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Global labor group cites deteriorating state of human rights

AN INTERNATIONAL labor group on Monday called for the declaration of a human rights emergency in the Philippines after authorities arrested six union organizers and a journalist.

The Council of Global Unions called on the United Nations Human Rights Council and the International Labour Organization to consider as an emergency “the deteriorating human rights condition in the Philippines.”

International bodies should also send “their missions to investigate human rights and trade union repression in the country and help reverse the situation,” the group said in a statement.

The arrest of union leaders “is yet another blow to the trade union movement in the Philippines,” it said. “Killings among activists and rights defenders as a way of instilling fear and silencing the people have not ceased.”

Police arrested a journalist and several labor leaders in separate operations last week over alleged illegal possession of firearms and explosives — the common charges against activists.

Bagong Alyansang Makabayan Metro Manila Chairman Raymond V. Palatino said the arrests were the “handiwork of a terrorist regime.”

Mr. Palatino said President Rodrigo R. Duterte should be held responsible for intensified attacks against his critics.

“It was his speech of red-tagging activists which unleashed the brutal forces of the state and targeted those who are condemned as enemies of the government,” he told a news briefing attended by relatives of the suspects.

“A President intolerant of opposition and determined to wage an all-out war against communists, a judge issuing questionable search warrants, police fabricating evidence, public servants red-tagging activists — all of these were reflected in the recent crackdown,” Mr. Palatino said.

A Quezon City judge issued the warrants for the arrest that allowed police to raid the homes of the suspects.

A Supreme Court circular allows the executive judges of the Manila and Quezon City trial courts to issue search warrants that can be served outside their jurisdictions.

Data from human rights group Karapatan showed that at least 188 human rights defenders have been killed under the Duterte administration, while 426 activists and community organizers have been arrested. — Kyle Aristophere T. Atienza

Almost half of Filipinos feel poor — SWS

ALMOST half of Filipino families consider themselves poor, according to the latest Social Weather Stations (SWS) poll.

SWS said 48% of families rated themselves poor and 36% said they were borderline poor. Only 16% felt they were not poor.

The November poll was the first time the pollster did face-to-face interviews since the coronavirus pandemic struck. The self-rated poverty poll could not be done in SWS mobile phone surveys earlier this year.

In December 2019, the last time that poll was done, there were 54% that felt poor, 23% felt borderline poor and 23% felt they were not poor.

The November poll also found 31% of families rating themselves as food-poor, 47% feeling borderline food-poor and 22% feeling they were not food-poor, SWS said.

The polling firm interviewed 1,500 adults for the poll, which had an error margin of ±2.5 points. — NPA

Gov’t told to suspend RFID toll scheme

PHILIPPINE STAR/ MICHAEL VARCAS

THE SENATE on Monday adopted a resolution asking the Transportation department and its attached agencies to suspend its mandatory cashless toll payment scheme.

The agency should defer the program pending complaints from motorists, according to Senate Resolution 596.

“On the outset, we can already see two major issues: the absence of an interoperable RFID on all expressways and the sheer volume of vehicles that need to obtain radio frequency identification (RFID) stickers within a short time frame,” Senator Grace S. Poe-Llamanzares said in her sponsorship speech.

Fourteen senators signed the resolution including Senators Ralph G. Recto, Juan Miguel F. Zubiri, Maria Lourdes Nancy S. Binay, Emmanuel D. Pacquiao, Imee R. Marcos, Ramon B. Revilla, Jr., Ronald M. dela Rosa, Francis N. Pangilinan, Panfilo M. Lacson, Leila M. de Lima, Emmanuel Joel J. Villanueva, Richard J. Gordon, Risa N. Hontiveros-Baraquel and Sherwin T. Gatchalian.

Ms. Llamanzares cited complaints about difficulties in getting RFID stickers, the limit on RFID applicants daily and the high minimum load requirements. There were also complaints about malfunctioning RFID scanners and delays in the reloading system.

