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ERC orders distribution utilities to expedite customer switching

THE Energy Regulatory Commission (ERC) has ordered distribution utilities to promptly process the applications of customers switching to other retail suppliers, on threat of penalty.

According to the regulator, the Retail Competition and Open Access (RCOA) scheme, a program allowing entities with large power needs to choose their own providers, is still being implemented in Luzon and Visayas.

In an advisory published Wednesday, the ERC ordered distribution utilities to process within 20 days the switching requests from their huge customers. Failing to do so “without any valid justification” may subject them to penalties.

“Distribution utilities are directed to facilitate the necessary requirements for the customer switching within 20 days from the receipt of the information on the executed retail supply contract from the retail electricity supplier or contestable customer,” it said.

Last month, the ERC reported a slight uptick in the number of power customers with more than 750 kilowatt-hours of usage in the contestable retail electricity market in the second quarter, though they contracted lower levels of supply during the period due to the impact of the coronavirus pandemic.

The ERC said this meant that more buyers have “opted to enjoy the benefits” of the RCOA, which is authorized by the Electric Power Industry Reform Act.

The weighted average price of power fell to P3.95 per kilowatt-hour (kWh) in June and P3.97/kWh in May from P4.12/kWh in April.

These developments were a “silver lining in the midst of this COVID-19 (coronavirus disease 2019) pandemic,” ERC Chairperson Agnes VST Devanadera has said.

At the end of June, there were 2,089 registered customers with contestability certificates, 70% of which have entered into retail supply contracts, while the rest are still powered by their respective distribution utilities. — Adam J. Ang

NEA loan collections fall 27% in first half after payment grace periods

THE National Electrification Administration (NEA) said loan collections fell in the first half after electric cooperatives were given more time to make payments due to the coronavirus pandemic.

With a collection efficiency rate of 95.90%, the agency took in P773.91 million worth of amortization from rural utilities, down 27% from a year earlier, according to a report issued by the NEA’s Finance Services Department.

Some electric cooperatives were able to make advance payments, while others took advantage of the grace periods offered in the past two quarters.

“The agency attributed this drop to no payment received from the ECs (electric cooperatives) for the first semester of 2020 but used the advance payment instead to pay for loan amortizations due,” it said.

“The lower collection was also due to the extension of the 30-day grace period for first and second quarter amortization payments in compliance with the directive of regulatory agencies in light of the coronavirus pandemic,” it added.

It identified the rural utilities making the most payments as Nueva Ecija II Electric Cooperative – Area 2, Occidental Mindoro Electric Cooperative, Central Pangasinan Electric Cooperative, First Laguna Electric Cooperative, and Misamis Oriental I Rural Electric Service Cooperative.

In the seven months to July, NEA extended P343.45 million in loans to electric cooperatives, most of which supported electrification projects and working capital requirements.

The agency tasked with electrifying the countryside offers various loan windows to rural utilities, such as regular, calamity, and concessional loans, stand-by and short-term loans, single-digit system loss loans, renewable energy loans, and modular generator set loans. — Adam J. Ang

DA offers grant program for farm cooperatives

THE Department of Agriculture (DA) said it developed a grant program that will provide capital to farm cooperatives.

In a statement, the DA said the program, known as the Enhanced Kadiwa Financial Grant, will fund purchases of supplies and equipment to enable direct selling to consumers. Covered items include packing equipment, delivery trucks, and vegetable crates.

The program can also serve as a revolving fund for assemblers and consolidators of fresh produce.

“The program also makes fresh produce more affordable by cutting out the layers of traders. Through the Enhanced Kadiwa Financial Grant, the cooperatives are also capacitated to take on more roles in the food supply chain, thus increasing their income,” the DA said.

The grant program has funding of P250 million and is part of the DA’s Kadiwa ni Ani at Kita marketing initiative linking producers directly to consumers.

The DA said the Kadiwa program has sold P6.5 billion worth of agricultural commodities, benefiting nearly 2 million households in the National Capital Region since the start of the coronavirus disease 2019 (COVID-19) pandemic.

An estimated 23,294 individual farmers and fishers and 4,453 agri-fishery cooperatives have benefited from this program, the DA said. — Revin Mikhael D. Ochave

Ensuring continuity

 

Considering how COVID-19 has affected the global economy, and how it has practically suspended tourism and business travel until who knows when, does it still make sense for the Philippines to invest in new international airports now, to serve Metro Manila and its neighboring provinces?

