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PEZA seeks unified ECQ rules amid movement snags at LGUs

THE Philippine Economic Zone Authority (PEZA) is calling for a unified plan in addressing the coronavirus disease 2019 (COVID-19) pandemic, saying that local governments are issuing rules that do not comply with national guidelines which continue to hamper the mobility of goods and workers.

PEZA Director-General Charito B. Plaza said in a statement on Tuesday that a harmonized strategy must be implemented nationwide during the enhanced community quarantine (ECQ).

“LGUs (local government units) should not separately address the pandemic and create invisible walls. Lockdown policies per island or per region greatly affect or hamper the flow of goods and mobility of workers because of the different EOs (executive orders) imposed by the LGUs,” she said.

She said government agencies must cooperate to address both public health and the continued production of essential products.

Cabinet Secretary Karlo Alexei B. Nograles, spokesperson of the Inter-Agency Task Force for Emerging Infectious Diseases (IATF-EID), in a briefing Saturday, said LGUs must lead the fight against the pandemic, and asked government agencies to recommend sector-specific plans.

Presidential Adviser for Entrepreneurship Jose Ma. A. Concepcion III said Sunday that selective quarantines at the barangay level for high-infection areas should remain in place after the extended ECQ ends.

Mr. Plaza said that PEZA is working with various government agencies and LGUs to ensure unhampered movement of goods and to implement national directives allowing economic zone locators to bypass checkpoints.

PEZA said it is extending the validity of permits, and has adjusted requirements for availing of incentives.

The authority said that 66% of its 835 companies in Luzon are operational as of April 20, while 40% of 176 Visayas-based companies and 94% of 31 Mindanao-based companies are operational.

“PEZA’s Incident Command System (ICS) in response to the COVID-19 crisis established requirements for companies in ecozones to continue operations during this period of ECQ,” Ms. Plaza said.

“It is the choice of companies to continue operations during the ECQ. But those who want to do so must comply with the protocols issued by the Department of Health (DoH) to avoid COVID-19 infections in the workplace.”

Ms. Plaza advocated for the unified enforcement of quarantine measures for public order, and argued against ECQ implementation that resembles a military crackdown.

“Our success and survival from this COVID crisis requires a well-calculated and a unified balancing act, addressing the health and food needs with the right courses of actions. The challenge now is employing the right tactics and strategies to preserve peace and order, protect our people’s lives and properties, she said.” — Jenina P. Ibañez

S&P raises PHL 2020 unemployment estimate to 6.8%

UNEMPLOYMENT is expected to surge in service sector-reliant Asia because of the pandemic, with the Philippine jobless rate projected at 6.8% this year from the 5.3% pre-outbreak forecast, according to S&P Global Ratings.

“Measures designed to limit viral spread are striking at the heart of the engine of job creation across Asia-Pacific — the service sector,” S&P said in a report, “Jobs and the Climb Back from COVID-19.”

Philippine unemployment in 2019 dipped to a 14-year low of 5.1% after a 5.3% reading in 2018, according to the Philippine Statistics Authority.

“In the absence of large and targeted wage subsidy schemes, we estimate that unemployment rates would rise by well over 3 ppt (percentage points) across the region, much more than the typical recession,” S&P said.

According to the National Economic and Development Authority, job displacement caused by the pandemic could involve between 116,000 and 1.8 million workers.

S&P said that the services sector has become a more significant part of the job market across the region, with 55 out of 100 workers employed in services against 14 in the industrial sector. Among those in services, 22 are employed in wholesale and retail or hospitality.

S&P added that small and medium-sized enterprises typically fuel services growth. It noted that about 50% of the service sector in emerging markets are firms with less than 250 employees.

“SMEs usually have fewer resources to draw on to weather an economic sudden stop. As revenues collapse, to stay alive, these firms will be forced to cut whatever expenses they can,” S&P said, noting that their largest expenses are typically wages.

In the Philippines, more than 90% of businesses are classified as MSMEs (micro-, small, and medium-sized enterprises), and they fuel employment opportunities, according to Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort.

Mr. Ricafort also said that the service sector is a significant part of the economy, as it accounts for nearly 60% of economic output, against the industry sector’s 30% and agriculture sector’s 10%.

“The lockdown and any social-distancing measures could still continue for months and could still adversely affect some services industries that depend so much on person-to-person transactions such as tourism, travel, transport and other related industries,” Mr. Ricafort said in an e-mail Tuesday.

Recent government programs to aid affected businesses amid COVID-19 may minimize the impact of the outbreak on unemployment, according to UnionBank of the Philippines, Inc. Chief Economist Ruben Carlo O. Asuncion.

“With BSP (Bangko Sentral ng Pilipinas) recently announcing help for SMEs through bank loans together with government guarantees, this will help cushion the potential unemployment that a majority of SMEs may experience. It will help restart the economy in a positive way,” Mr. Asuncion said in an e-mail. — Luz Wendy T. Noble

Food delivery glimpses upside after wider adoption during ECQ

THE on-demand food delivery industry demonstrated its potential after its services were called upon extensively during the pandemic, with usage now expected to surge from a low base in 2019, Maybank Kim Eng said in a report.

