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Public spending in agriculture: Is it enough?

In my recent piece entitled “Agriculture and Rural Push,” which was featured on Aug. 18 in BusinessWorld, I cited the factors why Philippine agriculture lags in the ASEAN in terms of productivity, diversification and exports. There are at least three main reasons:

1. limited land access under the Comprehensive Agrarian Reform Program which discourages private investments;

2. fragmented low-skill extension of the local government units; and,

3. lack of merit-based bureaucracy at the Department of Agriculture (DA).

Equally important is the comparatively low budget for agriculture.

The Department of Budget and Management (DBM) approved a budget ceiling of P66.4 billion for the DA in 2020 versus P79.9 billion in 2021. The DA asked for P282.4 billion but this was disallowed. It will receive an extra P42 billion from Bayanihan II, bringing the total to P121.9 billion.

In 2020, the DA has P66.4 billion or 1.7% of the total budget of P4.1 trillion. This has been a lucky year: the Rice Competitiveness Enhancement Program (RCEP) added P10 billion and farm-to-market roads another P10 billion, for a total of P86.4 billion or 2.1% of the total budget. Add the irrigation budget under the Department of Public Works and Highways (DPWH) of P36.9 billion. Altogether, P123.3 billion or 3% of 2020’s total budget went to agriculture.

Indonesia. The Ministry of Agriculture has a budget of Rp84 billion or 3% of the total budget of Rp2,529 trillion. There is a Village Fund of Rp2.25 billion equivalent, or about 0.1%, which brings the total agriculture and rural budget to Rp86.25 billion or 3.4%.

Malaysia. Several ministries are involved in agriculture. The Ministry of Agriculture and Agro-based Industry (MOA) has a total budget of MYR4.9 billion or 1.6% of the national budget including irrigation and drainage. There are also allocations for the land schemes: Federal Land Consolidation and Rehabilitation Authority (FELCRA) with MYR738 million under the Ministry of Finance; Rubber Smallholders Development Authority (RISDA) with MYR550 million under the Ministry of Economic Affairs; and the Federal Land Development Authority (FELDA) with MYR810 million under the Prime Minister Department. The subtotal of the three agencies amounted to MYR2.098 billion or 0.7%. Overall, the budget is about MYR7.0 billion or 2.3% of the total budget.

Thailand. The Ministry of Agriculture and Agricultural Cooperatives (MAAC) has a budget of 109 billion baht out of a total budget of 3,000 billion baht, equivalent to a share of 3.6% of the total budget. The amount includes the allocation for the Royal Irrigation Department.

Vietnam. The Ministry of Agriculture and Rural Development has a budget of VND98 trillion while the national budget is VND1,500 trillion.

For the five countries, rice accounts for a significant share of the agriculture budget with irrigation (mainly for rice) as the main item. Thailand and Vietnam are global rice exporters. And their costs are competitive. In the Philippines, irrigation accounts for about 40% of the sector budget.

The Philippines is behind its ASEAN neighbors in terms of agriculture share to total budget. In 2020, agriculture accounted for only 1.7% of the total budget, without the extraordinary additional appropriations from other sources. Its ASEAN counterparts, except for Malaysia, fared much better: Indonesia has 3.4%, Thailand 3.6%, and Vietnam 6.5%.


MOVING FORWARD
What needs to be done with the agriculture budget? Well, support for agriculture must be increased. Crops are not receiving the importance they deserve based on value added. Coconut, with the largest physical area, is not receiving support despite the P100 billion locked in levy funds.

The Philippine agriculture budget has been heavily rice-centric for a long time. As a result, other crops like coconut, tree crops, fisheries and aquaculture, and livestock are neglected. This long-term neglect of other crops translated to higher rural poverty.

Agriculture Secretary Willie Dar has sought a higher budget for other crops in 2021. While rice has a budget of P10 billion under the RCEP, there is less per area for the many others. But the Secretary’s move is in the right direction. It is imperative to increase support for other crops in order to make a more significant dent in reducing rural poverty.

This article reflects the personal opinion of the author and does not reflect the official stand of the Management Association of the Philippines or the MAP.

 

Rolando “Rolly” T. DY is the Co-Vice Chair of the MAP AgriBusiness Committee and the Executive Director of the Center for Food and AgriBusiness of the University of Asia & the Pacific.

map@map.org.ph

rdyster@gmail.com

http://map.org.ph

Our coronavirus world is undernourished

BUMPER HARVESTS and healthy stockpiles coming into 2020 have helped the world dodge the worst of food-security worries triggered by the COVID-19 (coronavirus disease 2019) pandemic. Staples have been plentiful enough — and oil cheap enough — to avoid a repeat of the 2007-2008 crisis, and supply lines have held. Nutrition has suffered anyway. That’s the result of migrant laborers being kept home, children being shut out of school, and workers losing jobs, in both emerging and developed markets. The economic consequences will linger.

