flights, and sitting within six feet of others, sometimes for hours, may increase your risk of getting COVID-19.”

Citing what they called the government’s unwillingness to create a plan for handling disease outbreaks in air travel — which is required under an international treaty — and the need for better understanding transmission, US House of Representatives’ leaders on transportation policy asked a watchdog agency to study the issue. 

Representatives Peter DeFazio, the Oregon Democrat who is chairman of the House Transportation and Infrastructure Committee, and Rick Larsen, a Washington Democrat who heads the aviation subcommittee, called on the Government Accountability Office to review research on how the disease is spread in air travel, and the government and industry’s response.

Until a vaccine against the coronavirus is widely distributed, “the US airline industry will depend in large part on a better understanding of how diseases, particularly those that are airborne, spread through air travel and identifying technologies and practices that can help mitigate disease transmission,” the lawmakers said in a letter to the GAO on Wednesday.

While some studies have shown cases in which no one on a flight became infected in spite of the presence of contagious passengers, other data have documented in-flight transmissions.

Purdue’s Chen said he’s been following news reports in China of possible infection between passengers on a Nov. 9 Air China flight from Los Angeles to Tianjin.

Ten people who weren’t connected to each other and resided in different parts of the US tested positive for Covid-19 after arrival. All the passengers had tested negative for the disease before the flight, suggesting at least some of the transmission occurred on the plane, he said.

Such incidents are confounding because they seem to contradict Chen’s own earlier research showing mask usage can dramatically lower risks of infection, he said.

“That’s why I’m having doubts about what’s going on in airplanes,” he said.

Government researchers in Ireland documented as many as 13 cases linked to a single flight last summer, according to a paper published in October. The infections in five of the cases were genetically linked, “strongly suggesting a single point source of infection,” the authors said.

The wide-body jet was largely empty, people were spaced out on the plane and almost everyone whose activity could be documented said they wore masks. Nevertheless, the authors estimated that 10-18% of passengers became infected.

“It is interesting that four of the flight cases were not seated next to any other positive case, had no contact in the transit lounge, wore face masks in-flight and would not be deemed close contacts under current guidance from the European Centre for Disease Prevention and Control,” the authors said. — Bloomberg

New Zealand’s Ardern set to declare climate emergency

WELLINGTON — New Zealand Prime Minister Jacinda Ardern’s government is to declare a climate emergency in a symbolic step to increase pressure for action to combat global warming.

The government will put forward a motion to declare the emergency next Wednesday, the government said as parliament reconvened after a general election won by Ardern’s party.

“We’ve always considered climate change to be a huge threat to our region, and it is something we must take immediate action on,” Ms. Ardern said, according to state broadcaster TVNZ.

“Unfortunately, we were unable to progress a motion around a climate emergency in parliament in the last term, but now we’re able to.”

Ms. Ardern returned to power last month delivering the biggest election victory for her centre-left Labour Party in half a century as voters rewarded her for a decisive response to the novel coronavirus.

The resounding win allows Ms. Ardern’s party to govern alone although she has joined forces with the Green Party for the next three-year term.

The newly elected members of parliament were sworn in on Tuesday and resumed work on Wednesday in New Zealand’s most diverse parliament ever. It has several people of color, members of rainbow communities and a large number of women.

In her last term, Ms. Ardern’s government passed a Zero Carbon Bill, which sets the framework for net zero emissions by 2050, with cross-party support in parliament.

If a climate emergency is passed, New Zealand would join countries like Canada, France and Britain that have taken the same course to focus efforts on tackling climate change.

Last week, Japanese lawmakers declared a climate emergency and committed to a firm timetable for net-zero emissions. — Reuters

Shop for a Cause This Christmas at Globe myBusiness Gift Local E-Bazaar

Christmas shopping has always been an exciting tradition during the holidays where everyone is filled with the spirit of giving and the desire to find that perfect gift for their friends and loved ones. And no matter how different this year’s celebration is, you can still recreate the holiday shopping experience from home, and even support a cause through the Gift Local E-Bazaar.

