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The dawning potential of digital banking

Owing to the significant role of digital platforms especially during the pandemic, the Bangko Sentral ng Pilipinas (BSP) recently recognized “digital banks” as a separate and distinct bank category with the issuance by the Monetary Board of the Digital Banking Framework on Nov. 26, followed by the issuance of the Guidelines on establishment of digital banks (BSP Circular 1105) on Dec. 2. BSP Governor Benjamin E. Diokno has also acknowledged the role of these banks “as additional partners in further promoting market efficiencies and expanding access of Filipinos to a broad range of financial services” consistent with the BSP’s financial inclusiveness agenda.

WHAT IS A DIGITAL BANK?
Does merely having an online banking platform, app or website (which most banks currently have) make a bank a digital bank? Not necessarily.

An online banking facility merely supplements the operations of traditional banks by allowing alternative ways to transfer money, check account balances or pay bills. A digital bank, on the other hand, is essentially an online-only bank.

Under the amended Manual of Regulations for Banks (MORB), a “digital bank” refers to an entity that offers financial products and services that are processed end-to-end through a digital platform and/or electronic channels with no physical branch, sub-branch or branch-lite unit offering financial products and services. This essentially requires the entire banking and service delivery process to be digitized — not just parts of it.

While a physical branch is not required, regulations still mandate that digital banks maintain a principal or head office in the Philippines. This houses the offices of management and serves as the main point of contact for stakeholders that include the BSP, other regulators and customers.

HOW DOES A DIGITAL BANK OPERATE?
Under the BSP Circular 1105, digital banks essentially operate and are regulated the same way as bricks and mortar banks. It has a similar license to grant loans, accept savings, time deposits, and foreign currency deposits, as well as invest in readily marketable bonds and other debt securities, commercial paper and accounts receivable, drafts, and bills of exchange. It can also act as a correspondent for other financial institutions, issue money products and credit cards, buy and sell foreign exchange, and present, market, sell and service microinsurance products.

However, digital banks are quite different in many ways from their traditional counterparts and in many cases, offer more convenient banking solutions.

A MORE CONVENIENT BANKING EXPERIENCE
Without the requirement of going to a physical branch, digital banks will allow clients to save time and effort in all transactions such as account opening, Know Your Customer (KYC) procedures and depositing cash or checks. Digital banks invest significantly in technology to allow facial recognition in conducting KYC and Anti-Money Laundering (AML) procedures or the use of fingerprint or digital signatures (instead of the traditional wet signatures) to transact — all by simply using a mobile phone or laptop. This is especially useful during the pandemic as it practically eliminates the need to physically go to a bank branch for face-to-face contact with bank personnel.

This platform also benefits the banks as they are able to save time and resources due, in large part, to the reduction in manpower costs, supplies (no need for deposit slips and other forms) and rent among others. Theoretically, the savings from these expenses would allow them to invest and constantly upgrade their IT infrastructure to ensure a safe and secure banking experience for its clients. Moreover, these savings on overhead costs may allow them to offer higher interest rates and possibly remove minimum maintaining balance requirements or service fees.

Digital banks may also offer true 24-hour/7 days a week accessibility on all banking transactions. While the online banking services of current bricks and mortar banks allow round-the-clock access to bank accounts for money transfers and billing payments, access to loan applications or certain financial products will still require clients to visit the bank.

WHO MAY APPLY FOR A DIGITAL BANKING LICENSE?
Because of the obvious advantage digital banks can offer, numerous banks have been showing interest in applying for a digital license. But what does it take to secure a digital bank license?

According to the BSP Circular 1105, the qualifications in terms of stockholdings cite that (1) foreign individuals or foreign non-bank corporations may own or control up to a combined 40% of the voting stock of the digital bank; and (2) Filipino individuals or domestic non-bank corporations may each own up to 40% of the voting stock of a digital bank. Qualified foreign banks may also own or control up to 100% of voting stock.

An applicant must submit a detailed review and assessment of the supporting IT systems and infrastructure vis-à-vis the digital banking model, and the applicable requirements in offering Electronic Payments and Financial Services (EPFS) under Section 701 of the BSP Circular. In addition, at least one member of the Board of Directors (BoD) and one senior management office should have a minimum of three years of experience and knowledge in operating a business in the field of technology or e-commerce.

Existing bricks-and-mortar banks are also allowed to convert to digital banks under certain conditions. The Circular specifically requires the bank to meet the minimum P1-billion capital requirement and transition plan (including the divestment or closure of branches or branch-lite units) within three years from approval of conversion. Once approved for conversion, however, the bank may no longer engage or renew transactions not associated with those allowed for a digital bank and within six months, shall phase out all inherent powers and activities under special authorities not normally associated with a digital bank.

Given these requirements under the BSP Circular 1105, it appears that existing banks that are commonly known or marketed as “digital banks” or meet all the qualifications of a digital bank but have not converted must secure a digital bank license from the BSP before they can officially operate as a digital bank.