“The resulting problem is not merely confined in the area where electronic toll collection systems are located,” she said. “The traffic jams they cause extend to nearby cities and municipalities which, in turn, paralyzes their local economies.” — Charmaine A. Tadalan

Nationwide round-up (12/14/20)

More Filipinos come home

MORE than 300,000 migrant Filipino workers have come home amid a coronavirus pandemic that has sickened 72.7 million people and killed 1.6 million worldwide, according to the Department of Foreign Affairs (DFA).

A total of 13,537 Filipinos arrived last week, the highest weekly count since DFA started the repatriation program in February, the agency said in a statement on Sunday night.

It facilitated 59 flights to bring home 319 distressed Filipinos from Dammam and Saudi Arabia; 11 who got stranded in Malaysia; nine undocumented workers in China; two seafarers in the Bahamas; and another in Australia.

Eight medical repatriates from France, Japan, Austria, Oman, the United Arab Emirates and the United States also came home. Three were from Qatar, Egypt and Syria, who may have been victims of human trafficking.

This brought the beneficiaries to 300,838 Filipinos, including 90,621 seafarers and 210,217 land-based workers, DFA said.

“This is the biggest repatriation effort in the history of the DFA and of the Philippines,” Foreign Affairs Undersecretary Sarah Lou Y. Arriola said in the statement.

In a separate statement, DFA on Monday reported 42 new coronavirus cases, 35 recoveries and one death.

About 12,350 Filipinos overseas have been infected with the virus, 3,457 of whom were being treated, 8,032 have recovered and 861 died. — Charmaine A. Tadalan

BI bats for ‘COVID-19 passports’

THE BUREAU of Immigration (BI) on Monday said it agrees with a proposal for a COVID-19 passport for international travelers that will show they have been vaccinated and are coronavirus-free.

In a statement, Immigration Commissioner Jaime H. Morente said this would speed up immigration processing at airports and could revive the travel industry.

He said the current procedure of requiring travelers to get tested at the airport “could pose problems” as the country reopens its borders.

“The anticipated influx of more international travelers could result in longer queues and overcrowding in our immigration counters as all of these passengers should be tested at the airport before they are allowed to enter the country,” he said.

Mr. Morente said having a COVID-19 passport showing that a traveller had been vaccinated and is not infected would result in quicken the immigration process.

He said he expects travelers to start arriving in the Philippines by the second half of next year, when a vaccine will have been available locally. — Vann Marlo M. Villegas

FB to expose lockdown violators

THE PHILIPPINE National Police (PNP) on Monday said it would monitor social media for potential quarantine violators amid a coronavirus pandemic during the holiday season.

PNP Chief of Staff Cesar R. Binag told a news briefing on Monday Facebook and other social media sites might show photos of people in large gatherings despite the prohibition.

Last week, Interior and Local Government Undersecretary Epimaco V. Densing III said local government officials should issue ordinances prohibiting mass gatherings and videoke activities during the holiday season.

National Task Force Against COVID-19 chief implementer Carlito G. Galvez, Jr. said the government would ask President Rodrigo R. Duterte to urge the public to take precautions before Christmas week.

The President is set to give a public address on Wednesday.

Mr. Galvez said he and Interior and local government officials were in talks on possible measures that will govern holiday events, including limiting attendance to 10% to 30%. — Gillian M. Cortez

Regional Updates (12/14/20)

NLEX urged to keep barriers up

THE MAYOR of Valenzuela City on Monday asked NLEX Corp. to make up its mind about his proposal to keep barriers up at its toll plazas to ease traffic congestion.

During a televised meeting between the company and city officials, city Mayor Rex T. Gatchalian said the toll operator should follow what is being done in neighboring countries such as Malaysia, where motorists still get charged even without toll fences.

NLEX Corp. President J. Luigi Bautista said the company would first consult regulators about keeping the toll fences up. “The open barrier is our direction,” he said. “But for us to get there, we will have to fix our infrastructure first. We will need coordination with the regulatory agency.”

On Dec. 7, Valenzuela City suspended NLEX Corp.’s business permits for some toll plaza, saying NLEX Corp. should address issues on consumer, traffic and radio-frequency identification sticker installation and reloading. — Arjay L. Balinbin

Housing offered to Pangasinan farmers

THE AGRARIAN Reform department on Monday said it had chosen Pangasinan as the pilot site for its housing project for farmers.

