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Creeping and climbing through Vietnam in a Raptor

Text and photos by Angel Rivero

DID YOU know that Vietnam has massive sand dunes — forming some sort of mini desert in colors of red and golden-white? They’re found in a place called Mui Ne — a coastal fishing town in the south-central Binh Thuan province, only a few hours’ drive away from Ho Chi Minh (Saigon). This place was completely out of my radar, but I am so happy to have visited it, thanks to Ford who organized a regional adventure drive to showcase the powerful features of the new, 2020 Ranger Raptor.

The vehicle was first unveiled to the world in a grand launch in Thailand in early 2018, as a performance pickup truck inspired by the success of North America’s gargantuan F-150 Raptor truck. It has since earned itself a massive following and is now a hot-selling product in the Philippines and the entire ASEAN region — being Asia-Pacific’s only factory-built performance truck to date.

The Ranger Raptor is the first to use a 2.0-liter bi-turbo diesel engine that spits out 213ps of power and 500Nm of torque. It is mated with the same automatic transmission found in the F-150 — an astonishing 10-speed that is specifically powertrain-matched. This feature allowed Ford engineers to key-in wider gear ratios in very small ratio steps — thereby optimizing the gear spacing and resulting in better acceleration and responsiveness for the pickup.

The Ford Ranger Raptor is also truly one of a kind, as it is the only pickup truck with Watt’s linkage rear suspension with coilover rear springs — and these gift the vehicle with excellent lateral control. But perhaps the crown jewels of the Ranger Raptor are in its expensive, racing-spec dampers — which include standard, front and rear Fox Racing Shox shock absorbers. These enable velocity and position-sensitive damping, and ultimately allow the Ranger Raptor to comfortably travel at high speeds, even while off-road (cue in: its uber-popular, Baja drive mode).

It was thus an excellent opportunity to showcase the latest Ranger Raptor’s remarkable, technical and high-speed off-roading skills while driving up and through Vietnam’s mountain trails and the aforementioned colossal sand dunes. The personal driving experience was even a bit bizarre, having had to pilot right-hand-drive vehicles (pulled out from Thailand) through the left-hand traffic of Vietnam — a truly unique situation which I had not been able to experience before.

Our first drive course was through multiple stations within the woodlands of a mountain in Dalat — a Vietnamese hill town that is kind of their equivalent of our Baguio. Cool highland temperatures, a wealth of flowers, tiny lakes, and an abundance of strawberries and vegetables sparked a constant déjà vu as we drove across town and eventually up the hilly, pine forest where the technical team was waiting.

The first station up on that mountain was meant to showcase the Ranger Raptor’s Hill Descent Control — a useful feature that (when activated) automatically applies and continually adjusts braking pressure to smoothly guide the vehicle down steep, off-road slopes without any braking input from the driver. A constant downhill speed may be maintained based on the selected drive gear.

Other stations capitalized on the Ranger Raptor’s stock ground clearance and versatile drive modes, via abysmal ruts and complex excavations we had to make the truck climb out of. Fortunately, the pickup truck comes equipped with a terrain management system (TMS) that makes handling such obstacles a walk in the park. It offers six drive modes to choose from: Normal, Sport, Grass/Gravel/Snow, Mud/Sand, Rock, and Baja — the world’s first high-speed, off-road driving mode (named in honor of the iconic Baja Desert Trail).

The Ranger Raptor is also equipped with an electronic locking rear differential — a feature that fortifies its true, off-road capacity by delivering full engine torque to both rear wheels, even when one wheel is already off the ground (a pretty common predicament in hard, off-roading scenarios). It also has a towing capacity of up to 2,500 kilograms.

If you really think about it, the Ranger Raptor is sort of like a motocross bike, snowmobile, and ATV rolled up into a macho-sized pickup truck! Combine that with a very comfortable interior embellished with some handsome blue stitching, and you’ve got a truly enticing product that creates its own, unique market segment.

Our drive up, down, and around the loose and tricky mounds of sand in Mui Ne was likewise a breathtaking adventure — driving fast and in full throttle, while maintaining traction and control. If you think about it, every aspect of the design of the Ranger Raptor exists for a functional purpose. Say, for example, the aggressive front bumper with air curtain ducts where wind can pass through to reduce aerodynamic drag (it is not solely for aesthetic purposes). The front fenders are molded from composite materials that resist dents and dings that often come along with off-road adventures. The sidevstep boards have holes in them to allow potential sand, mud or snow to drain through. The seats are also specially engineered for off-road, high-speed performance support, and make use of technical suede for additional occupant grip.

Furthermore, the 2020 Ranger Raptor now comes equipped with camera-based, autonomous emergency braking (AEB) with pedestrian detection, a lane-keeping system, a windscreen-mount USB, and LED projector lamps with LED daytime running lights and automatic headlamps — for the same price.

Bankers go home, tellers stay: virus exposes office inequalities

JPMORGAN asked many of its roughly 37,000 employees in the New York metro area this week to work from home in staggered shifts to stem the spread of the COVID-19 virus. Bank tellers, who account for about half its New York workforce, weren’t included.

Fiat Chrysler Automobiles NV sent 14,000 mostly white-collar workers from its US headquarters to work from home Thursday. Factory workers were required to show up at their plants, including one in Kokomo, Indiana, where a worker had tested positive for the virus.