One can argue that government money can perhaps go to better use if a bigger chunk is directed towards improvements in public health and education services, as well as creating job opportunities for millions of workers displaced by COVID-19. But, I believe, it is also time to encourage and support the private sector to help out in a bigger way on infrastructure projects like airports and tollways and telecommunication facilities.

In this line, and noting how spending on public works can also help grow a stumbling economy, I am actually in favor of building a new international airport complex in Bulacan; to rehabilitating the existing international airport complex in Pasay and Parañaque cities; to putting up a new international terminal and runway at Sangley Point in Cavite; and, to reopening the shipyard in Subic Bay, Zambales, among others.

I support the proposal to make new toll roads, including one that will run parallel to the Pasig River, as well as extending the existing tollways to the Ilocos Region to the north and the Bicol Region to the south. In addition, I support the proposal to build a new telecommunication backbone and more hospitals. But, more than anything, we should all support efforts to improve the local production of food and potable water.

Commuter railways, and also for cargo, going north and south, and subways in Metro Manila are all part of the long list of desired facilities. And, many of these appear to be in the present pipeline of projects. Frankly, I am not very concerned with who will build them or which foreign government is extending assistance. I am more concerned with whether or not any of these projects will actually get done.

In our experience, economic and development planning — and the political will to execute projects — come in cycles. Since 1986, these are cycles of six years — or one cycle for every presidential term. While there may have been references to the government’s Medium-Term Development Plan, it would seem we have had only relative success in pursuing long-term projects or those with long gestation periods.

Some big proposals stay only in the planning stage. A few don’t go beyond lip service and storyboards. For example, we had planned on an integrated steel mill as early as the 1950s, and had some relative success when National Steel Corp. was put up. But this government corporation has since been sold to the private sector, and to date, I am unsure if any integrated steel mill — one that actually makes steel rather than just rolling them — is actually operating in the country.

We built a nuclear plant in the 1970s but have since abandoned it. It was built, but never used, and yet we still agreed to pay the foreign loans related to its construction. We ran a railway from Damortis, La Union all the way to the Legaspi, Albay up until the 1970s. To date, through the rehabilitation of the rail system in parts, we have had a running commuter service within Metro Manila and to some parts of Laguna. But, we have yet to restore the rail line to its former glory. And, we have not managed to get cargo moving on rail.

We have run an international airport within Metro Manila since after World War 2, and now operate four terminals. But we have not gone beyond two runways. Up until the start of the COVID-19 pandemic, our international airport was almost always congested because of runway limitations. The same can be said of our commuter light rail system in the metropolis, which we have expanded to only three running lines in 36 years or since LRT-1 started in 1984.

The efficient movement of people and goods is essential to any economy seeking to grow. Inefficiencies in these movements, or bottlenecks, are enough to stifle growth and to hold back an economy from operating at capacity and reaching full potential. Now that the economy has stumbled, and is grappling with recovery, it needs a strong push in the right direction. Investing in infrastructure can help in this regard.

Investing in worthwhile projects now is bound to produce better returns for investors in the long term, rather than letting cash sit in banks. Even the stock market is not producing attractive returns. The property market remains attractive for those with the funds to invest, but investors have become more particular about purchases. Everybody is looking for a bargain. Where else can one invest money now that can promise a relatively good return?

And while more private money appears to be heading to financial technology, software development, and technology-related services, I still see value in putting cash in hard infrastructure related to power, water, transportation, food and water production, telecommunication, and delivery of health and education services. Housing demand will have to make up for the drop in retail and commercial property development.

I believe the COVID-19 global pandemic to be temporary, and that the global economy will eventually recover from it. In short, while things may not go back to exactly the way they were, for sure, the global economy will eventually be back in business. And when that happens, our investments in public infrastructure will start to make more sense — and perhaps bear fruit.

When the world reopens, even in the era of electric transportation, we will still need roads and rails. Smaller planes, and short-distance travels by air or sea, will still need ports for business travel and tourism. Exports and imports will be restored and will require facilities for storage and transportation. And, even without a pandemic, people will still get sick and need hospitals and other similar medical facilities.

Many of the proposed or planned projects now will take more than two years to complete. To start on them now will give us an advantage as the world economy begins to recover. Early preparation is a key element of success. And while the threat of disruption remains not only because of the pandemic but because of geopolitics and international trade issues, these too will eventually pass. Life will go on.

The more crucial part is ensuring the continuity of long-term plans and programs, and assuring investors and proponents that government planning and execution now, and its imprimatur, will go beyond the remaining years of the Duterte Administration. We cannot risk all these efforts being overturned by a succeeding administration, for one reason or the other. We have had enough economic hiccups since 1945. By this time, we should have already learned the hard lessons of the last 75 years.

