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SMC power unit open to proposals to settle PSALM obligation

A SAN MIGUEL CORP.-owned power firm told legislators it “welcomes” any proposals to settle its obligations with the Power Sector Assets & Liabilities Management Corp. (PSALM), which its parent company has long disputed.

Jupiter M. Cabaguio, representing South Premiere Power Corp. (SPPC) at a House hearing conducted by the committees on good government and public accountability and on public accounts, said the firm will evaluate any plans to settle the obligations, which PSALM estimates at P245.76 million.

“For the meantime your honor… we will welcome any plans or any proposals to settle this,” he said.

San Miguel Corp. President and CEO Ramon S. Ang has long disputed PSALM claims that its power unit owes money to PSALM, adding that the company, which operates the Ilijan gas-fired plant in Batangas, has adhered to the terms of its Independent Power Plant Administration Agreement (IPPA) awarded in 2010.

The committees were tackling the issue of PSALM’s receivables, with one senior committee member urging SPPC to consider “the public good.”

“It’s very clear (in the) record that SPPC is making money. They issued dividends. I think it’s about time you should reconsider. At the end of the day, you should relay to your (superiors that) what we’re doing here is for the public good,” Representative Luis Raymund F. Villafuerte, Jr., a Deputy Speaker from Camarines Sur said.

In her presentation during a House hearing on Feb. 19, PSALM President and Chief Executive Officer Irene Joy J. Besido-Garcia reported a total of P95.42 billion worth of overdue receivables, as of the end of 2019.

PSALM’s corporate life will end on June 2026. According to Ms. Besido-Garcia, if PSALM fails to collect the unpaid receivables, the national government will take over the job of collecting.

PSALM was tasked to manage “the orderly sale, disposition and privatization” of power generation assets with the objective of “liquidating all (National Power Corp.) financial obligations and stranded contract costs in an optimal manner.”

PSALM’s collections will go towards settling the maturing obligations of the National Power Corp. — Genshen L. Espedido

Economic team to advise BARMM on revenue

THE ADMINISTRATION’S economic managers will represent the national government in the fiscal policy body formed to assist the Bangsamoro Autonomous Region in Muslim Mindanao (BARMM) with revenue generation.

In a statement Wednesday, the Department of Finance (DoF) said Secretary Carlos G. Dominguez III will co-chair the Intergovernmental Fiscal Policy Board (IFPB) along with BARMM Chief Minister Ahod Ebrahim.

Also representing the national government on the board are Socioeconomic Planning Secretary Ernesto M. Pernia, Budget Acting Secretary Wendel E. Avisado and Trade Secretary Ramon M. Lopez.

BARMM representatives on the board are Minister Abu Amri Taddik, Minister Naguib Sinarimbo, Deputy Speaker Hatamil Hassan, Mohajirin Ali, and Said Salendab.

Finance Undersecretary Bayani H. Agabin said the IFPB will first meet in the third week of March.

Citing a report presented during a recent meeting, DoF Legal Group Director IV Jesus Nathaniel B. Gonzales said the national government representatives have agreed to appoint a point person for each of the agencies for better coordination.

The National Government-Bangsamoro Government Intergovernmental Relations Body (IGRB), tasked to coordinate and resolve issues between the national government and the autonomous region, convened its first meeting in december last year in Davao City.

The Office of the Presidential Adviser on the Peace Process (OPAPP) will provide the joint secretariat of the IGRB, handling administrative requirements and documenting the meetings of the intergovernmental body.

“The IGRB is tasked to exhaust all means to resolve issues brought before it, which include the effective implementation of the Bangsamoro Organic Law and the national programs and projects of the national government in the BARMM. It also aims to resolve territorial issues, and issues of devolution and jurisdiction; and the creation of the other intergovernmental relations mechanisms enumerated under the BOL,” the DoF said. — Beatrice M. Laforga

BFAR tightens watch on vessels operating in distant waters

THE Bureau of Fisheries and Aquatic Resources (BFAR) toughened its regulation of fishing vessels operating in “distant waters,” and sought to establish a monitoring list of such vessels suspected of engaging in illegal, unreported, and unregulated fishing (IUUF).

The new rules were outlined in an administrative circular claiming authority from Section 32 of Republic Act (RA) 8550, or the Philippine Fisheries Code, as amended by RA 10654.

The new circular implements stiffer fines for violations committed by Philippine-flagged vessels.

The Philippines is committed to crack down on IUUF at the insistence of trading partners like the European Union.

