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African swine fever inflicts renewed toll on northern China’s hog herd

CHINA pork & hog prices under pressure as fresh hog disease outbreaks boost slaughter rates. — REUTERS

BEIJING — A wave of African swine fever outbreaks this year has wiped out at least 20% of the breeding herd in northern China, industry sources and analysts said, exceeding expected losses and raising fears about the potential for further impact in the south.

The estimates point to the extent of the disease’s resurgence in the first quarter of 2021 after more than a year of declining outbreaks, heralding a significant setback to China’s efforts to replenish its hog herds after African swine fever reached the country in August 2018 and wiped out 50% of the country’s pigs within a year.

The virus’ impact slowed by late 2019 as pig numbers fell and large producers learned to minimize its spread by removing infected pigs from herds early, a process the industry calls “tooth extraction.”

But an exceptionally cold winter, a higher density of pigs following a year of restocking, and new strains of swine fever triggered a fresh wave of outbreaks across the northeast, northern China and Henan province, the country’s third-biggest hog producing province.

“At least 20% of the herd was affected, maybe even 25%” in the northern and northeastern Chinese provinces because of outbreaks during the first quarter, said Jan Cortenbach, chief technical officer at feed maker Wellhope-De Heus Animal Nutrition.

Henan lost between 20% and 30% of its breeding sows, a report by Founder Cifco Futures said on Monday, adding the damage could be “irreversible.”

Beijing Orient Agribusiness Consultant Ltd. said in a report last month that sow stocks in northern China in March fell by between 25% and 30% compared to February.

“This feels like 2018, 2019 all over again,” said a China-based manager with a company that supplies large hog producers.

Several customers in northern China have lost thousands of sows in recent months, he added, with some losing more than half of their breeding stock.

The Ministry of Agriculture and Rural Affairs did not respond to a fax seeking comment on a resurgence of the disease and significant losses over the winter.

Food security is a sensitive issue in China and the government has confirmed few African swine fever outbreaks since the virus began spreading. Numerous industry insiders have described the impact as worse than official data show. The disease is not harmful to humans.

The agriculture ministry reported eight African swine fever outbreaks in the first quarter, mostly on small farms or in pigs in transit in southern China. It said the sow herd grew by 1.1% in January versus December and a further 1% in February.

NORTHERN WAVE
Shandong and Hebei provinces in northern China are both among the country’s top six pig producing provinces and the first quarter outbreak was especially severe in Shandong, Beijing Orient said.

New Hope Liuhe, China’s fourth-largest hog producer, told investors in March that African swine fever had a large impact in Hebei and northern Shandong, where it has many farms.

Though losses varied between companies, “in general it may be more serious than in early 2019 when most companies did not master prevention and control methods such as precise tooth extraction,” said Yan Zhichun, the company’s chief science officer, according to a transcript of a call with investors on March 4.

A considerable portion of New Hope’s farms in Hebei and Shandong were impacted by “atypical” swine fever strains, said Yan. The firm had previously reported finding a less deadly, but chronic form of swine fever on its farms.

It said its sow herd shrank 7.5% from December to February, or by 90,000 pigs, because of African swine fever as well as the elimination of inefficient sows.

The agriculture departments for Hebei, Shandong and Henan provinces did not reply to questions sent by fax about the resurgence of swine fever.

PIGLET PRICES RISE
While live hog prices fell sharply from January to March, piglet prices are rising because of the hit to the breeding herd, Changjiang Securities said in a note this week.

Piglets cost on average more than 1,800 yuan ($273.94) per head, it said, not far off the record 2,356 yuan in February 2020, and significantly up from 995 yuan in November.

That will eventually translate to higher pork prices.

Producers in the south are on high alert, said industry sources, after rain and floods were blamed for swine fever outbreaks last year.

“With the arrival of the rainy season in the second quarter, it is still unknown how swine fever will impact the south,” said the Changjiang analysts. — Reuters

Style (04/05/21)

5 sandal styles for summer

THE PERFECT footwear to go with hot weather outfits are undoubtedly sandals. These trendy styles will easily match with just about anything: slides, which are easy to slip on and off, and as easy to wash and clean; flip-flops for when you’re off to take a dip in the pool or splash around the beach; wedges are a closet staple even after summer, versatile shoes that work whether you dress up and down; flat sandals that are easy to slip-on, are stylish and chic; strappy velcros are the trendy sandal-of-the moment, plus, they’re comfy and fit snugly on your feet. Check out the sandals from SSI brands online at www.Trunc.ph or through The Specialist, SSI’s At-Home Concierge service (facebook.com/SSILifePH).

