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#COVID-19 Regional Updates (03/16/20)

Senators push for rent moratorium, hazard pay for frontliners

A MORATORIUM on rental fees, one-month reprieve on the payment of utility bills, and hazard pay for frontliners are among the measures proposed by senators amid the community quarantine imposed in Metro Manila. Senator Christopher Lawrence T. Go on Monday recommended that rental fees as well as bills from basic utility providers be waived to cushion the impact on those most affected by the quarantine. As of Monday, telecommunications companies PLDT, Inc., and its wireless unit Smart Communications, Inc., and Globe Telecom, Inc. have announced a 30-day payment extension period. Globe will also provide free and unlimited internet connection through its GoWiFi services in select hospitals in Metro Manila, including the Chinese General Hospital, Metropolitan Medical Center, Philippine General Hospital and Manila Doctors Hospital. Sky Cable Corp. also extended the bill payment for its cable and internet services for 30 days.

HAZARD PAY
Senator Risa N. Hontiveros-Baraquel, for her part, called for the immediate grant of hazard pay for health workers, government employees, military, and the police, among other frontliners. Ms. Baraquel said the law provides that public health workers exposed to danger and high risks are entitled to additional hazard pay of as high as 25% of their monthly basic salary. She also recommended that additional pay be considered in the private sector, which is not covered by the law. — Charmaine A. Tadalan

Night patrol

PHILIPPINE COAST GUARD

Members of the Philippine Coast Guard (PCG) patrol the waters around Bohol all night to prevent the entry of boats from other provinces. Bohol has declared a community quarantine from March 15–20, subject to extension, which prohibits the entry of all non-residents via all modes of transportation.

Cagayan de Oro maintains no lockdown policy

“WE SHALL not lockdown Cagayan de Oro but instead, remove the non-essential reasons of the people to enter the city.” This was the message of Mayor Oscar S. Moreno on Monday during a press conference amid localized community quarantine declarations by most local governments around the country. City Health Office head Lorraine J. Nery, in the same briefing, said enough measures have been taken by the city’s COVID-19 Task Force, which includes the suspension of classes in all levels, disinfection of churches, offices including city hall, markets, establishments and terminals. Mr. Moreno has also ordered the closure of all shopping malls — except supermarkets, pharmacies and other essential services — as well as the four night markets in different parts of the city. The mayor said a lockdown is “not easy to impose” and “not practicable as Cagayan de Oro serves as hub for Northern Mindanao catering to patients especially those referred to Northern Mindanao Medical Center (NMMC), the ports and other agencies.”

Philidor refuted?

We continue from last Thursday.

To recap, in the Philidor Defense after 1.e4 e5 2.Nf3 d6 3.d4 Black’s woes can be traced to his insistence on maintaining the strongpoint on e5. Why not just give it up and play solid? What’s wrong with 1.e4 e5 2.Nf3 d6 3.d4 exd4 4.Nxd4 Nf6 5.Nc3 Be7, the Antoshin Variation? GM Larry Kaufman in “Kaufman’s New Repertoire for Black and White,” remarks that this line is a pretty reasonable choice for Black in a must-win situation, because although White is better, both sides have play, and the chances of a draw are fairly low. He then revealed that he selected this defense for Black repeatedly and successfully for the computer program Rybka in a match where it gave draw and White odds in every game to GM Joel Benjamin.

But there is something wrong with the Antoshin. Later on in the game portion of the book Kaufman says that the line works reasonably well for Black against routine play by White, but the plan of Bf4, Qd2, 0-0-0 then f3 followed by a general pawn advance in the kingside is pretty much a refutation of it.

The Dutch IM Robert Ris has an online show on chessbase.com entitled “The Fast and Furious” where he shows the latest attacking ideas. He analyzed the Antoshin Variation extensively and came to the same conclusion — the Philidor set-up of 1.e4 e5 2.Nf3 d6 3.d4 exd4 4.Nxd4 Nf6 5.Nc3 Be7 has been refuted.

Our friends from chessbase.com have agreed to allow our readers to access the video for free. Just go to the links below:

If you want to see a short introduction and discussion of the line go to:

https://en.chessbase.com/post/fast-and-furious-with-im-robert-ris-2020-4

if you want to go to the video directly here is the link:

https://videos.chessbase.com/Video/2020-01-30%20Philidor%20with%20exd4

Note: There are several lectures here. Pick the one which says “Philidor with exd4.” I will repeat what I just said to give it emphasis — Chessbase.com has very generously agreed to allow our readers to access the video for free.