In an e-mail interview, BFAR Information Officer Nazario C. Briguera said that the amendment strengthens the regulatory regime for distant-water fishing.

“Our policies must… adapt (to) evolving issues in fisheries resource management,” Mr. Briguera said.

Monitoring of Philippine-flagged fishing vessels is performed via the BFAR’s Integrated Marine Monitoring Systems. — Revin Mikhael D. Ochave

Infrastructure seen driving growth of IT-BPM, creative industries

THE Department of Trade and Industry (DTI) said Wednesday that infrastructure and innovation were key to ensuring the continued growth of the Information Technology and Business Process Management (IT-BPM) and creative industries.

The DTI was testifying before the Senate Committee on Finance, which was assessing the government’s performance in guiding industrialization and generating jobs.

Trade Undersecretary Rafaelita M. Aldaba said the Philippines remains competitive in the IT-BPM sector in the voice segment, but may be left behind due to technological advances.

“We are number one in the world, in terms of voice, but in AI (Artificial Intelligence), it’s highly likely that our position will be displaced, hence it is really very important (to catch up),” Ms. Aldaba told the committee.

The Department of Information and Communication Technology (DICT) said it is working with the industry on “very targeted programs” to develop and upgrade skills.

“We’re targeting to train about 5,000 people for this year and with 70% absorption possibly,” DICT Assistant Secretary Emmanuel Rey R. Caintic said.

In addition, the Department is also assisting the industry with ease of doing business and identifying next-wave cities.

“We are at the forefront of helping the Anti-Red Tape Authority push the central business portal and the unified employee reporting system,” Mr. Caintic said.

Mr. Caintic said the DICT identified 20 cities, which it will review to ensure they are ready to host BPOs.

Trade Secretary Ramon M. Lopez said the Philippines also has the potential but lacks the technology and infrastructure in the creative sector.

“We have the potential, the human capacity is there, but we need all this new technology that should allow us to leapfrog our capabilities and optimize our potential,” he told the panel.

Senator Juan Edgardo M. Angara, who chairs the panel, said the DTI should look into further developing the film industry.

The Film Development Council of the Philippines said the Philippines still lacks infrastructure and an incentive regime attractive to international productions.

“There are many aspects of infrastructure that we still need to work on, sound stages being one,” Executive Director David D. Fabros said. “The other aspect is incentives.”

He noted that last year the industry was granted P15 million worth of incentives, which is expected to double foreign productions in the Philippines.

“A lot of productions have been filming here without the incentive, so they’re really interested in the country, but with the incentive we’re expecting it to double,” he said. — Charmaine A. Tadalan

Cash-transfer beneficiaries targeted for skills training

THE Labor department said it signed an agreement with the Social Welfare department to prepare beneficiaries of the government’s cash-transfer program to enter the workforce.

The deal between the Department of Labor and Employment (DoLE) and the Department of Social Welfare and Development (DSWD) covers beneficiaries of the Pantawid Pamilya Pilipino Program (4Ps), which provides financial aid to the poorest families.

The departments signed a Memorandum of Understanding (MoU) on Wednesday with manpower agency Starboard, Inc. to equip 4Ps beneficiaries with skills training and employment.

“DSWD partners with various organizations to ensure that appropriate assistance is given 4Ps beneficiaries towards improving their well-being enabling them to eventually transition out of poverty,” the DSWD said in a statement.

Starboard will deliver free training for 4Ps beneficiaries pre-qualified by the DSWD. The agency will also endorse potential hires to its employer-partners for job opportunities here or overseas. — Gillian M. Cortez

People first in the age of automation

The past couple of years demonstrated rapid growth in Robotics Process Automation (RPA), which continues to be a strategic priority for many organizations. Research published in December by Gartner showed that RPA adoption grew by 60% from 2018. It also predicted that in 2024, automation combined with redesigned operational processes will reduce 30% of an organization’s operational costs, making it even more enticing for industrial enterprises. With such momentum, RPA is revolutionizing business operations, including those of industry leaders, which has led to an automation-first mindset across all industries. In the face of RPA implementation, more organizations are finding ways to adapt quickly to the increasingly competitive business environment.

An automation-first mindset enables everyone in the organization to drive robotics ideas. It embraces continuous improvement by analyzing processes and eventually identifying candidates for automation, thereby building on the framework that improves productivity without spending too much on sophisticated software or hiring additional manpower. Guaranteeing the success of an organizational automation-first mindset lies in one critical factor: engaged people. Without it, automation is reduced to a catchphrase, and RPA is just another technology.