Tumi luggage collection inspired by McLaren

LEADING international travel and lifestyle brand, Tumi has unveiled its new collection designed and developed in partnership with luxury supercar maker and Formula 1 team, McLaren. McLaren’s designers, engineers, and racers travel thousands of miles around the world each year in pursuit of perfection. Just as each driver relies on their car to get them across the finish line, the team depends on their luggage and travel necessities to get them to their destination. That inspiration manifests in the superior made-to-last quality of the collection. Since announcing in 2019 that the two companies would work together, Tumi’s Creative Director Victor Sanz and Rob Melville, McLaren’s supercar Design Director have created a premium capsule collection of elegant business, travel and everyday essentials. The capsule collection consists of nine pieces. Each encompasses elements of McLaren’s sleek, bold supercars and race cars. All are highlighted with McLaren’s signature Papaya colorway and feature CX6  carbon fiber accents. Key travel pieces include the Aero International Expandable 4 Wheel Carry-On and the Quantum Duffel. The carry-on is crafted in a hybrid of materials, including Tegris, an extremely hard-wearing thermoplastic composite found in race cars. The hard shell is contrasted by a moulded-fabric front panel with a supercar-influenced design that is echoed throughout the collaboration. The interior features a compression strap that takes its cues from the six-point racing harnesses found in its race cars and track-only models such as the limited-edition McLaren Senna GTR. The Velocity Backpack was created to keep wearers connected all day long thanks to the inclusion of a USB port and padded laptop compartment. Tumi’s hallmark “Add-a-Bag” sleeve makes it a fitting companion to the collection’s carry-on. The Torque Sling and Lumin Utility Pouch are additional contemporary styles for light-carry and hands-free days. The Orbit Small Packing Cube, Trace Expandable Organizer, and split compartment Teron Travel Kit are all ultra-portable accessories to keep belongings protected, organized, and readily available. The collection is now via TUMI.com, Tumi’s global retail stores, McLarenstore.com, and select McLaren retailers globally.

Michael Kors releases the Bradshaw bag

MICHAEL Kors has come up with a small convertible shoulder bag called the Bradshaw, a refined take on the iconic baguette bag. Inspired by 1990s style, the bag features a compact shape, fold-over silhouette, and short shoulder strap. Modern design elements give it of-the-moment appeal. Smooth leather is punctuated by high-shine hardware, like a gleaming push-lock fastening that opens to an interior sized to hold all the essentials, and an MK charm that, in a design first, is meticulously incorporated into the shoulder strap. Available in an array of luxe colors, this bag makes for the perfect staple in any city girl’s wardrobe. For something a little larger, the Bradshaw Messenger is the perfect go-to. The bag features the same ’90s-inspired baguette shape as the small Bradshaw, but with a roomier interior and a utilitarian webbing strap, which is embellished with an MK charm. In the Philippines, Michael Kors (MK) is exclusively distributed by Stores Specialists, Inc., located at Central Square in Bonifacio High Street Central, Greenbelt 5, Newport Mall, Power Plant Mall, Rustan’s Makati, and Shangri-La Plaza Mall, and online at Trunc.ph and Rustans.com. Visit www.ssilife.com.ph for details.

GUESS opens its first outlet store in Batangas

AMERICAN clothing retailer GUESS recently opened its first-ever outlet store in Batangas at The Outlets at Lipa. The GUESS outlet store offers shoppers high quality apparel and fashion accessories such as watches, jewelry, perfumes, bags, and shoes at discounted rates. It joins other big lifestyle brands at The Outlets such as Adidas, Nike, H&M, Puma, Cotton On, Ipanema, Samsonite, and Speedo. The Outlets at Lipa is one of Luzon’s largest outlet shopping destinations, offering products from some of the biggest global brands at a discount all-year-round. It is located within LIMA Estate in Lipa-Malvar, Batangas, a 700-hectare Philippine Economic Zone Authority-registered economic zone that is home to 127 industrial locators, 167 retail and restaurants spaces, a 138-room four-star hotel, a transportation hub, over 2,000 households, and more than 58,000 employees.