 

Marvin Tort is a former managing editor of BusinessWorld, and a former chairman of the Philippines Press Council

matort@yahoo.com

Flatten the fear and hysteria, not the economy

As more comparative economic data come in, the more they confirm that the Philippines’ hard, strict, and draconian lockdown policies did more harm than good. We can summarize them as follows:

One, the Philippines has second worst performing gross domestic product (GDP) in Asia next to India, the economic contraction is similar or worse than countries with five times to 15 times as many COVID-19 deaths per million population (CDPMP) than us, like the US, Brazil, Canada, Mexico, UK, France, Italy and Spain. Hong Kong has a deeper contraction but it is partly due to their Basic Law having been amended so that some China laws will apply to Hong Kong.

Two, Philippines unemployment rate of 10% last July is again second highest in Asia next to India, and worse than those in the UK, France, and Italy which have very high CDPMP.

Three, Philippines has the steepest decline and contraction from last year probably in the whole world. From 6% in 2019 to -8.6% in the first half (H1, January-June) 2020, or a dive of -14.6% points.

Four, the Philippines should not have had such a steep contraction considering that we have a small GDP of only $377 billion in 2019, just slightly higher than our neighbors with small populations like Hong Kong, Singapore and Malaysia (see Table 1).


Among the questions that I often encounter from non-economists is “What do those GDP growth or contraction mean to our daily lives?”

It is a valid and practical question so we have to quantify in pesos, not just percentages, the changes in GDP. We better use current or nominal prices as they reflect current spending and income. The deep contraction means that some P680 billion in national income was lost in H1 2020 compared to H1 2019. It also means that our GDP size in H1 2020 was even lower than H1 2018 or two years ago, despite the increase in population of nearly 3 million over the past two years.

GDP by expenditure, the biggest contraction was in private investment or gross capital formation, a P919 billion decline. GDP by industry, the biggest contraction was in the industrial and manufacturing sector (see Table 2).


The hypothesis “more lockdown = more virus control” has been proven to be wrong. Otherwise we should not have a high number of COVID-19 cases and deaths now considering the very strict lockdowns from March to May.

President Rodrigo Duterte’s policy of indefinite lockdown until a safe and effective vaccine is available is wrong. It will prolong the economic agony without reducing COVID-19 cases. Instead, the President and the Inter Agency Task Force (IATF) should open up the economy by Oct. 1, lift the generalized lockdown for all, and limit the quarantine only to small areas where serious cases are reported, and retain the restriction on mobility those 70 years and above and immuno-compromised people.

The doctors in the Flatten the Fear Philippines coalition suggested many cheap immune-boosting measures that people themselves can take without waiting for the vaccine like taking more Vitamins C and D, the use of known prophylaxis (hydroxychloroquine, zinc, etc.) vs other infectious diseases like malaria.

Yes, there are existing and cheap measures to flatten the fear and hysteria. The economy must rise again, the high government spending and borrowings that will require high taxes and regulatory fees must be controlled and flattened.

 

Bienvenido S. Oplas, Jr. is the president of Minimal Government Thinkers

minimalgovernment@gmail.com

Price is no longer an obstacle to clean power

AS THE HARM from climate change becomes increasingly manifest, there is some good news: The estimated cost of reducing carbon emissions is falling rapidly. One dramatic example is an analysis by Geoffrey Heal of Columbia University showing that it would cost only $6 billion a year for the US to move to carbon-free electricity generation by 2050.

Even if the precise numbers are off, Heal is right to emphasize that the transition to cleaner energy is much less costly today than it used to be. Three forces are changing the math.

First, renewable power costs are dropping so fast, both utility-scale solar and onshore wind power have become cheaper than natural gas or coal power, as Lazard’s levelized-cost-of-energy estimates from 2019 show. As I wrote when these numbers came out, multiple forces have driven costs down, including ongoing improvements in technology and lower capital costs. (In November, Lazard will have updated estimates of the cost of various energy technologies.)

Second, the cost of storing renewable energy is also falling. The challenge with wind and solar energy is that they are intermittent, so they require either supplemental conventional power, such as combined-cycle natural gas, or enough storage to smooth the variation relative to demand. As storage becomes more affordable than supplementation, the share of energy production based solely on renewable power can expand.

Here, too, there is good news: Storage technologies are evolving rapidly and costs are plummeting. The costs of lithium-ion battery technology are declining especially fast compared with other storage technologies, Lazard’s study of the levelized cost of storage shows. (Heal admits that these costs are the most uncertain part of his analysis; for simplicity he assumes that enough storage will be needed for two days of aggregate production from all renewable plants. That feeds into his $6 billion a year estimate.)