Just over a decade ago, low stocks, bad crops, and high crude prices (which drive up demand for biofuels and increase input costs) combined to cause crippling food inflation. Export bans also played a part. It’s cheering that such an outcome has been averted this time, in an otherwise grim year. There have certainly been glimpses of panic. Consumers rushed to empty supermarket shelves in the early months, while the likes of Vietnam, one of the world’s largest rice exporters, and Kazakhstan, a major producer of wheat and flour, imposed restrictions on shipments. There were disruptions, too, most notably when labor-intensive slaughterhouses and meat-packing plants became infection hot spots.

Yet the global system has proved remarkably resilient overall, with trade continuing and international cooperation prevailing, as Aurelia Britsch, head of commodities research at Fitch Solutions, points out. The context of ample food stocks and low prices helped, Britsch says; the picture might have been very different had the coronavirus hit in 2011. It’s a welcome achievement nonetheless, given four-fifths of us are fed at least in part by imports.

The bad news is that pressures aren’t easing. Prices are still modest in historical terms, but China has boosted purchases of late — pork production is normalizing after a huge African swine fever outbreak, and feed demand is rising — while wary, import-dependent governments like Egypt have been accumulating reserves. Unseasonable weather in the US has hurt the crop outlook there, while droughts have hit Russia and South America. Contained global food costs haven’t stopped inflation spikes in India, Pakistan and elsewhere, as supply disruptions hit.

With lockdowns coming back as coronavirus cases surge in the northern hemisphere, global nutrition looks likely to get worse before it gets better.

More worrying is that while food production and stocks have remained sufficient, household budgets haven’t. Even before the pandemic, the world was hungry. A report published in July by the United Nations’s Food and Agriculture Organization and others estimated almost 690 million people were underfed in 2019 — up by 10 million from the previous year, and by nearly 60 million in five years. Close to 750 million of us, or nearly one in 10, didn’t have reliable access to sustenance.

The pandemic has made that pain more acute, and nowhere more so than in emerging markets, with its armies of informal and migrant workers. The Asian Development Bank estimated in August that the global economy could lose more than $100 billion in remittances in 2020, and Asia and the Pacific alone could see transfers from abroad that are a fifth below 2018 levels, in large part because of lower sums from the Middle East. Tourism and leisure, significant earners for many countries, have been battered, while oil-exporting economies have found national coffers emptier as crude languishes.

Countries as varied as Indonesia and Brazil face a double burden with populations that are both underfed and overweight, thanks to cheap, widely available, ultra-processed food. This is a malnutrition time-bomb for public health and for the global economy that is getting worse under the pressures of 2020. Simply, nutritious food is too costly for more than 3 billion people. The July UN report puts a healthy diet, with costly dairy, fruit, vegetable, and protein, at five times the price of meeting energy needs with starch.

The phenomenon isn’t confined to the least affluent countries. In the US, food banks have seen a surge in demand, while in the UK, soccer star Marcus Rashford has stepped in to campaign for free meals for children while schools were closed.

The trouble with such widespread malnutrition is that the health and wider economic consequences persist. Decades of academic studies show there are costs to having citizens who are both underfed and overweight, not least due to associated illnesses such as diabetes. The World Bank has previously put the figure for Indonesia at 2% to 3% of gross domestic product. Beyond the cost of hospital admissions, there’s the lost potential of children whose growth is affected by a poor diet. Stunting, a marker of under-nutrition, tends to correlate with weaker cognitive development and earning potential.

Free meals for schoolchildren are a good place to start. A study published in the Lancet journal last year cited improvements in body mass indexes and height from school breakfast programs. An illustrative analysis of research done in Guatemala, Indonesia, and Nigeria suggested that the benefits of such projects to improve diets outweighed the costs thanks to increased education, future earnings, and avoiding premature mortality through obesity. In Indonesia, the return was more than four times the cost, and that was before the latest cataclysm hit. Governments should take note.

BLOOMBERG OPINION

Trump casts doubt on integrity of prolonged count

ROME, Ga./PHILADELPHIA — President Donald Trump cast doubt on the integrity of the US election again on Sunday, saying a vote count that stretched past Election Day would be a “terrible thing” and suggesting his lawyers might get involved.