From November 27 to 29, the Globe myBusiness Gift Local E-Bazaar in Lazada will feature SME merchants and bazaaristas from the retail, food, and tourism industries, and even social enterprises. Everyday at 6PM for the duration of the event, selected merchants will have a live-selling that will be shown on Lazada’s platform and the Globe myBusiness Facebook page. Fun games, exciting raffle prizes, and entertainment courtesy of Globe Voices also await all e-shoppers!

Here are some of the participating merchants for the e-bazaar:

  • Kajg jewelry and accessories
  • TeeshertCo
  • BEBE CO.
  • miNEEYture
  • Obra Kinaiya
  • Crafts by Lesy
  • Terra Philippines
  • Old World Food Enterprise
  • Everything About Snack

Aside from giving shoppers a virtual one-stop shop where they can buy gifts for their families and even for themselves, Globe myBusiness will be donating 100% of the merchants’ joining fee to Ayala Foundation’s Brigada ng Ayala project that seeks to provide help to disaster-affected areas as well as provide connectivity to public school teachers and students.

“The Gift Local campaign is all about supporting our local entrepreneurs by encouraging Christmas shoppers to buy local products. But this bazaar is unlike any other, because it incorporates the newly launched Globe myBusiness’ Unli Internet Plans, which brings the bazaar experience online for unli enjoyment,” said Alyssa Gil, Globe myBusiness Segment Marketing Manager.

Globe myBusiness’ new Unli Internet Plans is the ideal connectivity tool for those who want to start their e-commerce journey. It comes with better internet experience and free digital services for MSMEs to enjoy such as Amber SMS Blast for sending the latest promos to customers and KonsultaMD for ensuring health and safety of employees.

Don’t miss the Gift Local E-Bazaar on Lazada on November 27 to 29, and make sure to visit Globe myBusiness’ Facebook page to know more about its new Unli Internet Plans and other solutions to help you digitally transform your business!

Peso tipped for strong December on record remittances

The Philippine peso, which lagged its peers in Asia this quarter, may get a boost in December with millions of Filipinos abroad set to send record amounts of money home to help families suffering from the pandemic and the recent typhoons.

December is a seasonally strong month for the peso, with the currency gaining in the period in five of the past six years. It is also the month when remittances, which totaled more than $30 billion in 2019, reached their highest levels for the year since 2009.

“With increased unemployment as a result of the pandemic and the impact of the typhoons, we expect extra remittances in order to support families at home,” said Wouter van Eijkelenburg, an economist at Rabobank in the Netherlands. “This would support the strength of the peso.”

The peso will edge higher to 48.08 per dollar over the next three months, according to Rabobank. It has risen 0.8% this quarter to 48.10, lagging behind some Asian currencies.

RISING INFLOWS

Remittances, the nation’s largest source of foreign exchange after exports, unexpectedly climbed 9.3% in September from a year earlier, the fastest pace in more than two years. That’s despite the repatriation of more than 300,000 workers from abroad who’ve lost their jobs due to the pandemic.

The overall flow of money from workers abroad to the Philippines are estimated to drop by 5% in 2020, taking into consideration those who have returned to the country, according to the World Bank. Still, as the major year-end holidays approach, coupled with the recent typhoons, it is possible that funds to the country will show resilience, said Dilip Ratha, World Bank lead economist on migration and remittances in Washington D.C.

For some, it’s not as though the Philippine currency has overcome all the headwinds. The peso may continue to lag behind regional peers given the Philippine economy is more domestically-oriented and less sensitive to bouts of risk-on from external factors, said Yanxi Tan, a strategist at Malayan Banking Bhd. in Singapore. It also depends on whether the recent tapering in daily virus cases in the Philippines can be sustained, Tan said.

Still, coupled with the remittance support, Oversea-Chinese Banking Corp.’s Terence Wu expects foreign flows to the nation’s stock market will start to pick up as vaccine progress boosts global appetite for risk assets.