Easy Spirit offers comfy shoes

THE 35-YEAR-OLD brand Easy Spirit’s mission is to be makers of shoes and experiences that are all about making life easy for all women. Now exclusively distributed by Rustan Marketing Corp., Easy Spirit will once again be accessible to all Filipinas who believe comfort should be uncomplicated. This season, Easy Spirit offers all-day walking shoes, mules, and sandals made for everyday ease. Each pair offers an easy support system and unique benefits. Easy Spirit’s product range includes orthotic friendly and ultra-flexible, breathable and super lightweight options with easy-on and easily adjustable designs. The Traveltime Family is a collection of sandals, sneakers and more, inspired by the comfort of Easy Spirit’s No. 1 bestselling Traveltime mule. The Spring collection also includes Walk-Easy Essentials, sneakers, sandals and mules that go the extra mile in comfort. Select styles feature the Easy Spirit 3 Triple the Comfort technology — three layers of advanced technology to soften each step. The Comfort Around the Clock collection offers footwear that can be worn from work to commute, from all-day wear and to every occasion. The Sandals collection is a one-stop shop for lightweight and supportive sandals. One step closer to a green future, Easy Spirit also offers Easy Eco, a collection for a more sustainable carbon footprint with select components made with recycled materials. Now all available on Zalora, this season’s collection combines the latest trends with comfort from denim and color-pop tie-dyes to flirty florals, artisan materials in classic and colorful shades and lightweight active knits designed with materials crafted from recycled components. The shoes at the Easy Spirit Flagship Store on Zalora are now available for introductory prices as low as P3,250 on select styles, plus there is a 30% off voucher that can be used until April 11.

FedEx pallets become upcycled furniture

FEDEX Express, a subsidiary of FedEx Corp., is collaborating with Filipino furniture designer Trademark Kawpeng Designs (TMK), to breathe new life into discarded shipping pallets in support of an emerging circular economy and finding ways to reduce environmental impact. A Manila-based furniture and home decor start-up known for its unique made-to-order pieces that embody Scandinavian minimalist functionality, TMK works closely with clients in realizing their designs using various quality materials. For this special project with FedEx, TMK created sustainable furniture by repurposing and upcycling wooden pallets from FedEx. To transform the donated pallets, they were first cleaned, dried, sanded, and treated. TMK’s Matti Kawpeng then crafted them into a collection of functional furniture, including a study desk, an arm table, a side table, and a media console. The rest were turned into useful crates and were marketed to TMK clients. Proceeds were used to subsidize bicycles for TMK workers who were affected when public transport stopped during the coronavirus lockdown. A portion of the sales generated from donated materials are used for employees’ needs, such as their daily uniforms, snacks, coffee, and maintenance of their bikes. Check out Trademark Kawpeng Designs on Facebook and @tmkawpeng.designs on Instagram for more pieces and design inspirations.

Longer lockdown, rising infections seen to hit stocks

THE uncertainty over the reimposed enhanced community quarantine (ECQ) in Metro Manila and nearby provinces Bulacan, Cavite, Laguna, and Rizal coupled with a surge in coronavirus disease 2019 (COVID-19) infections are anticipated to cloud investor sentiment this week.

The Philippine Stock Exchange index (PSEi) shaved off 102.46 points or 1.56% to 6,443.09 on Wednesday.

Week on week, the PSEi declined by 101.54 points from its 6,544.63 close on March 26.

Trading was cut short as the country observed Holy Week, prompting the market to close on Thursday and Friday.

“Next week, we still see a downward bias for the local market as our COVID-19 situation continues to worsen,” Philstocks Financial, Inc. Senior Research Analyst Japhet Louis O. Tantiangco said in a Viber message on Saturday.

“The continuous surge in our COVID-19 case count is seen to weigh on the market due to its negative impact on consumer and business confidence,” he added.

The Philippines logged a record of 15,310 new COVID-19 cases on Friday, the country’s highest single day tally so far. On Saturday, 12,576 new infections were reported.

The country has since recorded 784,043 COVID-19 infections, 165,715 of which are active cases.

On Saturday evening, the Office of the President approved the recommendation of the government’s coronavirus task force to extend the lockdown measures for another week.

“Though the recommendation is appropriate [in] this circumstance, we may see the [market continue] its downtrend with the ECQ mobility restrictions and infection rates on the rise,” Diversified Securities, Inc. Equity Trader Aniceto K. Pangan said in a text message on Sunday.

