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Thunder’s pride

All but the most impassioned fans wrote off the Thunder heading into the 2019-20 season, and seemingly with reason. After All-Stars Paul George and Russell Westbrook departed for greener pastures, even advanced metrics pegged them to miss the postseason; in fact, conventional wisdom had them winning some 30-odd games and finishing in the lowest fourth of their conference. Head coach Billy Donovan was stuck with middling talent even as a trove of draft assets gave general manager Sam Presti leeway to oversee a rebuild. Under the circumstances, pundits foresaw a year of transition.

The predictions were, to be sure, based on sound judgment off sold analyses of the numbers at hand. That said, the predictions were still predictions — subject to validation, or, as the Thunder insisted, repudiation. They had pride, and firmly believed they could, and would, exceed their supposed ceiling. No doubt, it was because they were led by Chris Paul, 10-time All-Star and acknowledged point god, in striving to prove their doubters wrong. Besides, they had nothing to lose, having already been written off and consigned to the dustbin of the highly competitive West.

For a while there, it appeared as if the Thunder could do no better than head to the preordained outcome; they were five games out of .500 a month into the season. Yet, they remained upbeat; only two of their 10 losses were blowouts, with the rest affairs that could well have gone their way. And, true enough, they began to change their fortunes by the turn of the year. As they got to know each other more, and as Donovan learned to maximize his personnel’s skill sets, they became better than the sum of their parts. Not coincidentally, they hitherto managed to claim 17 of their last 22 games when the season was suspended in the middle of March.

The Thunder would go on to finish fifth in the West after the seeding games, a spot higher than their standing the year before, and leaps and bounds better than preseason prognoses. And as if they didn’t have enough motivation to excel in the playoffs, they were scheduled to face the Rockets in the first round. With Westbrook in their sights and Paul determined to reinforce his return to All-Star form, the stage was set. And if their gutsy stands to overcome zero-two and two-three deficits are any indication, they’ll be at their best in the rubber match tomorrow.

Regardless of how Game Seven unfolds, the Thunder have every right to hold their heads high. Instead of blowing up the roster as all and sundry thought best, Presti stayed put. Meanwhile, Donovan showed his mettle as a bench tactician, and Paul underscored the value of self-assurance with unshakable steadiness in the clutch. No matter what happens, they’re already winners.

 

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

Enforcing the tax code on online businesses

As soon as the effects of COVID-19 were felt, people have craved for the same thing: a duplicate of the life before the global pandemic.

To satisfy this (with minimal physical contact as much as possible), people have resorted to electronic means to carry on their regular day-to-day activities. Hence, there was a rise in the number of online businesses, as opportunists have seen this as a means to create revenues while under quarantine. At the same time, the government was figuring out a way to efficiently collect taxes on these businesses, as it had to increase its revenues as well.

All businesses, including those conducted through electronic means, are generally required to be registered pursuant to Section 236 of the Tax Code, which states that every person subject to any internal revenue tax shall register with the appropriate Revenue District Officer on or before the commencement of business. Similar to other businesses, online merchants are required to pay the corresponding taxes due on their earned revenues.

Considering the increase in the number of online businesses, the Bureau of Internal Revenue (BIR) deemed it proper to reiterate that the requirements of the Tax Code also apply to online businesses. In June, the BIR issued Revenue Memorandum Circular (RMC) No. 60-2020 to emphasize that online merchants are required to register their businesses with the BIR.

In RMC No. 60-2020, it was specified that this requirement shall include “not only partner sellers/merchants, but also other stakeholders involved such as the payment gateways, delivery channels, internet service providers, and other facilitators.”

Moreover, online businesses were advised to comply with the requirements of the Tax Code on the following:

1. Issuance of registered Sales Invoice or Official Receipt for every sale of goods or services to clients/customers/buyers;

2. Keeping of registered Books of Accounts and other accounting records of business transactions;

3. Withholding of taxes, as applicable;

4. Filing of required tax returns; and,

5. Payment of correct taxes due on time.

To encourage online businesses to register, it was stated in RMC No. 60-2020 that all those who will register or update their registration status, and those who will voluntarily declare their past transactions and pay the pertinent taxes due thereon not later than July 31, 2020 will not be liable for the corresponding penalties. Further, the BIR released RMC No. 75-2020 extending the said deadline for an additional period of 30 days, or until Aug. 31.