In a statement, Agrarian Reform Secretary John R. Castriciones said a 26,111-square meter lot in the village of Carayungan in Umingan, Pangasinan would be the site of the pilot that will start on Dec. 15.

Each house will cost P300,000 and will have duplex-type units with a 36-square meter floor area, toilet, electrical and water facilities, tiled floors and painted interior and exterior walls.

Agrarian reform beneficiaries may avail themselves of the housing program, which should boost farmers’ morale and result in better crop yields, income and quality of life, Mr. Castriciones said.

Aside from Umingan in Pangasinan, the project would be replicated in Nueva Vizcaya, Nueva Ecija, Samar, Cebu, Camariñes Norte and Davao del Sur, he said. — Revin Mikhael D. Ochave

House approves measure creating 99-year trust from coco levy funds

THE House of Representatives on Monday approved on third and final reading the bill creating the coconut levy trust fund.

With 221 affirmative votes, six negatives, and zero abstentions, legislators passed House Bill No. 8136, the proposed Coconut Farmers and Development Trust Fund Act. The measure seeks to mobilize coconut levy funds collected decades ago into programs designed to rehabilitate and modernize the coconut industry.

The levy, billed during the Marcos administration as a means of investing in the industry’s development, but actually redirected to purchase stakes in San Miguel Corp. and United Coconut Planters Bank, is now valued at around P76 billion.

President Rodrigo R. Duterte made it a campaign promise in 2016 to return the funds in his first 100 days in office. He vetoed a previous version of the bill last year, saying in his veto message that the measure failed to “accelerat(e) the further utilization of coco levy assets and funds for the benefit of our marginalized coconut farmers and the coconut industry.”

Deputy Speaker and Party-list Representative Sharon S. Garin, who heads the technical working group evaluating the measure, said in a statement that getting the bill signed into law would provide “much-needed relief for the families of coconut farmers who have long waited for their share.”

“With the COVID-19 pandemic choking agricultural supply chains, the situation of small coconut farmers will continue to worsen should the enactment of the bill be delayed,” she said in a statement.

Citing a 2013 report by the National Anti-Poverty Commission, she said the poverty rate among coconut farmers was between 41 and 60%.

The bill’s approval is a “good news to our coconut farmers and a boost to the industry,” Philippine Coconut Authority (PCA) Administrator Benjamin R. Madrigal, Jr. told BusinessWorld in a Viber message Monday.

Mr. Madrigal said the PCA has asked stakeholders to identify their “requirements for consideration or inclusion in the would-be proposed program for the levy fund” and to encourage all farmers to join the national registry system for the sector.

“We are now organizing a regional and provincial coconut industry stakeholders forum as a venue for info dissemination, coordination and consultation,” he said.

The bill is expected to benefit around 3.5 million coconut farmers from 68 provinces. The eligibility cutoff is set at ownership of five hectares of coconut land or less.

The bill calls for the trust fund to be maintained for 99 years, supporting the Coconut Farmers and Industry Development Plan (CFIDP) to be drafted by the PCA.

The measure creates a Coco Levy Trust Fund Board, composed of coconut farmers and their organizations, industry associations, civil society organizations, academic experts, and other stakeholders.

An initial allocation of P5 billion has been authorized for the PCA to organize the trust fund and prepare the CFIDP. The Department of Finance will manage the trust fund. — Kyle Aristophere T. Atienza

ARTA launches push to organize agency-level bodies in fight vs red tape

THE Anti-Red Tape Authority (ARTA) has launched a campaign to install red tape-reduction committees at all government agencies, which it billed as necessary to make public services more “citizen-centric.”

“It is indeed our sincerest desire that through this issuance every representation of the Philippine government will have a citizen-centric mindset and will strive hard to provide ways and means to give more efficient public service for the Filipino people,” ARTA Director-General Jeremiah B. Belgica said at the virtual rollout of the guidelines for forming such committees on Monday.