RPA is playing a vital role in the age of digital transformation. While it has showcased its benefits, many fear that it will replace jobs and diminish the value of human workers. While full-scale RPA implementation eliminates job redundancies, organizations tend to overcomplicate this benefit; as a result, people misjudge the intentions of RPA and automated solutions as a whole.

Undeniably, RPA has an impact on an organization’s workforce. People are so used to spending most of their time on high-volume mechanical tasks that accurately adhere to a set of procedures that they fail to find meaning in their work. However, this is where one of the significant benefits of RPA comes in. Through robotics, people can concentrate on value-adding activities that create higher knowledge and encourage the acquisition of new competencies as RPA takes repetitive and low-value tasks off their hands. Employees can focus on meaningful work where they can gain leverage over robots and machines. Even though RPA initially disrupts the status quo, its long-term benefit is to create strategic roles that give people a more profound sense of purpose in an organization.

To ensure a people-centered RPA implementation, organizations should have a well-designed change management program that will allow employees to appreciate what RPA is and dispel their fear of replacement by highlighting how it augments the quality of their outputs. People often dread disruptive technologies because they bring change, sometimes job losses; therefore, organizations implementing RPA, regardless of scale, should disclose their purpose with an effort to support those employees directly impacted by the change. How to harness technology for people to learn new skills and unlock opportunities should be carefully defined and planned out. If effectively undertaken, an RPA initiative will be embraced by people, setting the tone to kickstart the strategic plan for technological transformation.

For an organization to succeed in RPA implementation, it must nurture a culture that commits to a shared mission, applying the ‘ABCs’ of change management.

First, organization-wide ‘Awareness on RPA’ should be prioritized to address resistance to change and empower stakeholders to be program partners. This goal is usually achieved by conducting an RPA business onboarding and articulation on why change is necessary rather than maintaining the status quo. The RPA onboarding should create a safe space for people to air their thoughts and be more participative. It invites insights and suggestions from the stakeholders to identify tasks that can be automated. As ideas are pooled, it is necessary to emphasize how RPA will enable people to focus and develop their core skills. This method will help eliminate fears of job replacement and secure the commitment of people as they warm up to the idea of change.

Second, organizations should ‘Build a base of knowledge.’ To get people engaged, they must be equipped with sufficient knowledge on the tools to be used in pursuit of the automation initiative. Each person within an organization can take ownership of the RPA implementation process through training activities. The change will eventually resonate in the entire organization. Firms can invest in setting up RPA boot camps, initially for a small group, with the intent of creating the base knowledge of the firm on digitization and automation. They can eventually champion RPA and lead projects within their departments, cascading their newly-acquired skills and knowledge to their team members as the organization prepares to expand involvement towards enterprise-wide integration. Other highly-valued skills like data analytics, design thinking, and collaboration should also be included as core skills in preparation for the changes in job roles once RPA has reached its full scale.

Finally, to sustain organization-wide engagement, a change management program should leverage the power of communication through storytelling. Newsletters and focus group discussions on how RPA helped individuals be effective in what they do, increased their productivity, improved their efficiency, and provided job satisfaction, will help sustain initiatives on robotic transformation. Sharing the impact of an RPA project on both the operational and financial aspects of the business will inspire people to align their individual goals with the organization’s success factors, reinforcing the vision of creating a better work culture.

The goal of the change management program is to empower individuals, freeing them from menial tasks and preparing them to assume greater roles that contribute to innovative insights. People can be empowered when organizations acknowledge their sentiments, encourage their involvement as early as possible, and actualize support as employees go through the process of change. Because no matter how profound RPA is (or any technology for that matter), one thing remains certain — human capital will continue to be the most valuable resource of any business.

The views or opinions expressed in this article are solely those of the author and do not necessarily represent those of Isla Lipana & Co. The content is for general information purposes only, and should not be used as a substitute for specific advice.

 

Jay Armand B. Ogayon is a Digital Transformation Solutions Manager at Isla Lipana & Co., the Philippine member firm of the PwC network.

+63 (2) 8845 2728

jay.armand.b.ogayon@.pwc.com

PSEi plunges to 6,900 level as COVID-19 spreads

By Denise A. Valdez, Reporter

THE MAIN INDEX plunged to the 6,900 level yesterday as Philippine shares continued spiralling on sustained fears from the worsening coronavirus disease 2019 (COVID-19) outbreak.

The Philippine Stock Exchange index (PSEi) sank to 6,909.84 on Wednesday, down 277.60 points or 3.86% from the previous session. The all shares index likewise slumped 136.05 points or 3.19% to 4,129.37.