As the issuance of the RMCs drew flak for being perceived to make it harder for those trying to adjust to the current circumstances, the BIR clarified that temporary online sellers will not be required to register their businesses. Hence, only those habitually engaged in the online selling business shall be covered by the RMCs. Moreover, even if registered, the BIR reminded online merchants that individuals who are earning an annual net income of less than P250,000 will not be liable for the corresponding taxes, pursuant to Section 24 of the Tax Code.

Lastly, the BIR and the Department of Finance (DoF) added that registration with the relevant agencies may allow the merchants to avail of incentives provided by the government, such as tax breaks and loans.

The taxation of online businesses is not a new issue for the BIR, as even before COVID-19, the number of businesses conducted through electronic platforms has been growing and its market, continuously expanding. In fact, in RMC No. 55-2013, it was clearly stated that “the existing laws and revenue issuances on the tax treatment of purchases (local or imported) and sale (local or international) of goods (tangible or intangible) or services shall be equally applied with no distinction whether or not the marketing channel is the internet/digital media or the typical and customary physical medium.”

To study this further, the Department of Finance has been exploring the taxation of the digital economy. This is because it cannot be denied that there are notable differences between businesses conducted online and those conducted physically. Consequently, the rules implemented to regulate the latter may not be squarely applicable to regulate the former. Further, considering the availability of numerous electronic platforms to start a business and the ease in reducing internet footprint, monitoring may also pose an issue. Considering the foregoing, it may be difficult for the BIR to impose the requirements of the Tax Code on online businesses. Although the BIR has expressed plans to transform digitally, the transition is taking some time. Also, there is a lingering question on whether the existing laws and regulations are enough to put online businesses and physical businesses on equal footing. However, bills which are currently pending with the Congress, may finally address these lapses.

With the rising number of positive cases everyday, the number of online businesses will continue to rise. Hence, the BIR might have to adapt, as we all do.

The views and opinions expressed in this article are those of the author. This article is for general informational and educational purposes, and not offered as, and does not constitute, legal advice or legal opinion.

 

Jo-Anne Monique D. Coloquio is an Associate of the Labor and Employment Department of the Angara Abello Concepcion Regala & Cruz Law Offices (ACCRALAW).

jdcoloquio@accralaw.com

(632) 8830-8000

Civil society as a co-producer in fighting corruption

Allegations of widespread misuse of public funds by the Philippine Health Insurance Corp. (PhilHealth) represent the continuing problem of corruption in the country. All over the world, it has been shown that the battle against corruption is waged not by government accountability agencies alone. Civil society organizations (CSOs) have proven themselves to be reliable co-producers in fighting corruption.

The late Professor of Political Science and 2009 Nobel laureate Elinor Ostrom defined co-production as “the process through which inputs used to produce a good or service are contributed by individuals who are not in the same organization. Co-production implies that citizens can play an active role in producing public goods and services of consequence to them.” As an organized entity working for citizen interests, civil society can co-produce anti-corruption programs with public and societal stakeholders.

Last week, the Transparency International (TI)-Philippines celebrated its silver anniversary as a CSO with a forum on “Fighting the Pandemic of Corruption” held in partnership with the Stratbase ADR Institute and Democracy Watch Philippines.

During the forum, Judge Dolores Español, Chair of TI-Philippines, narrated the contributions of her organization in the co-production of inputs that were utilized over the years in various anti-corruption campaigns. The role of civil society in governance and development is acknowledged by the 1987 Constitution. Article 1, Section 23 stipulates that “the State shall encourage non-governmental, community-based, sectoral organizations that promote the welfare of the nation.”

The function of civil society in fostering rules-based governance globally is shown in the work of Transparency International, founded by Dr. Peter Eigen in 1993. With headquarters in Berlin, TI has accredited national chapters in more than 90 countries. When TI-Philippines was launched in 1995, it started to produce a directory of government agencies and CSOs doing anti-corruption work. A database was set-up for public, business, and civil society sectors to explore networking and collaborative activities against corruption.