Michael L. Ricafort, chief economist at Rizal Commercial Banking Corp. (RCBC), said over text message on Saturday that the extension of the ECQ “has been widely expected and may have already been priced in by the markets” ahead of the Holy Week trading break.

“ECQ’s duration uncertainty and economic recovery delay are the market’s top worries,” First Metro Investment Corp. Head of Research Cristina S. Ulang said in a separate Viber message on Saturday.

Philstocks Financial’s Mr. Tantiangco said he expects investors to use the country’s March consumer price index data as their reference for trading activities.

“A further rise in our inflation rate is seen to add to the downside risk of the market,” Mr. Tantiangco said.

“Mitigants are news about the vaccination drive gaining speed and the lockdown tempering the daily cases,” Ms. Ulang said.

“This will take time and so PSEi will be on a lower range trading mode but bargain hunting will provide support,” she added.

RCBC’s Mr. Ricafort placed the index’ support at 6,400, which he said would “help prevent further downward correction towards the 6,000 to 6,200 levels.” Meanwhile, Diversified Securities’ Mr. Pangan expects the market to move between 6,200 to 6,325.

“The local market’s support is seen at 6,100. Its immediate resistance is seen at its 10-day exponential moving average which closed last week at 6,540.19. After the 10-day EMA, the market’s next resistance is seen at 6,600,” Mr. Tantiangco said. — Keren Concepcion G. Valmonte

Toyota confirms arrival of GR Yaris

JUST AS IT promised, Toyota Motor Philippines (TMP) is more earnestly bringing in Gazoo Racing, the high-performance brand of Toyota, into the country.

“(Year) 2021 is an exciting year for the Toyota Gazoo Racing brand indeed as TMP proudly announces the arrival of the GR Yaris here in the Philippines,” the country’s number-one auto brand said in a release.

The performance-oriented version of the Yaris was first unveiled at the 2020 Tokyo Auto Salon, and was executed as a homologation model for the FIA World Rally Championship. The GR Yaris is powered by Toyota’s G16E-GTS engine — a 1.6-liter inline three-cylinder, DOHC with intercooler turbo. It can deliver up to 261ps at 6,500rpm and 360Nm at 3,000 to 4,600rpm. The vehicle can accelerate from standstill to 100kph in 5.5 seconds. It has a 4WD mode switch that allows the driver to choose from Normal, Sport, and Track characteristics.

The car is made at the GR Factory of the Motomachi Plant in Japan. The GR Yaris is the third Gazoo Racing-branded vehicle to enter the country, following the GR Supra in 2019 and the Vios GR-S recently. The performance hatch will retail for P2.65 million, with details on the launch and reservation info to be made available by TMP “soon.”

TMP said it will release a list of dealers accepting reservations. For more information, visit toyota.com.ph/GRYarisiscoming, follow Toyota Motor Philippines and Toyota Gazoo Racing PH on Facebook and Instagram, or check out toyota.com.ph. TMP is also on Twitter (ToyotaMotorPH) and Viber (Toyota PH).

Yields on government debt climb amid renewed COVID-19 concerns

By Lourdes O. Pilar, Researcher

YIELDS on government securities (GS) ended mixed last week as market players reacted to the imposition of a stricter lockdown in Metro Manila and nearby provinces to help curb the surge in coronavirus disease 2019 (COVID-19) cases.

On average, GS yields rose by 1.51 basis points (bps) week on week, according to the PHP Bloomberg Valuation (PHP BVAL) Service Reference Rates published on the Philippine Dealing System’s website as of March 31.

At the secondary market on Wednesday, the yield on the 182-day Treasury bills (T-bills) ended higher by 5.51 bps to 1.5198%. Meanwhile, rates on the 91- and 364-day T-bills fell by 1.67 bps and 2.71 bps, respectively, to 1.2839% and 1.9078%.

At the belly, Treasury bonds (T-bonds) saw their yields higher from week-ago levels. Rates on the three-, four-, five-, and seven-year T-bonds went up by 1.79 bps (2.7887%), 5.16 bps (3.0870%), 8.27 bps (3.3947), and 11.09 bps (4.0138%). Only the two-year debt papers saw their yields decline with 1.09 bps to 2.4190%.

At the long end, the rates of the 10-year T-bonds increased by 3.50 bps, yielding 4.4085%. On the other hand, the 20- and 25-year papers fell by 6.44 bps and 6.76 bps to 4.9389% and 4.9297%.