With two days to go until Tuesday’s election and trailing Democratic rival Joe Biden in opinion polls, Mr. Trump raced through battleground states in a late hunt for support, while Mr. Biden implored attendees at two rallies in the pivotal state of Pennsylvania to get out and vote.

Americans have rushed to vote early, already casting nearly 60 million mail-in ballots that could take days or weeks to be counted in some states — meaning a winner might not be declared in the hours after polls close on Tuesday night.

“I don’t think it’s fair that we have to wait for a long period of time after the election,” Mr. Trump told reporters before a rally in North Carolina. Some states, including Pennsylvania, do not start processing mail-in votes until Election Day, slowing the process.

Mr. Trump has said repeatedly without evidence that mail-in votes are prone to fraud, although election experts say that is rare in US elections. Mail voting is a long-standing feature of American elections, and about one in four ballots was cast that way in 2016.

Democrats have pushed mail-in voting as a safe way to cast a ballot during the coronavirus pandemic, while Mr. Trump and Republicans are counting on a big Election Day in-person turnout.

“We’re going in the night of — as soon as the election is over — we’re going in with our lawyers,” Mr. Trump told reporters without offering further explanation.

Mr. Trump denied an Axios report that he has told confidants he will declare victory on Tuesday night if it looks like he is ahead, even if the Electoral College outcome is unclear. But he said it was a “terrible thing” that ballots would be counted after Election Day.

Asked about the Axios report, Mr. Biden told reporters between campaign stops in Philadelphia: “The president’s not going to steal this election.”

Mr. Trump, aiming to avoid becoming the first incumbent president to lose a re-election bid since fellow Republican George H.W. Bush in 1992, trails Mr. Biden in national opinion polls.

But the race is seen as close in enough battleground states that Mr. Trump still could achieve the 270 votes needed to win in the state-by-state Electoral College that determines the victor. Mr. Trump held rallies in Michigan, Iowa, North Carolina and Georgia, and planned a late one in Florida. Mr. Biden, the former vice president, made several appearances in closely contested Pennsylvania, the state where he was born and one that is crucial to his quest for the White House.

“There is nothing he can do to stop this nation from voting,” Mr. Biden told a drive-in rally in a parking lot outside a Philadelphia church, where supporters honked their car horns in approval.

“He knows that if you get to have your say, he doesn’t stand a chance. But the American people will not be silenced,” Mr. Biden said.

Mr. Trump, buffeted by snow flurries in Washington, Michigan, a town north of Detroit, wore his trademark red cap emblazoned with the words “Make America Great Again” as he promised a boisterous crowd he would lead a recovery from the pandemic, which has killed more than 230,000 Americans and hammered the economy.

“I’m delivering the great American comeback, and we’re not having any lockdowns,” Mr. Trump promised.

‘NEVER HAD ANYTHING LIKE THIS’
Mr. Biden criticized Mr. Trump for encouraging his supporters after they harassed a Biden campaign bus in Texas. A caravan of vehicles bearing Trump campaign flags surrounded the bus carrying campaign staff on a highway on Friday, forcing the campaign to cancel two events.

“We’ve never had anything like this. At least we’ve never had a president who thinks it’s a good thing,” Mr. Biden told reporters.

Mr. Trump on Saturday retweeted a video of the incident and wrote: “I LOVE TEXAS!” In Michigan, he asked supporters if they had seen videos of “our people” with the bus.

“It was Trump Trump Trump and the American flag,” Mr. Trump said.

The FBI said on Sunday it had opened an inquiry into the Texas incident. The president later criticized the investigation, tweeting: “In my opinion, these patriots did nothing wrong.”

Mr. Biden is ahead 51% to 43% nationally in the latest Reuters/Ipsos poll, taken Oct 27-29. The race remains a toss-up in Florida, North Carolina and Arizona, Reuters/Ipsos polls showed, as Mr. Trump trails by 7 percentage points in Pennsylvania and 10 points in Michigan and Wisconsin. 

In his 2016 victory over Democrat Hillary Clinton, the real estate developer and reality TV personality-turned-politician was propelled into the White House by victories in Pennsylvania, Wisconsin and Michigan, states that for decades had gone into the Democratic column.