Yesterday’s finish was the lowest for the PSEi in more than a year, following its 6,843.83 close last Nov. 13, 2018. When it hit the 6,800 level that time, it was 10 months after it closed at an all-time high of 9,058.62 last Jan. 29, 2018.

“The PSEi was Asia’s worst performer today after investors rushed the exits with double the force, as the market remained closed for the holiday yesterday,” AAA Southeast Equities, Inc. Research Head Christopher John Mangun said in an e-mail on Wednesday.

He added it was the biggest daily loss since 2013 as it ended the day down 3.86%.

Diversified Securities, Inc. Equity Trader Aniceto K. Pangan said on Wednesday that the PSEi’s decline was still largely due to the COVID-19 outbreak, with the virus already spreading to countries other than China and raising concerns on global growth.

“The uncertainties of the effects of the spread of the virus is creating fear among investors. The spread is indicative that it could hardly be contained and possible lockdown in other nations will definitely affect their economy,” he added.

“Philippine shares tumbled after… companies indicated earnings would be affected from the spread of the virus,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a mobile message. “More cases were reported in Korea, Italy, and Iran… [T]he (World Health Organization) commented that rest of the world is not yet ready for the spread.”

All sectoral indices bled yesterday. Industrials dropped 389.36 points or 4.42% to 8,416.22; property erased 154.08 points or 4% to 3,696.81; services shed 55.47 points or 3.89% to 1,370.28; holding firms trimmed 264.59 points or 3.76% to 6,761.39; financials fell 44.19 points or 2.6% to 1,649.56; and mining and oil declined 162.09 points or 2.33% to 6,770.32.

Some 1.35 billion issues valued at P10.06 billion switched hands yesterday, lower than Monday’s 1.42 billion issues worth P4.64 billion.

Names that fell stood at 184, while those that advanced totalled 27. Those that closed unchanged totaled 30.

Net foreign selling surged to P3.08 billion yesterday from P877.66 million on Monday.

“There is a lot of uncertainty right now and the best option is to remain on the sidelines and wait out the storm,” AAA Southeast Equities’ Mr. Mangun said.

Peso drops to P51:$1 level on coronavirus

THE PESO succumbed to the P51 level against the greenback on Wednesday as investors continue to prefer safe-haven assets amid fears of a continued rise in cases of the coronavirus disease 2019 (COVID-19) outside China and a sell-off in the local stock market.

The local unit ended trading at P51.035 versus the dollar, weakening by 7.5 centavos from its Monday close of P50.96, according to data from the website of the Bankers’ Association of the Philippines.

The peso opened at P51.085 per dollar. Its weakest showing for the day was at P51.13 while its intraday best was at P50.99 versus the greenback.

Dollars traded on Wednesday went up to $1.43 billion from $1.303 billion on Monday.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the peso’s weaker finish on Wednesday was due continued risk aversion in the market amid losses in the local bourse.

“The peso exchange rate closed among the weakest in four months amid sharp sell-off in the local stock market for the second straight day, to new 15-month lows,” he said.

The benchmark Philippine Stock Exchange index closed Wednesday’s session down by 277.60 points or 3.86% at 6,909.84.

Reuters reported that Japan’s Nikkei stock index slid 0.92%, while shares of Japan’s Dentsu Group, Inc, an advertising agency deeply involved in the planning and operation of the games, fell to a seven-year low on Wednesday.

“[There was] increased global market risk aversion to safe assets amid the sell-off in riskier assets, leading to stronger dollar versus emerging market currencies,” Mr. Ricafort said.

Meanwhile, a trader said the peso continued to weaken amid heightened fears of new cases of COVID-19 outside China.

“The peso continued to depreciate from elevated global coronavirus concerns following the sharp increase in cases in Europe and from contagion fears to the US,” the trader said in an e-mail.

Reuters reported that COVID-19 has already affected some 80,000 people across the world and caused the death of more than 2,600 people, majority of whom are in China.

For today, Mr. Ricafort gave a forecast range of P50.90 to P51.20, while the trader expects the peso to move within the P51 to P51.20 levels. — L.W.T. Noble with Reuters

Media and politics

One media giant is now under fire from the government for alleged violations of its legislative franchise to broadcast. And while the concerns of ABS-CBN are now headlines, it is not really unusual for media companies — or personalities — to be in the sights of politicians at one time or the other. After all, news media have significant influence on Philippine political dynamics.