“With the ban on dine-in services, more food merchants are signing up with delivery platforms such as GrabFood, Foodpanda and Deliveroo,” it said.

Food e-commerce is also expected to help small food and beverage companies ride out periods when their customers cannot dine in restaurants, it added.

In an e-mail to BusinessWorld in response to queries, Maybank Kim Eng analyst Lee Ju Ye said the pandemic offers lessons for businesses and will drive investment in e-commerce channels.

“The Philippines still faces limitations with regard to technology adoption, last-mile delivery capability and online payment systems,” she said.

Ms. Lee has noted that big companies have started to boost their online presence, citing Jollibee Food Corp., which has teamed up with food aggregators Foodpanda Group and Grab Philippines, as well as Robinsons Supermarket Corp. which has partnered with Metromart.

Shailesh Baidwan, president of digital payments firm PayMaya Philippines, Inc. told BusinessWorld earlier that the company has taken note of a rise in digital transactions for retail outlets like groceries, bricks-and-mortar restaurants, smaller online food specialty stores, and fresh and frozen product suppliers which have started accepting orders online.

Maybank Kim Eng said the Philippines has among the lowest e-commerce penetration rates in the region at about 4%, which is similar to Indonesia’s. The corresponding rates for the rest of the region are 4.4% for Thailand, 4.7% for Malaysia, 9% for Singapore, 13% for China and 30% for South Korea.

Ms. Lee said there is still “much room” for growth in Philippine e-commerce even when social distancing measures are removed.

“There would be many consumers who shifted to the online platform for the first time and as they grow accustomed to shopping online during the lockdown period, they may continue to do so when the lockdown ends,” Ms. Lee said. — Luz Wendy T. Noble

LNG market favorable in next few years due to low prices

THE next years will likely be favorable for importers of liquified natural gas (LNG) like Philippines due to low prices, Fitch Solutions Country Risk and Industry Research said in an outlook issued Tuesday.

“The Philippines has yet to enter into any LNG supply contracts for its terminals, and as such, it could prove to be an attractive market for the growing legion of LNG suppliers globally,” it noted.

Fitch Solutions raised anew its concerns about the rapid decline in output of the Malampaya deepwater gas-to-power project, the Philippines’ only indigenous natural gas producer, which supplies 20% of the country’s total electricity needs.

The government has identified LNG imports as a substitute for the diminishing Malampaya production, which the Department of Energy (DoE) expected to be nearly depleted by 2027.

Various firms have submitted their proposals for LNG regasification facilities.

One of these projects is the gas-to-power project by Australian firm Energy World Corporation (EWC) in Pagbilao, Quezon, which has been seeing delays in securing licenses to operate and in acquiring the government’s permission to connect its project to the country’s power grids.

First expected to go online this year, the project, which has a 4.1 billion cubic meter capacity, could start commercial operations in the next two years, coinciding with the target start of the operations of EWC’s Sengkang production site in Indonesia, set to be the Pagbilao LNG project’s main feed-gas source.

Other firms with LNG projects which were issued notices to proceed are First Gen Corp. and partner Tokyo Gas Co.’s $1-billion 1,200 megawatt (MW) gas-fired generation unit and a 5 million tons per annum (mtpa) regasification unit, and American firm Excelerate Energy, which signed a deal to supply LNG for the Ilijan gas-fired power plants of SMC Power Holdings Corp., a unit of San Miguel Corp.

Recently, the Lucio Tan Group proposed to develop a $735-million 1.1 gigawatt (GW)-integrated gas-to-power project with capacity of 3 mtpa. It is set to partner with the Blackstone Group’s Gen X Energy.

Meanwhile, the joint venture $2-billion Tanglawan LNG project by Phoenix Petroleum Philippines, Inc. and China National Offshore Oil Corp. was suspended. It was expected to have a 2.2 mtpa import capacity.

Fitch Solutions noted that the on-going territorial disputes in the resource-rich West Philippine Sea and the slow progress in joint oil exploration negotiations with China have led to suspensions of drilling activity and discouraged exploration within the area.

The outbreak of coronavirus disease 2019 (COVID-19), which disrupted supply chains around the world, “is unlikely to have helped matters,” it said.

Recently, UC Malampaya Philippines Pte. Ltd., a unit of Udenna Corp., acquired the 45% stake of Chevron Malampaya LLC in the Malampaya project under the DoE-awarded Service Contract 38. Other stakeholders include Shell Philippines Exploration B.V. (SPEX), which also owns a 45% stake in the project, and state-led Philippine National Oil Co. Exploration Corp. (PNOC EC), which holds the remaining 10%.

The report said the Philippines is still not committed to developing natural gas and other clean energy sources, despite promoting the use of low-carbon footprint sources in its energy blueprint.

Stronger gas off-take, it said, may not necessarily help achieve its plan to improve energy security and expand energy access, two of the strategic pillars of the Philippine Energy Plan 2017-2040, as coal is expected to increase its share of the energy mix in the next two decades, while the share of other energy sources is expected to contract.