A record-setting 92.2 million early votes have been cast either in-person or by mail, according to the US Elections Project, representing about 40% of eligible voters. The early surge has led Michael McDonald of the University of Florida, who administers the project, to predict a turnout rate of about 65% of eligible voters, the highest since 1908. — Reuters

Europe’s COVID-19 cases double in 5 weeks

EUROPE’s new coronavirus disease 2019 (COVID-19) cases have doubled in five weeks, propelling the region on Sunday across the bleak milestone of 10 million total infections, according to a Reuters tally.

Just last month, both Latin America and Asia reported over 10 million total cases in their regions. The United States alone has over 9 million cases with a rapidly accelerating outbreak.

While Europe almost took nine months to record its first 5 million COVID-19 cases, the next 5 million cases were reported in slightly over a month, according to a Reuters analysis.

With 10% of the world’s population, Europe accounts for about 22% of the global caseload of 46.3 million infections. With over 269,000 deaths, the region accounts for some 23% of the global COVID-19 death toll of nearly 1.2 million lives lost.

Amid the surging cases, France, Germany and the United Kingdom have announced nationwide lockdowns for at least the next month that are almost as strict as the restrictions in March and April. Portugal has imposed a partial lockdown and Spain and Italy are tightening restrictions.

According to Reuters analysis, Europe has reported more than 1.6 million new cases in the past seven days, nearly half the 3.3 million reported worldwide, with over 16,100 deaths, a 44% jump over the previous week.

For every 10,000 people in Europe, over 127 coronavirus cases have been reported and about four people have died, according to a Reuters analysis. In the United States there have been 278 cases and seven deaths per 10,000 residents.

Within the region, Eastern Europe has nearly one-third of the total reported COVID-19 cases, the highest number of cases, while Southern Europe leads the death toll with about 32% of the total coronavirus-related deaths in Europe, according to a Reuters analysis.

Russia is the worst-affected Eastern European country with over 1.6 million COVID-19 infections. The nation’s Deputy Prime Minister Tatiana Golikova said on Wednesday that hospital beds were at 90% of capacity in 16 regions of the country.

Governments across Europe have been under fire for a lack of coordination and for failing to use a lull in cases over the summer to bolster defenses, leaving hospitals unprepared. — Reuters

Tourism app promotes domestic travel amid the pandemic

The Department of Tourism (DOT) and the Tourism Promotions Board (TPB), in partnership with inclusion technology venture builder HIMO Global Inc., launched an application that helps tourists gather information about local destinations, carry documents conveniently, and travel safely amid the COVID-19 pandemic.

Travel Philippines contains a destination database with a list of accredited restaurants and accommodations as well as articles on lifestyle. The information is fact-checked and updated daily by a dedicated team from DOT, TPB, and local government units. If a tourist finds a particular accommodation, restaurant, or article relevant to their trip, they can bookmark the items and organize them in a personal itinerary maker.

Digital copies of pertinent documents such as boarding passes and medical certificates can also be uploaded on a personal encrypted folder. To further ensure a smooth trip, the application’s news feed is updated with the latest health and safety protocols for each destination.

Travel Philippines is a progressive web application, meaning it can be accessed across all devices and operating systems through a web link. In consideration of areas in the country with poor Internet connection, Travel Philippines can also run offline.

The travel industry was severely affected by the COVID-19 pandemic, with the DOT saying revenues declined by 55% in the first four months of 2020 to P79.8 billion from P180.5 billion in the same period a year ago. 

Through digital initiatives such as Travel Philippines, industry leaders hope that they can recover and adapt to the new future set by the pandemic. “Travel Philippines marks DOT’s continued push to breathe new life into the severely affected tourism industry by promoting safe and responsible travel,” said department secretary Bernadette Romulo-Puyat in a press statement.

While the application is a step towards this new vision, the TPB clarifies that it is not a requirement for entering a destination. “Various local government units have varying policies and protocols in place,” said Anthonette Velasco Allones, chief operating officer of the TPB, during a virtual presser on October 30.

 DOT, TPB, and HIMO Global Inc. will expand the featured locations on the database as it only contains those that are open for travel, namely Palawan, Boracay, Bohol, Baguio, Ilocos Norte, and Metro Manila. They are also coordinating with the Department of Health (DOH) in getting a list of COVID-19 testing laboratories per locality.

Additional features in the pipeline include a list of travel deals offered by each destination’s local government unit, integration of cashless payments, a menu-viewing and food-ordering tool, and a chatbot that allows tourists to talk with local tour guides ahead of their trip.

