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Meralco powers NCR’s biggest Covid-19 quarantine center

Meralco crews work round-the-clock to ensure safe, adequate, and reliable supply of electricity to the Solaire-PAGCOR Mega Quarantine Facility. The 525-bed center located in Paranaque City, is the biggest quarantine facility in Metro Manila and is one of the additional COVID-19 facilities to serve Metro Manila, Bulacan, and the Calabarzon Region. The said energization project includes the installation of new metering facilities, four (4) new concrete poles, three (3) spans of covered conductor, and three (3) 333KVA single-phase distribution transformers. Powering quarantine and treatment facilities is one of Meralco’s priority projects this year, as the company continues its relentless support to the government and to the private sector in the fight against COVID-19.

 

 

Philippine police draw flak for plan to monitor social media on quarantine

Philippine National Police Lieutenant General Guillermo T. Eleazar (center), head of a task force enforcing quarantine protocols, said that police could use public postings on social media as leads. Photo via Edd Gumban/PhilStar

Philippine police drew criticism from netizens and activists on Sunday for a plan to monitor social media to enforce quarantine rules, with critics accusing the authorities of authoritarianism and double standards.

Philippine National Police Lieutenant General Guillermo T. Eleazar, head of a task force enforcing quarantine protocols, warned of fines and penalties of community service for people violating precautionary measures, while violators of liquor bans will face “additional charges.”

“Police could use public postings on social media as leads, and these will be over and above the police visibility operations we are conducting and will complement tips we get from police hotline,” Mr. Eleazar told Reuters by phone.

Manila ended a second round of strict lockdown measures on Aug. 19 to boost business activity, but people still must wear masks in public and observe one-meter distancing, while children, the elderly and pregnant women are urged to stay at home.

The plan to monitor social media, announced on Saturday, seems to show the police agency “wants to use the pandemic to turn us into a police state, where every action is being watched by the authorities,” Renato Reyes, secretary general of left-wing activist group Bayan (Nation) said on Twitter.

Critics said the plan shows a double standard after a police chief was allowed to keep his post despite flouting a ban on social gatherings in May.

Photographs on the police force’s Facebook page showed Debold Mr. Sinas, chief of the National Capital Region police, celebrating his birthday along with dozens of people without masks sitting close together, with beer cans on their tables despite an alcohol ban. Mr. Sinas apologized.

Mr. Eleazar said criminal and administrative cases have been filed against Sinas for the incident.

The Philippines has recorded 234,570 coronavirus cases, the highest in Southeast Asia, with 3,790 COVID-19 deaths. — Reuters

Singapore tells firms to hire more locals to earn incentives

Singapore has drawn on reserves equivalent to more than 20 years of past budget surpluses to combat the blow from the pandemic. Image by Jason Goh / Pixabay

Singapore said it will support companies that hire new local workers in the next six months under a program that’s aimed at boosting the domestic workforce during the pandemic.

The government plans to disburse S$1 billion ($733 million) to encourage companies to “bring forward their hiring plans,” the manpower ministry said in a statement on Friday. The jobs must pay a gross monthly wage of at least S$1,400, and a company’s incentive will be reduced if existing employees leave, it said.

Eligible companies under the Jobs Growth Incentive program will receive wage support of as much as to S$15,000 for each local hire under 40 years old and S$30,000 for older workers. The government will pay 25% of the first S$5,000 of monthly salaries for those under 40 for a year, and 50% for those over that age, it said.

Singapore has drawn on reserves equivalent to more than 20 years of past budget surpluses to combat the blow from the pandemic. The government last month announced additional support measures of S$8 billion—including the S$1 billion Jobs Growth Incentive program—to help businesses and workers, adding to some S$93 billion in earlier pledges of aid for the economy.

The topic of local employment has been in focus recently, with Singapore authorities making several moves to support domestic talent and curb the number of foreign employees on its shores. Last month, the government announced an increase in the minimum salaries for some foreign pass holders, which could make it tougher for companies to hire overseas workers over Singaporean applicants.