About 70% of America’s workers don’t have the luxury of working from home, including people like bank tellers, factory workers and those who labor in such industries as waste hauling, retail and health care. These 100 million people are likely to be the last ones at work even as the rest of their colleagues set up shop in home offices or at kitchen tables.

The split is raising thorny legal and fairness issues for corporations, from Amazon.com, Inc. to Procter & Gamble Co., that understandably want to isolate workers while the highly communicable disease continues to spread. It’s “making very, very visible a lot of the kinds of inequalities that have long been in place,” said Erin Hatton, an associate professor of sociology at the University of Buffalo who studies race, gender, class and inequality.

“What this public-health crisis is doing is making those dynamics and those inequalities kind of part of the problem of this public health crisis,” Ms. Hatton said.

AMAZON PLANS
The issue is playing out across corporate suites, in many permutations. Companies are being forced to make hard choices about how quickly they should implement continuity plans, how to communicate them without causing panic and how to keep morale up for workers who can’t telecommute.

Amazon sent much of its office staff home, but left in place workers who operate warehouses, and the contractors who deliver packages vital to people stuck at home.

Procter & Gamble sent office staff home Thursday but also operates more than two dozen factories making vital products such as toilet paper and disinfectants. The Gap sent white-collar workers home in New York and San Francisco as thousands of retail locations remain open.

Even in Italy, where cases have surged, grocery stores, pharmacies and some banks are still open, meaning people have to come to work even as the global death toll tops 5,000, including 1,000 in Italy. The US toll stands at 36.

Companies face a risk of claims from employees getting different treatment, but generally the law allows such disparities, said Derek Barella, a labor and employment lawyer at the Schiff Hardin LLP law firm in Chicago.

‘LEGITIMATE REASON’
“You need to make sure that we have a legitimate reason for why we’re treating some people differently than others, and it has to be based on the job,” Mr. Barella said. “It is true, and it will be true, that a lot of jobs are capable of being performed remotely, whereas others are not.”

The United Auto Workers has raised the issue with Fiat Chrysler and other companies, seeking paid leave for workers who self-quarantine. While union contracts cover sick leave, there’s uncertainty regarding workers who have to isolate themselves to prevent the spread of the virus. General Motors Co. and Ford Motor Co. have also asked white-collar employees to work from home.

“The UAW feels strongly that no member should be disadvantaged in response to the COVID-19 process,” Cindy Estrada, a union vice-president, wrote in an e-mail to members.

The issue came to a head at Fiat Chrysler’s Windsor, Canada, minivan plant, where employees have refused to go to work since Thursday after a factory worker self-quarantined, a company spokeswoman said. The Canadian Ministry of Health has determined the plant is safe and the automaker is meeting with the union to try to get workers to return, the spokeswoman said.

GO AWRY
Even with a clear concept and good intentions, plans can go awry in the rapidly changing environment, as JPMorgan discovered.

JPMorgan had moved faster than most other US banks in implementing measures, such as restricting non-essential travel for its entire work force and asking staff to test remote access capability.

On Monday, it was prepared to go further by implementing a staggered work-from-home policy for roughly a third of its 127,137 consumer-unit employees who work from corporate offices across the country. But it put the plan on pause while leaders debated what would happen if implemented company-wide and how to communicate what could be a touchy issue given the branch employees and call-center operators, people familiar with the talks said earlier this week.

It wasn’t until New York state sought business help that the bank implemented on Thursday a staggered work-from-home plan for its New York-area employees.

Wells Fargo & Co., which also has thousands of branches, has been testing limited work-from-home capabilities this week. Morgan Stanley, Goldman Sachs Group, Inc., BlackRock, Inc. and Citigroup, Inc. asked portions of their staff to work from home in rotating shifts.

Retail giant Costco Wholesale Corp., which is based in Issaquah, Washington, bucked the trend altogether, so far, telling headquarters workers to stay at their desks unless ill.

“We know some home office employees would like to work remotely, but our jobs here are to support our retail business, and we’re not prepared at this point to have corporate employees work from home,” the company told employees. “This decision may be unpopular with some, but we consider it a matter of equity and fairness.”

LEAVE POLICY
The growing awareness of the gap between workers has prompted some corporate adjustments for employees who can only work at work.

Walmart, Inc. announced a new emergency-leave policy for its hourly workers after a store employee tested positive for the coronavirus. The retailer will allow employees to stay home if they are unable to work or feel “uncomfortable” at work, according to a memo seen by Bloomberg. To be paid for the time, employees will still need to use regular paid time-off options, it said.

“What this is bringing to the fore is just how important these front-line service workers are to our service economy,” said Erin Hatton, the University of Buffalo professor. “And in my ideal vision, businesses would come out of this, as well as the government, with a better sense of ‘Wait, we need to take care of these workers because our economy is only as robust as these workers are protected.’” — Bloomberg

China proposes standards on hormone residues in beef after US trade deal

BEIJING — China has drawn up food safety standards on residue limits of growth hormones in beef, a move seen as a further step towards opening up its market to American imports of the meat.