“Participants took profit ahead of the long break… although light volume was observed as most opted to stay on the sidelines,” Security Bank Corp. Chief Economist Robert Dan J. Roces said in an e-mail.

Financial markets were closed from April 1 to 2 in observance of the Holy Week.

In a separate e-mail, a bond trader said last week’s yield movements was “basically a tug of war” and inflation expectations and outlook on economic growth following the stricter lockdown imposed on Metro Manila and the nearby provinces

“Basically, it was a tug of war between inflation expectations and the growth outlook following the lockdown,” a bond trader said via e-mail.

The government has placed Metro Manila and the provinces of Bulacan, Rizal, Cavite, and Laguna under enhanced community quarantine, the strictest lockdown level, for two weeks due to a surge in COVID-19 infections.

The Philippine economy slumped to a record 9.5% last year as it implemented one of the longest and most stringent lockdowns in the world.

This year was seen to be a period of economic recovery as the government gradually reopens sectors of the economy. Recent developments, however, put a damper on this outlook.

The Department of Health reported 11,028 new COVID-19 cases yesterday, bringing the total number of cases to 795,051 and active cases to a record 135,526.

Meanwhile, inflation settled at 4.5% for the first two months of the year, beyond the central bank’s 2-4% target for the year. This was also faster than the 2.8% posted in the same period last year.

The next inflation report for the month of March will be released tomorrow [April 6].

For the bond trader, the direction of trading this week would depend on whether the government will extend the strict lockdown, as well as the release of inflation data for March.

For Security Bank’s Mr. Roces: “We expect [the] market to trade sideways ahead of the CPI data [this week].”

US farmers to plant fewer corn, soy acres than expected — USDA

CHICAGO — The US Department of Agriculture’s (USDA) forecasts for corn and soybean plantings on Wednesday fell below analyst expectations, sending futures prices for both commodities up by their daily limits.

Smaller-than-expected plantings of the two main cash crops in the United States would heighten concerns about global food and animal feed supplies after importers and domestic processors loaded up on grain and oilseeds earlier this year. The United States is the world’s biggest corn exporter and the No. 2 soybean supplier.

With soybean prices hovering around a 6-1/2 year high and corn prices the highest in some 7-1/2 years, analysts had expected record combined acreage of both crops.

Farmers plan to sow 91.144 million acres (36.885 million hectares) with corn this year, the most since 2016, and 87.600 million acres with soybeans, the most since 2018, USDA said in its first official, survey-based look at 2021 US crop area.

However, both figures fell below nearly all the estimates in a Reuters poll of analysts.

Some analysts expressed disbelief at the USDA forecasts, noting growers had strong incentives to expand acreage after struggling with the US-China trade war and low crop prices in recent years.

US soybean stocks are projected to shrink to a mere 9-1/2 days’ supply ahead of the next harvest, according to the latest USDA forecast, while end-of-season corn supplies were seen at a seven-year low.

“We just can’t afford that bean acreage number,” said Jim Gerlach, president of US broker A/C Trading. “We’ve got to pull some acres out of a hat somewhere.”

Analysts had been expecting the report to show that farmers intended to plant 93.208 million acres of corn and 89.996 million acres of soybeans, according to the average of estimates gathered in a Reuters poll.

American Soybean Association Economist Scott Gerlt said the USDA’s March planting intentions report has a good track record in terms of predicting final acreage. However, he said of Wednesday’s report, “This could easily be an intentions report that has a higher than normal error.”

Wheat planting intentions topped expectations at 46.358 million acres, above a trade estimate of 44.971 million acres and up from 44.3 million acres last year, mostly due to an expansion of winter wheat seedings.

The USDA will release its first production estimates for the 2021 crops on May 12. The USDA is scheduled to release revised acreage estimates on June 30, once planting is mostly complete.

In a separate report Wednesday on quarterly grains stocks, USDA said soybean stocks as of March 1 thinned to the lowest level in five years while corn stocks hit a seven-year low. The agency polled about 8,300 commercial grain facilities about 78,900 farmers in its final look at US grain supplies before planting begins in a few weeks.

On- and off-farm soybean stocks were estimated at 1.564 billion bushels as of March 1, down from 2.255 billion at the same point last year, the USDA said. Corn stocks were pegged at 7.701 billion bushels, down from 7.952 billion a year earlier.

Analysts surveyed ahead of the report expected soybean stocks, on average, at 1.534 billion bushels and corn stocks at 7.767 billion bushels.