“While it’s a little bit more challenging to travel, the ability to be more helpful is getting bigger,” said Winston Damarillo, president of HIMO Global Inc. — Mariel Alison L. Aguinaldo 

Unconscious bias makes it harder for women entrepreneurs to get funding

Unconscious bias puts women-backed businesses at a disadvantage when it comes to pitching and funding. 

“I’ve been on calls and discussions where I see women often being described more as ‘young’ and ‘inexperienced,’ whereas I do see men with similar profiles often being described as more ‘promising’ and ‘visionary,’” said Shuyin Tang, partner at Patamar Capital, an early-stage venture capital firm, and chief executive officer and co-founder of Beacon Fund, an investment firm for women, during a virtual event on closing the funding gap. 

A 2019 survey by HSBC Private Banking found that 35% of female entrepreneurs have experienced unconscious bias, wherein investors would ask them more about risk mitigation plans or personal matters—such as family circumstances—compared to male entrepreneurs.

Unconscious biases are “social stereotypes about certain groups of people that individuals form outside their own conscious awareness.”

One way to address this bias is to put more women in decision-making positions within investment teams and pitch panels. According to All Raise, a non-profit organization aiming to accelerate the success of female founders and funders, only 12% of decision makers at United States–based venture capital firms are women. Furthermore, 68% of these firms do not have any female partners, or investors who are able to write checks.

“You don’t need to be female to be able to invest in female founders, but there’s a level of understanding that is often lacking [with male investors],” said Patricia Sosrodjojo, partner at Connecting Founders, a capital advisory firm for female founders, citing male investors who ask female technology (femtech) founders why they don’t have products for men.

Funding firms should periodically re-evaluate their investment process to identify steps where unconscious bias may come into play. This initiative provides investors with a common reference point that will allow them to call each other out if they make biased decisions. Ms. Tang said that her team conducts monthly assessments of how their process is working, helping them review if they might have made biased decisions.

On an individual level, unconscious or implicit bias training conducted by professionals can also help investors identify their deep-seated preconceptions. This training must be provided to employees of all circumstances and not just men. “Just because I’m a female investor doesn’t mean that I’m bias-free or truly see the potential of female entrepreneurs,” said Ms. Tang. 

The EndeavHER: Closing the Funding Gap webinar was held on October 29. — Mariel Alison L. Aguinaldo

These are the airlines teetering on the brink of COVID ruin

IATA, in a new analysis released last week, said total industry revenues next year are expected to be down 46% on 2019’s $838 billion. Without additional government financial relief, the median airline has just 8.5 months of cash remaining at current burn rates.

Having a home government with deep—and open—pockets is emerging as key in terms of whether an airline will make it through the coronavirus pandemic.

Carriers in jurisdictions where there is scant support from up high are most likely to go bust, according to an analysis by Bloomberg News. Using the Z-score method developed by Edward Altman in the 1960s to predict bankruptcies, Bloomberg sifted through available data on listed commercial airlines to identify the ones most prone to financial strife.

Versus the same analysis done in March, when the virus was just starting to spread beyond China into parts of Asia and Europe, rapidly cutting off international travel, the results show a clear swing to the West. At least four of the 10 airlines named back then have restructured in some fashion, and all but one were in Asia.

The list now is populated more by carriers in Africa and Latin America, where some have already folded or entered administration. Representatives from Medview Airlines Plc, Precision Air Services Ltd., Grupo Aeromexico SAB, and Gol Linhas Aereas Inteligentes SA didn’t immediately respond to requests seeking comment.

AirAsia Group Bhd. and Azul SA declined to comment. Thai Airways International Pcl said a reorganization plan will be proposed to the Central Bankruptcy Court by the end of the year, and noted the company plans to fulfill its commitments to all creditors.

A spokesman for Pakistan International Airlines Corp. said while data may show the airline’s liabilities exceed assets by around four times, “in reality it’s different because those liabilities are extended on sovereign guarantees and servicing is done through the government budget. In that sense, the situation isn’t as it shows. We’re comparatively doing okay.”

That’s not to say Asia is out of the woods. AirAsia X Bhd., AirAsia’s long-haul budget arm, is restructuring more than $15 billion of debt and the future of state-run Malaysia Airlines Bhd. remains uncertain. The director of aviation development at the Malaysian Aviation Commission, Germal Singh, said recently the government is unlikely to intervene to help out.

CASH BURN
In Latin America, Grupo Aeromexico SAB last month received a $1 billion bankruptcy loan, while Colombia’s largest airline, Avianca Holdings SA, is awaiting court approval for a $2 billion financing plan as it reorganizes under Chapter 11. Mexican President Andres Manuel Lopez Obrador has ruled out bailouts for large companies, while a Colombian court in September temporarily blocked a $370 million government loan to Avianca after a citizen expressed concern about a lack of guarantees.