China has previously had zero tolerance for any residues of growth hormones, which has restricted the amount of beef it can import from the United States where the drugs are widely used.

However, Beijing agreed in its Phase 1 trade deal with the United States signed in January to adopt residue limits for three hormones used in beef, in addition to other changes to make more US beef eligible for export to China, the world’s top importer of the meat.

The proposed standards were published last week on the website of the Ministry of Agriculture and Rural Affairs’ department of agricultural products quality and safety supervision, with a public comment period that closed on March 6.

Proposed maximum residue limits (MRLs) for Zearanol and Trenbolone Acetate in beef muscle were 2 micrograms per kilogram while for Melengestrol Acetate it was 1 microgram. The standards did not cover beef offal.

The residue limits are in line with those used by Codex Alimentarius, a collection of internationally recognized food safety standards.

While it is not clear when they would come into effect, China had agreed to adopt MRLs for the hormones within one month of the trade deal coming into effect on Feb. 14.

Any new standards would also apply to other beef exporters.

China’s beef imports have seen strong growth for years, and last year jumped 59.7% year-on-year to 1.66 million tonnes. But US beef, which only regained access to the Chinese market in 2017 after a 14-year hiatus, accounted for less than 1% of China’s imports in the first nine months of 2019.

Though acceptance of hormone residues will help to boost those numbers, analysts said it will still take time to grow US sales to China.

“They still need to find the distribution model and the consumers willing to pay for a high quality beef with high prices,” said Justin Sherrard, global strategist of animal protein at Dutch bank Rabobank.

Demand for imported beef in China this year is expected to take a significant hit from measures implemented to curb the coronavirus epidemic, Mr. Sherrard said.

Most of the country’s catering and food service sector where imported beef is predominantly consumed has been shut for weeks.

“We don’t anticipate China’s imports to grow this year, and they may even come down,” he said. — Reuters

Volatility seen amid uncertainties due to virus

By Denise A. Valdez
Reporter

LOCAL SHARES are seen to remain volatile this week as investors grapple with uncertainties brought by the coronavirus disease 2019 (COVID-19) pandemic.

The benchmark Philippine Stock Exchange index (PSEi) gained 57.67 points or 1% to close at 5,793.94 on Friday. But on a weekly basis, it dropped 14.42% to mark the main index’s third straight week of decline.

Value turnover averaged P7.79 billion, up 28% from P6.07 billion in the week prior. Net foreign selling last week increased to an average of P748.05 million from P449.93 million.

Last week marked the market’s entry into bear territory after losing 6.76% to 6,312.61 on Monday. It also saw two instances of the PSE triggering a 15-minute trading halt — called a circuit breaker — after falling at least 10% intraday.

The selloff in the market was primarily due to investor concerns over the worsening COVID-19 spread in the Philippines. After the World Health Organization officially declared the virus a pandemic last week, the Health department announced daily increases in confirmed cases in the country. As of Sunday afternoon, the Philippines had 111 confirmed cases and eight deaths due to the virus.

“[This] week, the market will continue to be volatile ranging from a support of around 5,000 to a resistance of 6,000. Definitely, this would be broad based on its negative effects especially on how the containment has effectively resulted,” Diversified Securities, Inc. Equity Trader Aniceto K. Pangan said in a text message yesterday.

“We see the stock market to under-perform [this] week as investors and fund managers digest the full impact of the disruption caused by the community quarantine and the rising number of COVID-19 cases,” trader Gab L. Magsino said in a text message Saturday.

He noted while the assistance from state pension funds may have lifted the market last Friday, “stocks could still suffer a decline should the number of infected locally increase at the rates similar to what we have seen in Europe and Middle East.”

For Philstocks Financial, Inc. Research Associate Claire T. Alviar, while the market may retain its volatility, a catalyst for the week is the expected announcement of a rate reduction from the central bank.

“The government’s instruction to the (state pension funds) to support the stock market by at least doubling daily average purchase volumes would give boost to the investors’ sentiment. This is in addition to the anticipated rate cut from the (Bangko Sentral ng Pilipinas) to somehow cushion the COVID-19 impact,” she said in a text message.

For PNB Securities, Inc. President Manuel Antonio G. Lisbona, another source of encouragement for investors is the improved performance of US markets last week. “This will likely have a spillover effect on our market,” he said.

Mr. Lisbona is putting initial support for the week between 4,800 and 4,900 and resistance at 6,700.

Dashboard (03/16/20)

MG is official car of Miss Universe Philippines 2020

MG Philippines has inked a pact with Miss Universe Philippines (MUP) to be its official car. This year is an especially significant year for MUP since, for the first time in Filipino pageant history, a locally produced Miss Universe competition will entertain the bids of all aspiring Filipina aspirants to the crown. The MUP competition will be recognized as the venue that will identify which Filipinas will represent the country in international competition. MG Philippines expressed its honor to be able to partner with the Filipino-led organization that celebrates the modern Filipina. It will provide the organization with its British heritage cars for use by the MUP organization as they travel for various pageant requirements. Furthermore, the very first Miss Universe Philippines will drive home a brand-new MG ZS Alpha Crossover SUV. In photo are executives of MG Philippines led by President and CEO Atty. Alberto Arcilla (fifth from right) with MUP National Director Shamcey Supsup-Lee (fourth from right) and MUP Creative Director Jonas Gaffud.