“This indicates that while Manila is prepared to offset the fall in Malampaya’s gas via LNG imports, there is yet no certainty that it is ready to steer the energy mix towards gas and LNG, in the manner of certain regional neighbors,” it said.

The DoE’s push for the use of nuclear energy might “provide distant competition for gas in the future,” it added. In March, Energy Secretary Alfonso G. Cusi urged President Rodrigo R. Duterte to issue an executive order seeking to restore nuclear energy to the energy mix. — Adam J. Ang

NCR construction material prices rise in March

THE wholesale price of construction materials in the National Capital Region (NCR) rose 1.6% in March, the Philippine Statistics Authority (PSA) said.

The construction materials wholesale price index (CMWPI) rose 1.6% year on year in March, compared to a rise of 1.5% in February.

Growth in the retail-level index, known as the construction materials retail price index (CMRPI), slowed to 0.9% in March, after coming in at 1.1% in February.

The acceleration in CMWPI growth was driven by upticks in concrete products and cement (1.3% from 0.6% in February) and reinforcing and structural steel (0.3% from 0.2%). The prices of doors, jambs, and steel casements rose 0.7% in March, a reversal from February when it declined 0.7% year on year.

Commodities where price growth rose at a slower pace in March compared with February were galvanized iron sheets (2.8% from 4%); sand and gravel (1.4% from 2.5%); electrical works (1.4% from 2%); hardware (4.7% from 5.3%); plumbing fixtures and accessories/waterworks (1.4% from 1.9%); lumber (3.3% from 3.8%); and painting works (0.9% from 1.1%).

Tileworks prices grew 17.5% while prices of glass and glass products rose 7.1% and those of PVC pipes rose 7.5%, while asphalt and machinery and equipment rental prices were flat.

Price declines accelerated in plywood (minus 0.4% from minus 0.1%) and fuels and lubricants (minus 5.7% from minus 0.7%).

Meanwhile, the year-on-year slowdown in the CMRPI in March was led by miscellaneous construction materials (0.5% from 0.8%); tinsmithry materials (1% from 1.3%); plumbing materials (0.7% from 0.9%); and painting materials and related compounds (1.6% from 1.7%).

The increase in retail prices accelerated for carpentry materials (1.3% from 1%); masonry materials (0.7% from 0.5%); and electrical materials (0.7% from 0.6%).

“The increase in wholesale prices of construction materials… can be due to increases in big-ticket construction developments over retail-type construction; hence, the slower movement in retail prices of construction,” John Paolo R. Rivera, associate director at the Asian Institute of Management, said in an e-mail.

However, Mr. Rivera found the data “puzzling,” and speculated why March prices rose when NCR was on extended community quarantine (ECQ) for half of the month.

“Is the BBB (Build, Build, Build ) program still on-going despite ECQ? I don’t think so. Or, is this a delayed reaction of wholesale prices to the previous movement in demand prior to ECQ? It might be. Or, is this reflective of the ‘construction’ efforts to refit certain facilities to augment COVID-19 (coronavirus disease 2019) response? It’s possible,” he said.

Luzon was placed under ECQ in mid-March to prevent the further spread of COVID-19. The lockdown was supposed to end on April 12 but was extended to April 30 as reported COVID-19 cases in the country showed no signs of slowing.

“Inflation is also slowing down from January to March due to decreasing oil prices… and slower economic activities due to ECQ. Given this movement, I expect both wholesale and retail prices to slow or go down assuming the government and private sector is halting huge construction projects and most resources are allocated to COVID-19 response,” Mr. Rivera said, adding that construction activities may be limited to refitting certain facilities.

Due to congestion in hospitals, the government has started to convert buildings into quarantine facilities. Among these include the Rizal Memorial Sports Complex, the Philippine International Convention Center and the World Trade Center. — Marissa Mae M. Ramos

IATF issues new directive forming food-security task group

THE Inter-Agency Task Force for the Management of Emerging Infectious Diseases (IATF-EID) has appointed a task group for food security led by the Department of Agriculture (DA).

IATF Resolution No. 25 authorized the formation of the Task Group on Food Security (TGFS). The group will address threats to the food supply during the coronavirus disease 2019 (COVID-19) outbreak.

“Guided by the whole-of-nation approach, the TGFS will work toward easing uncertainties of our countrymen on the supply and movement of food from farm to table,” Agriculture Secretary William D. Dar said.

Resolution No. 25 revised a previous IATF resolution that created a food security sub-group under the task force’s technical working group on resource management.

Members of the TGFS include the Department of Trade and Industry (DTI), the Department of the Interior and Local Government (DILG), the Department of Social Welfare and Development (DSWD), the Department of Budget and Management (DBM), the Department of Education (DepEd), the Department of Science and Technology (DoST), and the National Economic and Development Authority (NEDA).

“Ensuring food security should be at the forefront of our priorities along with ensuring the safety and health of our people. Again, we stand by our conviction that the threat of hunger is as real as the threat of COVID-19,” Mr. Dar said.