I strongly encourage our readers to consider taking up a Chessbase premium membership account. I have one and I use it several times a day to watch videos, watch broadcast of major tournaments, comment on, analyze and save games in the cloud, access the live database where other members store their analyses as well — this ensures that you are always on the cutting edge of theory, etc etc. I find a premium membership indispensable — it is around P250/month. In general the options are here: https://account.chessbase.com/en/matrix

Chessbase.com and IM Robert Ris have also allowed us to present “The Fast and Furious” analyses of “Crushing the Philidor” to our readers

White in the following game is the 25-year old Dutch International Master Nico Zwirs playing against GM Sipke Ernst, an International Grandmaster from Holland and a very active chess player (especially in the German and Belgian leagues), chess coach, and author.

I have added a few comments which are prefaced by <BA>

Zwirs, Nico (2386) — Ernst, Sipke (2540) [C41]
Groninger Combinatie op
Groningen (7), 02.06.2019 (annotated by IM Robert Ris)

1.e4 e5 2.Nf3 d6 3.d4 exd4

<BA> Let’s take a final look at the other possibilities here.

We already discussed 3…Nf6, 3…Nd7 and the infamous 3…Bg4 last Thursday; Paul Morphy also played the Philidor himself with Black, and his move was 3…f5 but I have no faith in this move. 4.exf5 e4 5.Ng5 Bxf5 6.f3 exf3 (6…d5? 7.fxe4 dxe4 8.Bb5+ Nc6 9.0–0 White’s advantage is already decisive) 7.Qxf3 Qe7+ 8.Kd1 Qf6 9.Qxb7 Qxd4+ 10.Bd3 Qg4+ (10…Bxd3? 11.Qc8+ Ke7 12.Qe6+ Kd8 13.Nf7#) 11.Nf3 Bxd3 12.cxd3 White is clearly winning. Look at the name of the player handling the black pieces. Even he could not hold it. Charbonneau,P (2513)-Nakamura, H. (2733) Lloydminster 2010 1–0 (31);

3…Nc6 4.Bb5 is the Ruy Lopez Steinitz Defense. I will show you the famous game Tarrasch versus Marco from Dresden 1892 later.

4.Nxd4 Nf6 5.Nc3 Be7 6.Bf4

This is the critical line, the one which really puts Black’s position under pressure. White’s pieces are more actively placed in the center, Black’s pieces are still on their initial squares and in general he lacks space, so it is harder for him to find squares for his pieces to attack his opponent.

6…0–0 7.Qd2 a6

I consider 7…Nc6 to be the main line. Another very common move here is 7…c6. Both of these moves will be taken up on Thursday.

We also see 7…Nc6 a lot. After 8.0–0–0 Nxd4 9.Qxd4 Be6 Black has a solid position, but it is an inferior one 10.f3 Nd7 11.Qe3 (more precise than pushing 11.g4 right away because then Black has 11…Bg5) 11…Bf6 12.g4 a6 13.g5 Be5 14.h4 Qe7 White has an easy position to play 15.Bh2 Bxh2 16.Rxh2 Ne5 17.Be2 f5 18.f4 Nc6 19.h5 fxe4 20.h6 g6 21.Nxe4 d5 22.Nc5 Rae8 23.Bf3 Bf7 24.Qxe7 Rxe7 25.Nxb7 1–0 (45) Lautier, J. (2663)-Dorfman, J. (2617) Val d’Isere 2002.

8.0–0–0 b5 9.f3

It is interesting to see Markus Ragger, a player who is always prepared, play 9.h4 c5 10.Nf5 Bxf5 11.exf5 Nc6 1–0 (53) Ragger,M (2687)-Rusev,K (2520) Skopje 2018. Very strong would have been 12.g4 Nxg4 (committing suicide) 13.Rg1 Nf6 14.Bh6 winning at least the exchange.

9…c5

[9…b4 is premature 10.Nd5 Nxd5 11.exd5 White’s position is much better because of the weaknesses induced in Black’s queenside]

10.Nf5 Bxf5 11.exf5 Nc6 12.g4!

White’s attacking prospects are obviously very good.

12…Nd4

To get more attacking ideas I recommend that you play over the following: 12…b4 13.Nd5 Nxd5 14.Qxd5 Bg5 15.Bxg5 Qxg5+ 16.Kb1 Nd4 17.Bd3 (17.Bc4 Qf4 18.Qe4 Qxe4 19.fxe4) 17…Qf4 18.Qe4 Qh6 19.Rde1 Rad8 20.Bc4 Qh4 21.Bd5 Rd7 22.Rhg1 Qf6 23.f4 a5 24.Qd3 Rb8 25.g5 Qd8 26.g6 Qf6 27.Qh3 h6 28.gxf7+ Kf8 29.Rxg7 Kxg7 30.Qg4+ 1–0 (30) Edouard,R (2594)-Kazhgaleyev,M (2626) Le Port Marly 2009.

13.Be3!

Giving up a pawn for the attack. This is stronger than 13.g5 Nh5 14.f6 gxf6 15.Be3 fxg5 16.Bxd4 cxd4 17.Nd5 Bf6 18.Rg1 when White is better but Black is still fighting. Pontikis,A (2400)-Ingersol,H (2392) LSS email 2007 1-0 (64).