The country is facing the worst recession in its history amid the coronavirus pandemic. Singapore’s unemployment rate rose to 2.9% in the second quarter, the highest since a decade ago during the global financial crisis. — Bloomberg

Factory output continues slump with 11.9% drop in July

FACTORY OUTPUT extended its losing streak to a fifth month in July, with an 11.9% year-on-year decline in the Volume of Production Index (VoPI), the Philippine Statistics Authority (PSA) said Friday.

The PSA was reporting preliminary VoPI results, which form part of the PSA's Monthly Integrated Survey of Selected Industries.

The decline was less than the revised 12.5% drop recorded in June, but deeper than the year-earlier decline of 8.5%.

In the seven months to June, the decline in factory output averaged 12%, compared with the 8.8% drop in the year-earlier data.

In a statement, the PSA said the VoPI's July performance departed from the June trend due to a 400% increase in the index tracking the petroleum products industry group in July, after it posted a gain of 16.1% in June. Also posting gains were two other industries – wood and wood products at 14.4% (from 19.9%) and chemical products 0.1% (from 6.3%).

Seventeen out of 20 industry groups registered negative growth in July, with seven posting slower declines: footwear and wearing apparel (-33% from -41.4%); beverages (-21.4% from -22.7%); non-metallic mineral products (-19.4% from -29.9%); printing (- 34.4% from -58.2%); miscellaneous manufactures (-7.2% from -18.8%); basic metals (- 1.9% from -3.8%); and leather products (-28.1% from -36.4%).

Capacity utilization averaged 75.4% in July. Only seven of the 20 sectors registered capacity utilization rates of at least 80%.

In a statement, the National Economic and Development Authority (NEDA) said the July reading marked a third straight month of reduced rates of decline.

"While manufacturing is not yet in positive territory, the trends of the volume and value of production in the last three months indicate an improvement in the trajectory of economic activity. This momentum suggests a gradual recovery of demand in the coming months until the end of the year," Acting Socioeconomic Planning Secretary Karl Kendrick T. Chua was quoted as saying in the NEDA statement.

Following the 38.8% contraction in April, VoPI declined 24.5% in May and 12.5% in June.

NEDA expects factory output "to remain subdued in the near-term as businesses expect the pandemic to have a lingering impact on production."

Sergio R. Ortiz-Luis, Jr., president of the Philippine Exporters Confederation, Inc. (Philexport), said the slower decline in July is "not a surprise" because of the easing in lockdown restrictions. "Hopefully by the end of the year, more jobs would be opened and transportation, such as buses, will be operational," he said in a phone interview.

Rajiv Biswas, Asia Pacific chief economist of IHS Markit, said the near-term outlook for manufacturing is "likely to be weak," noting that Metro Manila and the surrounding provinces have been moving in and out of stricter quarantine regimes.

"The IHS Markit Philippines Manufacturing Purchasing Managers Index (PMI) for August showed that new work inflows contracted sharply in August as movement was further restricted, while some sectors were forced to operate at reduced capacity," Mr. Biswas said in an e-mail.

"According to the survey, a net positive number of businesses expected an increase in output over the coming year. However, business confidence on the outlook remained subdued, reflecting the uncertainty of the path of the pandemic and lockdown measures," he added.

The Philippine manufacturing PMI of 47.3 in August was lower than the 48.4 reading in July and 49.7 in June.

A PMI reading above 50 indicates an expansion in activity; below 50 signals a contraction.

Mr. Biswas said while IHS Markit expects the Philippine economy to rebound next year, the pace and timing of the recovery remains dependent on the regulatory approval of a coronavirus vaccine and the rollout of immunization programs. — Ana Olivia A. Tirona

Japan hoping subway project contributes to ‘V-shaped’ PHL recovery

Japanese Ambassador to the Philippines Koji Haneda expressed the hope that the Japan-backed Metro Manila subway will help the Philippines achieve a “V-shaped” economic recovery, with the project expected to generate thousands of jobs.

“I hope it can help lead the Philippines to a possible V-shaped economic recovery, while it lays down the foundation for a more prosperous next generation. I look forward to marking another milestone with you, our partners, in our quest to make the Metro Manila Subway a staggering success,” Mr. Haneda said Friday after the virtual presentation of the six tunnel boring machines currently in Japan that will be used to construct the Philippine capital’s first subway line.