Suzuki drives with Doraemon

SUZUKI PHILIPPINES teams up with the popular Doraemon, the robotic cartoon cat character loved by many generations — particularly in the Philippines. The fun, carefree, and inspirational character who promises to make everyone’s dream come true has proven to be an influential brand to this day — evidenced in Doraemon-themed merchandise and events.

Meanwhile, Suzuki Philippines knows that purchasing a vehicle is one of the most memorable moments in a family’s journey. Customers visiting any Suzuki showroom nationwide will see the “Shall We Drive” campaign evident, with loveable Doraemon memorabilia. The campaign ensues until February next year.

BDO Unibank not spared by last week’s massive sell-off as investor fears prevail

By Mark T. Amoguis
Assistant Research Head

INVESTORS, spooked by the coronavirus disease 2019 (COVID-19) pandemic, prompted massive sell-offs, making BDO Unibank, Inc. one of the most actively traded issues last week.

A total of 19.81-million BDO shares worth P2.57 billion exchanged hands on the trading floor from March 9 to 13, data from the Philippine Stock Exchange (PSE) showed.

Shares in BDO declined by 10.2% on a week-on-week basis to P127 per share last Friday from P141.50 apiece last March 6. The stock has fallen by 17.5% since the start of the year.

The largest lender in terms of assets was “just swept off” by the overall market sentiment to sell, according to Rachelle C. Cruz, senior equity analyst at AP Securities, Inc.

“It’s the fact that [BDO] belongs to the top five largest companies in the PSEi (PSE index) and given what was happening worldwide… Whenever there’s a worldwide sell-off, expect the ‘glamor index stocks’ will be the first ones to be sold down…,” Ms. Cruz said in a phone interview.

Wendy B. Estacio, senior equity research analyst at Philippine National Bank’s Research Division, shared a similar assessment, adding it was cushioned somewhat by BDO’s earnings performance in 2019.

“[T]he stock slightly outperformed the PSEi’s and financials index’s (week-on-week) decline of 14.4% and 11.3%, respectively. In our view, this was due to the bank’s strong full-year 2019 performance, which exceeded its net income guidance,” Ms. Estacio said in an e-mail interview.

Last Wednesday, the World Health Organization (WHO) declared COVID-19 a pandemic. It was first reported in late December in the city of Wuhan in China’s Hubei Province and has since spread to 123 countries and territories, killing more than 4,000 people and affecting nearly 133,000 more.

In the Philippines, there are 111 detected cases as of March 14, with eight fatalities due to the disease.

WHO’s announcement sent the local bourse on Thursday to a nearly eight-year low finish of 5,736.27 — a level never before reached since Dec. 18, 2012’s 5,636.59 close.

PSEi likewise recorded its biggest single-day decline that day at 9.71%, the lowest in at least 12 years or since the 12.27% drop on Oct. 27, 2008 at the height of the global financial crisis.

That day also triggered the circuit breaker — the second time it was activated since the global financial crisis — which is activated when the PSEi slumps by at least 10%, after the main index declined by 10.33%. This prompted a 15-minute trading halt.

This circuit breaker was triggered again last Friday after the PSEi dropped 10.43% during the morning trading session.

Meanwhile, BDO’s net income jumped by more than a third to P44.17 billion last year, exceeding its P38.5-billion profit forecast amid “strong performance of its core recurring income sources.”

The lender’s total assets went up by five percent to P3.19 trillion last year as loans and receivables increased by 7.4% to P2.23 trillion.

“Despite strong 2019 results, we think that the investors’ fear may prevail while waiting for the full impact of COVID-19 to its operations in [the first quarter of 2020],” PNB’s Ms. Estacio said.

“For the banking sector, focus risk areas are borrowers with the following linkages: tourism, shipping, travel, OFWs (overseas Filipino workers), and SMEs (small and medium enterprises). Banks are currently conducting rapid portfolio review and are preparing for the likelihood of slower loan growth and possibly higher NPLs (nonperforming loans),” she added.

Ms. Estacio expects BDO to book a P43.9-billion net income this year, “driven by slight improvement in net interest margin due to lower cost of funds.”

She clarified, however, that this projection has not yet accounted for the COVID-19 impact.

AP Securities’ Ms. Cruz said that the impact of the COVID-19 to BDO’s loan portfolio this year is not that big.

“The banking sector might see higher bad loans if the virus spread persists. But we don’t see it severely affecting the balance sheet of the banking sector as a whole, especially in terms of capitalization. They’re very much resilient compared to the 2008 global final crisis,” she said.

“The banking sector itself, especially BDO, is very well prepared for this kind of scenario,” she added.

Ms. Cruz pegs BDO’s support and resistance levels at P99 and P130 this week.

“[W]e expect the higher than normal share price volatility to continue because of the overall panic in the market,” Ms. Estacio said.

For Tag Heuer, smartwatch is ‘additional business’ beyond core

AS MAJOR events were getting canceled across the US, and New York was banning gatherings of 500 or more on March 12, the Swiss luxury watchmaker Tag Heuer hosted a final shindig in honor of its new Connected Watch.