Despite the tight soybean stocks, some farmers told Reuters they were opting for corn this season, citing the importance of crop rotations to maintain long-term soil health, strong export demand and an improved outlook for corn-based biofuel. — Reuters

Analysts’ March inflation rate estimates

INFLATION likely accelerated further in March due to elevated food and fuel prices, remaining beyond the central bank’s target range for a third straight month, a BusinessWorld poll showed. Read the full story.

Analysts’ March inflation rate estimates

How PSEi member stocks performed — March 31, 2021

Here’s a quick glance at how PSEi stocks fared on Wednesday, March 31, 2021.


Renewable Energy, a revisit

(First of two parts)

In my column a decade ago, “Renewable energy – reality check” (https://www.fef.org.ph/fef/renewable-energy-reality-check/) I chided the private proponents of new renewable energy (RE) technologies (solar, wind, and biomass), the National Renewable Energy Board (NREB), and multilateral institutions for pushing an expensive Feed in Tariff (FIT) program on the Philippines on the grounds that we need to do this as our contribution to averting a climate change catastrophe. This notwithstanding our global carbon emission contribution being a rounding error (0.3 of 1%), and our RE mix then at 42% of total power generation capacity, is four times the global average.

I noted in my article then that this would have burdened us with 20-year supply contracts with power costs that were equivalent to P10 to P25 per kWh, twice to five times avoided cost. This is not even counting the cost of ancillary power standby to cover for RE intermittency (when there is no wind or when it is cloudy) and their needed transmission and distribution infrastructure.

Thanks to the advocacy on behalf of consumers and taxpayers by the Foundation for Economic Freedom, the PCCI, and the wise intervention of then-Senate Energy Committee Chair Serge Osmena, the final FIT rates were negotiated down substantially.

Fast forward 10 years to today, and we find that just counting the direct cost of FIT subsidy payments to RE providers now runs at P20 billion annually. For perspective, this is the equivalent to conditional cash transfer social assistance for 10 million poorest people in 2019, and is around the annual budgets of each of the following executive departments: Environment and Natural Resources, Finance, Foreign Affairs, Justice, and Science and Technology. And P20 billion is an annual number; for the long run cost, multiply this by 20 years, the contract period.

Since then the prices for solar, especially of solar panels, have dropped; is it now time to embrace them unqualifiedly? And should government mandate them through quotas like Renewable Portfolio Standards (RPS), excise taxes like the recent coal tax insertions in TRAIN 1 (see my column https://www.bworldonline.com/gravy-train-leaving-common-sense-isnt/), or restrictions on building new fossil plants?

Consider: if indeed the drop in RE prices and technology improvements now make them commercially competitive with fossil fuels as contended by their champions, there should be no need for more subsidies, direct or hidden: No FIT, no quotas and no taxes and bans on coal. (Riding on this lobby are the advocates of natural gas, passing it off as green and renewable, even while gas has half the carbon footprint of coal, and is not renewable.)

Precisely because such non-technology neutral government interventions are an override on market competition, they have the effect of raising the cost of power, particularly immiserating for a country like the Philippines that has yet to develop a manufacturing base to absorb the millions of jobless. Manufacturing requires base load plants which today, setting aside controversial nuclear plants, can only be driven by fossil fuels.

How high is that cost burden now? To illustrate further, compare the current FIT rates for solar and wind of P8 to P10 per kWh for 20 years versus the competitively bidded cost of P4.15/P4.26 per kwh in the recent CSP bidding of Meralco. (“SMC units submit lowest bids for 1,800 MW Meralco supply deal,” Feb. 20).

And what have we got to show for this heavy cost? Very little. This conclusion is validated by a study of Dr. Josef Yap, “Evaluating the Feed-in Tariff Policy in the Philippines” (https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3520401) that even with energy subsidized through the FIT, end users still face a net higher cost, despite this so-called merit order effect of RE. (Any power supply contract with lower marginal cost than peaking plants will have identical effect, and is not unique to RE).

Moreover, solar and wind generation together only account for 2.4% of total generation. The bulk of our RE still comes from traditional renewables, hydro and geothermal (20%) that do not enjoy, nor lobby for, such subsidies or quota mandates.

This heavy public cost of supporting such expensive RE is mirrored at the global level in states and countries that embraced such policies versus those who didn’t.