He added, “Hindi na po kakailanganin dapat ng taumbayan ng mga fixers na syang nagbibigay ng mas mabilis na proseso bagamat ito ay iligal. Tayo na po, ang ARTA, at sa tulong ng mga committees na ito ang magiging fixer ng kanilang problema. Fixer na walang bayad. Fixer na tama (The public should no longer resort to illegal fixers for faster service. Let us do the right thing and be the fixers ourselves, without pay.)” 

Mr. Belgica approved on Sept. 30 Memorandum Circular No. 2020-07, which sets the guidelines for organizing such committees, in compliance with the Ease of Doing Business and Efficient Government Service Delivery Act of 2018.

The memorandum is applicable to all government agencies including state universities and colleges, local government units, and government-owned or controlled corporations, among others.

Under the guidelines, the committee will be composed of a chairperson, a vice chairperson, and at least five members.

“It shall be composed of a number of members who are institutionally tasked to identify, develop, implement, and review policies and monitor processes,” it said.

The committee will also be responsible for ensuring that the host agency complies with the requirements of the ease of doing business law. — Arjay L. Balinbin

Wholesale price growth of general goods eases in Sept.

YEAR-ON-YEAR wholesale price growth in general goods eased in September compared with August, according to data released by the Philippine Statistics Authority (PSA).

The general wholesale price index (GWPI) rose 2.2% year on year in September, against 2.4% in August.

The GWPI’s performance in September was driven by slower year-on-year price increases compared to a month earlier in the following materials: food (4.3% in September against 4.4% in August); beverages and tobacco (4.5% from 5.1%), crude materials, inedible except fuels (26.1% from 24.6%); chemicals including animal and vegetable oils and fats (1.1% from 1.3%); and manufactured goods classified chiefly by materials (0.7% from 1.3%).

Price growth rates that were unchanged from the rate recorded the previous month included those for machinery and transport equipment (0.4%) and miscellaneous manufactured articles (0.5%). Meanwhile, mineral fuels, lubricants and related materials posted a 6.1% decline in September, against the minus 4.1% recorded in August.

In a separate data release, the PSA reported that year-on-year wholesale price growth of construction materials in Metro Manila was unchanged in November compared with a month prior.

Metro Manila’s construction materials wholesale price index grew 0.8% year on year in November, the same rise recorded in October.

Posting higher price growth were hardware (3.4% in November from 3% in October), lumber (3.7% from 3%), tileworks (14.4% from 13.8%), and painting works (0.7% from 0.6%).

Registering slower price growth were sand and gravel (0.9% from 1.7%) and electrical works (1.4% from 1.5%).

Construction materials posting price declines were plywood (minus 0.2%); reinforcing and structural steel (minus 1.0%); plumbing fixtures and accessories/waterworks (minus 1.5%); and fuels and lubricants (minus 11.9%).

Commodities in which price growth was unchanged from October were concrete products (1.1%); galvanized iron sheets (0.9%); glass and glass products (7.1%); doors, jambs, and steel casements (0.2%); polyvinyl chloride (PVC) pipes (4.4%), asphalt (0%); and machinery and equipment rentals (0%).

In an e-mail, Security Bank Corp. Chief Economist Robert Dan J. Roces said the GWPI result “validates” the consumer price index (CPI) results over the same period. The CPI forms the basis for headline inflation.

“[A]s a deflator to consumer price growth, the latest GWPI reading shows that supply levels were essentially better amid steady or slower demand in September” he said.

“We expect the [GWPI] to be higher in the next readings as supply — notably in the food index — was severely affected by the recent typhoons,” he added.

Headline inflation was 2.3% in September, decelerating from 2.4% in August. The PSA attributed the slowdown mainly to the performance of food and non-alcoholic beverages, which are heavily weighted in the CPI.

In an e-mail, ING Bank NV Manila Senior Economist Nicholas Antonio T. Mapa said the subdued wholesale prices reflect economic activity being “stuck on low gear.”

“We expect this trend to continue as hobbled domestic demand keeps a lid of demand-side pressure on wholesale and eventually retail prices,” he said.