At the Caldwell Factory in New York’s trendy West Chelsea district, guests played with the new smart timepiece, which comes in four variations to retail from $1,800 to a steep $2,350 — making it one of the most expensive, serially produced, connected watches on the market.

“The new Connected Watch combines high-performance digital experiences with our new TAG Heuer Sports App and fine watchmaking,” says Frédéric Arnault, the company’s chief strategy officer and digital officer. “With the steel bracelet and interchangeable straps, the dynamic dial designs that are inspired by our mechanical watches, and the case design, especially with the ceramic bezel, it looks like you are wearing a mechanical watch.”

The Connected Watch — crafted in stainless steel or titanium — features a ceramic bezel that improves the communication for the sensors underneath to align with the app. In previous generations, a steel bezel interfered with the sensors, so the watch construction was a bit bulkier. (The molecules of the ceramic allow for better transmission.) The new watches are thinner and lighter in weight, as well as more ergonomically designed to fit the wrist. They are also highly intuitive for the user because instead of being a total touch-screen device, functional crown and chronograph pushers are installed on the case side. They can be used to start and stop programs, return to original menu screens, and more.

Tag Heuer, still a traditional watchmaking company focused on mechanical watches, views the connected business as a new revenue stream, not a replacement for existing categories. “We continue to invest heavily in the mechanical watch space; it is what we stand for, and our core values are in the mechanical watch world,” says the Mr. Arnault, 24, whose father Bernard is chairman of Tag’s parent company, LVMH. “The smart watch is additional business, and it increases our consumer base.” In fact, the connected watch business nourishes the mechanical business, according to Mr. Arnault: Some people who start with a smart watch go on to buy mechanical TAG Heuer watches.

How much additional business can the brand expect from the new Connected Watch? The smartwatch market “is really booming, with very high double-digit growth year over year, and it’s just the beginning. It is only four or five years old, and there is more coming, especially since the true use is health and fitness, where we have positioned ourselves,” says Mr. Arnault. “So we have strong ambitions and believe the volume can reach several hundreds of thousands of watches. We think this could reach 20 to 30%of the business in the years to come.”

While the Covid-19 coronavirus pandemic could slow initial sales as people delay big-ticket purchases, the Tag Heuer Connected Watch is a multipurpose purchase, especially with the Sports App that tracks not just walking, but jogging, running, and even golf. (A separate digital team was created in Paris to work on this app, created over the course of 18 months.)

According to Mr. Arnault, the next sport to be tracked, with updates coming in the next few months, will most likely be swimming. Currently, the watch has interchangeable rubber straps and metal bracelets and is water resistant to 5 ATM, which means it’s ready for the pool.

“The tactile sense of the watch, the functional pushers, and crowns make it very easy to use,” says Mr. Arnault. “We wanted the user interface to be intuitive and fluid; that was a high priority. The [previous model’s] heavy reliance on touchscreens bothered us. If you have wet fingers and can’t move the screen, for instance, it is a problem. With this watch, even a mechanical watch user feels very comfortable.” — Bloomberg

Tea and cocoa-loving Nigerians finding new thirst for coffee

LAGOS — Businessmen in the Nigerian city of Lagos typically broker deals over cognac or champagne. But, on a sunny afternoon in the city’s upmarket Victoria Island business district, a clutch of men celebrated with steaming coffee that cost 35,000 naira ($114) for a three-cup brew.

Jamaica Blue Mountain, the gourmet variety they imbibed, is coveted around the world for its superior quality.

Ibrahim Samande, owner of the Mai Shayi Coffee cafe that sold the drink, knows not everyone can afford the splurge. But he believes cachet and ceremony, and attractive spaces to enjoy a cup, will lure more of Nigeria’s 200 million people to drink coffee.

At present, Nigerians drink only a tiny amount of coffee. Tea or cocoa are the hot drinks of choice, and are forecast to account for close to 40% of Nigeria’s non-alcoholic drink spending by 2023, according to research body Fitch Solutions. By contrast, spending on coffee is seen only at 2.5 percent.

Samande is among a new breed of entrepreneurs hoping to cash in on coffee. They are betting that wealthy Nigerians will cultivate a cafe culture that can also spur consumption of locally grown crops.

“Nigeria is a very aspirational society,” Mr. Samande said. “And it’s very easy for things to catch on.”

Consumption is rising; the retail value of coffee sold has nearly tripled since 2010 to $29 million last year, according to Euromonitor.

But it is still a market in its infancy. Kenya, with a quarter the number of people as Nigeria, consumes close to the same amount of coffee, and spent $11 million more on the drink last year. Meanwhile South Africa consumed more than six times as much coffee as Nigeria and spent 9 times as much.

In a country where the majority live on less than $2 a day, most Nigerian coffee-drinkers opt for bitter cups of instant coffee that street vendors hawk for 100 naira, just a few cents.

International coffee shop chains have yet to enter the country significantly, although there are a few domestic chains. Nigeria’s Café Neo has several locations in Lagos, and Happy Coffee also aims to bring coffee to the masses.

Mr. Samande, whose grandmother roasted her own beans with cardamom and ginger, believes that brewing with imported Italian Moka pots, Japanese siphons and American Chemex coffeemakers can convince Nigerians to drink higher-quality coffee.