Third, and crucially, many power plants are nearing the end of their useful lives and need to be replaced one way or another. That means the cost of building new facilities is a given, and shouldn’t be counted as a cost of the transition to lower-carbon electricity. So now is an opportune moment to jump to improved production technologies, before new capital costs are incurred and the technologies are locked in.

If the costs of replacing old plants are included, Heal’s estimate rises to $41 billion a year — still quite manageable.

So how do we get there from here? The Business Roundtable recently endorsed pricing carbon along with a portfolio of complementary policies to reduce emissions. Most economists, in contrast, would put almost exclusive emphasis on pricing carbon, downplaying other approaches such as tax subsidies and energy-efficiency standards.

But Heal is skeptical that simply putting a price on carbon will work all that well, at least unless the price is much higher than commonly appreciated. As a result, he reluctantly embraces additional policy measures, joining the Business Roundtable in embracing more than just pricing carbon.

The bottom line? The cost of switching to cleaner energy is falling drastically and seems eminently manageable. Heal suggests that for $20 a person per year, it’s possible to eliminate net carbon emissions from our power grid within three decades. His estimates may be too optimistic, but he’s right that the cost of switching to clean energy is falling fast — and given the stakes, it’s becoming the bargain of the century.

BLOOMBERG OPINION

Worst-case scenarios

 

THERE is always at least one person in your chat group that posts, often and lengthily, worst-case scenarios. As if the pandemic is not scary enough, the prophet of doom manages to trigger your worst nightmares. Using old data, fake news, and even prophecies of Nostradamus, his warnings are posted. The vaccine won’t be available until the next decade. There is a new strain of the virus that will make one or both of your eyeballs pop out into your sinigang soup. The mask you’re wearing has been manufactured to spread the virus.

And get this, you complacent optimist, even if you have no symptoms like coughing and loss of a sense of smell (though you can still sniff bull shit) you may already be contaminated and dying, but don’t know it yet. So, there.

Even with the admonition of legal luminaries in the group who lose their temper with Mr. Doom (where did you pick up that fake news again?), the latter is unrepentant in his crusade to make you lose sleep — do you need an affidavit?

Should pessimists ruin our sense of equanimity? Do we need to constantly challenge them and get into verbal tussles just to put doomsayers in their place? Are worst-case scenarios worth worrying about?

Scenario-building has long been a corporate planning tool. The process is derived from movie-making where scenes are laid out in a storyboard to determine the narrative flow. They also detail the logistical requirements such as the budget, sets, costumes, actors needed in the frame, and the location or weather for the best shoot.

Even in these unpredictable times, scenarios are still useful. They determine the way forward. Restaurants decide how long they can last in varying lockdown levels (just take-out) to see how much revenue will be diminished by fewer diners allowed in the same space. What scenario justifies closing the operation?

Worst-case scenarios are the hardest to deal with, even when they are assigned a low probability. In this pandemic, the vaccine seems to be the silver bullet that everyone is waiting for to kill this vampire sucking blood from the economy.

And when do we go back to watching movies on the big screen again? When can we travel freely? Will life really get back to the old normal when the contagion count is no longer a daily bulletin to watch out for at 4 p.m.? Maybe the news will finally go back to trivial pursuits like what politicians and movie stars are up to, not necessarily together.

Still, scenarios are based on what Donald Rumsfeld called the “known knowns,” or already familiar variables. The other category of “totally unexpected” is not considered in a scenario-building exercise. And a virus emanating from a city in China is definitely a “black swan,” a term first used by Nassim Taleb. He cites such an unforeseen event as the 2008 financial crisis, another contagion of sorts, arising from the proliferation of an investment instrument called collateralized debt obligation (CDO).

Containing panic and thus being able to cope with life’s volatility require us to revisit the stoic philosopher and Roman emperor Marcus Aurelius: “You have power over your mind — not outside events. Realize this and you will find strength.” Stoics are known for their calm reaction to both good fortune and bad.

Controlling our state of mind allows us to function normally and not be paralyzed by fear. No need to be reckless. We still wear a face mask when we have a haircut. Barbers are trained to cut around the ears.

Life is full of risks, even without a pandemic. We can get run over by a motorcycle. A heart attack can take us after a dinner of crabs at a lavish wedding reception, when this was still possible (and will surely be again).

Life is a gift and we take it one day at a time.

As to the irritating Mr. Doom whose posts you shouldn’t bother to read anymore or take the trouble to argue with, should he still make you lose sleep? Anyway, we are already living in a disaster movie. And we know its ending. There is a sunrise, a new beginning, and stirring music as the credits roll.