13…Nxf3 14.Qg2 Ne5 15.Be2 b4 16.Na4 Nfd7 17.g5 Re8 18.h4 Qc7 19.Bf4 Rac8 20.Bxa6 Ra8 21.Bb5 Reb8 22.b3 c4 23.f6 Bf8 24.Bxd7 Nxd7

[24…Qxd7 25.Bxe5]

25.fxg7 Kxg7

[25…Bxg7? 26.Bxd6]

26.g6!

Great attacking idea.

26…fxg6 27.h5 cxb3 28.axb3 Rxa4 29.bxa4 Qc3

[Black’s problem is that 29…b3 can be met by 30.Bh6+ Kxh6 31.hxg6+ Kg7 32.Rxh7+ Kg8 (32…Kf6 33.Rf7+ Ke5 34.Qd5#) 33.Qd5#]

30.Rd3! Qa1+ 31.Kd2 Qf6 32.Bg5 Qe5 33.hxg6 Nc5 34.Rxh7+ Kg8

[34…Kxg6 35.Bf4+]

POSITION AFTER 34…KG8

35.Rh8+! Kg7

[35…Qxh8 36.Qd5+ Kg7 37.Qf7#]

36.Rh7+ Kg8 37.Qd5+ Qxd5 38.Rxd5 b3 39.Rxc5 1–0

Because 39…dxc5 is met by the move 40.Bf6

Here is the Steinitz Defense game I mentioned earlier. Back in 1892 Tarrasch claimed to have refuted the Steinitz and published his analysis in the February 1892 issue of “Schachzeitung,” a magazine he edited at that time. Apparently Georg Marco had not seen that article for come July 1892 he walked exactly into that analysis!

Tarrasch, Siegbert — Marco, Georg [C66]
DSB Kongress–07 Meisterturnier Dresden (7.3), 22.07.1892

This game was played during Tarrasch’s dominant period, in the early 1890s when he was winning everything. In 1892 he was offered a title match with the world champion Wilhelm Steinitz, but declined due to the demands of his medical practice. He probably should have taken up the offer, for when Emanuel Lasker became world champion in 1896 Tarrasch was “destined to play second fiddle for the rest of his life” (Reinfeld).

1.e4 e5 2.Nf3 Nc6 3.Bb5 d6 4.d4 Bd7 5.Nc3 Be7 6.0–0 Nf6 7.Re1 0–0?

Tarrasch: After this move Black is lost. Better is 7…exd4 but it is not good enough to equalize.

8.Bxc6! Bxc6 9.dxe5 dxe5 10.Qxd8 Raxd8

Tartakower:

An insoluble problem for Black. If 10…Bxd8 11.Nxe5 Black, deprived of a valuable pawn, would be at a manifest disadvantage;

If 10…Rfxd8 there follows 11.Nxe5 Bxe4 12.Nxe4 Nxe4 13.Nd3 (13.Rxe4?? Rd1+) 13…f5 14.f3 Bc5+ 15.Kf1! (with Black’s rook on f8 this move would not have been possible) 15…Rxd3 16.cxd3 and White has won the exchange

11.Nxe5 Bxe4

After 11…Nxe4 12.Nxc6 White wins, not a pawn, but a clear piece.

12.Nxe4 Nxe4 13.Nd3 f5 14.f3 Bc5+ 15.Nxc5 Nxc5 16.Bg5! Rd5

Tartakower: Still trying to save his minor piece; after any other move, White’s reply 17.Be7 is still more convincing.

17.Be7 Re8 18.c4 1–0

The final point: White wins the exchange and the game.

Please don’t be too harsh on Marco for losing in this way. I just now looked up the final position in Chessbase and find that since 1892 62 players have fallen into the same trap, and that includes our very own IM Oliver Dimakiling, who lost to Viacheslav Diu in this same way in the HD Bank Open held in Ho Chi Minh City in 2014.

 

Bobby Ang is a founding member of the National Chess Federation of the Philippines (NCFP) and its first Executive Director. A Certified Public Accountant (CPA), he taught accounting in the University of Santo Tomas (UST) for 25 years and is currently Chief Audit Executive of the Equicom Group of Companies.