TI-Philippines was a key player in the formation of Integrity Circles in government. In partnership with the Civil Service Commission and the support of the United Nations Development Program, TI-Philippines’ produced the 2010 manual on Organizing Integrity Circles written by Dr. Antonio Roldan, Jr.

According to Judge Español, TI-Philippines cooperated with several government agencies including the Government Service Insurance System, Department of Public Works and Highways, Philippine Navy, and Philippine National Police in the implementation of the Integrity Circles Program.

In this program, the integrity circles were set up in the critical or corruption vulnerable sections of each agency. Each integrity circle consisted of five to 10 personnel from the same office who perform similar or related functions. They committed to abide by the values of honesty and professionalism and to improve their delivery of public services.

Integrity circles are work groups tasked to develop tools for diagnosing corrupt practices and creating action plans to address the identified problems. Top-level management personnel are designated to be part of the Integrity Circle Committee that reported on the work progress. Aside from working with agency personnel, the program tapped outside organizations to constitute Integrity Circle Support Groups whose job is to help monitor, evaluate, and reward the honesty and performance of the integrity circles.

The TI-Philippines manual emphasized that the integrity circles would be most useful in agencies that are prone to corruption. These organizations suffer from the following features: 1.) loose management controls; 2.) unclear ethical and performance standards; 3.) weak personnel recruitment and selection systems; 4.) patronage-driven promotion systems; and, 5.) blurred service procedures for clients.

If we go by the initial findings from the Senate and House of Representatives probe on alleged corruption in PhilHealth, the insurance agency would be a prime candidate for an integrity check based on the criteria provided by TI-Philippines.

Arguably, the level of civil society engagement in anti-corruption work, including that of TI-Philippines, has declined in recent years. It is welcome news that TI-Philippines intend to revive its dormant programs and introduce transparency and accountability work to a younger audience.

The tools, manuals and programs developed by TI-Philippines can be recalibrated to suit the contemporary governance context. New co-production mechanisms can be established to address the new practices that have emerged to contravene the rule of law and use public office for private benefits.

Today, the Corruptions Perceptions Index of TI represents a knowledge intermediary between and among countries to craft anti-corruption strategies on all fronts. These strategies are all the more important now that we face a pandemic. And, as TI has shown over the years, an engaged civil society plays a vital role in these strategies and in the fight for more transparent and accountable governance.

Corruption can be controlled through a combination of ethical codes, prosecution of offenders, organizational change, institutional reform, and the rule of law.

 

Dr. Francisco A. Magno is a Trustee and Convenor of the Right Governance and Open Governments Program, Stratbase ADR Institute

Word of honor

In Jolo a few days ago, a tired-looking Rodrigo Duterte lauded Lapu-Lapu whom he said was actually a Tausug who had migrated to Cebu as the first Filipino to fight an invader. Just a few minutes later, I came upon part of a TV coverage of a kempt Duterte speaking at a conference of the Filipino Chinese Chamber of Commerce. In that speech two years ago, our President actually and quite literally stated his wish that the country which he leads could become “a province of China.” Just like Fujian, he said. This had the Chinese ambassador who was in the audience smiling from ear to ear. Of course, Malacañang later claimed, as usual, that the President was only joking.

Our President added in his Filipino Chinese Chamber talk that China’s President Xi Jin Ping had assured him that they would never build military facilities in the South China Sea; and Xi Jin Ping, he added, was “a man of his word.” That was only two years ago. Now our Defense Department has installed a fledgling naval outpost on Fuga Island in Cagayan province which, if turned into a military base by China, would seriously endanger our national security.

How can our President be joking about a country which has actually invaded our marine territories and converted some of our islets including all of our Scarborough Shoal into military bases?

This is not funny at all. The West Philippine Sea is rich in marine resources; and now our own fishermen are not allowed access to our own waters. When one of their primitive wooden boats was rammed by a steel-hulled Chinese-owned vessel, our fishermen were abandoned struggling for life in the sea. Fortunately for them, some Vietnamese fishermen rescued them. Our government did not even demand an apology from China.

There is much potential for oil and gas reserves in our West Philippine Sea which if tapped and developed could turn our struggling country into a booming economy. Our President does not seem concerned enough to fight for these. He has not even declared support for the heroic triumvirate of former Foreign Affairs Secretary Alberto del Rosario and retired Supreme Court Justices Antonio Carpio and Conchita Carpio Morales who continue to persevere in their advocacy of our territorial rights over the West Philippine Sea.