“These developments should be positive for the peso going into the year-end,” said Wu, a currency strategist at OCBC in Singapore. — Karl Lester M. Yap/Bloomberg

A resilient customer experience partner to rely on

By Bjorn Biel M. Beltran, Special Features Assistant Editor

The world was caught unaware by the coming of the COVID-19 pandemic, with many businesses, organizations, and even governments scrambling to make sense of the changes it was making to society. Many sought guidance, but with everyone experiencing the most impactful global event in recent history, very few could give it.

TTEC, the leading global customer experience as a service (CXaaS) partner for many of the world’s most iconic and disruptive brands, saw this as an opportunity.

“This pandemic crisis has provided us an opportunity for our client-companies to leverage our expertise as a true trusted advisor and partner,” Arthur Nowak, senior vice-president, Asia-Pacific, said in an interview.

Arthur Nowak Senior Vice President, Asia Pacific Market

“At TTEC, we design, implement, and deliver transformative customer experiences and we continued to do so during this global pandemic evolving our work-at-home model to include business continuity for our bricks and mortar operations. Our flexibility and resiliency were critical in guiding our clients successfully through the impacts experienced during the pandemic.”

 

Because of the company’s Business Contingency Team, Mr. Nowak said TTEC stayed ahead of the curve and responded with agility to ensure that TTEC’s resilience principles and priorities were upheld, especially in times of natural disasters and the pandemic. Among the priorities set by the company included the health and safety of their employees, clients, and community, all the while keeping business continuity and minimizing disruption at top of mind.

In the Philippines, within 48 hours of the start of the nationwide lockdowns, TTEC implemented different work arrangements for its employees, with a plan intended to maintain business continuity while allowing employees to focus on their personal welfares. Work-from-home models were adopted, while provision of transportation services, hotel accommodations, and additional support were issued to those which required them.

Based on TTEC’s formal client satisfaction survey, TTEC is one of the few Business Process Outsourcing companies that have provided immediate solutions in response to the varying quarantine status around the world. These solutions are a combination of TTEC-initiated solutions and compliance to government-mandated solutions. Consequently, TTEC’s COVID- 19 Response, as led by TTEC’s Business Contingency Team, has been recognized as a Circle of Excellence Awardee at the recent Asia CEO Awards.

Founded in 1982, TTEC has over 56,000 employees and operate on six continents across the globe. TTEC began operations in the Philippines in 2002 and have since grown to include 20+ facilities in Metro Manila, near-Metro Manila, and provincial areas.

The company’s TTEC Digital Business provides insight-driven, outcome-based, and AI-enabled omnichannel cloud platforms and CX consulting solutions. TTEC Engage, meanwhile, delivers operational excellence through customer care, acquisition, retention, fraud prevention and detection, and content moderation services.

Ready for any future crisis

TTEC has managed to adapt quickly to the pandemic because it has invested time and effort in creating systems that can mitigate any disruption to its services. In 2019, the company activated an employee-focused, technology-enabled movement called CultureCX, that at its core, is all about digitizing employee experience to attract, support, and develop motivated individuals who can best represent brands from the inside-out. This initiative continues and remains a key element in future-proofing the company.

“We invest in the same customer-facing technology to empower both our @home and brick-and-mortar workforce. We understand that the employee experience, powered by a great digital experience, leads to amazing customer experiences. EX to the power of DX = CX is a formula we live by and enable for our clients,” Mr. Nowak said.

This year, TTEC further accelerated innovation as it launched the Humanify@Home Platform – a true CX as a Service Platform that currently powers over 80% of TTEC’s remote contact center agents across the globe in 100% secure at-home environments. Large-scale software deployment can happen in hours, and in-person associate experiences are realistically replicated with virtual collaboration and productivity-enhancing tools.