Transportation Secretary Arthur P. Tugade said the construction and operations of the 34-kilometer subway will generate 9,000 direct jobs and up to 50,000 indirect ones. He also assured the public that the subway, once completed, will not be affected by flooding.

“The ground testing has been done extensively…. Will there be flooding in the subway? No. What is the assurance? JIMT (JIM Technology Corp.) is the assurance. The technology of our Japanese construction partners is the assurance. Their experience is our assurance,” Mr. Tugade said.

He added he wants the “partial operability section” of the project from Barangay Ugong in Valenzuela City to North Avenue in Quezon City completed by December of 2021.

“Hangarin po namin na ang partial operability ay magawa bago magtapos ang 2021… Pamaskong handog natin yan na may partial operability (We hope to achieve partial operations as a Christmas gift by the end of 2021),” he said.

The first tunnel boring machine is expected to arrive from Japan in January.

“Each of these gigantic machines can lay down up to 12 meters of tunnel segments per day, and excavate, daily, up to 600 cubic meters of soil,” Undersecretary for Railways Timothy John R. Batan said.

Assistant Secretary Goddes Hope O. Libiran has said the tunneling work is expected to begin in the “second half of the year.”

The Metro Manila Subway will have 17 stations: East Valenzuela, Quirino Highway, Tandang Sora, North Avenue, Quezon Avenue, East Avenue, Anonas, Katipunan, Ortigas, Shaw, Kalayaan Avenue, Bonifacio Global City, Lawton, Senate, FTI, NAIA Terminal 3, and Bicutan.

The government broke ground on the first three stations in February 2019 after the Transportation department signed a P51-billion deal with the Shimizu joint venture, which consists of Shimizu Corp., Fujita Corp., Takenaka Civil Engineering Co. Ltd., and EEI Corp.

The Philippines and Japan signed in March 2018 the first tranche of the P355.6-billion loan for the project.

“We…fully understand that there is much work to be done and more challenges ahead but we assure our partners in the Department of Transportation and the Government of the Philippines that JICA (Japan International Cooperation Agency) is a partner you can trust to provide high-quality and innovative solutions for your country’s development goals and facilitate ‘win-win’ partnerships between the Japanese and Filipino peoples,” JICA Chief Representative Eigo Azukizawa said. — Arjay L. Balinbin

Metro Manila water allocation cut after decline in Angat Dam levels

THE WATER allocation for Metro Manila has been reduced to 46 cubic meters per second (cms) from 48 cms to address the declining water levels in Angat Dam, the National Water Resources Board (NWRB) said.

In a mobile phone message, NWRB Executive Director Sevillo D. David Jr. said Angat Dam experienced low rainfall at its watershed during July and August.

"We reverted to the regular location of 46 cms considering the current level of Angat Dam," Mr. David said.

On Friday morning, water levels at Angat Dam fell 16 centimeters to 179.53 meters, below the dam's minimum operating level of 180 meters and far from its normal elevation of 212 meters, according to the government weather service, known as PAGASA.

However, Mr. David said the agency is looking forward to the rainfall projected by PAGASA.

"We are guided by the near-normal to above-normal rainfall projections of PAGASA for the rest of the year and probable occurrence of a La Niña episode by the last quarter of the year," Mr. David said.

Mr. David said the National Power Corp. (NPC), the National Irrigation Authority (NIA), and PAGASA are monitoring the situation and the possible impact on irrigation and the water supply of Metro Manila, which depends largely on Angat.

"Considering that we are at the middle part of the wet cropping season in Bulacan and Pampanga, coupled with the need for steady supply of water for Metro Manila as a preventive measure against the coronavirus disease 2019 (COVID-19), water allocation for September is currently maintained at 46 cms," Mr. David said.

Mr. David said the NWRB is looking for other sources of water that may assist in meeting the water requirements of Metro Manila such as Laguna de Bay and deep wells.

"We are also expecting some local inflows to the Metropolitan Waterworks and Sewerage System (MWSS) reservoir during this rainy season to complement raw water releases from Angat Dam," Mr. David said.

Mr. David appealed to the public to use water responsibly while Angat levels deteriorate. — Revin Mikhael D. Ochave

Foreign borrowing for pandemic measures hits $8.83 billion

Foreign borrowing to fund pandemic-containment measures hit $8.83 billion in August, the Department of Finance said Friday.