The best-case scenario is always a possibility… in our mind.

 

Tony Samson is Chairman and CEO, TOUCH xda

ar.samson@yahoo.com

US-China tensions flare at UN as Trump accuses Beijing of unleashing ‘plague’

NEW YORK — US President Donald Trump told the United Nations General Assembly on Tuesday that China must be held accountable for having “unleashed” COVID-19 on the world, prompting Beijing to accuse him of “lies” and abusing the U.N. platform to provoke confrontation.

China’s President Xi Jinping struck a conciliatory tone in his pre-recorded virtual address to the General Assembly, calling for enhanced cooperation over the pandemic and stressing that China had no intention of fighting “either a Cold War or a hot war with any country.”

But China’s U.N. ambassador Zhang Jun rejected President Trump’s accusations against China as “baseless” and said “lies repeated a thousand times are still lies.”

Trump and Xi, leaders of the world’s two largest economies, laid out competing visions at a time when relations have plunged to their worst level in decades, with coronavirus tensions aggravating trade and technology disputes.

Trump, facing a November re-election battle with the United States dealing with the world’s highest official number of deaths and infections from the coronavirus, focused his speech on attacking China.

He accused Beijing of allowing people to leave China in the early stages of the outbreak to infect the world while shutting down domestic travel.

“We must hold accountable the nation which unleashed this plague onto the world, China,” he said in remarks taped on Monday and delivered remotely to the General Assembly due to the pandemic.

“The Chinese government, and the World Health Organization — which is virtually controlled by China — falsely declared that there was no evidence of human-to-human transmission,” he said.

“Later, they falsely said people without symptoms would not spread the disease … The United Nations must hold China accountable for their actions.”

The president promised to distribute a vaccine and said: “We will defeat the virus, and we will end the pandemic.”

‘GET THROUGH THIS TOGETHER’
Xi’s address contained what appeared to be an implicit rebuke to Trump, calling for a global response to the coronavirus and a leading role for the WHO, which the US president has announced plans to leave.

“We should enhance solidarity and get through this together,” he said.

“We should follow the guidance of science, give full play to the leading role of the World Health Organization (WHO) and launch a joint international response … Any attempt of politicizing the issue, or stigmatization, must be rejected.”

The WHO rejected President Trump’s remarks.

“No one gov’t controls us,” its communications director, Gabby Stern tweeted, adding: “On Jan. 14 our #COVID19 technical lead told media of the potential for human-to-human transmission. Since February, our experts have publicly discussed transmission by people without symptoms or prior to symptoms.”

Russian President Vladimir Putin told the General Assembly the WHO should be strengthened to coordinate the global response to the pandemic and proposed a high-level conference on vaccine cooperation.

China has portrayed itself as the chief cheerleader for multilateralism at a time when President Trump’s disregard for international cooperation has led him to quit global deals on climate and Iran, as well as the U.N. Human Rights Council and the WHO.

Xi took an apparent swipe at Trump’s “America First” policy in a statement on Monday to a meeting celebrating the U.N.’s 75th anniversary. 

“No country has the right to dominate global affairs, control the destiny of others, or keep advantages in development all to itself. Even less should one be allowed to do whatever it likes and be the hegemon, bully or boss of the world. Unilateralism is a dead end,” he said.

The US coronavirus death toll surpassed 200,000 on Monday, by far the highest official number of any country.

Mr. Trump also attacked China’s record on the environment, but leveled no direct criticism at Beijing over human rights.

Mr. Trump, a frequent critic of the U.N., said that if it was to be effective, it must focus on “the real problems of the world” like “terrorism, the oppression of women, forced labor, drug trafficking, human and sex trafficking, religious persecution, and the ethnic cleansing of religious minorities.”

In his U.N. address, French President Emmanuel Macron called for an international mission under U.N. auspices to visit China’s Xinjiang region to look into concerns about alleged abuses of Muslims there.

China’s envoy Zhang Jun issued a statement in response to Mr. Trump’s remarks, accusing the United States of “abusing the platform of the United Nations to provoke confrontation and create division.”

In his speech, Mr. Xi announced plans to boost China’s Paris climate accord target and called for a green revolution, just minutes after Mr. Trump blasted China for “rampant pollution.”

U.N. Secretary-General Antonio Guterres warned that the world was “moving in a very dangerous direction” with US-China tensions.

“We must do everything to avoid a new Cold War,” he said. “Our world cannot afford a future where the two largest economies split the globe in a Great Fracture — each with its own trade and financial rules and Internet and artificial intelligence capacities.