That’s in contrast to some parts of Asia. Although Singapore Airlines Ltd. has cut around 20% of its workforce, it’s raised S$11 billion ($8 billion) from loans and a rights issue supported by state investor Temasek Holdings Pte. Cathay Pacific Airways Ltd., which has also slashed jobs, raised billions of dollars in a restructuring in June that resulted in the Hong Kong government getting a stake and two observer seats on its board.

“Many governments have done a good job in financially supporting aviation jobs,” International Air Transport Association (IATA) Director General Alexandre de Juniac said last month. “Where this has not happened—in Latin America for example—we see bankruptcies. Airlines continue to burn through cash and that is expected to persist into next year. Without a second tranche of financial aid, many airlines will not make it through the winter.”

The Z-score method uses five variables measuring liquidity, solvency, profitability, leverage, and recent financial performance. The model has an accuracy rate of between 80% and 90% the year prior to insolvency, Altman said in a 2018 interview. A score below 1.8 indicates danger of bankruptcy within two years while a number closer to 3 suggests a company is on solid ground.

Among those airlines found to be most vulnerable in March were Virgin Australia Holdings Ltd. and Thai budget carrier Nok Airlines Pcl. Virgin Australia is now going through an A$3.5 billion ($2.5 billion) restructuring under its new owner Bain Capital LP, while Nok Air has applied to the nation’s Central Bankruptcy Court to undergo debt rehabilitation.

FRESH WAVES
Alarmingly, the coronavirus outbreak shows little sign of abating. Global cases exceed 46 million as new waves sweep across Europe and the US, sending many cities back into partial lockdown. Deaths are nearing 1.2 million. Several vaccine trials have suffered setbacks and any effective jab may be months away.

IATA, in a new analysis released last week, said total industry revenues next year are expected to be down 46% on 2019’s $838 billion. Without additional government financial relief, the median airline has just 8.5 months of cash remaining at current burn rates.

While some places—in Asia, notably Singapore, Hong Kong, Australia, and New Zealand—are toying with travel bubbles, IATA has said thorough COVID-19 testing is the only way to get the aviation industry back on its feet. But that idea is yet to gain widespread traction given the elusiveness of the virus, which typically has a two-week incubation period.

At stake are plane orders worth hundreds of billions of dollars with Boeing Co. and Airbus SE. Both manufacturers are facing scores of scheduled deliveries that may be deferred, or worse, canceled.

BACKLOG UNCERTAINTY
On average, there’s a 12.6% chance that airlines may cancel or defer planned deliveries from Airbus, according to an analysis by Bloomberg Intelligence, which arrived at the number based on the five-year default probability of airlines or their parents. The situation is worse for Boeing, which faces an average 14% risk for its orders, with American Airlines Group Inc. and United Airlines Holdings Inc. most likely to revisit their plans.

As many as 900 planes each at Boeing and Airbus are from unidentified customers and failed airlines and aren’t given any risk rating, BI analysts led by George Ferguson wrote in an Oct. 10 report. Airlines undergoing restructuring, like Avianca and Latam Airlines Group SA for Airbus, and Aeromexico and Virgin Australia for Boeing, pose the biggest cancellation risk.

“The worst isn’t behind any airline,” said Akbar Al Baker, chief executive officer of Qatar Airways Ltd., which has already received $2 billion in state aid. “Airlines need to be supported by their governments to survive.” — Anurag Kotoky and Angus Whitley/Bloomberg 

Britain’s Prince William contracted COVID-19 in April — media

Britain’s Prince William contracted COVID-19 in April at a similar time to his father Prince Charles, British media reported late on Sunday, citing Kensington Palace sources.

William, grandson of Queen Elizabeth and second-in-line to the British throne, kept his diagnosis a secret because he did not want to alarm the country, The Sun newspaper reported.

“There were important things going on and I didn’t want to worry anyone,” William was quoted by the newspaper as having told an observer at an engagement.

He was treated by palace doctors and followed government guidelines by isolating at the family home Anmer Hall, in Norfolk, the newspaper said, adding he still carried out 14 telephone and video call engagements during April.

“William was hit pretty hard by the virus—it really knocked him for six. At one stage he was struggling to breathe, so obviously everyone around him was pretty panicked,” a source told The Sun.

The BBC also confirmed the news from sources late on Sunday, with Kensington Palace and the office of Prince William refusing to comment officially to the news outlet.