And now, in his latest State of the Nation Address, President Duterte has shrugged his shoulders and admitted that he is helpless (“inutil”) against such a powerful nation that has already taken possession of the territory. Remember his campaign promise to ride a Jetski to the Scarboroughs and to plant our flag thereon? These are marine territories that the UN Arbitral Council has technically declared and ruled to be ours by nullifying China’s claim of a “Nine-Dash Line.” The largest share of the territories claimed by China under the Nine-Dash line belongs to our country. Our neighbors Vietnam and Indonesia have strongly asserted their rights against attempts by China to encroach upon their shares.

The West Philippine Sea issue is not the only case of mixed signals by our leader. One of his latest public concerns is “fighting corruption.” He says he will not tolerate a whiff of it. And yet, there have been cases of conflicts of interest among many of his senior level appointees which have been exposed; and these officials are still in office. Former Justice Secretary Jose Calida, who is now Solicitor General, has been criticized for having service contracts with government agencies which he may have to investigate as SolGen. He has kept his job. Health Secretary Francisco Duque was reported to have contracts with the Department of Health and/or PhilHealth for Doctors Pharmaceuticals, a drug manufacturing firm owned by him. Duque is still in office. Does his company still have the lease contracts? What exactly comprises a “whiff of corruption”?

Early in his term, President Duterte publicly swore to “kill” drug lords, including his kumpadre Peter Lim whom he specifically named. Where is Peter Lim today?

President Duterte talks as if he values “word of honor.” Does he know what it means?

In his Jolo speech the other day, Duterte referred to the Quran respectfully as he reminded his audience that he is part Moro. He has once in a while deferred to “God.” And yet, he has on more than one occasion sworn against a “stupid God.”

I am afraid that among his worst legacies, Duterte’s lack of a “word of honor” will influence the already poorly informed Filipino voter, who has been cited by a European-based social research agency as among the least informed among all countries about public issues. If his example becomes the “new normal” among our elected leaders, we are truly going downhill. This country is truly “going to the dogs,” as my son, who works in New York, says to me.

Alas. What kind of leaders can we expect to have in our future if Word of Honor is no longer important? And what will happen to the character and culture of our descendants if this value no longer exists? What else do we stand to lose if we continue to have leaders whose word cannot be trusted?

 

Teresa S. Abesamis is a former professor at the Asian Institute of Management and Fellow of the Development Academy of the Philippines.

tsabesamis0114@yahoo.com

Shinzo Abe had a lot of time, but not enough

By The Editors

WHEN Japanese Prime Minister Shinzo Abe announced his pending resignation last week for health reasons, he had been in office for nearly eight years, the longest such stint in Japanese history. But even that wasn’t long enough to fulfill the potential of his premiership. His successors would be wise to appreciate why.

Abe will rightfully be remembered for the many changes he did manage to push through. His three-pronged “Abenomics” program of loose monetary policy, fiscal stimulus, and structural reforms scored some initial successes — boosting growth, stocks and employment. His government brought an unprecedented number of women into the workplace and immigrants into the country. Corporate governance reforms have begun to change the complexion of boards and behavior in Japan, Inc. And, perhaps most dramatically, Abe bolstered Japan’s geopolitical standing, by strengthening its military capabilities and by pushing through free-trade deals with the European Union and the nations that remained in the Trans-Pacific Partnership after the US withdrew.

Yet whoever follows Abe will confront challenges almost as great as he did. The fact is growth, wages, and inflation never really picked up sustainably; now, after pandemic-related lockdowns, the economy has shrunk to the size it was before Abe took charge. A huge $2.2-trillion stimulus and continued monetary largesse from the Bank of Japan should help cushion the blow. Nevertheless, the list of unfinished tasks is long. Regulations that stifle entrepreneurship and innovation still need to be slashed. A seniority-based employment system that impedes mobility and wage growth needs to be shaken up. Too many Japanese remain trapped in irregular work with few benefits and career prospects.