The company also continues to revolutionize its technology to enable and support its remote workforce. In September, TTEC’s RealPlay — its AI-powered training technology—has been named the “Disruptive Technology of Year” by Customer Contact Week as part of its 2020 CCW Excellence Awards.

TTEC’s revolutionary proprietary RealPlay leverages the latest Artificial Intelligence (AI), voice recognition, machine learning technology, responsive game development, and data visualization to simulate the same real-world customer scenarios (good and bad) associates experience before they take live calls from real customers.

“Our ability to rapidly enable large commercial enterprise and government clients with frictionless and fully digitized employee and customer experiences has never been more critical and relevant,” Mr. Nowak said.

“Our end-to-end approach to designing, building, and operating CXaaS is resonating with organizations that are handling increasingly complex, high-end and mission-critical customer engagement. COVID-19 kicked open the digital front door, and companies realize they cannot go back to the way things were before. TTEC has emerged as a partner of choice in this substantial transformation and ongoing performance for global enterprise customers.”

 

 

National Government Fiscal Performance (Oct. 2020)

THE government’s budget deficit swelled in October, bringing the 10-month gap to nearly P1 trillion as state revenues remained weak and spending continued to decline even as economic managers pledged to ramp up spending to stimulate the economy. Read the full story.

National Government Fiscal Performance (Oct. 2020)

Budget deficit widens in October

Tax collection by the Bureau of Internal Revenue and Bureau of Customs remained sluggish in October, amid the economic slowdown. COMPANY HANDOUT

THE government’s budget deficit swelled in October, bringing the 10-month gap to nearly P1 trillion as state revenues remained weak and spending continued to decline even as economic managers pledged to ramp up spending to stimulate the economy.

Latest data from the Bureau of the Treasury (BTr) showed the budget gap rose by 24.56% to P61.4 billion in October. This brought the year-to-date shortfall to a record-high of P940.6 billion, up 170% from the P348-billion deficit seen in the same period last year.

In 2019, the budget deficit reached P660.2 billion. Economic managers estimated that the budget gap will hit P1.815 trillion this year or equivalent to 9.6% of gross domestic product (GDP).

Broken down, overall spending went down for the second straight month last month by 6.84% to P290 billion from P310.8 billion in October 2019. The decline, however, eased from the 15.45% annual contraction seen in September.

“This is largely attributed to the base effect of the one-off pension differential releases for the military and uniformed personnel (MUP) in October last year, as well as the expected lower capital outlays during the year because of the pandemic,” the BTr said.

The weak performance was due to lower primary spending — or expenditure less the interest payments —  which dipped 7.79% to P267.5 billion. This was tempered by the 6.5% increase in interest payments to P22.1 billion.

“The decline in capital expenditures is mainly attributed to the discontinuance and realignment of some capital outlay projects this year pursuant to the Bayanihan I law, and to the delays brought about by the COVID-19 lockdowns,” the BTr said.

Revenue collections also slid by 12.75% to P228.2 billion in October, the seventh consecutive month of year-on-year contraction or since April. To recall, nearly all businesses were shut when Luzon was placed under an enhanced community quarantine in mid-March.

Tax revenues dropped by 14% to P203.8 billion, while a 1.84% uptick was seen in non-tax sources to P24.4 billion.

Taxes collected by the Bureau of Internal Revenue (BIR) fell 14.62% to P152 billion, while those by the Bureau of Customs (BoC) dropped by 12.25% to P50.6 billion. Taxes collected by other offices declined by 37.92% to P1.1 billion.

Meanwhile, non-tax sources rose mainly due to the 31% increase in income generated by other offices through privatization proceeds and fees and charges, among others, to P17.5 billion. The BTr’s profits fell 35% to P6.9 billion because of lower proceeds from the dampened income of Philippine Amusement and Gaming Corp. and Manila International Airport Authority.

Despite October’s slump, overall spending in the first 10 months of the year was still 12.75% higher to P3.312 trillion than the P2.94 trillion spent in the comparable period last year.