“A technological and economic divide risks inevitably turning into a geo-strategic and military divide. We must avoid this at all costs.” — Reuters

Pfizer’s COVID-19 vaccine trial may beat rivals

THE CORONAVIRUS disease 2019 (COVID-19) vaccine trial designed by Pfizer, Inc. and its German partner BioNTech SE may allow them to find whether their shot works before their fastest-moving rivals.

The companies plan a first look after a mere 32 coronavirus infections have accumulated in their massive 44,000-person trial. That case total could be reached as soon as Sept. 27, according to Airfinity Ltd., a London-based analytics firms tracking vaccine trials. Pfizer has also given itself four chances to get a preliminary result, before reaching the final goal of 164. Some trial experts say the company appears to be looking for a leg up in a race against frontrunners such as Moderna, Inc. and AstraZeneca Plc to be first with a vaccine.

“I’ve never seen a trial where there were four interim analyses; that may be the Olympic record,” said Eric Topol, editor-in-chief of Medscape, a website offering clinical information for health-care professionals, and director of the Scripps Research Translational Institute in La Jolla, California. “It’s obvious why it is being done: so you can just keep looking at the data to try to win a race.”

A wide range of symptoms and severity makes the evaluation of COVID-19 vaccines tricky. The U.S. Food and Drug Administration has said that to be approved, vaccines should cut the number of symptomatic cases by half. Yet documents released by the drugmakers show each has its own approach to defining which symptoms count, and when to count them.

Big drug studies usually allow a panel of monitors to get an early peek at the data once or twice before the planned end. The panel can stop the trial early if a treatment is judged overwhelmingly effective — or alternatively, a total dud. Four early looks may give Pfizer an “easy route” to making sure it has results soon, said Marie-Paule Kieny, a former World Health Organization (WHO) official who’s now a research director at the French health-science institute Inserm.

“It seems that there are different levels of stringency,” she said in an interview. “I wouldn’t say that Pfizer-BioNTech comes out as a star of stringency.”

Moderna, working with the U.S. National Institute of Allergy and Infectious Diseases, won’t dive in until 53 cases have occurred; its ultimate goal is to make a judgment at 151 diagnoses. Cancer powerhouse AstraZeneca, collaborating with the University of Oxford, will take its first look at 75 cases, and not again until the trial is complete with 150.

“All trials have set the bar quite low for what they test against,” said Rasmus Bech Hansen, Airfinity’s chief executive officer.

Pfizer’s trial was designed to evaluate its vaccine candidate “as fast as possible,” said Amy Rose, a spokeswoman, in an e-mail. The company has worked with government scientists to develop best practices for testing and based its schedule for interim analyses on the vaccine’s “strong profile” in early human trials and animal tests, she said.

Moderna’s plan was agreed upon with U.S. regulators, and the company has been open about the numbers since before the trial began in late July, spokesman Ray Jordan said in an e-mail. Case totals for interim analysis were based on probabilities of success and “were not selected based on timeframes,” he said.

AstraZeneca said its trials are conducted under regulatory oversight and its plans have evolved over time to make sure they produce robust information in a timely way. All the companies said their trials will continue beyond points such as a preliminary readout or potential authorization.

Pfizer says its study will likely yield conclusive results in October. None of the drugmakers will likely know whether their vaccines lower hospitalizations until February, according to Airfinity. But it’s the earlier assessments that have observers most concerned.

Treatments such as Gilead Sciences, Inc.’s antiviral remdesivir and convalescent plasma — a soup of immune factors taken from the blood of recovered COVID-19 patients — have already been authorized on the basis of somewhat limited data.  

But those are mainly given to extremely sick patients whose lives are in danger. Authorizing a vaccine, on the other hand, might lead to use in hundreds of millions of uninfected people. If that happens, the data ought to be pretty convincing.

“A small number of additional events occurring or not occurring can tip the balance of a trial as to whether the findings are valid or not,” said Jonathan Kimmelman, director of the Biomedical Ethics Unit at McGill University in Montreal. “If you want robust findings that are going to be generalizable, you’re going to want to accumulate a reasonable number of events.”

Some vaccines are approved after just a few cases appear in trials. Merck & Co.’s Ebola vaccine was approved last year based on a 3,500-patient study that identified 10 cases, according to its label. But that shot had perfect effectiveness and was designed to prevent a disease with a sky-high death rate.