News media plays a role, primarily, as that of a truth-seeker. That it aims to inform, perhaps even educate, media consumers also comes with its mission to report the truth — regardless of consequences. But even truth has many versions, at times equal to the number of viewpoints expressed. It is in this line that media always endeavor to seek all sides of a story, a scandal, or controversy.

Bias in reporting is not unusual, and cannot be denied nor ignored. People who gather and report the news cannot help but be influenced by their own personal biases and prejudices, while a media company can always be distracted by business concerns or market dictates. To survive, a media entity needs to be prosperous enough to pursue its mission of reporting.

But while one can be forgiven for biases, one must always be measured by a high standard of intellectual honesty. One must struggle to report the facts, and just facts, as they happened, as correctly and as honestly as possible. Commentary and opinion can be left to commentators and columnists, to the opinion section, and to editorials. News pages and news programs, however, must be considered sacred and reserved only for facts and news.

Over the years, I believe ABS-CBN has proved itself equal to this task. It had stood its ground on many occasions, reaping political whirlwinds as consequences of its reporting. But it had managed to live on. Martial rule silenced it for over a decade. However, as political winds changed in 1986, so did its fortunes.

Admittedly, the media giant is not without its politics, if not its political linkages. In a number of occasions, its news media personalities — after years of service with the network — had managed to launch successful political careers, notably Senator Loren Legarda and Vice-President Noli de Castro. Even the company’s beginnings and evolution were always tied to politics. It is thus perhaps unsurprising that even its continued survival now is again influenced by politics.

American James Lindernberg started the Bolinao Electronics Corporation in 1946 to do radio equipment assembly. By 1949, the company shifted to radio broadcasting, and by 1953, it was also into television broadcasting. But the latter wouldn’t have happened if Lindenberg, in 1951, did not partner with Antonio Quirino, brother of then-Philippine President Elpidio Quirino. It was for this reason that in 1952, Bolinao was renamed as Alto Broadcasting System or ABS, as “Alto” was a contraction of “Tony and Aleli,” the first names of Quirino and his wife. The TV station was also known as DZAQ-TV, from Quirino’s initials.

In 1956, Chronicle Broadcasting Network (CBN) was put up by Eugenio Lopez, Sr. to do radio broadcasts. At the time, Lopez’s brother, Fernando, was a senator. This was after Fernando served as Vice-President to Elpidio Quirino in 1949-1953. Fernando was reelected senator in 1959, and was later reelected vice-president to Ferdinand Marcos in 1965-1969.

By 1972, the ABS-CBN network owned and operated two television stations and seven radio stations in Manila, and 14 radio stations and three television stations in the provinces. However, having found itself on the side of the opposition to then president Ferdinand Marcos, and despite the political involvement of Fernando Lopez with Marcos in 1965-1969, the network was shut down with the declaration of Martial Law.

The basis for closure, in line with Presidential Proclamation 1081 on the declaration of Martial Law, were Letters of Instruction No. 1 and No. 1-A, series of 1972. LOI No. 1, addressed to both the Press Secretary and the Secretary of National Defense, was an order “to take over and control or cause the taking over and control of all such newspapers, magazines, radio and television facilities and all other media of communications, wherever they are, for the duration of the present national emergency, or until otherwise ordered by me or my duly designated representative.”

This was “in order to prevent the use of privately owned newspapers, magazines, radio and television facilities and all other media of communications, for propaganda purposes against the government and its duly constituted authorities or for any purpose that tends to undermine the faith and confidence of the people in our Government and aggravate the present national emergency.”

LOI No. 1 noted that this was “in view of the present national emergency which has been brought about by the activities of those who are actively engaged in a criminal conspiracy to seize political and state power in the Philippines and to take over the Government by force and violence the extent of which has now assumed the proportion of an actual war against our people and their legitimate Government.”

More interesting, however, is LOI No. 1-A, which was addressed only to the Secretary of National Defense, to the exclusion of the Press Secretary. While LOI No. 1 ordered the Press and National Defense offices “to take over and control or cause the taking over and control of all such newspapers, magazines, radio and television facilities and all other media of communications,” LOI No. 1-A singled out only two out of several media entities for seizure of assets.

LOA No. 1-A ordered the Secretary of National defense to “sequester the ABS-CBN Broadcasting Corporation and the TV and Radio network and facilities owned and operated by the Associated Broadcasting Corporation [ABC] which include radio stations DZMT, DZTM and DZWS and sister radio stations in Davao City, Cebu City, Laoag City and Dagupan City, as well as Channel 5 and its sister TV stations in the cities of Davao and Cebu.”