Electricity prices in RE-supportive California rose five times more than the rest of the US. German electricity prices rose 51% from 2006-2018, and now stands at twice the level of France which is mostly nuclear powered. In Fact, Germany now depends on France to stabilize their RE-heavy and thus unstable grid.

Don’t get me wrong about RE. It has a role in energy provision for the Philippines – it already does! But poorly designed public policies to promote RE can have damaging effects on how our energy markets work, and that has led to higher prices for Filipinos, poor use of public funds, and misinformation about the necessary role thermal energy has in powering this country’s economy. If the government wants to play a role, just be sure to do so only where it is needed, and follow the Hippocratic oath of our caring doctors and nurses when designing public policy: “Do no harm”

Climate Change Adaptation Vs Mitigation

On the point about “only where it is needed” let’s consider adaptation versus mitigation, and what makes sense for the Philippines. In Paris in 2015, the Aquino administration committed our country to reduce our greenhouse gas emissions by 70% by 2030, an ambitious, costly and unrealistic target. The Climate Change Commission said the country needs to spend $12 billion to $15 billion, or P584 billion to P730 billion, to reduce up to 70% of its emissions. A staggeringly large number equivalent to 3.25% to 4% of our GDP.

This likely does not even fully reflect the higher cost of power and the cost of managing intermittency discussed earlier. And as I argued, THIS yields very little for the country and our people. (Maybe except green bragging rights? But that is like asking a poor man to wear an Armani suit which he cannot afford and which is inappropriate for his tropical climate just so he can look fashionable in the eyes of the world.)

I have been following the FaceBook page of Finance Secretary Sonny Dominguez, newly designated chairman of the Climate Change Commission. An astute fiscal manager of our country’s scarce resources who deeply cares for our people, he quickly pivoted away from the climate change mitigation chorus and into grounded actionable climate change adaptation programs.

And I quote:

“Why does the Philippines focus more on climate adaptation rather than mitigation?

“Despite the Philippines being one of the lowest contributors to global GreenHouse Gas Emissions (GHGs) at around 0.3%, we are still one of the most vulnerable countries to the effects of climate change.

“This is why our climate action efforts focus more on climate adaptation rather than mitigation. We need to adapt and be prepared for the harmful effects of natural disasters (e.g., typhoons, drought, rising ocean temperatures, etc.) brought about by climate change.” ( Source: Department of Finance FaceBook page .)

Amen!

The Climate Change Commission may have reaffirmed, even strengthened, its 2015 commitments, perhaps before Secretary Dominguez assumed its chairmanship. My appeal: please review and align with your most recent sound pronouncements, Secretary Sonny?

(Part 2 of this column will discuss the energy trilemma, the need to balance energy security, energy equity/affordability, and energy sustainability using the World Economic Forum framework, regulatory philosophy and practice under EPIRA, and a suggested RE transition roadmap for the Philippines).

Romeo L. Bernardo was finance undersecretary during the Cory Aquino and Fidel Ramos Administrations. He is currently GlobalSource Partners Philippine Adviser (globalsourcepartners.com). He is also an independent director in the largest renewable energy company in the Philippines.

Checkpoint staff told not to hinder movement of agricultural goods

PERSONNEL MANNING quarantine checkpoints have been told not to hinder the movements of agricultural goods, as well as farming and fisheries workers, who are classified as essential personnel, the Department of Agriculture (DA) said.

Agriculture Secretary William D. Dar said in a statement that the Philippine National Police and local government units have been notified of such exemptions to quarantine rules.

The enhanced community quarantine (ECQ) declaration covering Metro Manila and neighboring provinces has been extended by a week to April 11.

Mr. Dar said food logistics must also remain unhampered.

“We have instructed our respective DA regional directors to ensure the continuous delivery of surplus farm and fishery products to the areas covered by the ECQ, through our farmers’ cooperatives and associations and through our KADIWA outlets in partnership with local government units in Metro Manila and the private sector,” Mr. Dar said.

On April 3, the President’s spokesman Herminio L. Roque, Jr. announced the one-week extension to contain a surge in coronavirus disease 2019 (COVID-19) cases.

Mr. Roque said the strictest form of quarantine covers the National Capital Region, Bulacan, Cavite, Laguna, and Rizal. The measure was first enforced on March 29 and was originally due to end on April 4.