Meanwhile, the IATF also reported that stocks of food are sufficient until June.

According to data from the DA, the national rice supply is 18 million metric tons (MT), poultry 1.95 million MT, and pork 1.12 million MT.

“We will not run out of food commodities in markets. There is enough food in the country,” IATF Spokesperson and Cabinet Secretary Karlo Alexei B. Nograles said. — Revin Mikhael D. Ochave

Foreign missions issued digital VAT exemption cards during lockdown

THE Bureau of Internal Revenue (BIR) will issue temporary digital value-added tax (VAT) certificates (VCs) and identification cards (VICs) to foreign missions to allow them to continue enjoying VAT exemptions during the lockdown.

According to Revenue Memorandum Circular No. 44-2020 dated April 17, published on Tuesday, the temporary digital copies of VCs and VICs are valid until August 30 and should be renewed within 30 days after the enhanced community quarantine (ECQ) is lifted.

The temporary documents will be issued to newly-accredited resident foreign mission (RFM) personnel qualified for the point-of-sale VAT exemption as well as to personnel and dependents who need to renew their VCs and VICs during the lockdown.

“As recommended by DFA-OP (Office of Protocol of the Department of Foreign Affairs), the BIR shall temporarily issue electronic copies of VCs and VICs which are to be renewed within 30 calendar days from the lifting of the ECQ following the same requirements and procedures set forth under Revenue Memorandum Order (RMO) No. 10-2019,” according to the circular.

BIR said RFM personnel and their dependents should also carry with them a digital copy of their Certificate of Accreditation from the DFA or a valid DFA protocol ID when availing of the exemption, while an RFM representative needs to present a valid ID and the Special Power of Attorney or an authorization letter.

BIR ordered all businesses to accept the temporary digital copies and grant the needed point-of-sale VAT exemption. The bureau said those who do not comply are subject to sanctions.

RMO No. 10-2019 grants foreign missions, qualified personnel and dependents a VAT exemption when paying for goods and services. — Beatrice M. Laforga

The world has a $2.5 Trillion problem. Here’s how to solve it.

By Maitreesh Ghatak, Xavier Jaravel, and Jonathan Weigel

THE CORONAVIRUS has not yet exploded in the developing world, but poor countries are already suffering from the pandemic. Their economies have been battered by lockdowns, falling commodity prices, declining remittances, and unprecedented capital flight. Some $100 billion has fled emerging markets since January, five times more than in the 2008 crash.

This will only compound the coming health crisis. Most countries in sub-Saharan Africa, for example, have fewer ICU beds than a single American hospital. This means they must “flatten the curve” even further to avoid their health systems being overwhelmed. Yet social distancing is all but impossible for people living on the margins of subsistence.

Developing countries need resources to combat the twin health and economic shocks. They need cash to buy medical equipment and to aid distressed firms and destitute households. But where will governments find these funds? Many already face debt crises, ruling out further borrowing. Even fast-growing economies are in trouble: Ghana and Ethiopia, averaging 5% to 6% growth in the past decade, now face insolvency. Middle-income countries like Turkey and South Africa are also on the brink.

Rich countries must help or face economic meltdowns from Pakistan to Peru. Failure to act wouldn’t just lead to a series of chaotic defaults and disrupt international supply chains as companies are shuttered the world over. It would also be a humanitarian catastrophe.

While some countries have postponed debt repayments and created swap lines to increase lending, it is a far cry from the $2.5 trillion the United Nations estimates is needed to respond to the coronavirus pandemic in the developing world.

Some hope the International Monetary Fund will step in, calling for it to provide liquidity by dramatically expanding its “special drawing rights,” perhaps by a factor of four. That’s a good idea, but it will be too little, too late. The United States, with veto power over such a move, opposes the idea, which would give all countries more liquidity. It prefers the alternative: having countries seek help one by one from the IMF or Federal Reserve, which can then pick the beneficiaries of their largesse.

More important, the IMF makes loans, not grants. But in this crisis, the developing world needs direct and immediate transfers, rather than ways to merely spread costs over time. IMF loan packages would take too long to put in place in all of the countries in need. Such loans would also be too small in magnitude, especially for insolvent countries that already worry creditors. Moreover, grants directly improve solvency and thus do more to restore investor confidence and curb capital flight. Saddling emerging markets with more debt now would also discourage future investment and stifle the global recovery.

FREEPIK

Some officials — mostly in creditor nations — warn that grants create moral hazard and encourage profligacy. That may be true in normal times, but it is absurd to suggest that helping countries in a pandemic will lead them to take pandemics less seriously in the future.

The truth is, the IMF is ill equipped to rapidly transfer resources earmarked for the pandemic response. What the world needs now is on the order of the Marshall Plan: a fund to transfer resources immediately to the developing world on a massive scale. We like to call it a Global Solidarity Fund (GSF).