THE TIMELY RISE OF DIGITAL BANKS
What remains to be seen, however, is whether bricks-and-mortar banks will immediately choose to convert to a full digital bank or retain their current license with some digital bank or online platform features to offer the best of both worlds to their clients. While digital banks may make the banking experience more convenient, the absence of a physical branch may not necessarily be ideal for some as it often translates to lack of physical and personal connection. Admittedly, many long-time banking clients still prefer a personal relationship with their banks and in the banking world, an established relationship between a bank and its client clearly goes a long way for both parties.

Regardless, it is safe to say that digital banking in the Philippines is finally online and here to stay. While our progress in the digital banking space has not been that swift, it is hoped that the financial inclusiveness agenda of the BSP will accelerate the expansion of digital banks to reach the unbanked and unserved population.

At the end of the day, it is always better to have inclusive choices available for everyone to encourage financial literacy and security. For as long as the market is assured of the integrity of the bank’s IT infrastructure and full compliance with the BSP Circular 1105 as well as strict adherence to BSP Corporate Governance Guidelines, digital banks can serve as a true alternative to traditional banks.

With the New Normal likely to remain in the foreseeable future, remote and virtual access to banks will not only be convenient to all but also essential for public health and safety.

This article is for general information only and is not a substitute for professional advice where the facts and circumstances warrant. The views and opinions expressed above are those of the author and do not necessarily represent the views of SGV & Co.

 

Maria Margarita D. Mallari-Acaban is a Tax Partner of SGV & Co.

The changed world of Philippine property

Prior to the pandemic, the Philippine property landscape was a bustling hub of investment. In fact, on the back of the government’s continued infrastructure investment, increased development of co-living projects, a surge of mid-income condominium units, and aggressive office construction alongside the explosive growth of the online gaming industry in 2019, the country’s real estate industry looked onwards with optimism.

Not half a year later in May, real estate experts Colliers International released an outlook calling the pandemic “worse than the Global Financial Crisis”, downgrading its previous net take-up forecast due to a softer demand in the market.

“We believe our original projection of 900,000 square meters (sq.m.) of net absorption (9.7 million square feet) is unlikely to be achieved. For 2020, Colliers is now looking at a net take up of between 300,000 sq.m. (3.2 million  sq.ft.) and  600,000 sq.m. (6.5 million  sq.ft.),” the report said.

“As a result, vacancy will likely hover between 5.5% and 7% in 2020. We see this supply and demand imbalance resulting in a 17% drop in office lease rates in Metro Manila this year.”

Yet the challenges for the industry did not end there. Inhibited by tax regulations and restrictive quarantine measures, Philippine online gambling operators (POGOs) were closing shop one after the other. In a report released by real estate consultancy firm Leechiu Property Consultants (LPC) in August, POGOs were found vacating 48,000 sq.m. of office space from March to June, making up 54% of the 89,000 sq.m. of vacated space during the period.

This exodus has led to a drop in first-half transactions to 234,000 sq.m. in 2020 from the previously recorded 885,000 sq.m in 2019. The business process outsourcing (BPO) industry — which accounted for the second biggest share of office demand — failed to fill in the gaps left by the POGOs, resulting in a massive plunge in office space demand of 74% in first half of 2020.

Property experts Jones Lang LaSalle (JLL) Philippines noted, however, that the BPO sector is expected to drive demand in the long term, despite the exodus of POGO firms in the country.

“Office demand from POGO firms may still remain despite ongoing tax concerns and reports of exits. We anticipate that operators that will stay are those that are keen to expand their operations in the country and lead to stable office demand moving forward,” Janlo de los Reyes, head of research and Consultancy at JLL Philippines, said.

The residential and retail sectors similarly showed weak activity due to the pandemic, with average residential rental vacancy rising to 8.2% in the third quarter of the year, while average retail vacancy rate increased by 6.3% as store closures outpaced store openings. JLL added that around 80% of mall developments originally slated for completion in 2020 slipped to 2021 due to construction schedule challenges posed by the pandemic.

Looking beyond the pandemic

Massive as they were, the consequences and overall impact of the pandemic are likely to linger throughout the year. Mr. de los Reyes said in a previous email that office space demand will remain subdued in 2021, led by the BPO and e-commerce sectors.

PHILIPPINE STAR/MIGUEL ANTONIO DE GUZMAN

However, demand is still expected to improve as organizations adjust to the “new normal” of business activities. “We anticipate a change in office space requirements given the operational impact of the pandemic where flexible work arrangement has become a norm across occupiers,” he said.

“We’ve seen the growth of e-commerce which is driving the logistics sector, technology, and on demand services firms. We’re also seeing increasing activity in data centers, security companies, life sciences, and multi-family dwellings,” he said.

The significant growth of such sectors, driven by necessity and burgeoned by the ongoing health and safety measures, could provide the much-needed opportunity for recovery for developers. Colliers suggested developers to continue to adapt to the evolving preferences of investors and tenants to survive “in a property market that has been redefined by the pandemic”.

“In our opinion, developers should continue converting and repurposing assets to take advantage of opportunities brought about by a lockdown economy. We recommend that developers and tenants continue to monitor opportunities in the market especially with the government-projected economic rebound in 2021,” Colliers said. 