"As of the end of August, the Department of Finance 9DoF) has secured a total of $8.83 billion in financing for our COVID-19 response efforts from our development partners and commercial partners," Finance Secretary Carlos G. Dominguez III told Congress Friday.

Some $5.98 billion was in the form of budget support from the Asian Development Bank (ADB), World Bank, Asian Infrastructure Investment Bank (AIIB), the Development Agency of Banks and the Japan International Cooperation Agency (JICA).

In additipn, the government raised $2.3 billion from global bond offerings, and received $496.36 million in grants and loans from development partners.

"Total borrowing for 2020 and 2021 is projected to reach P3-trillion to support priority expenditure necessary for the country's swift recovery from the COVID-19 crisis and public investment in infrastructure and social services," Mr. Dominguez said. He added borrowing is expected to total P2.3 trillion by 2022.

Mr. Dominguez was speaking before the House appropriations committee during the Development Budget Coordination Committee's briefing on the P4.506-trillion national budget for 2021.

The Department of Budget and Management (DBM) said P1.347 trillion of the budget will go to economic services, P1.663 trillion to social services, P210.6 billion to defense, P724.2 billion to general public services and P560.2 billion to debt service.

Budget Secretary Wendel E. Avisado said P212.39 billion will go to the health system to fund COVID-19 programs under Universal Health Care (UHC).

He also said the 2021 spending plan allocated P1.107 trillion to infrastructure, which is expected to generate 140,000-200,000 jobs next year.

University of the Philippines political science professor Ranjit S. Rye also recommended to the panel an increase in the P2-billion allocation to micro, small and medium enterprises (MSMEs).

Acting Socioeconomic Planning Secretary Karl Kendrick T. Chua said that the proposed Bayanihan to Recover as One bill (Bayanihan II) will inject capital into government financial institutions for lending to MSMEs.

"There is a feature that allots P20 billion for GFIs so they can… multiply (lending) 10 times so that they can reach out to more enterprises," Mr. Chua said. — Charmaine A. Tadalan

ARTA rules reducing permit requirements endorsed by IATF

The Anti-Red Tape Authority (ARTA) said Friday that its guidelines on reduced requirements for issuing government permits, which it pitched as a means of dealing with the "new normal,” were endorsed by the body enforcing pandemic regulations, the Inter-Agency Task Force on Emerging Infectious Diseases (IATF-EID).

"The IATF-EID endorsed the guidelines and is set to direct all agencies to adopt the measures," ARTA said in a statement.

It said the guidelines are in line with the directive of President Rodrigo R. Duterte to streamline and digitize government processes.

ARTA's guidelines require government agencies to reduce the number of requirements for permits, licenses, and authorizations.

According to ARTA's Memorandum Circular No. 2020-06: "Government agencies are enjoined to adopt alternative procedures for verification of information that can be secured from other government offices, agencies and departments, such as, but not limited to data-sharing arrangements.”

They should not require information from requesting parties that can be sourced from offices within the same agency, ARTA added.

Government agencies are also required to use and accept digital or electronic signatures in documents, while electronic payment systems should be set up for cashless transactions.

ARTA said the zero-contact policy "should not be used as a tool in denying government service to the transacting public who are requesting for an update on the status of their applications."

"In line with the zero-contact policy, requirements for meeting with the applicant shall be removed, unless the procedure is considered strictly necessary for a complex or a highly-technical transaction. In such a circumstance, the government agency shall strictly observe contactless interactions through the use of technological platforms," it added.

ARTA Director General Jeremiah B. Belgica said: "ARTA is mindful of the challenges that many government agencies are facing since the adoption of alternative work arrangements. However, this shall not be an excuse for us in the government to forego the prescribed processing time. Any failure to deliver government service constitutes a violation of the law." — Arjay L. Balinbin

August inflation eases to 3-month low

By Marissa Mae M. Ramos, Researcher and Beatrice M. Laforga, Reporter

Inflation eased to a three-month low in August amid improved supply as the economy reopened from another two-week strict lockdown meant to contain a coronavirus pandemic, according to the local statistics agency.