The palace was not immediately available for comment late on Sunday.

The residence of William’s father, Prince Charles, had said on March 25 that Charles tested positive for the coronavirus. The heir to the throne had self-isolated at his residence in Scotland for seven days with mild symptoms.

Britain has been hit hard by the coronavirus outbreak and has reported 46,717 COVID-19 deaths—defined as those dying within 28 days of a positive test. A broader measure of those with COVID-19 on their death certificates puts the toll at 58,925. — Reuters

Guidelines for COVID-19 tests for airline passengers could set global bar for reliability, sources say

MONTREAL/WASHINGTON — A global aviation manual now under review by a UN body suggests global guidelines calling for the use of highly reliable tests when screening passengers to detect the novel coronavirus ahead of flights, three sources familiar with the matter said.

Carriers and airports are pushing for uniform global testing guidelines to waive strict quarantine requirements that are decimating travel, with airline trade group IATA (International Air Transport Association) forecasting a 66% decline in 2020 air traffic because of the pandemic.

Travel restrictions and the use of testing now vary globally. Certain airlines require passengers to obtain a negative test, even as some countries allow visitors in without quarantine, while others bar all non-essential foreigners.

The International Civil Aviation Organization (ICAO) Manual on Testing and Cross Border Risk Management Measures, expected in November, would offer voluntary technical guidance but not oblige countries to remove quarantines.

The manual is not expected to suggest specific tests, such as antigen or polymerase chain reaction (PCR), the sources said. Instead, it would recommend passengers be screened using a test with a sensitivity and specificity of 95% so there would be few false positives and negatives, the sources added.

Some rapid tests are less sensitive and therefore more likely to miss positive cases than PCR alternatives, although the accuracy gap has narrowed.

One of the sources said a range of tests, with reliability as low as around 80% to close to 100%, had initially been considered.

Another proposal is that passengers be tested up to 48 hours ahead of travel but not necessarily at the airport, the sources said. The sources declined to be identified as the discussions are confidential.

US Federal Aviation Administration (FAA) Deputy Administrator Dan Elwell told Reuters on Wednesday that the manual would not be “heavy-handed” or provide a prescription for testing. He did not confirm specific details about the manual.

“It’s like ‘look, if you are going to do pre-departure testing or arrival testing or quarantine, here’s how we think you should do it,’” said Mr. Elwell, who heads an ICAO working group on issues like testing and quarantines.

ICAO said in an e-mailed statement the manual provides countries with a risk management framework for evaluating testing options and factors to consider, should a country elect to implement testing.

While the United States “would like to get to a point where quarantine is not necessary,” Mr. Elwell said, “it would be difficult to create global guidelines for removing travel restrictions through testing since countries have individual concerns.” 

“There are a lot of mixed feelings about quarantines.” — Allison Lampert and David Shepardson/Reuters

Britain starts accelerated review for AstraZeneca’s potential COVID-19 vaccine

AstraZeneca Plc said on Sunday Britain’s health regulator had started an accelerated review of its potential coronavirus vaccine.

“We confirm the MHRA’s (Medicines and Healthcare Products Regulatory Agency) rolling review of our potential COVID-19 vaccine,” an AstraZeneca spokesman said.

In rolling reviews, regulators are able to see clinical data in real time and have dialogue with drugmakers on manufacturing processes and trials to accelerate the approval process.

The approach is designed to speed up evaluations of promising drugs or vaccines during a public health emergency.

AstraZeneca’s COVID-19 vaccine is being developed along with the University of Oxford. Bloomberg reported on Friday that MHRA had also begun an accelerated review for the COVID-19 vaccine candidate from Pfizer Inc.

AstraZeneca and Pfizer are among the frontrunners in the race to develop a vaccine for the coronavirus, with the race also including Johnson & Johnson and Moderna Inc. Their vaccine candidates are in late-stage trials, interim data from which are expected in the coming weeks.

The British drugmaker said on Monday its COVID-19 experimental vaccine produces an immune response in both old and young adults. The vaccine also triggers lower adverse responses among the elderly, it said.

The novel coronavirus has killed more than 1.19 million people globally, damaged the world economy, and turned normal life upside down for billions of people.

Work began on the Oxford vaccine in January. Called AZD1222 or ChAdOx1 nCoV-19, the viral vector vaccine is made from a weakened version of a common cold virus that causes infections in chimpanzees. — Kanishka Singh/Reuters

Analysts’ October inflation rate estimates (2020)

INFLATION may have slightly picked up in October due to a rise in food prices and transport costs, as well as the impact of base effects. Read the full story.