Mr. Mapa also noted that construction was one of the sectors hit hard by the pandemic, with real estate developers “hitting the brakes” on new projects on expectation of soft demand in the months ahead.

“Thus, we’ve seen modest price gains in construction material, all the more given the slow recovery in the government’s ‘Build, Build, Build’ efforts amidst the lockdowns,” he said.

Mr. Mapa expects “downward pressure” on wholesale prices in the coming months in the absence of demand, which could offset slight price increases due to typhoon-related supply disruptions. — Michelle Anne P. Soliman

PCC, Hong Kong antitrust body sign collaboration deal

THE Philippine Competition Commission (PCC) said it signed Monday a memorandum of understanding with its Hong Kong counterpart covering staff exchanges, research collaboration, capacity-building exercises, and other forms of technical cooperation.

The tieup allows the PCC and the Hong Kong Competition Commission (HKCC) “to notify each other of anti-competitive cases of mutual interest prior to or after enforcement, and conduct joint activities to enhance each other’s competition law enforcement capacity,” the PCC body said in a statement.

PCC Chairman Arsenio M. Balisacan noted that international cooperation is a “critical component” in the enforcement of competition laws, “as more transactions turn borderless or go digital.”

Both parties have engaged in previous collaboration involving staff exchanges, competition enforcement workshops, and activities on the policy and advocacy front, the PCC said.

Chairman Samuel Chan of the HKCC said, “This strong relationship has grown organically, and based on this solid foundation, both of our agencies recognize the considerable benefits in formalizing and further strengthening this partnership.” — Arjay L. Balinbin

Ho Ho Ho! CREATE is coming to town

For Filipinos, Christmas is the most anticipated event of the year. Preparation for the festivities starts as early as September with Christmas celebrations lasting until January of the following year. While this year’s festivities will inevitably be different due to restrictions on gatherings, Filipinos can undoubtedly make the most of the situation and make the Christmas spirit come alive.

Known for our resilience, we usually rebound from setbacks, rise above the challenges, and recover. Even the pandemic and recent typhoons are unable to dampen the Filipino spirit. For us, Christmas must go on, and so will the CREATE bill, which aims to help enterprises bounce back from the pandemic, thereby create ripple effects to boost economic recovery.

The Senate version of the measure was approved on Nov. 26. On Dec. 7, the Committee on Ways and Means recommended to the Speaker of the House of Representatives the acceptance of the amendments introduced under Senate Bill 1357 or the Corporate Recovery and Tax Incentives for Enterprises Act (CREATE). The House still has to act on the recommendation. It is hoped that the bill will be signed into law by President Rodrigo R. Duterte before the year ends particularly as some provisions have retroactive effect.

Among the indispensable features of the CREATE bill is the rationalization of the fiscal incentives system. For years, various reforms have been undertaken to improve the management and provision of tax incentives.

The Philippines has been very generous in granting tax incentives with neither time limits nor thorough cost-benefit analyses. With CREATE, tax incentives will be performance-based, targeted, time-bound and transparent to ensure that every peso granted as a tax incentive yields a positive benefit to the country.

Under CREATE, a Strategic Investment Priority Plan (SIPP) is to be formulated every three years to identify priority projects and activities that will receive incentives, taking into account the size of the investment being contemplated, employment generation prospects especially in less developed areas, the potential for export, and the introduction of innovative processes and technologies.

The Fiscal Incentives Review Board (FIRB), or the investment promotion agencies (IPAs) under a delegated authority from the FIRB, are authorized to grant incentives pursuant to the Tax Code only to the extent of their approved registered project or activity under the SIPP. Approval of registered projects or activities of P1 billion pesos and below is to be delegated by the FIRB to the IPAs. To compel efficient processing, all applications for tax incentives are to be deemed approved if not acted upon within 20 days.

To qualify for the fiscal incentives, registered business enterprises must comply with the following: (i) they must be engaged in an activity included in the SIPP; (ii) they must meet the target performance metrics after an agreed time period; (iii) they must install adequate accounting systems that can identify the investments, revenue, costs and profits for each activity or establish a separate corporation for each registered project or activity; (iv) they must comply with e-receipting and e-sales requirement; and (v) they must submit annual reports of beneficial ownership of the organization and related parties.