Countries able to borrow cheaply would take a GSF pledge to commit 1% of their gross domestic product to a trust dedicated to the global pandemic response. Initially, funds would be channeled through existing emergency mechanisms: the United Nations’ Global Humanitarian Response, the World Health Organization’s Health Emergencies Program and the World Bank’s Pandemic Emergency Financing Facility. Relief could begin flowing immediately.

Who could realistically create the GSF and start contributing? With the United States bereft of leadership and China skeptical of multilateralism, Europe must lead the way. Britain and France can borrow funds over 10 years essentially for free. Germany can get paid by financial markets to issue bonds. As other nations recover, they should make a GSF pledge, too. Philanthropists could also contribute to the fund. If all G7 countries and China committed 1% of GDP, it would raise $650 billion. This sum, combined with $1 trillion in debt forgiveness and $1 trillion in liquidity from IMF special drawing rights, as the United Nations has called for, would bring the $2.5 trillion target within reach.

As the GSF grows, under the leadership of early contributors, it could make discretionary grants, as the Global Fund to Fight AIDS, Tuberculosis and Malaria does. For instance, it could support nongovernmental organizations using mobile money to transfer cash directly to households, providing both immediate relief and local economic stimulus.

The GSF could also purchase ventilators, N95 masks, and — soon, we hope — therapeutics and vaccines for countries in need. Rich countries must begin sharing, not hoarding, medical resources after their own epidemics peak.

Some rich countries will probably refuse to share, fearing a second wave of infections. But such fears will become a self-fulfilling prophecy, as the virus would surely find its way north again if permitted to lay ruin to the south. The developed world cannot heal if the rest of the world is in critical care.

A failure to combat the looming crisis in the developing world would cost hundreds of thousands of lives and damage the world economy for years. Barriers between countries would rise, and the fruits of globalization would wither. Renewed commitment to multilateralism and global solidarity is the safest path forward — for all of us.

 

THE NEW YORK TIMES

 

Maitreesh Ghatak, Xavier Jaravel, and Jonathan Weigel are professors at the London School of Economics.

Viral law: Stop spreading false information

There is a pandemic of false information that is as deadly as the coronavirus disease 2019. As it is, fake news is a scourge in modern society. It destroys reputations, causes mental stress, disturbs psychological well-being, and in some cases, results in the injury and death of the affected individuals. False information in these times literally kills.

The new Bayanihan to Heal As One Act, passed into law in response to the public health emergency, says that “individuals or groups creating, perpetrating, or spreading false information regarding the COVID-19 crisis on social media and other platforms, such information having no valid or beneficial effect on the population, and are clearly geared to create chaos, panic, anarchy, fear or confusion; and those participating in cyber incidents that make use or take advantage of the current crisis situation to prey on the public through scams, phishing, fraudulent e-mails, or other similar acts” can be punished.

There are two parts to the section: the second on the foisting of scams and the like is already punishable under existing laws like the Cybercrime Protection Act of 2012. What is novel is the first part — the creation, perpetration, or spread of false information. What is false information, or when is information false? Simply, information is fake or false if it is not based on facts. Semantically, fake news or false information is not news or information at all. Similarly, facts that are not verified are not facts but mere statements or allegations.

Such false information does not provide a valid or beneficial effect on the population. Validity relates to the “trueness” of the information; benefit refers to gain or advantage with the acquisition or use of such information. In either case, false information does not meet the test.

The false information is meant to create chaos, panic, anarchy, fear, or confusion — states of mind which invariably results from perceiving such incorrect data. In fact, the net effect of false information is to mislead and to deceive.

In many of our chat groups and social media accounts, there is a profusion of information that is not verified or downright false. Even among the educated, the tendency is to mindlessly press the forward button as if one is obligated to share whatever, whenever.

It does not help the individual or group to preface its own message with “Just forwarding, not sure if true,” or to say, “This is from another Viber group.” In either case, all the elements of the crime are present and make the spreader, the sharer, or forwarder guilty of a crime.

Common sense requires that if one is not sure, the thing to do is to not to forward. That the message was posted somewhere else does not mean that it is true or that it deserves to be shared. It needs to meet the same standard of personal knowledge or a verified and credible source.

But then it is also a sly and pernicious method — to tout in the message that a person or an entity, i.e. a doctor who, an epidemiologist how, a health institute what as the source, to give it credibility and increase its dissemination.

Prudence compels the recipient to end the spread of disinformation and to call out the spreader on the harm being caused.

Consider messages that headline “Gargling with antiseptic kills the virus,” or “Cadavers piling up in a hospital.” Woe to the person who shuns medical care and rinses himself to kingdom come. Then there is the anguish to the community to be led to believe that people are dying like flies in our healthcare system.

A particularly malicious post is the purported death of a person. Can you imagine what the family has to go through in supporting a loved one’s fight for life and at the same time fighting false information?

There is no utility or honor in spreading or sharing such information, no matter how good the intention is. It is the result of the action that is judged. It is the act that is punished by law. The punishment is imprisonment of two months and/or a fine of P10,000 to P1 million.

Why do people create or spread false information? Ignorance counts for many cases. There are those who do it for fun, or trying to be smart by putting one over others, or for the sake of a viral post. Then there are dark forces that operate as only evil does.