bobby@cpamd.net

Nationwide round-up

Bill filed on benefits for barangay health workers

A BILL seeking to provide compensation and benefits package as well as security of tenure and free education for barangay health workers (BHWs) has been filed by the Makabayan bloc in Congress. House Bill 6562, if passed, will be known as the Barangay Health Workers Act of 2020. “BHWs are among the front-liners in primary health care especially now in the time of COVID-19 (coronavirus disease 2019), as they provide assistance and support to physicians, dentists, nutritionists, public health nurses, and midwives. Their role is indispensable to community health and wellness,” Bayan Muna Partylist Rep. Ferdinand R. Gaite said in a statement on Monday. The bill provides that each barangay should have its own BHWs. The number of assigned BHWs per barangay will be determined by the Department of Health (DoH). The measure also provides that a competency-based education and training curriculum for all BHWs will be developed by the DoH, in coordination with the University of the Philippines (UP). Funding for the benefits and incentives of BHWs will be sourced from the internal revenue allotment for local governments, the tobacco excise tax, and local government income from economic enterprises and local taxes. “They (BHWs) are volunteers that are risking life and limb to save others so it is high time the government reward their sacrifices with higher allowances and benefits,” Mr. Gaite said. — Genshen L. Espedido

Courts limit operations to ‘urgent matters’

THE SUPREME Court (SC) has ordered all courts nationwide to “drastically” reduce operations and attend only to “urgent matters” until April 15 to help curb the spread of the new coronavirus. Administrative Circular No. 31-2020 issued Monday directs courts to just maintain skeleton staff, suspend night courts, and observe office hours only from 9 a.m. to 3 p.m. There will be no work except in court and court offices dealing with resolution of urgent matters and cases, payments of salaries, release of 2019 Bar examination results, medical services, and security of courts. All hearings are suspended except on matters on bail and habeas corpus, promulgation of judgement on acquittals, reliefs of those arrested during the period. Filing deadline within this period is extended for 30 days starting April 16. The Judicial and Bar Council interview for the SC Associate Justice position to be vacated by Andres B. Reyes, Jr. who will retire on May 11, will also be reset. — Vann Marlo M. Villegas

House to form ‘Defeat COVID-19’ committee

THE HOUSE of Representatives will create a “Defeat COVID-19” committee, which will serve as an advisory and coordinating panel to the government’s inter-agency task force on the the coronavirus disease 2019, House Speaker Alan Peter S. Cayetano said. In a live-streamed press briefing on Monday, Mr. Cayetano said the functions of the committee are to submit policy recommendations to departments and other relevant agencies, and to assist in communicating to the public factual and up to date information on the developments relating to the COVID-19 spread. The proposed committee will be composed of members from the committees on health, economic affairs, tourism, trade and industry, labor and employment, banks and financial intermediaries, public information, appropriations, ways and means, local government, and metro manila development. Mr. Cayetano also said that Congress is already coordinating with various departments on ways to fast-track government procurement processes. “We’re looking at all departments, ‘yung existing nilang pondo kung paano po ito makakatulong (their existing funds, on how these can help) during this time. We will make sure that strict procurement process is still followed,” he said. — Genshen L. Espedido

Former communist leader Salas granted bail

THE SUPREME Court has allowed a former communist leader to post bail over his 15 counts of murder charges. In a notice dated March 12, the court’s third division granted the petition of Jody S. Salas, son of former communist leader Rodolfo C. Salas, to allow his father to post a P200,000 bail before a regional trial court in Manila, unless he is being detained for other cases. Mr. Salas was arrested on Feb. 28 over murder charges in 2007. He is accused of being part of the cleansing of ranks of suspected enemies within the local and regional committees of the Communist Party of the Philippines. — Vann Marlo M. Villegas

Postponed

Golf was among the last of the organized sports to shut down due to the novel coronavirus. The Players Championship, long touted to be the pro ranks’ unofficial fifth major event due to its competitive fields and highly regarded home course, actually finished its first round — and with crowds to boot — before being called off. Up until then, United States Professional Golfers Association Tour commissioner Jay Monahan had been adamant in saying the show would go on in light of the varied circumstances under which competitive play occurs.

Thankfully, authorities wised up before any real damage was done. Not long after, other near-term stops on the tour calendar were likewise scuttled. Most prominent among these is the Masters, far and away golf’s premier spectacle. Officials have wisely avoided using the word “canceled” in making the announcement, instead settling for “postponed” to assuage players and fans alike. There is comfort to the choice, certainly, what with its openness to the possibility of normalcy down the line. There is nothing more dramatic than a final-round back-nine charge in front of a frenzied crowd en route to claiming the coveted Green Jacket. And, in turn, there is nothing more disappointing than confirmation of the utter absence of activity in Augusta National.

To be sure, there are logistical hurdles to holding the Masters in abeyance. The pride of Georgia is closed half the year for a reason; weather conditions hamper playability in the summer. Which is why only twice in its history has it hosted the tournament outside of April — but before, and never after. Projecting when the 2020 competition will be held is speculative; assuming community quarantine remains through the next month, the earliest is likely October, when the ryegrass has grown, and when the grounds look as picturesque as always. Before then, odds are low that Club chairman Fred Ridley will allow the gates to open.