Consumer prices rose by 2.4% last month, bringing the eight-month average to 2.5%, the Philippine Statistics Authority said in a statement on Friday.

Philippine central bank Governor Benjamin E. Diokno said the latest headline inflation was consistent with their expectations of a benign inflation environment.

“The balance of risks tilts toward the downside owing largely to potential disruptions to domestic and global economic activity of the ongoing pandemic,” he told reporters in a Viber group message.

“The prevailing interest rate environment and ample liquidity in the financial system are seen to provide sufficient support for economic activity,” he added.

“Price pressures moderated in August as demand-side price pressures faded much faster than anticipated with the economy now in recession,” Nicholas Antonio T. Mapa, a senior economist at ING Bank N.V. Manila, said in a note.

“The capital region was placed under a more stringent quarantine level for the first two weeks of the month, which may have slowed already hobbled demand further,” he added.

The August inflation was slower than 2.7% in July, but faster than 1.7% in August 2019.

It was below the median estimate of 2.8% in a BusinessWorld poll last week. It was at the low end of the Bangko Sentral ng Pilipinas’s (BSP) 2.5-3.3% forecast for the month.

The PSA traced the slower inflation last month mainly to a slower increase in the prices of heavily-weighted food and nonalcoholic beverages at 1.8% from 2.4% in July.

Food inflation eased to 1.7% from 2.5% in the previous month, the slowest since December 2019. However, it was faster than the 0.3% a year earlier.

Other commodity groups with a similar downtrend were beverages and tobacco (17.7% from 19.3%); clothing and footwear (1.9% from 2.2%); furnishing, household equipment and routine maintenance of the house (3.9% from 4%); education (0.1% from 0.5%); and restaurant and miscellaneous goods and services (2.3% from 2.5%).

WITHIN GOAL

Recreation and culture posted a 0.1% annual decline in August, a turnaround from 1.1%. In July.

The eighth-month average inflation was still within the central bank’s 2-4% target and slower than the 2.6% forecast for the full year.

Core inflation, which excludes volatile prices of food and fuel, settled at 3.1% in August. This was slower than 3.3% in July, but faster than 2.9% a year earlier.

The slower price increase might have been due to “steady transport costs”, Security Bank Corp. Chief Economist Robert Dan J. Roces said in a Viber message.

Meanwhile, the August inflation for the bottom 30% of households slowed to 2.7% from 2.9% in July, though it was faster than 1.7% a year earlier. The eight-month average stood at 2.7%.

Inflation is expected to quicken in the coming months as more areas revert to a looser lockdown, which could improve mobility and bring up transport costs, Mr. Roces said.

“The BSP will continue to evaluate the transmission of its recent policy actions,” he said. “But we have penciled in a likelihood of a policy cut and a reserve requirement ratio cut toward the end of this year or early next year as a nudge to recovery efforts in 2021.”

ING Bank’s Mr. Mapa expects rates to remain untouched until next year, even with the real policy rate falling by 0.15%, which could make Philippine assets less attractive to investors.

While negative real interest rates make it more difficult for the central bank to cut rates further, the lack of additional funding for fiscal stimulus measures would make such easing measures possible, said Michael L. Ricafort, chief economist at Rizal Commercial Banking Corp.

“For the coming weeks/months, any further monetary easing measures, especially any further cut in banks’ reserve requirement remain possible as the economy needs all the support measures that it could get at this time,” he added.

The country must improve the agricultural supply chain to ensure stable inflation amid a coronavirus pandemic and impending typhoons, the National Economic and Development Authority said in a separate statement.

NO RATE CUT

Meanwhile, the Philippine central bank is unlikely to cut benchmark interest rates further this year after its governor said policy actions were enough for now, according to Mitsubishi UFJ Group (MUFG) Global Research analyst Sophia Ng.

Mr. Diokno told reporters in a Viber message on Friday monetary measures to cushion the impact of the pandemic “are seen to provide sufficient support to economic activity.”

“This reinforces the notion that another rate cut by the BSP this year is increasingly unlikely,” Ms. Ng said in a note on Friday.

As of July, the central bank has provided about P1.6 trillion in liquidity to the financial system, equivalent to 6.4% of gross domestic product.