Analysts’ October inflation rate estimates

Inflation seen slightly faster in Oct.

An uptick in fares and cost of transport may have also contributed to faster inflation in October. — PHILIPPINE STAR/MICHAEL VARCAS

By Luz Wendy T. Noble, Reporter

INFLATION may have slightly picked up in October due to a rise in food prices and transport costs, as well as the impact of base effects.

A poll of 15 economists by BusinessWorld last week yielded a median estimate of 2.4%, close to the higher end of the 1.9-2.7% forecast given by the Bangko Sentral ng Pilipinas (BSP) and well within the 2-4% target this year.

If realized, the median estimate will be a tad faster than 2.3% in September and 0.9% in October 2019. The BSP’s latest average inflation forecast for this year is at 2.3%

Analysts’ October inflation rate estimates

The Philippine Statistics Authority will release October inflation data on Thursday.

Analysts said upside risks from higher prices of some food groups might have caused inflation to slightly quicken last month.

“The recent typhoons could affect the uptick of prices of some commodities such as vegetables. Prices of meat items such as pork and chicken remain high due to limited supply,” said Mitzi Irene P. Conchada, an economist from De La Salle University Manila.

Two typhoons hit the country in late October. The Department of Agriculture  said agri-fishery damage from typhoons Pepito and Quinta reached P67.57 million and P2.2 billion, respectively. Hardest-hit areas include some provinces in Central Luzon, Calabarzon (Cavite, Laguna, Batangas, Rizal, Quezon), and the Bicol Region.

The agency last week raised the suggested retail price (SRP) for various cuts of pork sold in Metro Manila to account for shortages caused by the African Swine Fever. The new SRP for pork shoulder, known as kasim, is now at P260 per kilogram (from P230), while the SRP for pork belly, or liempo, was set at P280 per kilogram (from P250).

An uptick in fares and transport costs may have also contributed to faster inflation in October as travel restrictions were eased and more economic activities restarted, analysts said.

“Transport costs are expected to have provided some upward contribution as well as mobility, especially from public transport,” Security Bank Corp. Chief Economist Robert Dan J. Roces said.

He added that higher electricity rates in areas served by Manila Electric. Co. (Meralco) could be another upside risk to inflation. October power rates rose by P0.1212 per kilowatt-hour (kWh) to P8.55 per kWh from the previous month, Meralco said.

Other factors such as base effects and education expenses in October may have also led to quicker inflation, said ING Bank N.V. Manila Senior Economist Nicholas Antonio T. Mapa.

But a slightly faster inflation will not be enough to compel the central bank to further cut rates, according to analysts.

“A record low local policy rate of 2.25% would still remain unusually below the inflation rate that results in net negative interest rates, thereby making any further cut in policy rates more challenging at the moment,” Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said.

“BSP will respond to the third-quarter GDP number rather than the inflation at this point. We expect that if the third-quarter GDP will remain worse than -8% to -9%, then the BSP will likely cut overnight policy rates further,” Sun Life Financial Economist Patrick M. Ella said.

The economy shrank by a record 16.5% in the second quarter as it succumbed to the impact of the tight lockdown during the period.

While a less steeper GDP contraction is expected in the third quarter as the economy gradually reopened, the government estimates GDP to fall by 4.5% to 6.6% this year. The official third-quarter GDP data will be released on Nov. 10.

Meanwhile, Alex Holmes, an economist from Capital Economics, expects the third-quarter growth data to underwhelm, adding that the BSP may be “too upbeat” on its economic outlook.

“We continue to expect another cut by the BSP before the end of the year. Just a 25-bp (basis point) cut, taking the policy rate down to 2%,” Mr. Holmes said.

The Monetary Board will hold its policy setting on Nov. 19, before its final meeting for the year on Dec. 17.

The BSP has slashed key policy rates by 175 bps this year to support the economy amid the pandemic. This has brought down the overnight reverse repurchase, lending, and deposit facilities to record lows of 2.25%, 2.75%, and 1.75%, respectively.

While the policy-setting body has opted for a “prudent pause” in its August and October meetings, BSP Governor Benjamin E. Diokno has said that the central bank continues to have room for further easing when the need arises. He said this would allow previous actions to be fully absorbed by the financial system.

Mr. Diokno has also said they would carefully assess the timing to unwind aggressive policy measures done in light of the crisis to prevent serious repercussions on the economy.

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