Already, living legend Jack Nicklaus has expressed doubts on whether the Masters can be held this year. His sentiments are not unfounded. Unless and until a definitive decision has been made, however, fans aren’t wrong to hope. That said, public safety is paramount. The prospect of foregoing golf at its finest is not a good one, but health concerns trump all others, as even the most diehard followers know.

 

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

Another year of single-digit loan growth for Philippine banks due to Covid-19

Philippine banks could see another year of slow loan growth and uptick in nonperforming loans (NPL) as the Covid-19 risk looms over economic growth and financial markets. 

S&P Global Ratings, the world’s leading provider of independent credit risk research, revised its 2020 GDP forecast for the Philippines to 5.8% from 6.2% due to the worldwide spread of Covid-19. This is less of a downward adjustment compared with Asia Pacific countries more exposed to people and supply-chain flows from China. It still has implications for the Philippines banking sector, however. “We expect trade and private investments to slow in the Philippines due to the global coronavirus outbreak, and this will drag on banks’ lending business,” said S&P Global Ratings credit analyst Nikita Anand.

The country’s banks could see a second year of single-digit growth after a long run of double-digit expansions in previous years. In 2019, credit growth slowed to 8.8% compared with 15% in 2018 as corporate loan demand softened due to a delay in passing the national budget and U.S.-China trade tensions. Covid-19’s impact could drag on demand for corporate loans—which make up 82% of the banking system’s loans—and stifle momentum in retail. Retail loans were a key growth driver last year, expanding 16% year-on-year.

Short-term disruptions

The virus outbreak will disrupt travel, hospitality, restaurants, entertainment, and trade sectors short-term. Consumers are likely to avoid public spaces and restrict travel due to the heightened health risk; this, in turn, will hurt consumption spending.

Banking sector NPLs rose to 2.1% of outstanding loans, a 30 basis points (bps) increase during 2019. This was partly due to the large default by Hanjin Industries, as well as a rise in retail loans where credit quality is weaker than corporate loans. NPLs are likely to inch up further this year due to macroeconomic headwinds.

“Banks may offer moratoriums on repayments for badly hit sectors if the health situation escalates, similar to Singapore and Thailand,” noted Ms. Anand.

The local banking industry is believed to be able to manage the risk due to good capital buffers, with an average tier-1 capital adequacy ratio of about 14%. Philippine banks reported an average 20 bps improvement in return on assets to 1.3% in 2019 – despite slower growth – on the back of a 400-bp cut in their reserve requirement ratio and higher trading gains in a falling interest rate environment.

Less vulnerable to Covid-19

The Philippines is less exposed to tourism compared with neighbors such as Thailand and Singapore, where tourism has a large share of the GDP and tourists from China account for a large share of visitors. Tourism-related exports are only 3% of GDP for the Philippines, and less than a fifth of its visitors are from China.

The expected slowdown in global growth, however, could be a blow to trade and private-sector investments in the Philippines. China’s GDP is estimated by S&P Global Ratings to slow to 4.8% in 2020 compared with its pre-outbreak forecast of 5.7%. China contributed 15% of overall trade with the Philippines. Region-wide disruptions to the electronics sector and factory closures in China affecting the supply chain network will slow growth in the Philippines’ manufacturing sector.

There continues to be uncertainty about the rate of spread and timing of the peak of Covid-19, and modeling by epidemiology experts indicates a likely range for the peak of up to June 2020. The global outbreak is assumed to subside during the second quarter of 2020, consistent with the credit risk research provider’s report, “Global Credit Conditions: COVID-19’s Darkening Shadow,” published earlier this month.

Dengue hotspot prediction tool declared global finalist and “Best Use of Data” in NASA Space Apps Challenge 2019

A dengue hotspot prediction tool from Manila won big in NASA Space Apps Challenge, the aeronautical agency’s international hackathon. The initial round was held last October 18-20, 2019 with over 29,000 participants in 71 countries, with De La Salle University (DLSU) as the local host.

Among six global finalists,  Project AEDES was recently awarded “Best Use of Data”, meaning a solution “that best makes data accessible or leverages it to a unique application”. The big data tool utilizes data from climate stations, Google searches, and satellite maps to predict potential dengue hotspot seasons and locations. This way, concerned task force units will be able to properly and efficiently allocate manpower and resources.

Aiming to help address the UN Sustainable Development Goal 3 of “good health and well-being”, the project was inspired by the enormous amount of local dengue cases in 2019, which increased by 92% from the previous year. The tool is an exercise in deriving action from the available wealth of data, which the team argues to be the essence of the Fourth Industrial Revolution.

“It’s not enough to just have data. You also need to generate insight from the data, and more importantly, you have to generate action from the insight. You need those three things for anything to work, and companies struggle with this deceptively simple rule,” said Dominic Ligot, the lead for Project AEDES.

“There are companies who have a lot of data, but they don’t know what to do with it… and then on the flip side, you have decision makers who take action without the benefit of insight and data. You add all of that, and you have the social problems that we have today.”