Although some enterprises may find it challenging to comply with some of the foregoing conditions, particularly having a computerized accounting system with e-receipting, which will entail extra costs and resources, still these conditions are reasonably necessary if we are to implement a system to assess the net benefits of incentive granted to Philippine economy.

The income tax incentives under CREATE are as follows: (i) income tax holiday (ITH) for four to seven years followed by special corporate income tax (SCIT) of 5% based on gross income earned, in lieu of all taxes for 10 years; or (ii) regular corporate income tax (CIT) with enhanced deductions for 14 to 17 years. Thus, enhanced deductions can in no case be granted simultaneously with the SCIT. Enhanced deductions include additional deductions for depreciation, labor, training, research and development, domestic input expense, power expense, investment allowance and claiming of NOLCO for next 5 years.

The fiscal incentives are also available to projects or activities that were registered prior to effectivity of CREATE Bill. Firms enjoying ITH may continue to enjoy the same within the remaining ITH period. On the other hand, firms enjoying ITH and 5% gross income tax (GIT) after the ITH or enjoying 5% GIT only, may continue to enjoy these for 10 years. Qualified expansions or entirely new projects or activities may also qualify for a new set of incentives.

CREATE offers a total period of incentive availment of up to 17 years. The duration of income tax incentives depends on the category (basic, enhanced, advances, superior), which in turn is based on location and industry priorities.

Other fiscal incentives under CREATE are: (i) exemption from customs duties on imports of capital equipment, raw materials, spare parts or accessories directly and exclusively used in the registered project or activity, which are not produced or manufactured domestically in sufficient quantity at reasonable prices; and (ii) a VAT exemption on imports and VAT zero-rating on local purchases of goods and services directly and exclusively used in the registered project or activity by a registered enterprise located inside an ecozone or freeport.

CREATE also gives the President the flexibility to modify the mix, period or manner of availment of incentives for a highly desirable project involving a minimum investment P50 billion, or those that generate employment of at least 10,000, subject to certain conditions and the recommendation of the FIRB. In such cases the ITH is not to exceed eight years; thereafter, a 5% SCIT may be granted, provided that the total period of availment not exceed 40 years. Further, the President may also grant non-fiscal support incentives such as facilitation of registration and certification requirements from government agencies, logistical support, training support, product testing and certification with the recommendation of the FIRB.

As in any other grant of incentives, the grantee-enterprise should meet the reporting requirements, specifically: (i) the use of electronic systems for filing and payment with the BIR; and (ii) filing with the respective IPA and with the FIRB a complete annual tax incentives report and an annual benefits report within 30 calendar days from the statutory deadline for filing of returns and payment of taxes.

Non-compliance with reporting requirements and failure to use the electronic system for filing and payment of taxes to the BIR makes the investor liable for penalties (first offense — P100,000; second offense — P500,000). On third offense, the fiscal incentives are to be canceled.

Our resiliency has been tested many times, in many ways. Despite the lingering uncertainty brought by the pandemic, Filipinos’ high hopes for a better life have never wavered. As we usher in a new decade, Filipinos are eager for better times. With CREATE, it is hoped that the long-overdue fiscal incentives reform will bring a much-needed recovery boost which will allow us to thrive in a post-pandemic environment.

Let’s Talk Tax is a weekly newspaper column of P&A Grant Thornton that aims to keep the public informed of various developments in taxation. This article is not intended to be a substitute for competent professional advice.

 

Farrah Andres-Neagoe is a senior manager of Tax Advisory & Compliance division of P&A Grant Thornton, the Philippine member firm of Grant Thornton International Ltd.

pagrantthornton@ph.gt.com

The vaccines that could use a shot in the arm

IN A PANDEMIC, trust is everything.

Beijing and Moscow saw early the potential benefits of pulling ahead in the race to produce an effective inoculation against COVID-19. Apart from the public health benefits and the keen awareness in both governments of the need to be self-reliant, a clear win would validate top-down models of government and innovation. It would also mean a much-needed image boost, at home and abroad.