Billions of healthy people around the world at low risk of life-threatening disease could get a coronavirus shot, raising the bar for safety. An authorization that’s based on early results could mean that doctors know very little about a vaccine, other than the bare-bones results. The issue is gaining attention as questions persist about the halt of AstraZeneca’s human tests in the U.S. following the appearance of side effects that Oxford said were unlikely to be linked to the vaccine.

If Pfizer’s vaccine were to receive emergency authorization based on results from October, for example, most patients would have had less than two months of follow-up. At that point, there will be little known about its duration of protection, and its impact on severe disease may not be clear.

Along with a positive test for the coronavirus, Moderna requires most patients to have two or more symptoms to count as a case for judging vaccine efficacy, unless they have a telltale marker like shortness of breath.

SORE THROATS
But Pfizer’s trial reaches deeper into patients with mildly symptomatic cases. It officially counts even a coronavirus-positive patient with fever alone, one of the disease’s most common manifestations, as a symptomatic case.

This may allow Pfizer to tally cases faster, but also could mean an early result based mostly on mild cases, according Airfinity’s Mr. Hansen.

“We should really have hospitalizations or deaths as endpoints because ultimately we want to prevent people from getting seriously ill,” he said.

The rush for results may make it harder to get clear answers about how well the vaccines work, said Mr. Topol, the Scripps scientist.

“We want to know this vaccine has strong efficacy,” he said. “And that means two things: that it works in the majority of people and that it works to prevent serious infections, not sore throats or muscle aches.” — Bloomberg

Rich families view markets with ‘extreme’ caution, Citi says

THE CORONAVIRUS disease (COVID-19) pandemic and the response by governments and central banks have family offices and ultra-wealthy individuals around the world on the defensive, according to a survey from Citigroup, Inc.’s private bank.

About three-quarters of respondents described their 12-month investment sentiment as “cautious.” That increased to 84% when adding those who said they plan to exercise “extreme caution,” according to the survey, which was administered in June and July to about 180 participants. Almost one-in-four said they were concerned about social unrest.

The misgivings come as the global death toll from the pandemic has topped 200,000 in the U.S. and almost 1 million globally. The blow from the virus has put gross domestic product on track to grow just 2% in 2020, according to Bloomberg Economics’ projection, which would be the slowest on record since reforms in the late 1970s. About half of respondents in the Citi survey expected total portfolio returns in the next year of only 1% to 5%.

David Bailin, Citi Private Bank’s chief investment officer, said the caution expressed in the survey “may portend” a missed opportunity. Global stocks have recovered quickly from the coronavirus-fueled sell-off, rebounding more than 45% since March and hitting a record high earlier this month.

“We envision a period of recovery of small-and medium-sized business and accelerating global growth in 2021 and 2022 based on the amount of stimulus issued by governments and further benefits from innovation globally,” Mr. Bailin said.

Private offices have survived the pandemic in good shape, but at least half said liquidity was a concern, according to Stephen Campbell, chairman of the firm’s private capital group.

“They are positioned to deploy further capital as they see opportunities arise, especially in private markets,” Mr. Campbell said, adding that clients are “often willing to sacrifice short-to medium-term returns to maintain” liquidity.

The survey found that 59% of family offices increased their allocation to direct investments, with information technology, health care and real estate the most attractive sectors. More than half said they intend to take advantage of low interest rates by refinancing, increasing lines of credit or both. — Bloomberg

Denver Nuggets bounce back

Nuggets hold off Lakers, halve West finals deficit

THE DENVER NUGGETS played their way back into the Western Conference finals on Tuesday night, riding 28 points from Jamal Murray, a postseason career-high 26 from Jerami Grant and a key late defensive stand to a 114-106 victory over the top-seeded Los Angeles Lakers in Game 3 near Orlando.

Nikola Jokic contributed 22 points and 10 rebounds as third-seeded Denver recorded its first win in the best-of-seven series.

Murray handed out a game-high 12 assists and grabbed eight rebounds, nearly amassing his first career playoff triple-double.

“We’re in this series,” Nuggets coach Michael Malone said. “We let them know we’re not going anywhere. That’s what you guys have done this whole postseason. That’s why everybody is rooting for us. Keep on showing that grit and resilience and playing for each other.”

LeBron James logged a 30-point, 10-rebound, 11-assist triple-double for the Lakers, who had a six-game winning streak come to an end.

Game 4 is scheduled for Thursday (Friday, Manila time).

Down 97-77 with just 10:36 to play, the Lakers used a 19-2 flurry to close within 99-96 with 6:07 remaining.

A layup by James kept the Lakers within 101-98 with 5:26 to go before Los Angeles ran out of gas, missing its next five shots, including four 3-point attempts, and mixing in a pair of turnovers as the Nuggets regained command.