What’s next for Project AEDES?

In order to make the information as accessible to as many people as possible, the team decided not to put Project AEDES commercially. The goal for now is to bring it to national—and local-level government health departments who can then build on the interface, such as adding an alerts system extension. In order to make the business sustainable, they are open to grants and may also entertain partnerships within the private sector.

In the meantime, Project AEDES has some upcoming plans for the platform, such a public-friendly version and a news enhancement to weed out fake news during “information epidemics”. “We’re building this for public health practitioners. They also have a duty to broadcast data to the public and eliminate fake news,” said Ligot.

The team will also be receiving support from Animo Labs, DLSU’s technology business incubator.

“What we offer… [is] essentially a safe and secure environment where they can do their work properly. That includes data privacy and intellectual property privacy, as well as assistance… that will help them do the work in other support areas so they don’t have to worry about legal, IP, audit, registration, et cetera,” said Federico Gonzalez, executive director at Animo Labs. “We find ways to do that for them so they can focus on what’s important for the project.

Gov’t to boost spending amid outbreak

By Beatrice M. Laforga
Reporter

THE government will boost spending this year including on infrastructure and social programs to shield the economy from the effects of the coronavirus disease 2019 (COVID-19) pandemic, softer global demand, and the Taal Volcano eruption at the start of the year, according to the Budget department.

“Nonetheless, the government will remain prudent with public expenditures to ensure long-term fiscal sustainability,” it said in a statement.

Infrastructure spending more than doubled to a record P177.9 billion in December from P75.6 billion a year earlier, data showed.

This brought total infrastructure spending to P881.7 billion last year, 9.7% higher than a year earlier and bigger than the 859.4-billion target, the Budget department said.

The agency traced the December spike to disbursements by the Department of Public Works and Highways (DPWH) that rose by 86% year on year.

DPWH finished road and bridge projects including the Bayombong-Solano bypass road and Tagum City flyover. It also completed right-of-way acquisitions, bridges, and flood mitigation structures and drainages at the Agno river basin and Cagayan river, the Budget department said.

The infrastructure spending surge was largely due to government “catch-up efforts,” said Ruben Carlo O. Asuncion, chief economist at UnionBank of the Philippines, Inc.

“We all know that the efforts were not enough to breach the 2019 growth target due to historical and perennial low absorptive capacity of government agencies and institutions implementing infrastructure projects,” he said in an e-mail. “Although some have improved, most are still challenged.”

Catch-up measures included a 24/7 work schedule for the construction of big infrastructure projects and streamlining right-of-way acquisitions, the Budget department said.

The economy grew by 5.9% last year, slower than 6.2% in 2018 and missing the government’s revised 6-6.5% goal.

Michael L. Ricafort, chief economist at Rizal Commercial Banking Corp., said state spending, which accounts for 11-12% of the gross domestic product, would be one of the biggest growth drivers this year.

Mr. Asuncion said increased infrastructure spending this year is part of the much needed fiscal stimulus to boost the economy amid the COVID-19 global pandemic.

“Infrastructure expenditure is critical and needed at this juncture where demand and supply have been dampened,” he said. “It will help pump-prime the macroeconomy in the next coming months.”

Mr. Ricafort said the outbreak could disrupt logistics and supply chains of various infrastructure projects even if supplies and workers are exempted from the month-long lockdown in Metro Manila.

“Additional spending should be moved forward to help rescue firms hardest hit by the coronavirus spread,” the analyst said.

Central bank seen to cut rates by 25 basis points this week

THE Bangko Sentral ng Pilipinas (BSP) may cut rates anew this week following the move of global central banks to ease policy amid fears of slower economic growth and lower demand for key commodities including oil due to the coronavirus disease 2019 (COVID-19) pandemic.

Twelve out of the thirteen analysts in a BusinessWorld poll held last week expect the Monetary Board (MB) to slash borrowing costs by at least 25 basis points (bps) at their meeting on Thursday, March 19, with some also seeing another 25-bp cut in May.

Policy rate expectations for March 19

The yield on the BSP’s overnight reverse repurchase facility currently stands at 3.75%, while overnight lending and deposit rates are at 4.25% and 3.25%, respectively, following the central bank’s decision to ease borrowing costs by 25 bps at the Feb. 6 policy meeting.

Security Bank Corp. Chief Economist Robert Dan J. Roces said the BSP will go for a 25-bp cut on Thursday amid disruptions due to the month-long lockdown of the National Capitol Region (NCR).

“There are worries of dents to growth that will permeate and that’s mostly from fears of supply chain disruptions, especially with the quarantine of Metro Manila that alone accounts for around 40% of total GDP (gross domestic product),” Mr. Roces said.

After a below-target 5.9% GDP expansion in 2019, the government targets 6.5% to 7.5% economic growth in 2020.