Coffee is one of the world’s most-traded commodities, he said. “I think there’s room for us to plug into that sort of supply chain.”

He buys Nigerian beans from Kim’s Coffee, a roaster around 1,000 kilometers (621.37 miles) to the north of Lagos. Kim’s founder David Dayi said strong demand saw them roast 3 tonnes of locally grown coffee last year — triple the 2017 level.

Dayi said Nigeria could easily grow more coffee — and that local consumption could help spur this. — Reuters

Coronavirus fears push gov’t debt yields up as bondholders prefer cash

By Carmina Angelica V. Olano
Researcher

YIELDS ON government securities (GS) rose almost across-the-board last week as market players sold off their bonds due to the spread of the coronavirus disease 2019 (COVID-19) in the country.

On average, GS yields went up by 28.8 basis points (bps) week on week, according to the PHP Bloomberg Valuation Service (BVAL) Reference Rates as of March 13 published on the Philippine Dealing System’s website.

“Bondholders reduced risk and chose to hold on to cash given the uncertainties surrounding the COVID-19 pandemic,” Kevin S. Palma, peso sovereign debt trader at Robinsons Bank Corp., said in a mobile phone message.

“It has been an extreme roller coaster ride for the financial markets and the rest of the world [last] week. As the local stock market entered the bear market, government bonds followed suit and experienced a sell-off of its own,” he added.

Security Bank Corp. Chief Investment Officer for Trust and Asset Management Group Noel S. Reyes shared the same view. “Because of the community quarantine, [people] prefer to hold cash. The growth of spread in terms of COVID-19 patients in the Philippines escalated fast. The overall market sentiment was de-risking,” he said in a phone call.

Amid the increasing number of COVID-19 cases in the country, President Rodrigo R. Duterte announced on Thursday that the National Capital Region will be placed under a 30-day “community quarantine” wherein travel by land, domestic air and sea to and from Metro Manila will be banned from March 15 until April 14.

There were 111 confirmed COVID-19 cases in the Philippines as of March 14, with eight fatalities recorded.

Meanwhile, last week also saw sell-offs in the equity market, with the Philippine Stock Exchange index’s nearly 10% plunge last Thursday to its lowest since 2012 amid deepening fears over COVID-19.

At the secondary market on Friday, yields on Treasury bills (T-bills) rose from week-ago levels, except for the 364-day T-bill which saw a 6.5-bp decline to 3.654%.

The 91- and 182-day T-bills went up 6.6 bps and 2.4 bps to fetch 3.124% and 3.391%, respectively.

At the belly, yields on the two-, three-, four-, five-, and seven-year Treasury bonds (T-bonds) went up by 39.1 bps (4.122%), 44 bps (4.264%), 45.6 bps (4.351%), 45.2 bps (4.410%), and 42.8 bps (4.512%).

Yields on longer-term debt papers likewise climbed, with the 10-, 20- and 25-year T-bonds fetching 4.673%, 4.906%, and 4.896%, up by 45.2 bps, 27.5 bps, and 24.6 bps.

“[For this week,] yields might fluctuate as investors rush to raise cash due to risks to growth and weakening sentiment. Doubts on the efficacy of policy responses amid escalating coronavirus cases drove the sell-off for the past few days and is expected to put market on a defensive stance,” the First Metro Asset Management, Inc. said in an e-mail.

“Despite the recent pullback, we think that the BSP will take a proactive measure and further cut rates by another 25 bps in its upcoming meeting which should support renewed fall in yields from current levels,” it added.

Security Bank’s Mr. Reyes said to expect more market sell-off and volatility if the growth of infected cases continues to rise.

“On a positive note the BSP will continue to apply cushion to help stimulate the economy,” he added.

For Robinsons Bank’s Mr. Palma said, “Local yields may inch higher as selling pressure for local bonds may prevail…, but we may already see some bargain hunters cautiously come in once any developments come to light.”

As monetary authorities continue to assess the impact of the outbreak, Bangko Sentral ng Pilipinas (BSP) Governor Benjamin E. Diokno has said he “is not totally ruling out” cuts worth 50-75 bps this year, with a 25-bp cut on the table this week. The BSP’s Monetary Board is set to meet virtually on Thursday to discuss policy.

How PSEi member stocks performed — March 13, 2020

Here’s a quick glance at how PSEi stocks fared on Friday, March 13, 2020.

 

Fear and Trembling

I anguished over the creeping amnesia when it comes to our wrenching from the dictatorship 34 years ago. But Filipinos have no sense of history, my dear confidant and most patient mentor said. And Manong sent me a copy of Søren Kierkegaard’s Fear and Trembling, to re-read and ponder in my mature years what had perhaps gone over my head in my college Literature classes.

“Anguish is a dangerous affair for the squeamish, so people forget it,” Johannes de Silentio, Kierkegaard’s pseudonym in Fear and Trembling says to the reader. “Silentio,” meaning “quiet.” To remain quiet would be the easier alternative than the painful existential self-examination of anguish and doubt, and the conflict of intuitive responsibility versus selfish detachment. “Silence is the snare of the demon, and the more one keeps silent, the more terrifying the demon becomes.