This was considering that “the ABS-CBN network and the Associated Broadcasting Corporation [ABC], whose owners, principal officers and key personnel are engaged in subversive activities against the Government and its duly constituted authorities and are participants in a conspiracy to overthrow the Government, have, more than once and often, actively engaged in or otherwise wittingly allowed the use of its facilities and manpower in the broadcast and dissemination of subversive materials and of deliberately slanted and overly exaggerated news stories and commentaries as well as false, vile, foul and scurrilous statements and utterances, clearly well-conceived, intended and calculated to malign and discredit the duly constituted authorities, and thereby promote the agitational propaganda campaign, conspiratorial activities and illegal ends of the Communist Party of the Philippines, and had been used as indispensable instruments in the assassination attempt against the President of the Republic of the Philippines by maligning him, all of which activities are patently inimical to the security and interest of the State.”

Simply put, ABS-CBN and ABC and their owners were deemed by the Marcos government “subversives” that must be put down. It was, in my understanding, the first time that the government actually made an official or legal declaration of media entities as “enemies” of the state that must be neutralized, for acting in ways allegedly contrary to the interest of the republic.

Likewise interesting is that LOI No. 1-A, perhaps for the first time in Philippine political history, used the terms “sequester” and “sequestration,” which was defined by the Marcos order to mean “the seizure of private property or assets in the hands of any person or entity in order to prevent the utilization, transfer or conveyance of the same for purposes inimical to national security, or when necessary to protect the interest of the Government or any of its instrumentalities. It shall include the taking over and assumption of the management, control and operation of the private property or assets seized.”

After the 1986 EDSA Revolt, which ousted Marcos and which celebrated its 34th anniversary just a few days ago, the Lopez family regained control of the ABS-CBN network with the help of then president Corazon Aquino. I am uncertain as to how this was actually done, and whether a legal document exists to provide legal basis to counter LOI No. 1 and No. 1-A, for the return of ABS-CBN to the Lopezes. I recall our late publisher, Raul Locsin, actually having written about this in the late 1980s.

That politics had an influence on ABS-CBN may all have been coincidental, really, particularly during the years when the Quirinos and the Lopezes were active in politics. But it was obviously political when Marcos shut down and sequestered the network in 1972, and when it was returned to the Lopezes in 1986. In its long history since 1952, politics had always had some part in ABS-CBN’s life, outside the world of news reporting. And this will still be the case, I guess, in 2020 and beyond.

 

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

matort@yahoo.com

World trade and the virus

The Philippines’ average merchandise trade deficit in 2018 was $3.6 billion a month, went down to $3.1 billion a month in 2019. The US and Japan remain the Philippines’ main exports market while China remains our main source of imported goods.

While we have generally balanced trade with the US, Japan, and Germany, that cannot be said of the rest of our Asian neighbors including our ASEAN partners. Our biggest trade deficits are with China, South Korea, Indonesia, and Thailand (see Table 1).

The main reason for this is that while tariff rates with our Asian neighbors are declining — with zero tariffs within the ASEAN — the non-tariff measures (NTMs) are increasing. The challenge for freer trade should focus on these NTMs.

In global trade, data from the World Trade Organization (WTO) show that the top three players are also the biggest economies in their respective continents — China, the US, and Germany. But the US suffers the biggest trade deficit overall, with an average deficit of $2.6 billion/day in 2018, while China and Germany have an average trade surplus of $1 billion/day and $0.8 billion/day, respectively.

In the ASEAN, our five neighbors belong to the top 30 world exporters and importers in 2018. Meanwhile, the Philippines ranked No. 47 in exports and No. 34 in imports (see Table 2).

We now go to the spreading coronavirus. China, the exports powerhouse, is also ground zero of SARS-CoV-2 (severe acute respiratory syndrome coronavirus 2) which causes Coronavirus Disease 2019 (COVID-19), and the economic dislocations there in the first two months of 2020 are huge, with many big cities looking like ghost towns and having minimal economic activities including near-zero manufacturing.

China’s exports are other countries’ consumer goods or raw materials and intermediate goods, even capital goods, for their manufacturing, agriculture, and services sectors. The same way that China’s imports are other countries’ exports of mining, manufacturing, agriculture products.

Trade diversification, and investment and tourism diversification are already happening — but at a slow rate. For instance, Philippine companies that relied heavily on imports from China have to adjust and substitute imports from Vietnam and other ASEAN neighbors whenever possible.

While COVID-19 will take care of the Philippines’ huge trade deficit with China, our ASEAN neighbors must relax or reduce their NTMs vs Philippines exports to them.