Even in areas where Abe made a good start, much work remains. The precariousness of most women’s jobs has been revealed by the pandemic; more needs to be done to address gender pay gaps and provide women with sufficient flexibility and child-care support to develop stable careers. Many of the business reforms promoted by Abe’s government ended up being more limited than originally envisioned; it will take an equally forceful leader to persuade boards and CEOs to continue improving Japanese corporate culture. Broader changes will be required if Japan is to attract the number and quality of immigrants the country really needs.

Abe can claim perhaps his greatest achievements in the international arena, where he has built Japan into a forceful advocate for the liberal, rules-based global order, both in partnership with the US and, when it comes to free trade, on its own. He has also been instrumental in developing a regional response to China’s rise, as well as providing a much-needed alternative to Chinese investment around the world. Yet here, too, one wonders what more could’ve been accomplished had Abe avoided unnecessary distractions, such as a futile trade spat with South Korea and a long and controversial campaign to revise Article 9 of the Japanese Constitution — the so-called peace clause.

Such heedless efforts may help explain why Abe backed off from pushing more drastic economic reforms earlier on, when his mandate was at its strongest. If Japan is to meet its steep demographic, financial and strategic challenges, his successors cannot afford to make the same mistake.

BLOOMBERG OPINION

US increases support for Taiwan

WASHINGTON — The United States said on Monday it was establishing a new bilateral economic dialogue with Taiwan, an initiative it said was aimed at strengthening ties with Taipei and supporting it in the face of increasing pressure from Beijing.

Washington also said it had declassified six Reagan-era security assurances given to Taiwan, a move analysts said appeared intended to show further support for Taipei.

The announcements come at a time of increasing Chinese threats towards Taiwan, and when relations between Washington and Beijing have sunk to their lowest level in decades. US President Donald Trump is campaigning for re-election in November with a tough approach to China among his key foreign policy platforms.

The State Department’s top diplomat for East Asia, David Stilwell, told a virtual forum hosted by the conservative Heritage Foundation the latest U.S. moves were not a policy shift, but part of a set of “significant adjustments” within Washington’s longstanding “One-China” policy.

Washington felt compelled to make these given the “increasing threat posed by Beijing to peace and stability” in a vitally important region and Beijing’s attempts to isolate Taiwan diplomatically while subjecting it to military threats.

“We will continue to help Taipei resist the Chinese Communist Party’s campaign to pressure, intimidate, and marginalize Taiwan,” Mr. Stilwell said.

Taiwan’s Foreign Ministry expressed thanks for the show of support at a time when it said China was using military intimidation to damage peace and stability near Taiwan, and said it would continue to strengthen its defence capabilities.

The United States, like most countries, has official relations with Beijing, but not Taiwan, which is claimed by Beijing as Chinese territory. However, Washington is bound by law to help Taiwan defend itself and is its main arms supplier.

Daniel Russel, a predecessor of Mr. Stilwell until early in the Trump administration, said the “Six Assurances” made to Taipei by the administration of former President Ronald Reagan had been a “loosely-kept secret” at best.

He said the decision to publish them looked like a compromise response to pressure from administration hawks to abandon “strategic ambiguity” — a long-standing policy of withholding a clear-cut U.S. commitment to defend Taiwan while still showing sufficient support to deter any Chinese military adventurism.

Among the assurances made in 1982, but never formally made public, are statements that the United States has not set a date for ending arms sales to Taiwan, nor agreed to prior consultation with Beijing on such sales, or to revise the Taiwan Relations Act that underpins U.S. policy towards the island.

The assurances, Mr. Stilwell said, “endure today.”

Douglas Paal, a former U.S. representative to Taiwan, said the move appeared largely for show.

“My guess at this time is that Stilwell and the administration want to look tough … So they are walking close to China’s red lines, but remain unwilling to cross them.”

Mr. Stilwell said the economic dialogue would “explore the full spectrum of our economic relationship — semiconductors, healthcare, energy, and beyond, with technology at the core.” 

“While they may be interrelated, our relationship with Taiwan is not a subset of our bilateral relationship with the PRC,” he said, referring to mainland China.

Monday’s announcements come several months after Taiwan Semiconductor Manufacturing Co. Ltd, the world’s biggest contract chipmaker, announced plans to build a $12 billion factory in Arizona as the Trump administration stepped up efforts to cut back supply chains dependency on China.