The rule can be summarized thus — When in doubt, verify. When unsure, don’t. Intentions don’t count, effects do. Life and death is a matter that is not up to us. But to live right by not spreading false information is something that we can do.

Fine print

What is Instagram in a pandemic?

It may be coffee-related arm exercises, or floating quiz boxes. It can be people singing and Lennon turning in his grave. It can also be a study on rights and nuances in the protection and limitation thereof.

In 2016, Mashable, Inc. approached Stephanie Sinclair to ask permission to use her “Child, Bride, Mother/Child Marriage in Guatemala” photograph, which Sinclair had earlier uploaded onto her public Instagram account, for their article on female photographers. In exchange for such use, Mashable offered her $50 for the licensing rights to the photograph. Sinclair refused.

A few days later, Mashable published its article on its website — with Sinclair’s photograph. Sinclair then sued Mashable and its parent company, alleging that they infringed her copyright when they used her photograph without her consent. On April 13 this year, the District Court of New York denied Sinclair’s infringement claim, and ruled in favor of Mashable.

The Sinclair v. Ziff Davis case was not the first copyright case that involved organizations sourcing images from individual social media accounts. In the 2014 AFP v. Morel case, photographer Daniel Morel sued Agence France Presse and Getty Images, Inc., for using and distributing his 2010 Haiti earthquake photographs without his consent and failing to properly attribute the same, despite being notified of such an error in attribution. In Morel, the Court found sufficient evidence to uphold the infringement claim against AFP and Getty Images, and ruled in favor of Morel.

Where AFP and Getty Images lost, Mashable emerged triumphant against one photographer’s copyright. How then was Mashable able to legally use Sinclair’s photograph?

Under US copyright law, copyright owners may license their rights to other parties. Thus, US jurisprudence held that copyright owners who permit licensees to grant sublicenses cannot claim infringement against such sublicensees if they act within the terms of the license and sublicense.

According to the Sinclair decision, when Sinclair created an Instagram account and set the privacy settings thereof to “public,” she agreed to be bound by Instagram’s Terms of Use. Under said Terms of Use, when users upload content on Instagram, they grant Instagram a “non-exclusive, royalty-free, transferable, sub-licensable, worldwide license to host, use, distribute, modify, run, copy, publicly perform or display, translate, and create derivative works” over the content, consistent with the user’s privacy settings. In view of these, the Court found that when Sinclair uploaded her photograph to her public Instagram account, she agreed to allow Mashable, Instagram’s sublicensee, to use it in their website.

In Morel, AFP argued that it was licensed to use Morel’s Haiti photographs. AFP maintained that when Morel posted the photographs on Twitter, he agreed to Twitter’s Terms of Service which, in turn, provided AFP license to use his content. The Morel decision rejected such an argument, as there was nothing in Twitter’s Terms of Service, at the time, that provided AFP with such license. Nonetheless, the Court stated that “a license is an affirmative defense to a copyright claim. If only the scope of the license is at issue, the copyright owner bears the burden of proving that the defendant’s copying was unauthorized.”

In Sinclair, Sinclair argued that the authorization given to Instagram to sublicense her photograph was invalid since Instagram’s Terms of Use was comprised of a series of complex, interconnected documents. According to Sinclair, though Instagram’s Terms of Use states that Instagram may sublicense users’ content, the sublicense’ scope may be found only by reading through other Instagram policies incorporated in the Terms through mere reference. The Court, however, found differently, reasoning that prevailing laws permit the practice of construing as one Agreement documents which incorporate each other through reference, and that “while Instagram could certainly make its user agreements more concise and accessible, the law does not require it to do so.”

The Philippine Intellectual Property Code provides that literary and artistic works are protected from the moment of its creation, and that copyright over such works may be licensed through a written agreement. Had Sinclair’s case been situated in the Philippines, it may be likely that Courts would rule similarly.

The cases provide insight into the nature and enforcement of copyright. Generally, IP rights owners are expected to be on continuous look-out for infringers. However, whereas applications for registration of trademarks and patents are examined, compared, and flagged for possible IP rights violations, and dedicated databases are made available to monitor possible unauthorized use, such resources are not available to copyright owners. Copyright owners have to exercise vigilance from the moment of creation, and safeguarding rights rely mainly on the rights-holder’s creativity and initiative.

However, such vigilance cannot be limited to unauthorized use. Sinclair is instructive on the consequences of haphazardly agreeing to policies and trusting third parties to always act in favor of its users’ rights. Examining policies may be dull, and mostly confusing, but it is dangerous for rights-holders to immediately agree and follow such policies on the basis of convenience. This convenience and faith in such third parties, as Sinclair shows, comes at a price of licensing others to limit the rights-holder’s rights and protection.

While rights could certainly be made easier to protect and enforce, the law does not require it be so. In a time when conditions are uncertain, and when the options available come with hidden prices, rights-holders must always be vigilant, exercise caution, and, most of all, though tedious, read and question the fine print.