In the new report, the International Trade Barriers Index 2019 produced by the Property Rights Alliance in Washington, DC, out of 86 countries covered, the Philippines ranked 78th or near the bottom. We scored high in NTMs (meaning we do not have many NTMs) but we scored low in tariffs, services restrictions, and trade facilitation.

The Philippines should not reciprocate with high NTMs against its Asian neighbors, rather everyone should reduce their respective NTMs. And the Philippines should address its problems and bureaucracies in services restrictions and trade facilitation. That is the way to freer trade and a more prosperous world. More prosperity will give us more resources to address COVID-19 and emerging or future communicable diseases.

 

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

minimalgovernment@gmail.com

Tastes of Saigon

I am currently in a quaint café along Bui Vien Walking Street in Saigon, enjoying a cup of egg coffee coupled with a glass of hot tea. Yes, you read it right — coffee, tea, and me! While I had been in Vietnam twice before, this is the first time I’ve tried its famous egg coffee. When the server asked me if I wanted hot tea to accompany my coffee, I was a bit surprised and told her that I was fine with my coffee. Until I took a sip. A little bit embarrassed, I asked the lady if her offer of hot tea still holds, as the egg coffee was incredibly sweet and a bit too rich for my taste. With a suppressed giggle, she served the hot tea. I wonder how they say, “Sabi ko na sa iyo, eh!” (I told you so) in Vietnamese.

And so my coffee shop-hopping tour in Saigon officially begins, something that I decided to do after the roughly 20-minute taxi ride from the airport to my hotel in the city center. Along the way, I saw several local cafés with names that caught my attention. For example, Là Viet Coffee raises expectations — Will drinking its coffee make me say, “Love it!”? For those who can’t survive without their dose of coffee in a day, MyLife Coffee should keep them, as the elementary school song goes, “alive, alert, enthusiastic.”

Actually, I had my first Vietnamese coffee yesterday at ThFi Café [yes, it had strong Wi-Fi]. The café was located on the third floor of an old apartment building along Tôn That Đam Street, a 15-minute walk from my hotel. From the street, the building looked abandoned and a bit creepy, but those who are curious enough are in for a surprise as the building houses several artsy cafés, tea houses, and fashion shops. I am aware that there are similar attempts to convert old buildings in Escolta into such types of places, an excellent way of preserving our colonial heritage and of keeping the old-city charm of Manila.

Saigon, of course, offers more than just coffee. Vietnam, after all, is known for its delicious and healthy cuisine. And so far, it has lived up to my expectations. From the really cheap king mackerel (cá thu kho) with rice and soup that I had for lunch in a street eatery to the more pricey classic chicken pho (pho gà) I had for dinner at Terraces Café of the Bitexco Financial Center; to my hotel’s complimentary breakfast buffet of banh mi and fried egg plus the chicken curry and baguette that I had early this morning, I’ve had my fill in less than 24 hours. Having recently read about (and now practicing) mindful eating (i.e., concentrating on every mouthful one eats), I find Saigon to be a delightful laboratory for this gustatory experiment.

Tonight, I will take a private motorbike tour that will allow me to experience Saigon’s night life from the back of a motorbike. I look forward to discovering wonderful street food in the city’s hidden alleys, and to learning more about Vietnamese food culture, courtesy of my tour guide, Vince.

I wonder how I will be able to consume “nine different dishes and unlimited drinks,” as promised by the tour provider, and do it in a mindful manner. Just visualizing the Vietnamese rice pancakes, coconut ice cream, and grilled banana cakes that I am supposed to learn how to prepare as part of the tour, makes my mouth water this very instant. While riding a motorbike on the busy streets of this beautiful city makes me a little bit nervous, the anticipation of enjoying the tastes of Saigon more than makes up for my initial hesitation.

By the way, I have just moved to another café in Bui Vien Walking Street. I type in the café’s Wi-Fi password “blackeagle,” and do a quick Google search. “I told you so” is “Tôi đã nói rồi mà” in Vietnamese.

 

Raymund B. Habaradas is a Full Professor at the Management and Organization Department of the Ramon V. Del Rosario College of Business of De La Salle University, where he teaches Methods of Research, Management Action Research, and Qualitative Research. He is also a Governor of the Philippine Academy of Management, and the holder of the Ambassador Ramon V. del Rosario Chair of Entrepreneurship.

rbhabaradas@yahoo.com

Pharma’s response to COVID-19 bringing out best in science and partnerships

Globally, more than 80,000 people have been confirmed to have been infected by the coronavirus acute respiratory disease 2019 (COVID-19), affecting 34 countries to date. Since the World Health Organization (WHO) declared the new coronavirus as a Public Health Emergency of International Concern (PHEIC) on Jan. 30, the world continues to closely monitor and respond to the COVID-19 outbreak. With close to 1,000 confirmed cases, South Korea has raised its infectious disease alert to its highest level.