Taiwan has been keen to negotiate a free trade agreement with the United States, but a large U.S. trade deficit, which Trump has been determined to reduce along with those of other trading partners, including China, has been an obstacle to this. — Reuters

Facebook to block news on Australian websites

SYDNEY — Facebook, Inc. on Tuesday said it would stop Australians sharing news content on its platforms if a proposal to make it pay local media outlets for their content becomes law, further escalating tension with the Australian government.

Under Australia’s closely watched internet reforms, the country will become the first to make the social media behemoth and Alphabet, Inc.’s Google pay for news sourced from local providers under a royalty-style system.

Facebook’s plan to block the sharing of news on Australian user accounts, rather than pay royalties, puts the firm broadly in step with Google on the matter and pushes the prospect of an agreement with the government further out of reach.

“Assuming this draft code becomes law, we will reluctantly stop allowing publishers and people in Australia from sharing local and international news on Facebook and Instagram,” Facebook Australia Managing Director Will Easton said in a blog post, referring to two Facebook-owned platforms.

“This is not our first choice — it is our last. It is the only way to protect against an outcome that defies logic and will hurt, not help, the long-term vibrancy of Australia’s news and media sector.”

Australian Treasurer Josh Frydenberg hit back, saying the proposed law was in the national interest, followed 18 months of public inquiry and would create a more sustainable local media industry where original content was paid for.

“We don’t respond to coercion or heavy handed threats wherever they come from,” Mr. Frydenberg said in an e-mail to Reuters’ request for comment.

Bridget Fair, chief executive of Free TV Australia, a lobby group for free-to-air broadcasters, said Facebook’s plan amounted to “bullying” and that the US firm would “say and do anything to avoid making a fair payment for news content.”

“Australian Facebook users are being held to ransom as a tactic to intimidate the Australian government into backing down on this issue,” she said in a statement.

Facebook’s Mr. Easton in his blog post called the proposed law “unprecedented in its reach,” and said the company could either remove news entirely or agree to pay publishers for as much content as they wanted at a price with no clear limits. “Unfortunately, no business can operate that way,” he wrote.

Like in most countries, Australia’s traditional media companies in recent years have seen their mainstay advertising income streams eroded by online competitors, and consumers shy away from paid subscription.

The Australian Competition and Consumer Commission (ACCC) , which drafted the proposed law, was not immediately available for comment on Tuesday. It has argued the law would allow news businesses to negotiate fair payment for journalists’ work.

Last month, Google began an advertising campaign using pop-up ads on its main search page that said its free service would be “at risk” and users’ personal data could be shared if the firm is made to pay news organizations for their content. The ACCC called the statements “misinformation.” — Reuters

Scientists see downsides to top COVID-19 vaccines from Russia, China

TORONTO/CHICAGO — High-profile coronavirus disease 2019 (COVID-19) vaccines developed in Russia and China share a potential shortcoming: They are based on a common cold virus that many people have been exposed to, potentially limiting their effectiveness, some experts say.

CanSino Biologics’ vaccine, approved for military use in China, is a modified form of adenovirus type 5, or Ad5. The company is in talks to get emergency approval in several countries before completing large-scale trials, the Wall Street Journal reported last week.

A vaccine developed by Moscow’s Gamaleya Institute, approved in Russia earlier this month despite limited testing, is based on Ad5 and a second less common adenovirus.

“The Ad5 concerns me just because a lot of people have immunity,” said Anna Durbin, a vaccine researcher at Johns Hopkins University. “I’m not sure what their strategy is … maybe it won’t have 70% efficacy. It might have 40% efficacy, and that’s better than nothing, until something else comes along.”

Vaccines are seen as essential to ending the pandemic that has claimed over 845,000 lives worldwide. Gamaleya has said its two-virus approach will address Ad5 immunity issues.

Both developers have years of experience and approved Ebola vaccines based on Ad5. Neither CanSino nor Gamaleya responded to requests for comment.

Researchers have experimented with Ad5-based vaccines against a variety of infections for decades, but none are widely used. They employ harmless viruses as “vectors” to ferry genes from the target virus — in this case the novel coronavirus — into human cells, prompting an immune response to fight the actual virus.