This article is for general informational and educational purposes only and not offered as, and does not constitute legal advice or legal opinion.

 

Elena Liliosa Q. Escober is an Associate of the Intellectual Property Department of the Angara Abello Concepcion Regala & Cruz Law Offices (ACCRALAW).

eqescober@accralaw.com

8830-0000

A generation of crisis and opportunities

In his book, The Greatest Generation, journalist Tom Brokaw extolled those born in the 1900s and up to the 1920s, relating how they survived the Great Depression, fought and won World War II, helped Europe and Japan get back on their feet and powered America to economic, military and industrial greatness. That generation also fathered the Baby Boomer Generation — born from 1946 — that enjoyed the fruits of that greatness.

These days, sociologists are hyper-analyzing and marketers are creating products and services for Generations X, Y, and Z, the children and grandchildren of the Baby Boomers, the latter being considered already passé.

I was born in 1939, past the apex of the Greatest Generation and not quite part of the Baby Boomer Generation. Obviously, I cannot be counted among Generations X, Y, and Z. Some pundits have patronizingly referred to my batch as the Silent Generation. But I, frankly, think that is selling us short. I believe my generation is much more than that.

I prefer to call the period covering my 80 years of existence on this earth as the Generation of Crisis and Opportunity. This generation has been ravaged by pandemics like people in the Dark Ages, fought more wars than the Greatest Generation, experienced the nuclear brinkmanship of the Cold War, survived economic downturns like the Great Depression, explored more new worlds than in the Age of Discovery, and conceived, innovated, and developed more new knowledge than the geniuses of the Renaissance

I was born at the height of the Great Depression, when the Philippines was still a US colony. Then came Pearl Harbor, the Japanese occupation, and the wars against Imperial Japan and Nazi Germany. While I was too young to fight in the war, I was old enough to remember its horrors. Growing up during the Cold War years, I learned that Russia and the United States were engaged in a vicious game of “chicken” that brought mankind to the brink of extinction during the Cuban missile crisis.

In 1991, we saw the disintegration of the Soviet Union, like the fall of the Roman Empire in 375 AD. On the other hand, like the establishment of the Mongol Empire by Genghis Khan in the 13th century, my generation is witnessing the emergence of China as an economic and military power.

While my generation was too young to fight in World War II, we experienced the Korean War, the Vietnam War, two wars in Iraq, and are seeing the continuing conflict in the Middle East. We have also witnessed terrorism used as a deadly weapon of international conflict.

On Sept. 11, 2001, we saw the attack on the twin towers in New York — live, on TV, as if we were watching a Hollywood action thriller. Since then, we have had to get used to the inconvenience of tight security inspections in the course of air travel, but we continue to be horrified by terrorist attacks that have claimed hundreds of innocent lives in cities around the world. TV has brought the carnage into our living rooms.

Did our forefathers experience revolutions? My generation participated in the People Power Revolt of 1986 and saw revolutions around the globe. Did they witness the martyrdom of Jose Rizal? We saw the assassination of John and Robert Kennedy, Martin Luther King, Anwar Sadat, Ariel Sharon, and Ninoy Aquino — as if the killings had been committed before our eyes.

In the Philippines, our generation experienced Martial Law and lived through a dictatorship that was eventually ended by the People Power Revolution. But it was an uprising like no other, with citizen-rebels defying tanks armed only with rosary beads. And then came the series of attempted coups that ended with a twist that could only have been written by an over-imaginative playwright: the leaders of the coup found their way into the Senate, as well as other important government posts.

And what about the “villains” of the People Power Revolt? In an inexplicable revision of history, they have become regarded as heroes, elected to the Legislature, and may even assume the presidency.

In 1957, the Russians led in the space race with Sputnik I, the first artificial satellite to orbit the earth. Then followed the feat of Yuri Gagarin, the first man in outer space, on board the Vostok 1. This happened in April 1961. A month later, America played catch-up by also launching Alan Shepard into space on board Freedom 7.

Then, in July 1969, we actually saw on live TV the first earthlings — Neil Armstrong and Buzz Aldrin — setting foot on the moon. It was like watching Christopher Columbus planting the banner of Spain in the New World.

Did European ships explore the globe during the Age of Discovery? Today, we are witnessing the exploration of the galaxy. Man may even land on Mars during my lifetime. I am already resigned to the possibility that God’s universe was not created for homo sapiens alone. I grew up at a time when there was no TV in the Philippines. Kids rushed home to listen to their favorite radio shows or lined up at flea-infested theaters to watch third-run double-feature movies. We also sang pop songs with song hits books in hand. Karaoke had not been invented. Not even cassette tapes. Much less CDs, MP3s, and YouTube.

It never occurred to me that I would eventually be a radio performer and would be among the first people to appear on television when it was introduced in the Philippines. But even while I had worked in the medium, owning a TV set was beyond my family’s modest means. And when the Age of Computers came, owning a desktop — and much less a laptop — was the stuff of wishful thinking.