Mr. Diokno said the central bank was ready to roll out measures needed as it continues to evaluate the coronavirus crisis.

The Monetary Board has cut key policy rates by 175 basis (bps) points this year, the latest being a 50 bps cut in June. This brought the overnight reverse repurchase, lending, and deposit rates to record lows of 2.25%, 2.75% and 1.75%, respectively.

At its Aug. 20 meeting, the policy-setting body kept the rates unchanged given the manageable inflation outlook and improved economic activities as quarantine rules eased.

“Other economic indicators show that the economy is improving,” Ms. Ng said.

Inflation in August slowed to 2.4% year on year from 2.7% in July, the local statistics agency said on Friday.

The jobless rate also eased from record levels to 10% in July from 17.7% in April. This was still higher than 5.4% a year earlier.

The unemployment rate was equivalent to 4.571 million jobless Filipinos, down from 7.254 million in April but higher than 2.437 million in July 2019.

“With the further reopening of the economy, the government expects the unemployment rate to drop to 6-8%,” Ms. Ng said. “However, the government also expects 700,000 overseas Filipino workers to be affected by year-end. This ultimately means that remittances would continue to decline.”

Acting Socioeconomic Planning Secretary Karl Kendrick T. Chua said they expect the rate to ease to 6-8% next year, backed by relaxed quarantine rules, and further down to 4-5% by 2022. — with Luz Wendy T. Noble

Finance chief assures security intact among state-run banks after UCPB heist

Government financial institutions have been ordered to beef up their security systems after United Coconut Planters Bank (UCPB) lost at least P167 million from a cyber-heist.

“UCPB is reviewing and strengthening its IT and security controls,” Finance Secretary Carlos G. Dominguez III told reporters in a Viber message on Friday. “I have instructed our government financial institutions to keep their security systems up to date and sophisticated.”

State-run UCPB and the National Bureau of Investigation (NBI) had been investigating the money heist since mid-June after it happened, Mr. Dominguez said.

The lender lost P167 million through a series of huge withdrawals from automated teller machines (ATM) and online transfers over three days, after its system was hacked to expand ATM withdrawal limits from P20,000 a day to P10 million, the Philippine Daily Inquirer reported on Thursday.

“We also assure the public that government financial institutions are consistently fortifying their cybersecurity systems,” Mr. Dominguez said. “Client funds are safe and intact, and we are taking the necessary steps to protect our stakeholders.”

Client accounts had not been affected by the money heist and the state lender remains “resilient and well-managed” after posting P2.9-billion in net income in the first half, he said, citing UCPB.

In July, the government increased its stake in UCPB to 97% from 75% after converting into special preferred shares P12 billion worth of notes that the bank had issued to the Philippine Deposit Insurance Corp. (PDIC) in 2009.

“Government banks are strictly complying with Bangko Sentral ng Pilipinas (BSP) circulars on information risks and security,” Mr. Dominguez said. He added that state lenders continue to update the security features of their databases, servers, devices and software.

Government financial institutions also verify their business partners and try to limit third-party access to critical programs, the Finance chief said. They also have systems in place to detect and eliminate potential cyber attacks, he added.

“We are working closely with law enforcement and the BSP to keep GFIs and the banking system safe, secure, and reliable,” Mr. Dominguez said.

“No stone will be left unturned as we investigate this incident and as we strengthen all components of our security systems,” he said. “We will also see to it that the perpetrators are caught, tried and punished to the fullest extent of the law.” — Beatrice M. Laforga

Payment surplus narrows to $8 million in July

By Beatrice M. Laforga, Reporter

The balance of payments (BoP) posted an $8-million surplus in July, the smallest in more than seven years, amid a surge of inflows from foreign borrowings of the National Government to fund its coronavirus pandemic response, according to the Philippine central bank.

The July figure was lower than the $248-million surplus in July last year and the $80-million excess in June. The payment position has been in surplus for four straight months now.

“The BoP surplus in July 2020 reflected mainly the inflows from the National Government’s foreign loan proceeds that were deposited with the BSP as well as the BSP’s income from its investments abroad,” the central bank said in a statement on Friday.

It said this was partly offset by foreign currency withdrawals by the government to settle some of its maturing foreign debt that month.