“This was propelled by the implementation of various government’s COVID-19 emergency response and assistance programs,” the Treasury said.

Primary spending jumped 13.49% to P2.977 trillion, while interest payments rose 6.54% to P335 billion.

During the 10-month period, revenues fell by 8.41% to P2.372 trillion on the back of a 11.58% slump in tax revenues and a 20% increase in non-tax income.

Tax collections reached P2.059 trillion as of end-October, with BIR revenues down 10.4% to P1.596 trillion and Customs revenues down 15% to P448.6 billion.

Non-tax revenues hit P313.1 billion, buoyed by a 61% jump in BTr’s income to P208.5 billion as state-run firms remitted higher dividends to help boost the government’s war chest against the pandemic. This was tempered by lower profits from other non-tax offices after state operations were disrupted by ongoing restrictions.

The latest spending data was disappointing, as the economy could have used the much-needed stimulus from government spending, said ING Bank N.V. Manila Senior Economist Nicholas Antonio T. Mapa in a note to journalists on Wednesday.

“Expenditures in the latter third of the year have slipped, posting negative growth as authorities hope to preserve fiscal metrics by reigning in expenditures… Nonetheless, we expect the downtrend in spending to be sustained until yearend, depriving the freefalling economy of much-needed fiscal stamina to recover from the pandemic,” Mr. Mapa said.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the government needs to ramp up spending, especially releasing the remaining funds from the second stimulus package of the government to boost economic recovery.

Budget documents showed P92.35 billion or 66% of the P140-billion budget allotted under Republic Act No. 11494 or the Bayanihan to Recover as One Act (Bayanihan II) has been released as of Monday. The law will expire on Dec. 19.

“The schedule is already tight and expediency is key right now to have a positive impact on the economic recovery program/efforts,” Mr. Ricafort said in an e-mail.

“More importantly, the timely approval of the P4.5-trillion 2021 national budget would help boost government spending especially on infrastructure spending for 2021, as an important pillar of the economic recovery program to pump-prime/stimulate the economy, alongside with further measures to reopen the economy,” he added.

For Mr. Mapa, the slow economic activity would mean revenue collection would remain sluggish, “but we note that collections have generally outpaced revised projections and targets.” — Beatrice M. Laforga

National Government Fiscal Performance (Oct. 2020)

PAL eyes court protection from creditors, says DoF

REUTERS

PHILIPPINE AIRLINES (PAL) is planning to seek court protection from creditors as it works on a debt restructuring plan, Finance Secretary Carlos G. Dominguez III said on Wednesday.

In a Viber message to reporters, Mr. Dominguez said the flag carrier informed the Department of Finance (DoF) about the company’s plans but did not specify the kind of aid it is seeking from the government.

“PAL informed the DoF team of their plans last week but gave no details on any assistance they may need from us,” he said.

Asked if the Lucio Tan-owned carrier’s plans included seeking a court-backed debt restructuring, the Finance chief said “yes, they did.”

In a statement on Wednesday, PAL said the company is currently working on a comprehensive recovery and restructuring plan to help the company survive the pandemic-induced crisis.

“We will make the necessary disclosures at the proper time, once details are finalized. In the meantime, we continue to gradually increase our flights operated on most of our international and domestic routes in line with market recovery,” it added.

PAL announced last month its plan to lay off 35% or 2,700 employees out of its 7,800 workforce, urging employees to apply for voluntary separation instead.

The pandemic has pummeled the airline industry around the world, amid travel restrictions and a collapse in demand due to the pandemic.

Parent PAL Holdings, Inc. reported its net loss ballooned to P7.92 billion in the third quarter, from P5.16 billion during the same period a year ago as revenues plummeted by 77% to P8.47 billion.

This pushed the listed firm’s nine-month net loss to P28.85 billion, more than three times the P8.49 billion loss posted a year ago.

As of end-September, PAL Holdings had a debt-to-equity ratio of -8.69, versus 46.54 as of end-2019. A company having a negative debt-to-equity ratio means it has negative shareholder equity, or more liabilities than assets.