However, the National Economic and Development Authority said earlier this month they expect GDP growth to come in at just 5.5% to 6.5%, as the economy starts feeling the impact of the outbreak, specifically on tourism and trade.

Meanwhile, amid the increasing number of COVID-19 cases in the country, NCR on Sunday began a 30-day “community quarantine” wherein travel by land, domestic air and sea to and from Metro Manila will be banned until April 14.

There were 140 confirmed COVID-19 cases in the Philippines as of March 15, with 11 fatalities recorded.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort, meanwhile, said a rate reduction could be on the table this week following global central banks’ move to ease their policy stance due to the virus.

“Another major factor that supports at least a 25-bp cut in local policy rates is the emergency 50 bp [US] Fed[eral Reserve] rate cut that could still prompt other central banks…to also cut rates as well, as part of the global coordinated measures to shore up confidence on both the global economy and financial markets,” Mr. Ricafort said.

The Fed implemented an off-cycle 50-bp cut on March 3 to cushion the economic impact of the COVID-19 outbreak.

Another rate cut from the Fed at their scheduled March 17-18 meeting may trigger a reduction of up to 50 bps from the side of the BSP, said Noelan Arbis, economist at Hongkong and Shanghai Banking Corp. Global Research.

“I think MB will cut policy rates by 50 bps due to the global spread and severity of COVID-19,” University of Asia & the Pacific (UA&P) economist Victor A. Abola said in an e-mail.

BSP Governor Benjamin E. Diokno earlier said another 25-bp cut will be discussed at the MB’s meeting this week, noting the central bank is not ruling out cuts worth 50-75 bps.

So far, the BSP has already slashed rates by 100 bps since 2019, partially reversing the 175 bps worth of hikes implemented in 2018 to temper rising inflation.

The BSP still has monetary space for further easing should COVID-19’s economic impact worsen, said ANZ Research economist Mustafa Arif.

“Falling US yields, low oil prices and tame domestic inflation give the BSP the space for a deeper easing cycle in the rest of 2020, if required,” he said.

Meanwhile, UnionBank of the Philippines, Inc. Chief Economist Ruben Carlo O. Asuncion said a reduction in banks’ reserve requirement ratio (RRR) is “more probable on the table.”

But UA&P’s Mr. Abola said the BSP will opt to keep banks’ reserve ratios at their current levels.

“I don’t think they will cut RRR because policy rate cuts will be more effective in lowering interest rates as the BSP is still paying rates for TDF (term deposit facility) higher than T-bill (Treasury bill) yields,” he said.

After 400 bps in reductions last year, the RRR for big banks now stand at 14%, while those of thrift and rural banks are at four percent and three percent, respectively. — L.W.T. Noble

Property giants to take a hit as Manila malls close

By Denise A. Valdez
Reporter

SOME shopping malls in Metro Manila will be closed starting today, after the government urged mall operators to suspend operations during the month-long “community quarantine” to prevent the spread of the coronavirus disease 2019 (COVID-19).

Listed property companies, which generate significant revenues from mall leasing operations, are expected to take a “huge” hit due to the month-long closure.

“(The) impact of mall closures, in a word: Huge!” PNB Securities, Inc. President Manuel Antonio G. Lisbona said in a mobile message over the weekend. “Our analysts are still quantifying exactly how much but foot traffic is the lifeblood of malls. Without people, it’s hard to do business.”

Ayala Land, Inc. (ALI) on Sunday announced it is temporarily closing its 16 malls in Metro Manila “in the interest of health and safety” until further notice.

SM Supermalls, Inc. announced late Sunday all of its malls in Metro Manila will be closed starting today until further notice.

Villar-led VistaMall and Starmalls also announced the temporary closure of its malls in Metro Manila. Vista Mall has four malls, while StarMalls has two — Alabang and EDSA-Mandaluyong.

“Drug stores, home essentials, hardware needs, banks and restaurants will remain open,” VistaMall said in a statement.

Robinsons Land Corp. (RLC) said late Sunday it is temporarily shutting all of its nine Metro Manila malls starting today until further notice.

SM, ALI and RLC said supermarkets, drugstores, convenience stores, banks and other establishments that offer basic services will remain open.

The mall closures are expected to drag the property giants’ bottom line.

ALI generated P22.02 billion in revenues from shopping centers last year, out of the P168.8 billion in total revenues. It has 2.12 million square meters of gross leasable area in its mall network across the country.

For SM Prime Holdings, Inc., revenues from malls stood at P63.63 billion in 2019, representing 54% of total revenues of P118.31 billion. It operates 74 malls in the Philippines with a total gross floor area of 8.5 million square meters, of which 42% are located in Metro Manila.

RLC’s mall operations generated P13.25 in revenues for 2019, comprising 43% of the company’s total revenues of P30.58 billion. It has 52 malls in its portfolio with 1.57 million square meters of gross leasable area.