“We turned the ball over too much and we put them on the free throw line,” said James. “I give credit where credit is due. They played better than us. They were more aggressive than us for three quarters.”

Murray’s final two hoops were back-breakers, a 3-pointer with 2:17 to go that pushed the Denver lead to 106-99 and a 29-foot trey that iced the win with 53.3 seconds left.

While Murray and Jokic combined for 50 points, Grant’s scoring was the biggest surprise. He hit seven of his 11 field-goal attempts, including two of five from 3-point range, and made 10 of 12 free throws.

The Nuggets outscored the Lakers 33-18 on 3-pointers and 23-14 from the free-throw line.

Monte Morris added 14 points off the bench for Denver, which came within a buzzer-beating 3-pointer by Anthony Davis from evening the series in Game 2.

“I thought Denver played with great energy throughout the game,” Lakers coach Frank Vogel said. “We didn’t match it early, we matched it late. They’re a great basketball team, so credit them for the win.”

Davis backed James with 27 points but was limited to two rebounds. Kentavious Caldwell-Pope chipped in with 12 points and Kyle Kuzma 11 for the Lakers, who lost just one apiece in each of their first two playoff series, against the Portland Trail Blazers and the Houston Rockets.

Up (29-27) after one period, the Nuggets got the first seven points of the second quarter on a pair of Murray free throws, and 3- and 2-point hoops from Michael Porter Jr. to build the lead to nine.

The margin was 10 at halftime and just 63-58 in the second minute of the third quarter before Grant had a dunk, a free throw, a 3-pointer, and a short-range hoop in an 8-1 run that built a 71-59 advantage.

Denver, which rallied from 3-1 deficits in the first two rounds against the Utah Jazz and the Los Angeles Clippers, went up by as many as 20 early in the fourth quarter before the Lakers rallied. — Reuters

PBA restart viewed as opening up possibilities amid pandemic

By Michael Angelo S. Murillo, Senior Reporter

APART from restarting their currently suspended season, the Philippine Basketball Association (PBA) view the league’s targeted restart next month as opening up possibilities both for local sports and the economy amid the coronavirus pandemic.

Shut since March when the pandemic started to make its presence felt in the country, the PBA is looking to resume its season on Oct. 9 in a “bubble” setting at Clark City in Angeles, Pampanga.

Under the bubble setup, which is similar to that employed in the National Basketball Association, players, coaches, and staff of the teams and the league will be holed up in one location for the duration of the tournament and will be shuttled to and from the hotel and the playing venue.

Games will be played at the Angeles University Foundation while the teams will be staying in the nearby Quest Hotel.

The league is just awaiting approval to proceed from the Inter-Agency Task Force for the Management of Emerging Infectious Diseases (IATF-EID).

For PBA Chairman Ricky Vargas, the league’s restart is about time and said that provided they do what is needed it could bode well on various fronts.

“This is the sport that most of us love, that the whole country loves. And bringing it back on air is a win not only from an entertainment value, but also from a mental health or from an economic (standpoint),” Mr. Vargas was quoted as saying by the official PBA website.

“If our bubble is successful, it will [help] open up the economy and it will become a more engaged environment especially in sports,” he added.

Since hitting the country, the coronavirus pandemic has put the local sporting scene largely at a standstill, with the end still to be determined.

Events have been postponed, or worse, cancelled, and training of athletes is still largely prohibited.

The pandemic, meanwhile, is expected to shrink the Philippine economy by 7.3% in 2020, according to the Asian Development Bank (ADB).

In its latest update to the Asian Development Outlook 2020 released last week, the ADB slashed its 2020 gross domestic product (GDP) forecast for the Philippines to -7.3%, much worse than the -3.8% forecast in June and the 2% projection in April.

The government, however, is hoping to get the economy back on its feet as the year ends by, among other things, allowing more industries to further open up and conduct business.

Mr. Vargas assured that the league is doing everything it can to have its return a success, taking cue from the models available in various leagues, particularly abroad, as well as making sure that their plans are aligned with government regulations and protocols to guard against the spread of the coronavirus.

“There are a lot of models that we can work with, and if we follow those models, I foresee that sports would be back,” the PBA official, who represents the TNT KaTropa, said.

Once the PBA returns, it will be a compressed tournament, lasting only two months and will feature two games daily. And the league expects to crown a champion by the second week of December.

Tournament format will see a single round-robin elimination, with the top eight teams advancing to the next round. The top four seeds will have a twice-to-beat advantage in the quarterfinals. The semifinals will be a best-of-five affair, and the finals best-of-seven.

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