“The ECQ will be coupled with a strict enforcement of the so-called “prevent, detect, isolate, treat and reintegrate (PDITR) strategy. Healthcare utilization, case numbers and the PDITR gatekeeping indicators would serve as the parameters to be assessed for the succeeding weeks’ risk classification,” Mr. Roque said. — Revin Mikhael D. Ochave

GOCC subsidies fall nearly 28% in February

SUBSIDIES GRANTED to government-owned and -controlled corporations (GOCCs) fell 27.7% from a year earlier in February to P7.581 billion, the Bureau of the Treasury reported.

The National Irrigation Administration received 65.9% of the total with P4.994 billion, down 15% from a year earlier.

The Bases Conversion Development Authority received P720 million, the Small Business Corp. P300 million and the Philippine Heart Center P296 million.

Other top recipients were the National Kidney Transplant Institute (P213 million), Philippine Children’s Medical Center (P209 million), Light Rail Transit Administration (P170 million), and Philippine Rice Research Institute (P155 million).

Towards the bottom of the subsidy list were the Subic Bay Metropolitan Authority (P2 million), Philippine Health Insurance Corp. (P3 million), the Aurora Pacific Economic Zone and Freeport Authority and Zamboanga City Special Economic Zone Authority (P8 million each), and the Tourism Infrastructure and Enterprise Zone Authority (P9 million).

The government subsidizes GOCCs firms to cover operational expenses not supported by their revenue.

It budgeted P148.188 billion for GOCC subsidies this year, down 22%. — Beatrice M. Laforga

Telemedicine hampered by lack of doctors, connectivity in rural areas

POOR BROADBAND internet access and the doctor shortage are major obstacles to telemedicine adoption in rural areas, a tech industry expert said.

“In the National Capital Region, there is a high doctor-patient ratio. There are 10 doctors for every 10,000 patients, which is supposed to be okay. The average across the countryside is about 2.5 to 2.8 doctors for every 10,000 patients. That is the one that needs to be addressed,” Jay Fajardo, chief executive officer and co-founder of telehealth platform provider Medifi, said at the BusinessWorld Insights online forum on March 31.

“Unfortunately, the countryside is also where we lack connectivity. Devices are not an issue,” he added.

In the Philippines, 80% of telemedicine, or the use of electronic communications and information technologies to provide health services, happens “asynchronously,” according to Mr. Fajardo. “It’s not real-time. If somebody sends a message, the doctor responds at his convenience, and the consultation happens over a long period of time.”

“The idea that telehealth is a one-to-one interaction is not real, and that impacts well on the need to have good bandwidth,” he said.

Benedict Patrick V. Alcoseba, vice-president and head of ICT Business at PLDT Enterprise, said the three ways to address the connectivity issue are investment, localization of content, and network expansion.

“We do agree that we play a big portion in how we can digitally enable not only the health industry but also other industries that rely on connectivity. The most recent capex (capital expenditure) guidance for 2021 was I think around P91 billion for PLDT, but it’s not just about how much we invest but what other initiatives we do,” he said.

“The way for us to improve connectivity to access content is not just to build bigger highways toward that content. A big impact can also happen if we have that content hosted locally,” he added.

He said PLDT is currently in talks with global content providers to localize their content for the Philippines.

“This will help speed up access to their content and make the experience much better for a wider section of the population. In parallel to that would be the expansion of all our networks into the areas where they are needed most. It’s ongoing,” Mr. Alcoseba also said.

Makati City Mayor Mar-Len Abigail S. Binay said the way to increase access to healthcare services through technology is by empowering barangays and instituting programs that can immediately address ICT access-related issues.

“All our barangays have computers. Even during the pandemic, we established what we call ‘Dyipni Maki’ (a mobile learning hub project) for our students. This project has computers and internet access. In terms of healthcare and even vaccination registration, we are making these computers available for everybody in the barangays,” she said.

“We’ve also developed a QR code for contact tracing as well as for the vaccination program,” she added.

Raymond Francis R. Sarmiento, director of the National Telehealth Center (NTHC), University of the Philippines-Manila, said the NTHC has been working with the government on innovation in public health, including drafting a working framework for telemedicine.

“Part of the work that we are doing at the National Telehealth Center would be to empower not just communities but also our academic partners, collaborators from the private sector, and most especially strengthening our partnership with the Department of Health and all other government agencies and instrumentalities to push forward our digital health agenda,” he said.

Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a majority stake in BusinessWorld through the Philippine Star Group, which it controls. — Arjay L. Balinbin