In the end, both have had success. Moscow in August, to great fanfare, became the first to grant regulatory approval for a vaccine, one of its two leading candidates. By then, Beijing had already allowed doses of one of its own vaccines to be given to its military. About a fifth of all shots listed by the World Health Organization as undergoing clinical trials are Chinese. Yet without more transparency about research and testing — and a little less propaganda —  neither country will earn the confidence needed to reap the full reward.

For an indication of the trust deficit, look at the way the market responded to Russia’s green light for its Sputnik V vaccine, or to news the flagship vaccine is more than 90% effective. They were yawns compared to the unbridled enthusiasm after Moderna Therapeutics published encouraging data in July, or indeed ongoing excitement as the vaccine from Pfizer, Inc. and German partner BioNTech SE goes through the US regulatory approval process. Last month, positive results for that inoculation from a large-scale clinical trial were enough to push the S&P 500, MSCI World, and the MSCI All-World indexes towards record highs, in no small part thanks to the robust evidence about the vaccine’s effectiveness.

China faced a higher trust hurdle from the start. It saw the first cases and there were questions from the earliest days of the outbreak over how swiftly it had shared information, perhaps missing opportunities to slow the spread. Even if it was not a repeat of 2002 and 2003, when Beijing took months to disclose the outbreak of Severe Acute Respiratory Syndrome, or SARS, wariness lingered. Then there’s the impact of past vaccine scandals, most recently over substandard inoculations in 2018. Controls have been overhauled since.

It’s no accident that Brazil’s president, Jair Bolsonaro — no stranger to mixing health policy and the demands of populist politics — in October criticized the Sinovac Biotech Ltd. vaccine being tested in his country by arguing people didn’t feel safe “because of its origin.” In a confusing set of events, the final-phase trial was suspended and then reinstated less than 48 hours later.

Russia’s plight has not been too different. The country has not been a vaccine research or production powerhouse, but an increasingly isolated government still saw the opportunity to boost its international standing and earn the sort of halo Soviet science did with the race to put humans in space. The first vaccine was, no surprise, named Sputnik V.

Yet with scarce data and plenty of government promotion, the dash for approvals and show over results has not translated into impressive diplomatic or domestic wins. For Russia, manufacturing hiccups haven’t helped at home, nor have accusations from several countries in July that Moscow-backed hackers tried to steal research. According to an October survey by the Levada Center, an independent pollster, 59% of Russians questioned said they would not take the vaccination. As Tatiana Stanovaya, head of political consultancy R.Politik put it to me, the Kremlin, which saw the vaccine as a question of pride and self-affirmation, simply overdid the hype. The result has been an acute lack of public trust.

Beijing and Moscow got to the finish line with impressive speed, but without the first mover advantages they had hoped for. Whatever happens next, they should consider the two specific reasons for the predicament.

The first is how the vaccine has been treated in early stages of testing. Everyone has cut corners, as breakthroughs that usually take years are happening over months. Too much is at stake. But there are questions in particular regarding extensive experimental use in both countries. China has injected thousands with unproven shots outside the trial process, many of them workers who may not have been at liberty to refuse. In Russia, scientists inoculated themselves and some of the country’s wealthiest submitted to the experimental serum too, as early as April. Testing cohorts have also been small.

Most important, though, is the question of transparency. Russia has published some information from its phase 1 and 2 studies for the Sputnik vaccine. Immediately after its first results were published, though, concerns were raised by a group of Western scientists, querying, for example, repeated patterns in the data that were not fully explained. Since, scientists from leading Russian universities have also asked for more information, further questioning methodology and data analysis. Even less is known about the second vaccine candidate. So too in China. The United Arab Emirates has said the Sinopharm vaccine showed 86% efficacy in Phase 3 tests, but more detail is required on side-effects and demographics. It could still receive China’s full approval later this month.

Russia and China are already reaching much of the developing world with their easier-to-store and likely cheaper vaccines. Beijing has joined COVAX, the WHO-backed scheme to distribute shots. Alibaba’s logistics arm, for example, has already established a cold chain route to Addis Ababa. Russian officials say orders have been placed for 1.2 billion doses. Humankind needs as much success as it can muster. It just needs a little more data too.