The seven-month BoP surplus has fallen by 18% to $4.12 billion from a year earlier.

The central bank also traced the BoP surplus to the lower merchandise trade deficit aside from the forreign borrowings between April and July.

“These positive outcomes negated fully the impact of higher net outflows of foreign portfolio investments, and lower net inflows from foreign direct investments, trade in services, and personal remittances,” the BSP said.

The government has raised $8.83 billion from foreign sources as of Aug. 27 to support its battle against the coronavirus, according to data from the Finance department.

The central bank expects the overall BoP position to post a surplus of $600 million by year-end, or equivalent to 0.2% of the gross domestic product.

Ruben Carlo O. Asuncion, chief economist at UnionBank of the Philippines, Inc. traced the smaller surplus to the sluggish economy.

The country plunged into a recession in the first half after economic output shrank by 16.5% in the second quarter. The economy is expected to shrink by 5.5% this year.

“This describes the lack of economic activity even though it is largely good, because the BoP is a surplus,” Mr. Asuncion said.

“However, the BoP includes the trade balance, foreign portfolio investments and government foreign currency operations and transactions,” he said in an e-mail. “It can be surmised that the benefits of a healthy BoP is not being maximized because of subdued economic growth and prospects.”

GOLD TRADE

Also on Friday, Mr. Diokno said the central bank would cut its gold reserves to 10% of the gross international reserves from 12%.

“Right now, we can buy from small miners,” he told a budget hearing at the House of Representatives. “But we’re not actively buying from the external market,” he added in Filipino.

“Our reserves are so big, we don’t have to buy more gold at this time,” Mr. Diokno said. “In terms of policy, we have excess gold as part of the gross international reserves,” he said in mixed English and Filipino.

Gold has broken above $2,000 an ounce in the world market, with some traders fearing a correction, but many analysts predict more gains as a global coronavirus pandemic spurs investors to buy into gold’s relative safety.

“Because of the attractiveness of gold trading now owing to its high price, in response to recent developments, the Monetary Board decided to shift from passive to active trading,” Mr. Diokno said in a mobile phone message.

The central bank’s 10% gold holdings are based on the World Bank’s recommendations, he said. “The BSP has always taken an opportunistic position in our reserve management.” — with Luz Wendy T. Noble

Coronavirus infections top 232,000

The Department of Health (DoH) reported 3,714 coronavirus infections on Friday, bringing the total to 232,072.

The death toll rose by 49 to 3,737 while recoveries increased by 1,088 to 160,549, it said in a bulletin.

There were 67,786 active cases, 90.7% of which were mild, 6.9% did not show symptoms, 0.9% were severe and 1.4% were critical.

Metro Manila had the highest number of new cases with 1,797, followed by Negros Occidental with 390, Batangas with 248, Laguna with 247 and Cavite with 150, DoH said.

Of the new reported deaths, 31 came from Metro Manila, seven from Central Visayas, and three each from Central Luzon and the Calabarzon region, the agency said.

One death each was recorded in Western Visayas, the Zamboanga Peninsula, Northern Mindanao, the Davao region and Mimaropa region.

More than 2.56 million individuals have been tested for the COVID-19 virus, it said.

The coronavirus has sickened 26.4 million and killed almost 900,000 people worldwide, according to the Worldometers website, citing various sources including data from the World Health Organization (WHO). About 18.6 million people have recovered, it said.

Meanwhile DoH said it may start clinical trials for the Japanese flu drug Avigan this month as a treatment for the coronavirus.

Health Undersecretary Maria Rosario S. Vergeire said the clinical trial agreement was under final review by the agency’s legal service.

The insurance policy for trial participants was being studied and the database containing details of the participants and monitoring of the drug’s effects were also being readied, she told an online news briefing.

A hundred patients aged 18 to 74 were expected to participate in the trials, which did not start as scheduled on Tuesday.

Meanwhile, there are two clinicals trials for virgin coconut oil as treatment for COVID-19, Ms. Vergeire said.

The first one at Sta. Rosa Community Hospital started in May and will end on Dec. 31, while the second at the Philippine General Hospital started on June 1 and will end on May 31. — Vann Marlo M. Villegas

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