The listed airline operator reported a P24.12-billion capital deficiency as of Sept. 30.

“The disruption in the Group’s operations due to the repercussions brought about by the COVID-19 crisis had a negative impact on its equity position at the end of the period,” PAL said in its quarterly report.

Philstocks Financial, Inc. Senior Research Analyst Japhet Louis O. Tantiangco said the company is in a “very risky position” right now, with its financial documents showing that it only has 35 centavos of assets for every P1.00 worth of liability.

“Looking at the bigger picture, total liabilities are 108.5% of total assets. So even all of the company’s assets are not enough to cover all that they owe at the moment,” Mr. Tantiangco said in a mobile phone message Wednesday.

As of Sept. 30, total liabilities reached P308.49 billion, while assets stood at P284.36 billion.

PAL’s move to tap the government for help is not surprising, Astro C. del Castillo, managing director at First Grade Finance, Inc., said. He believes it is the “best way” to protect the carrier’s assets while trying to hang on until the pandemic is over.

“Given that it was on the verge of its continuous expansion, obviously its exposure to debt is very obvious and logical. Given the strain on its finances, not much revenue and income during the pandemic, so indeed it has to be proactive in protecting its assets and financial condition,” Mr. Castillo said in a phone call interview Wednesday.

“Seeking government help is logical considering that it is a recognized national airline. Also, as a national carrier, given its reach, our OFWs (overseas Filipino workers) employed, and the spending capacity of the Filipinos, I think it’s just a good move to seek the help of the government,” he added.

Investors might have been considering the pandemic’s impact on the airline sector for a while now so the “price reaction will be limited, if any” at all, said Luis A. Limlingan, head of sales at Regina Capital Development Corp.

“Granted everyone has seen an erosion in their balance sheet, what is more important is that they can meet their debt obligations through interest payments (for) the short and medium term,” Mr. Limlingan said via Viber.

Moving forward, Mr. Tantiangco said the sector’s outlook remains bleak and clouded by uncertainty as the pandemic is far from over.

“Even if the COVID-19 crisis is already solved, economies around the world have already taken heavy damage which will take time to mend so demand for air transportation services are not expected to immediately return to their vibrant levels,” he said.

Shares of PAL Holdings dropped by 4.3% or by 33 centavos to close at P7.35 apiece on Wednesday. — Beatrice M. Laforga with inputs from Arjay L. Balinbin

Economy may return to pre-pandemic growth by mid-2022


By Beatrice M. Laforga, Reporter

THE Philippine economy may go back to its pre-pandemic growth trend starting mid-2022, on the back of strong fundamentals and an expected rebound in consumer confidence amid optimism that a coronavirus vaccine will be available by next year, experts said on Wednesday.

Socioeconomic Planning Secretary Karl Kendrick T. Chua said they expect the economy to be strong enough to go back to its 2019 levels by mid-2022 — around the time President Rodrigo R. Duterte steps down from his post.

“There will be scars and delays but putting all the numbers together, we are seeing a return in the 2019 levels sometime in the middle of 2022. We can accelerate that further if we can focus on the recovery programs,” Mr. Chua said during a panel discussion at the BusinessWorld Virtual Economic Forum.

Mr. Chua said the economy is projected to grow by 6-7% next year coming from a low base in 2020. The economic team is keeping a 6.5-7.5% growth rate for 2022.

“The opening of the economy appears to be the most important policy that we should be pursuing so long as we do it as safely as possible,” he said.

Since the strict lockdown began easing in June, the government has continued to relax quarantine restrictions to help the ailing economy recover at a quicker pace.

The crisis will leave many economic scars, particularly the impact of delays in education that may hamper future productivity and income of families in the next few years.

Restoring consumer confidence is key to recovery, Mr. Chua said, noting the economy is largely consumption driven.