“Recurring income from their malls provide a significant portion of the bottom line for some of our major property developers. This is expected to greatly hit their income for the first half of 2020,” Trader Gab L. Magsino said in a text message.

Trade Secretary Ramon M. Lopez told reporters yesterday that the interagency task force will be meeting on Monday for the guidelines on mall operations. He added that the “econ(onomic) cluster will announce (a) government support package” by today, but the details of which he refused to preempt yesterday.

Regina Capital Development Corp. Head of Sales Luis A. Limlingan said mall operators and retailers may see an upside as consumers resorted to “panic buying” ahead of the lockdown.

“For those malls, there will be an impact but it’s hard to calculate. On the one hand some retail will be affected if they deal with non-essentials, but since these developers have groceries, drugstores and essential appliances, the surge in sales will offset the slump in others,” he said in a mobile message.

Pending the government’s final guidelines on restricting mall operations, other mall operators have adjusted operating hours to close shop at 7 p.m.

Coronavirus fears expected to spur more stock market volatility

CORONAVIRUS DISEASE 2019 (COVID-19) fears are expected to spur more volatility in the already bearish stock market, as Metro Manila starts the first work week under “community quarantine.”

Last week’s bloodbath saw the Philippine Stock Exchange index (PSEi) plunge over 10% during intraday trading on Thursday and Friday, triggering the circuit breaker for the first time since October 2008. The PSEi recovered slightly on Friday, closing up 1% to 5,793.94.

For Philstocks Financial, Inc. Research Associate Claire T. Alviar, Friday’s rebound may not be indicative of a market’s recovery as worries over the COVID-19’s economic impact persist.

Metro Manila on Sunday began a month-long lockdown that also banned mass gatherings, as well as land, domestic air and sea travels to and from the region.

“Although goods and services will continue to flow and no disruption of supply is expected by the government, the demand for unnecessary goods and services might drop since the public is avoiding crowded places,” she said in a text message.

“Negative sentiment will further rise in the market due to the expected lower demand from the public which will eventually hurt businesses’ earnings,” she added.

Regina Capital Development Corp. Head of Sales Luis A. Limlingan said investors are reacting to each development on a day-to-day basis.

“All sectors are vulnerable. At a situation like this, it is hard to guess where people will be allocating their resources,” he said in a mobile message over the weekend.

Amid panic selling in the stock market, Ms. Alviar said the most vulnerable are airlines — PAL Holdings, Inc. and Cebu Air, Inc.

The direct impact of cancelled flights, travel bans and lower tourist arrivals to the airlines’ earnings is unavoidable, she said.

“(What) they can only do is reduce costs by layoffs or cut pay, while the lower oil prices will also help to mitigate some losses,” Ms. Alviar added.

PAL Holdings has already announced layoffs affecting around 300 workers, while senior management officials of Cebu Pacific have decided to take a pay cut as the virus outbreak hurts operations.

PNB Securities, Inc. President Manuel Antonio G. Lisbona said oil and energy stocks may also fall amid slowing demand.

He said the month-long community quarantine in Metro Manila will hurt mall operators and restaurant chains, as people avoid going out and forced to stay at home.

Mr. Lisbona said property firms are also vulnerable due to the slowing demand from the Chinese market.

Ms. Alviar also noted companies in the tourism sector, as well as casinos and gaming, may see slower earnings, amid a drop in both domestic and foreign tourists.

Companies with export demands involving China are also seen to take a hit, Ms. Alviar said.

“Since many were likely caught unable to sell given the suddenness of the drop, I would advise to take advantage of any rallies to lighten up their portfolios and raise liquidity and buy back at some later date,” Mr. Lisbona said in a mobile message.

While the market may remain volatile, he said Philippine stocks may see a spillover from the gains in the US market last Friday. “On the whole, smaller markets will move in alignment with the major markets particularly the US,” he said.

For Philstocks’ Ms. Alviar, it is best to sell on rally and secure gains for now. “We think that (investors should) start to accumulate shares only when the virus cases subside,” she said.

She noted investors may snap up stocks of food manufacturers and grocery retailers for now as these offer essential goods and may “benefit” from the public’s panic buying.

For Diversified Securities, Inc. Equity Trader Aniceto K. Pangan, investors should also look for companies with low valuation and buy only on market weakness.

“Investors should also avoid listed companies with high debt exposure that are above industry level as this will be hit hard by this situation,” he said in a text message. — Denise A. Valdez

Policy rate expectations for March 19

THE Bangko Sentral ng Pilipinas (BSP) may cut rates anew this week following the move of global central banks to ease policy amid fears of slower economic growth and lower demand for key commodities including oil due to the coronavirus disease 2019 (COVID-19) pandemic. Read the full story.

Policy rate expectations for March 19

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