“(But) people do not know what they ought to say but only that they must say something.” Yet notwithstanding the philosopher Descartes’ conviction that “I think, therefore I am,” the quality of thought declines with age because of the alterations and compromises suggested by experience, the author says. “For life has divided what has been united in the child’s pious simplicity… Is (your) heart still young enough not to have forgotten the fear and trembling that disciplined (your) youth, and which, although the grown man mastered it, no man altogether outgrows?”

If you have been tested like Abraham in the Bible, you will never forget how you feared for yourself and for your loved one, but more than fear, how faith in your God and in yourself should not have made you fear at all. In a four-scenario exegesis of Genesis 22:1-18, Johannes as Conscience monologues on the anguish of the patriarch Abraham, who was asked by God to kill his beloved son Isaac at the altar of sacrifice. Abraham stoically proceeds to obey God’s orders until God stops him in time and rewards his devotion.

Kierkegaard says, “Infinite resignation is the last stage before faith, so anyone who has not made this movement does not have faith, for only in infinite resignation does an individual become conscious of his eternal validity, and only then can one speak of grasping existence by virtue of faith.”

I have not forgotten the fear and trembling of my youth, Manong. What Kierkegaard calls “the shudder of thought” shakes us all still — history has been battered with conflicts of universal principles, with global wars and horrible terrorism. Thoughts and emotions are more complex than can ever be conjured by the allegorical scenarios of Johannes Silentio of the sacrifice of Isaac by his own father. Is it time for the sublimated resignation to Fate, while hoping, in the realm of the existentialist Absurd, that it will not be Humankind who will be the final victim of sacrifice in all these? To be truly absurd, who else can it be?

In our country, a peaceful revolution that restored democracy is being denigrated as an event that lacked follow-through. Six presidents after ousting the dictator Ferdinand Marcos — are we back to where we were before 1986?

Gross Domestic Product (GDP) rose like a phoenix from the ashes of a -7.31% GNP growth in Marcos’ last year to 3.42% in 1986, the first year of Corazon Aquino, by default the icon for democracy, by being the widow of the slain Senator Benigno Aquino, Jr., whose murder in 1983 triggered the public protests against the dictatorship. From 1986, GDP rose and fell parallel to world measure according to fluctuations in the global economy, growing with the ASEAN region to levels of 6-7% ,and averaging about 5% in the last 20 years. Not a bad recovery for a country plundered by an autocracy.

But for the yet unrecovered and now seemingly unrecoverable plundered wealth of the country, the people must be most jealously zealously for honesty and integrity in government and in private life, and most consciously fighting for human rights in the fear and trembling memory of the atrocities in martial law. “Life can only be understood backwards; but it must be lived forwards,” Kierkegaard exhorts.

Transparency International’s 2019 Corruption Perceptions Index has ranked the Philippines 113th of 180 countries least corrupt (meaning 67th most corrupt), a 14-notch fall from its standing of 99th place in 2018 and a 28-notch plummet from the much-better 85th rank in President Benigno Simeon Aquino III’s term. Shall we dubiously console ourselves that anyway, the Philippines “improved” from its lowest rank of 141 in 2008, at the height of the Gloria Arroyo corruption scandals? We ranked 36th in 1995, when Fidel V. Ramos was president.

The Human Rights Watch (HRW) 2019 World Report cites the Philippine Drug Enforcement Agency’s (PDEA) own report of 4,948 suspected drug users and dealers killed in police operations from July 1, 2016 to Sept. 30, 2018 in President Rodrigo Duterte’s War on Drugs. But this does not include the thousands of others killed by unidentified gunmen, the HRW says. According to the Philippine National Police (PNP), 22,983 such deaths since the “war on drugs” began are classified as “homicides under investigation.”

The HRW website lists prominent human rights defenders, oppositors to Duterte’s Drug War, red-labelled activists, some vocal journalists and critics against the administration who have been arrested and detained, ousted and/or had cases filed against them. Rappler’s Maria Ressa with other journalists under siege in their respective countries has been recognized as Person of the Year for 2018 for “for taking great risks in pursuit of greater truths, for the imperfect but essential quest for facts, for speaking up and for speaking out,” Time Magazine declared. Perhaps the most chilling attack on press freedom has been the surprise quo warranto case filed by the Solicitor General Jose Calida on the ABS-CBN network, which has raised dust in the circus of investigations-in-aid-of-legislation for the tight-rope renewal of its franchise to operate.

The sovereign rights of the Filipino people have been gravely compromised in the blatant disregard of a UN Arbitral ruling that had already and finally decided that the West Philippine Sea belongs to the Filipinos and that China’s “nine-dash line” is invalid, according to the Permanent Court of Arbitration. Yes, China is very much in the picture, as the 1998 US Visiting Forces Agreement was terminated by Duterte last month. With fear and trembling we realize the country is now very much dependent on China who, ironically, will be the most immediate and proximate protector of our boundaries in case of attack. And the Chinese illegal entrants or specially admitted “tourists” (generally believed to be about 300,000) who operate and use the online gaming operations (POGOs) seem here to stay, with Duterte’s blessing, because POGOs “help the economy,” suspectedly inclusive of money-laundering activities.