He said the government will prioritize strengthening the capacity of the healthcare system to accommodate COVID-19 patients, as this would help reassure the public.

As the rebound in consumer and business confidence would depend on the availability of a vaccine, herd immunity can be achieved by vaccinating 70% of the total population, according to Edsel T. Salvana, director of the Institute of Molecular Biology and Biotechnology at the National Institutes of Health at the University of the Philippines Manila.

Mr. Salvana said a vaccination program may start as early as April, prioritizing the vulnerable sector and gradually covering the general population towards the end of 2021.

“So long as we can keep our hospitals from being overwhelmed, we will continue to do better in managing these severe cases. We have been working on vaccines and more data is coming out. The projection is that in the second quarter we will have some vaccine availability. We are learning to live with the virus but the danger is really in complacency and vigilance is crucial,” Mr. Salvana said.

The government plans to borrow P73.2 billion to buy coronavirus disease 2019 (COVID-19) vaccine for 60 million Filipinos.

Global drugmakers such as AstraZeneca and Pfizer, Inc. have reported their coronavirus vaccines were tested to be 90-95% effective.

“With the high efficacy rate that we are seeing with the vaccines, we might be able to eliminate this. I’m very optimistic. We’re now seeing 90-95% so there’s a real chance of herd immunity,” Mr. Salvana said.

Better coordination among the private and public sectors will also play a crucial role in economic recovery according to BusinessWorld President and CEO Miguel G. Belmonte.

“There is growing recognition, and we fully concur, that the impact of COVID-19 is such that it requires a whole-of-government, whole-of-society response,” Mr. Belmonte said in his keynote speech at the start of the BusinessWorld Virtual Economic Forum.

Børge Brende, president of the Word Economic Forum, said the Philippines can capitalize on its vibrant young population and great relationship with the biggest economies as it bounces back from this year’s slump.

“We know that if there is COVID-19 anywhere, it will be everywhere so it’s really a global responsibility to fight this pandemic and in many places in the world, we are still just in the crisis mode. We are not in the recovery phase yet, we are fighting the pandemic,” Mr. Brende said in a separate speech at the same forum.

Bernardo Mariano, Jr., the chief digital and information officer at the World Health Organization (WHO), stressed the need to harness technology in ramping up the response to the pandemic as the health sector also goes through its digital transformation amid the crisis.

“We live in a world where equity, where access to broadband, is still far from ideal. Let’s make sure that those inequities and inequalities are reduced,” he said.

Moving forward, Guillermo M. Luz, the chief resilience officer at the Philippine Disaster Resilience Foundation, said the pandemic has emphasized the importance of establishing business continuity plans, particularly for micro-, small- and medium-sized enterprises.

“It’s not a problem for large corporations because they are used to putting business continuity programs for themselves… so we concentrated a lot on MSMEs (to help in creating plans) and how to keep them going,” he said.

“What we found in this pandemic is that it has forced people to make adjustments, especially on digital transformation, far faster than they originally anticipated,” he added.

House approves bill amending AMLA on 2nd reading

THE House of Representatives on Tuesday evening approved on second reading a measure strengthening the regulations against money laundering, which is key to helping the country avoid being gray-listed by the Financial Action Task Force (FATF).

Anti-Money Laundering Council (AMLC) Executive Director Mel Georgie B. Racela said that House Bill 7904, which amends Republic Act No. 9160 (Anti-Money Laundering Act), may be enough to address deficiencies in current money-laundering regulations but could have been tighter on suspicious real estate transactions.

The FATF gave the Philippines up to February 2021 to address the deficiencies in the AMLA and implement regulations to improve its efforts to curb money laundering and terrorist financing. The original deadline was in October, but it was moved to February due to the pandemic.

President Rodrigo R. Duterte certified the urgency of the proposed anti-money laundering law amendments.