I suppose Generations X, Y, and Z (among them, my children and grandchildren) can never understand how it is like not to own an i-Pad, a laptop, a smart phone, and have a color TV in every room in the house. Or how it is not to talk to each other on FaceTime, exchange jokes on Facebook, and do research on Google. Or how it is not to have Alexa and Siri help with the homework.

Talk about smartphones, I once produced a TV spy series that had the hero wearing a video wrist watch with which he could visually communicate with his spy chief at headquarters. Of course, that was pure science fiction then. In fact, at that time, having a PLDT landline installed in one’s house in Manila was like queuing for a liver or kidney transplant. Needless to say, portable or cellular phones were not even in our fantasies.

These days, Generations X, Y, and Z, as well as the househelp, can never understand how we survived without mobile phones. Today, a cell phone is considered as essential as life itself — but not just any phone — it also has to be a computer, a still camera, a video recorder, and an interactive video device.

Indeed, the Industrial Revolution appears so primitive when compared to today’s achievements in electronics and digital technology. And the Renaissance is so old-fashioned alongside today’s innovations in arts and entertainment.

At my age, I may soon be denied renewal of my driver’s license. But this generation is already developing driverless cars — a leap far into the future from the days of the horseless carriage. Indeed, the leaps and bounds of discovery and technological developments have been awesome.

But as I write this, we are being scourged by a pandemic and are cowering in our homes like the Jews during the Passover at the time of Moses.

The coronavirus disease 2019/COVID-19, as deadly as the Black Plague of the Dark Ages, is a humbling reminder that this generation has not yet mastered one thing.

Our mortality.

 

Greg B. Macabenta is an advertising and communications man shuttling between San Francisco and Manila and providing unique insights on issues from both perspectives.

gregmacabenta@hotmail.com

Enabling our pork and chicken industry

In the absence or presence of man-made or natural disasters, food production is a commonsensical key process that should be protected and facilitated. In a period of lockdown due to enhanced community quarantine (ECQ) to hinder the further spread of the Wuhan virus, food availability and access should also be one of the top priorities of the government.

Specifically, the chicken and swine industries that are worth P300 billion and represent a crucial component in the country’s agricultural economy face formidable challenges. Presently, the threat matrix to the chicken and swine sectors, which primarily consists of animal diseases like the Avian flu and the African Swine Fever (ASF), has been doubly compounded by the transport constrictions due to the ECQ and the existing over importation despite the sufficiency in supply. These issues directly involve the regulatory function of government.

The ECQ as a means to restrain the movement of people and the practice of social distancing to ensure the physical spacing between and among people are altogether a social safeguard to combat the spread of the Wuhan virus. Limiting the movement of people through lockdowns and the physical presence of checkpoints, however, are never intended to impede the flow of goods and the manner of distributing them.

This is understandable as chicken and pork meat are intended to be distributed to the consumers as part of the daily meal consumption of the population. For this part of the problem, the Inter-Agency Task Force (IATF) chaired by President Duterte has been on its toes, having to resolve the emergent everyday problems regarding the continuous flow of food supply. Time and again, the IATF has explained that the transport of food and food products should not be hampered.

But of course, the bureaucratic problems or complications also lie in the hands of the local government units (LGUs). As the checkpoints are situated in the strategic areas bordering LGUs, the passage of food and food products should be a priority. It is in this aspect where the mayors and police (or soldiers) should be reminded about the protection and facilitation of food chains.

In turn, the availability of chicken and pork meat through well-defined and well-coordinated transportation and distribution would in itself serve the demand stimulus. In an island-wide lockdown, the demand for the said food products would surely dwindle. However, if the people see that chicken and pork meat are widely available and accessible, their demand would be encouraged.

Another regulatory challenge that the chicken and pork industries confront pertains to over-importation. This happened in 2018 when Philippine pork and chicken imports far exceeded the country’s commitment to the World Trade Organization (WTO) by millions of kilos. These are regulatory lapses that directly endanger not only the livelihoods of growers, feeders, dealers, workers, and businesses but the resilience of our agricultural economy as well. As such, a sensible course of action would be to halt the issuance of importation permits and let the local supply be consumed by the population during and after the ECQ.

Lastly, it is also within the purview of regulation to allow or grant reprieves to both the chicken and pork businesses in terms of local business taxes and sanitation permits in this time of crisis. This is an alleviative resolution; with a colatilla that such business will not lay off workers during the ECQ period and that savings from taxes would instead be given to workers in the form of assistance.

Developing the country’s food production capacity is critical to national security. There needs to be systematic monitoring and an updated database so that the government can avoid over-importation of meat products. The situation poses very harmful repercussions to our local producers and jeopardizes the jobs of millions of families. It is a national security problem that can spark public unrest.

And while government has its hands full in simultaneously addressing ECQ concerns and effecting a national plan for economic recovery, it should not lose sight of the critical task to ensure the existence of an enabling regulatory environment that facilitates food supply and distribution. Any disruptions at this time will feed the already anxious atmosphere of the ongoing Crisis.

 

Jaime Jimenez, Ph.D, is the Deputy Executive Director for Research of Stratbase ADR Institute.

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