But many people already have antibodies against Ad5, which could cause the immune system to attack the vector instead of responding to the coronavirus, making these vaccines less effective.

Several researchers have chosen alternative adenoviruses or delivery mechanisms. Oxford University and AstraZeneca based their COVID-19 vaccine on a chimpanzee adenovirus, avoiding the Ad5 issue. Johnson & Johnson’s candidate uses Ad26, a comparatively rare strain.

Dr. Zhou Xing, from Canada’s McMaster University, worked with CanSino on its first Ad5-based vaccine, for tuberculosis, in 2011. His team is developing an inhaled Ad5 COVID-19 vaccine, theorizing it could circumvent pre-existing immunity issues.

“The Oxford vaccine candidate has quite an advantage” over the injected CanSino vaccine, he said.

Xing also worries that high doses of the Ad5 vector in the CanSino vaccine could induce fever, fueling vaccine skepticism.

“I think they will get good immunity in people that don’t have antibodies to the vaccine, but a lot of people do,” said Dr. Hildegund Ertl, director of the Wistar Institute Vaccine Center in Philadelphia.

In China and the United States, about 40% of people have high levels of antibodies from prior Ad5 exposure. In Africa, it could be has high as 80%, experts said. 

HIV RISK
Some scientists also worry an Ad5-based vaccine could increase chances of contracting HIV.

In a 2004 trial of a Merck & Co Ad5-based HIV vaccine, people with pre-existing immunity became more, not less, susceptible to the virus that causes AIDS.

Researchers, including top U.S. infectious diseases expert Dr. Anthony Fauci, in a 2015 paper, said the side effect was likely unique to HIV vaccines. But they cautioned that HIV incidence should be monitored during and after trials of all Ad5-based vaccines in at-risk populations.

“I would be worried about the use of those vaccines in any country or any population that was at risk of HIV, and I put our country as one of them,” said Dr. Larry Corey, co-leader of the U.S. Coronavirus Vaccine Prevention Network, who was a lead researcher on the Merck trial.

Gamaleya’s vaccine will be administered in two doses: The first based on Ad26, similar to J&J’s candidate, and the second on Ad5.

Alexander Gintsburg, Gamaleya’s director, has said the two-vector approach addresses the immunity issue. Ertl said it might work well enough in individuals who have been exposed to one of the two adenoviruses.

Many experts expressed skepticism about the Russian vaccine after the government declared its intention to give it to high-risk groups in October without data from large pivotal trials.

“Demonstrating safety and efficacy of a vaccine is very important,” said Dr. Dan Barouch, a Harvard vaccine researcher who helped design J&J’s COVID-19 vaccine. Often, he noted, large-scale trials “do not give the result that is expected or required.” — Reuters

Philippines says won’t stop projects with China firms blacklisted by US

President Rodrigo R. Duterte will not follow Washington’s move to sanction Chinese firms involved in building and militarizing artificial South China Sea islands because infrastructure is a national priority, his spokesman Harry L. Roque, Jr. said. Image courtesy of the Philippines’ Department of National Defense/Handout via Reuters.

The Philippines will not halt infrastructure projects involving Chinese firms blacklisted by ally the United States and will make its own decisions, not those of a foreign power, the president’s spokesman said on Tuesday.

President Rodrigo R. Duterte will not follow Washington’s move to sanction Chinese firms involved in building and militarizing artificial South China Sea islands because infrastructure is a national priority, his spokesman Harry L. Roque, Jr. said.

“We are not a vassal state of any foreign power and we will pursue our national interest,” Mr. Roque told a regular news conference.

“Our national interest is to ensure flagship projects are completed.”

Mr. Duterte has a race against time to make headway in his $180 billion infrastructure overhaul, which is fraught with complications.

The United States, a defense treaty ally of the Philippines, has blacklisted 24 Chinese companies and targeted individuals over the building of military facilities on submerged reefs in disputed waters, escalating tensions with Beijing.

The Philippine foreign minister recommended terminating deals with those entities.

Mr. Duterte’s non-intervention could cause some friction, as several of China’s islands challenge his country’s interests, most notably Mischief Reef, built within its 200-mile Exclusive Economic Zone and equipped with missiles capable of striking the Philippines.