“This will prevent us from being gray-listed and that is very important to us. If we are unable to comply with the findings of the FATF, in so far as the effectiveness and efficiency of the AMLC is concerned, we might suffer the consequences of gray-listing, and that would mean higher cost of operations not only for our overseas Filipino workers, but also our businesses,” Quirino Representative Junie E. Cua House, chairman of the House Committee on Banks and Financial Intermediaries, told BusinessWorld on Wednesday.

Covered transactions under the bill include single cash transactions involving dealers of jewelry and precious stones and metals exceeding P1 million, cold cash exceeding P5 million for casino and real estate transactions of brokers and developers, and any other transactions that involved an excess of P500,000 in just one banking day. Such transactions will be under the tight watch of AMLC and can then be labeled as suspicious, depending on some grounds.

“It is closely and substantially similar to the proposal of the AMLC except for the increase in the covered transaction reporting threshold of  exceeding P1 million (from the original bill) to  exceeding P5 million cash transactions, ” Mr. Racela said in a text message to BusinessWorld.

Mr. Cua accepted the proposal to raise the threshold for covered transactions in the real estate sector from the P1 million backed by the AMLC. A group of developers and brokers earlier claimed such a low threshold would make reporting requirements more burdensome.

At a Senate hearing, Christopher Ryan T. Tan, a board adviser at the Organization of Socialized and Economic Housing Developers of the Philippines, Inc., had requested the exclusion of low-cost and socialized housing where price points are usually below P3 million for the covered transactions. Mr. Tan said they also did not agree to the initial P1-million threshold for covered transactions.

“The Senate says we don’t think of poor Filipinos, our answer is that poor Filipinos don’t bring in cold cash worth  P1 million to purchase real estate. More so now that it was increased to P5 million cold cash,” Mr. Racela said.

Mr. Racela has said the inclusion of real estate brokers and developers as covered persons were considered as they have confirmed that launderers use proceeds from their transactions to purchase properties.

The counterpart measure of the House bill is still pending at the Senate Committee on Banks and Financial Intermediaries. Mr. Racela said the Bicameral Conference Committee will no longer need to convene if the Senate adopts the House version.

Under the bill, suspicious transactions involve a circumstance where “there is no underlying legal or trade obligation, purpose or economic justification, the client is not properly identified, and the amount involved is not commensurate with the business or financial capacity of the client.”

Taking into account all known circumstances, it may be perceived that the client’s transaction is structured in order to avoid being the subject of reporting requirements under the law.

The measure enhances and strengthens the investigative powers of the AMLC, particularly its subpoena and contempt powers.

In the conduct of its investigations, the AMLC may use investigation techniques available to other law enforcement agencies and only through court-approved searches and seizures.

It authorizes AMLC to preserve, manage and dispose of assets subject to freeze orders  or asset preservation orders and to retain forfeited assets pending turnover to the government.

The measure also mandates the AMLC to facilitate the prosecution of persons involved in money laundering activities  wherever committed by extending the government’s cooperation in transnational investigations on anti-money laundering cases and enforce targeted financial sanctions against individuals or entities involved in the financing of the proliferation of weapons of mass destruction, terrorism, and financing of terrorism as designated and listed under United Nations Security Council resolutions.

The measure likewise prohibits courts from issuing temporary restraining orders or writs of injunction against the AMLC in its exercise of freeze and forfeiture powers  with the exception of the Court of Appeals and the Supreme Court.

Under the law, a person whose account has been frozen may file a motion to lift the freeze order and the court must resolve this motion before the expiration of the freeze order.  No court shall issue a temporary restraining order or a writ of injunction against any freeze order, except the Supreme Court.

Mr. Racela is hopeful the revisions to the AMLA will be signed into law at least two months before the February deadline so they can still pursue other matters needed for the law, including its implementing rules and regulation.

“I am confident it [timely passage] will help but then again, it is not enough to just pass the bill into law, we must also demonstrate effective implementation of what FATF describes as  positive and tangible progress,” Mr. Racela said. — Luz Wendy T. Noble, Kyle Aristophere A. Atienza with inputs from Charmaine A. Tadalan