BLOOMBERG OPINION

Making agriculture recovery sustainable

 

Over the last five years, agriculture grew by a meager 0.9% per annum. This year is likely to be no exception, considering the impacts of the COVID-19 pandemic and climate change (such as the recent super typhoons Rolly and Ulysses).

So, can Philippine agriculture still grow by three to four percent in the medium term? And reduce rural poverty? Yes, it can, but it will require a paradigm shift.

What is the principal shift? To diversify resource use to broaden the economic base.

Today, more than half of the annual budget for agriculture and irrigation goes to rice. The crop occupies some 30% of physical area and with irrigation of almost 40% of annual harvested area. That leaves 60% for other crops.

Let us consider three factors for diversification: value per hectare, gestation period, and existing business models.

VALUE PER HECTARE
Value is composed of harvested area and unit value (price). The leading crops by area are palay (unmilled rice), coconut, and corn in that order. Far behind are banana, sugarcane, rubber, and cassava.

On gross value per hectare, the leaders are pineapple, banana, tobacco, and mango.

Offhand, what can be discerned? The top three crops in terms of area (palay, coconut, and corn) offer low value. They occupy some 87% of the area and account for 61% of the value. Banana and pineapple comprised 4% of area but contributed 27% of value.

As I have mentioned in my previous articles, productivity is a problem for many local crops.

GESTATION (TIME TO HARVEST)
Crops differ in gestation, i.e., the time from planting to harvesting. It is a consideration in making crop choices. Annuals take less than one year from planting to harvest. But perennials or “permanent” crops take longer. Net present value may be similar but the short gestation means faster cost recovery.

Technology, however, can short-circuit yield and gestation. To cite examples:

a.) Rubber can be tapped normally in six years. But the Sandique technology in North Cotabato can reduce gestation to 3.5 years using large planting materials, and also lead to increased yield.

b.) Coconut hybrids can be harvested in three years with higher density. It is also easier to harvest, especially for virgin coconut oil.

EXISTING BUSINESS MODELS
There are lessons to learn from the existing business models of our ASEAN peers. Some have financial support, like the rubber levy in Malaysia and Thailand. Malaysia has management-assisted consolidated schemes and Indonesia nucleus outgrowers program using corporations as extension, processing, and marketing hubs. Vietnam, with its strong research and extension, assists farmers in farm consolidation for mechanization. These models lead to higher harvest and exports and, in turn, reduced poverty.

WHERE TO?
Crop diversification is the way to go to make agriculture recovery sustainable. The decision on crop selection will be driven by either government support, the private sector, or a partnership. It can also result from a combination of the said factors plus such factors as market (domestic and export), prices, technology, availability of areas for planting, and investment cost.

Below are some decision analysis examples:

Rice

There is a market for import substitution. To be sustainable, it is necessary to use hybrid seeds, consolidate for mechanization and invest in mills with high recovery, among other things.

Coconut

There is a growing market for value-added products, such as coconut water, virgin coconut oil, coconut milk, and coconut cream. Proposed actions include replanting activities to replace old, senile trees; using hybrids; expanding areas; and promoting fertilization using recommended practices to boost yield levels.

Coffee

The domestic market is huge but supplied mostly by imports. To boost local supply, there is a need to pursue production expansion, improve yield levels through the use of good seedlings and good/best farm practices, and invest in mills to improve recoveries, among other things.

Diversification can also be guided by the following:

• Minding the enabling factors. On the policy front, this is access to land beyond the five-hectare limit under the agrarian reform program;

• Availing of disruptive technologies like high yielding seeds, large planting materials, etc.; and,

• Adopting good management to achieve economies of scale for higher yield and better quality.

Unfortunately, only a few small farmers can access these. The Department of Agriculture, the local government units, and the private sector can join hands to leverage skills and resources to help farmers achieve better productivity and higher incomes.

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

 

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

map@map.org.ph

rdyster@gmail.com

http://map.org.ph

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