In a WHO-led conference with scientists and experts held recently, Director-General Dr. Tedros Adhanom Ghebreyesus recognized that the “outbreak is a test of solidarity — political, financial, and scientific.” He called on the global community to come together to fight a common enemy that defies borders, and emphasized the need to ensure that resources will be made available to end the outbreak. He added that research is an integral part of the response and was hopeful that science could find shared answers to shared concerns.

Until today, there is still no vaccine and no specific antiviral medicine to prevent or treat COVID-2019. Those affected are receiving supportive care to relieve symptoms, and, thankfully, many recover.

The WHO said that possible vaccines and some specific drug treatments are under investigation and being tested through clinical trials. At the moment, the WHO is coordinating efforts to develop vaccines and medicines to prevent and treat COVID-19.

Members of the International Federation of Pharmaceutical Manufacturers & Associations (IFPMA) are developing new medicines and vaccines to help respond to the COVID-19 epidemic. R&D biopharmaceutical companies with potentially relevant know-how have teams of scientists checking their libraries for potential assets that could fight coronaviruses. The Pharmaceutical and Healthcare Association of the Philippines (PHAP) is a member of the IFPMA, which represents the research-based pharmaceutical companies and associations across the globe.

The IFPMA said that the speedy sharing of the pathogen sequence, followed by the declaration of the novel coronavirus as an international emergency, and the convening of a research and development forum, should further galvanize global collaboration with the private and public sectors for the timely development of vaccines and treatments.

As a science-driven sector, global pharmaceutical companies have reviewed their drug and vaccine portfolios to see if there is any research that could be helpful in tackling COVID-19. This includes efforts to identify suitable assets in their libraries that could be utilized in the fight against coronaviruses. Relevant assets include diagnostics and biomarkers, approved therapies, or compounds in development that could be repurposed for use in treating patients with the coronavirus. Artificial Intelligence is also finding its place in the process, and is being used to mine through medical information to find drugs that might be helpful for tackling the novel coronavirus.

Several biopharmaceutical companies are working with the Chinese government and research institutes in the United States and Australia to fast-track the development of vaccines against COVID-19. Biopharmaceutical company Johnson & Johnson announced that it has begun to develop a vaccine for the novel coronavirus, “leveraging on Janssen’s technologies that provide the ability to rapidly upscale production of the optimal vaccine candidate.” GlaxoSmithKline, on the other hand, said that it is making its adjuvant technology available to support rapid development of candidate vaccines, as use of an adjuvant can allow “more vaccine doses to be produced and made available to more people.” Sanofi Pasteur, meanwhile, announced that it will leverage previous development work for a vaccine on Severe Acute Respiratory Syndrome (SARS), and “will use its recombinant DNA platform.”

In addition to R&D efforts, many research-based biopharmaceutical companies with a presence in China are donating funds, medicines, diagnostics, and medical protective products.

The IFPMA said that Johnson & Johnson has provided boxes containing laboratory-based investigations to the Chinese Center for Disease Prevention, which includes drug screening for anti-viral properties against the novel coronavirus. Pfizer, meanwhile, has made cash contributions to its global NGO partners that have shipped supplies to hospitals in China. Roche also donated diagnostic tests, medical supplies, and financial support.

In the Philippines, PHAP fully supports efforts that will enable the pharmaceutical sector to continue the work it has started in the research and development of potential vaccines and treatments for COVID-19. PHAP president Dr. Beaver Tamesis said that now more than ever, there is need for public-private partnerships to stop the spread of the disease and its several consequences. Pharmaceutical companies enable the research and development of innovations and technologies for the detection of the COVID-19, and in the ongoing search for its potential prevention and treatment. Once available, Dr. Tamesis said, PHAP’s goal is to immediately bring these life-saving innovations into the country.

PHAP also expresses readiness to support efforts to contain this current health threat.

PHAP member companies are also looking very closely at their supply chains to ensure that essential medicines and vaccines are available for Filipino patients. Business continuity plans are also in place to ensure that the supply of needed diagnostics and medicines is uninterrupted during health emergencies.

 

Teodoro B. Padilla is the executive director of the Pharmaceutical and Healthcare Association of the Philippines.

medicinecabinet@phap.org.ph