“At last, Senate asks Supreme Court to define limits of Duterte’s power,” Rappler gasps in an article on March 9. This is the first time since July 2016 that the Senate as a body is challenging a Duterte policy before the High Tribunal, clearly asserting the almost-doubted separation of the executive, legislative, and judiciary powers in the Constitution. Duterte cannot unilaterally decide to terminate the VFA agreement, and not to renew the ABS-CBN franchise.

But just as soon as the fear and trembling of the nation relaxed in anticipation of the resolution of tensions and anxieties, Duterte faced the people on March 12 to announce the “lockdown” (his words) of Metro Manila amidst the COVID-19 pandemic. Metro Manila’s mayors will impose a curfew from 8 p.m. to 5 a.m. for social distancing under the “community quarantine” status.

“I do not have the time to think of whether the lockdown can be a prelude to the declaration of martial law; right now I can only think of the virus,” a writer-friend says. Kierkegaard writes the existentialist conclusion: “for one who does not understand that the whole power of the spirit is required for dying, and that the hero always dies before he dies, that man will not get so very far with his conception of life.”

Faith saved Abraham and Isaac from hurting each other. God will save us too.

 

Amelia H. C. Ylagan is a Doctor of Business Administration from the University of the Philippines.

ahcylagan@yahoo.com

COVID-19 and collective action

The Lancet, the most accessible peer-reviewed medical journal, discusses the COVID-19 crisis in stark terms. Read Roy Anderson et al., “How will country-based mitigation measures influence the course of the COVID-19 epidemic?” (March 9, 2020). The authors state that “we calculate that approximately 60% of the population would become infected.”

It comes nevertheless with a qualification that this is a “very worst-case scenario.” There are uncertain factors like the transmission in children and remote areas. Mitigating measures like forced and voluntary quarantine will significantly reduce transmission.

The COVID-19 crisis has been likened to a world war, and rightly so. But this is not a war between nations, not an ideological war, not a political war, not a class war, not an imperialist war. It is a war pitting humanity against the pandemic. In this war, we will be learning warfare through warfare.

Precisely because the world is suddenly confronted with a novel coronavirus, the response, too, has to be novel. The world has to act despite being severely constrained by unknowns and uncertainties. It is thus understandable that countries and policy-makers are groping their way to resolve the crisis.

Even the most advanced economies like Europe, Japan, and South Korea were caught unawares. Norway — the utopia for many, an example of the much-envied Scandinavian model of development, featuring a strong public health system — has recently imposed a country lockdown.

Without a vaccine, and it will take more than a year to develop one even as the transmission grows exponentially, the best that societies can do is to slow down the spread through draconian measures. The jargon is “flatten the epidemic curve.”

Perhaps, we can learn from China, which has taken extreme, aggressive measures to flatten the curve. But then, many countries, even those with current authoritarian leaders like the Philippines, do not have the system that China has.

Take note of the commentary of an analyst Adam Wren in his article “China stopped the coronavirus. Your country won’t” (medium.com, March 9, 2020):

“In the early days of the outbreak there were videos of people being seemingly kidnapped from the streets or marched out of apartment buildings and into vans by Chinese government officials.

“These were people being taken away for mandatory testing because they had been in contact with somebody that had been confirmed infected.

“How many governments have police or military forces capable of collecting hundreds of thousands of people for mandatory testing?”

PHILSTAR/MICHAEL VARCAS

This is tokhang! But Philippine-style tokhang won’t work.

China, notwithstanding its becoming a market economy, still maintains the structure of a command economy that can produce 1.6 million test kits per week. The Philippines relies on the market, which has panicked, and the essential medical supplies have vanished.

China has an effective tracking and tracing system because it controls the information and the apps. The Philippines still has to put in place a national ID system and the registries of the basic sectors are outdated and spoiled.

The citizens of China are trained to follow rules; the principle of “democratic centralism” applies not only to the Communist Party but also to the whole of society. The organized citizens of the Philippines associate united action with civil disobedience.

Worse, Philippine-style tokhang will only result in more deaths — including extra-judicial killings.

But what is undeniable is that collective action is essential and urgent. It is surely difficult to undertake collective action when society itself is fractious and its institutions are weak. But the existential threat of COVID-19 will compel us to do collective action.

The Lancet article says: “Individual behavior will be crucial to control the spread of COVID-19.” But the individual behavior we desire will run afoul without collective action. Amid the crisis, stories abound regarding panic buying, hoarding, non-compliance with rules, and selfishness all around. This is human impulse that nevertheless leads to a herd behavior that creates systemic risks.

We need a positive kind of collective action. This will however involve extraordinary and even draconian measures. It will necessarily involve the whole society.

Government must provide all the relevant information and communicate it well. It must be transparent and encourage discussion and debate.

Society, the private sector in particular, should allow government to intervene in solving market failures. And civil society should step in not only to help provide the essential services but also to address governance failures.

Remember, this is humanity against COVID-19. COVID-19 threatens everyone. COVID-19 does not choose its victim whether one is a capitalist or a worker, a Dutertard or a Yellowtard, a communist or a liberal, a Democrat or a Republican, a Christian or a Moro, a Tagalog or a Bisaya. We all have to act as one.

 

Filomeno S. Sta. Ana III coordinates the Action for Economic Reforms.

www.aer.ph

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