Among firms involved are China Communications Construction Co (CCCC), which has teamed up with a Philippine partner for a $10-billion airport project, and its subsidiary, China Harbour Engineering Company, which is partnering on a $1.2 billion reclamation project with the firm of tycoon Dennis Uy, Mr. Duterte’s associate and biggest election campaign donor.

China Harbour will partner also with the Philippines’ richest family on separate $1.86 billion reclamation venture.

Those firms have not responded to Reuters requests for comment on the blacklisting.

Opposition lawmaker Risa N. Hontiveros-Baraquel filed a senate resolution on Tuesday to investigate possible collusion by Filipinos over China’s artificial islands.

“It is not hard to suspect dubious engagement by either party,” Ms. Hontiveros-Baraquel said. — Reuters

Global trade seen recovering faster now than after Lehman crisis

Global trade is on course to recover more quickly from the coronavirus pandemic than after the 2008 financial crisis, according to Germany’s Kiel Institute for the World Economy.

Shipping volumes are already back at levels that took more than a year to reach following the collapse of Lehman Brothers, hinting at a V-shaped recovery, the institution’s President Gabriel Felbermayr said.

Trade has seen a “deep slump and a quick rebound,” he said. “The current situation is significantly better” than a decade ago.

The pandemic has pushed the global economy into what may be its deepest slump since the Great Depression. The initial rebound reflects the lifting of severe restrictions to contain the virus, and policy makers have warned against premature optimism that the worst has passed.

The World Trade Organization said earlier this month that projections for a strong, V-shaped trade rebound in 2021 might be “overly optimistic.”

Yet others—including the Kiel Institute—are taking a more confident stance. On Monday, International Monetary Fund Managing Director Kristalina Georgieva pointed to a “revival of trade.”

The Kiel Institute argued container shipping activity in key areas supported its conclusion, with ship movements in the Americas, Asia, and Europe normalizing. Freight capacity was back at levels that would be expected in late August—even without a crisis. — Bloomberg

AstraZeneca’s COVID-19 vaccine candidate begins late-stage US study

AstraZeneca Plc said on Monday it has begun enrolling adults for a US-funded, 30,000-subject late-stage study of its high profile COVID-19 vaccine candidate.

Trial participants will receive either two doses of the experimental vaccine, dubbed AZD1222, four weeks apart, or a placebo, the company said.

The trial is being conducted under US government’s Operation Warp Speed program, which aims to accelerate development, manufacturing and distribution of vaccines and treatments for COVID-19.

US President Donald J. Trump has said a vaccine for the novel coronavirus could be available before the Nov. 3 presidential election, much sooner than most experts anticipate.

AstraZeneca, which is developing its vaccine in conjunction with Oxford University researchers, and Pfizer Inc. with partner BioNTech SE have said they could have data by October to support US emergency use authorization or approval of their respective vaccines.

AZD1222 is already undergoing late-stage clinical trials in Britain, Brazil, and South Africa, with additional trials planned in Japan and Russia. The trials, together with the US Phase III study, aim to enroll up to 50,000 participants globally.

The US trial will evaluate whether the vaccine can prevent COVID-19 infection or keep the illness from becoming severe, the National Institutes of Health said in a statement.

It also will assess if the vaccine can reduce incidence of emergency department visits due to COVID-19. — Reuters

Opening up without control of COVID-19 is recipe for disaster, says WHO

GENEVA — Countries with significant active spread of coronavirus must prevent amplifying events, as opening up without the virus being under control would be a “recipe for disaster,” the World Health Organization (WHO) said on Monday.

WHO director-general Tedros Adhanom Ghebreyesus recognized that many people are getting tired of restrictions and want to return to normality eight months into the pandemic.

The WHO fully supported efforts to reopen economies and societies, he told a news conference, adding: “We want to see children returning to school and people returning to workplaces, but we want to see it done safely.”

“No country can just pretend the pandemic is over,” he said. “The reality is this virus spreads easily. Opening up without control is a recipe for disaster.”

“Explosive outbreaks” have been linked to gatherings of people at stadiums, nightclubs, places of worship, and other crowds, where the respiratory virus can spread easily among clusters of people, Mr. Tedros said.

“Decisions about how and when to allow gatherings of people must be taken with a risk-based approach, in the local context,” he said. — Reuters

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