It added, “In our view, office landlords should be proactive in offering alternative leasing schemes to tenants while mall operators and retailers should ramp up omnichannel strategies to take advantage of pent up demand. Condominium developers should be on the lookout for attractive sites and price segments.”

Colliers projects new office supply to reach 632,600 sq.m. (6.8 million sq.ft.) (+64% YOY) and a net take-up of about 250,000 sq.m. (2.7 million sq.ft.) (+213% YOY) in 2021. Vacancy rates are still expected to rise to 11.6% with rents treading a slow path to recovery of 2%.

For the residential sector, the forecast is a project delivery of 7,270 new units in 2021, up 21% from 6,000 units in 2020. More than 75% of the upcoming supply will likely come from the Bay Area as selected projects in 2020 were delayed to 2021 due to temporary work stoppages. 

Colliers also sees the delivery of about 304,700 sq.m. of new retail space in 2021, with a projected vacancy rate of 13% due to an expected rebound in consumers’ confidence and purchasing power. Lease rates are further expected to drop by about 2% in 2021.

Much of this depends on the rollout of the COVID-19 vaccine in the first half of the year. Colliers Philippines noted that the implementation of crucial infrastructure projects within and outside Metro Manila will be major drivers of growth moving forward.

“Previously, we emphasized that the completion and upgrading of railways, toll roads, and airports across the Philippines should contribute to higher land and property values. In our view, these projects are also likely to play an important role in dictating the development strategies of property firms beyond the pandemic,” Colliers said in its 2021 Property Outlook.

The timely approval and implementation of the 2021 national budget will be crucial in supporting economic growth for the year. The government has set a budget of P109 billion (USD 2.3 billion) for the Department of Transportation and about P667 billion (USD13.9 billion) for the Department of Public Works and Highways to resume the implementation of its landmark infrastructure program, and the construction of new roads, airports, and bridges is likely to stoke the property development sector. 

“In our view, these allocations will likely support the construction of infrastructure across the country beyond the current administration’s term. These public projects should also stoke demand for integrated communities outside of Metro Manila beyond 2022,” the firm said.

Colliers further suggested that office landlords, condominium developers, and mall operators be mindful of the government-projected recovery in 2021, urging them to be more strategic with their land banking and development strategies so they can capture pent-up demand once the economy rebounds in 2021. Particularly, office landlords should be more proactive in offering alternative leasing strategies to their tenants and assist those planning to occupy vacated PEZA spaces.

Meanwhile, demand in the residential sector in 2021 will likely be driven by mid-income to

luxury projects. As of Q3 2020, Colliers Philippines data showed that projects in these segments due to be completed from 2021 to 2022 have sold an estimated 86% of their inventory. To tap pent-up demand, developers should continue to offer flexible payment terms and adopt property technology (proptech) platforms, such as virtual reality (VR) tours and automated communication platforms for tenants and property management providers.

As it transforms the office landscape with new work-from-home models and stimulates residential transactions with such innovations, technology is serving to prop up recovery in the retail space.

This year, according to Colliers’ report, the pace of construction of new malls will ultimately hinge on the improvement of Filipinos households’ consumer confidence and purchasing power; and retailers’ propensity to continue taking up physical mall space despite the growing popularity of online shopping.

“Some mall operators have introduced curbside pick-up where customers are offered a contactless option to get their orders. Others have rolled out personal shopper services to reduce the risk of transmitting the COVID-19 and to enable contactless shopping,” the report pointed out.

Major players are leading the charge. Ayala Land is offering DeliverEasy and Ayala Malls Neighborhood Assistant (ANA); Megaworld has launched a lifestyle delivery app Pick.A.Roo; SM Supermalls has introduced Get and Go which offers curbside and drive-through pick-ups for essential needs; while Robinsons Malls is offering Ring Rob, Rpersonal Shopper and Rdelivery services.

“A number of retailers have also been aggressive in rolling out online shopping strategies. Swedish furniture giant Ikea recently announced that they will likely open their online store months before the completion of their physical store in the Bay Area. H&M has partnered with Zalora to setup its first e-commerce marketplace while Merrymart is pioneering the dark grocery stores concept that intends to provide a 15-minute delivery service in selected cities in Metro Manila,” Colliers said.

Whether such measures would be enough to turn the tide of a struggling industry, likely only time will tell. The Philippine property market has undoubtedly been redefined in the span of a short year, and it will likely continue to change moving forward.

Moving forward after last year’s bumps

Optimism expressed by the automotive sector for 2021

The country’s automotive industry felt the grave impact of the coronavirus disease 2019 (COVID-19) pandemic last year. Yet, with the economy gradually opening up and the industry eventually surviving the bumps from earlier months, it takes a positive outlook this year while it is set to embrace significant disruptions among consumers.

As the lockdown caused showrooms to close, the joint total vehicle sales of Chamber of Automotive Manufacturers of the Philippines (CAMPI) and Truck Manufacturers Association (TMA) reflected the pandemic’s impact.

The drop started in March 2020, when 11,029 units were recorded, much below 29,790 units in February. Then, in April — a month after the lockdown started — car sales plunged to only 133 units, apparently the lowest monthly sales output to date.

The following months, however, saw a slow yet assuring rebound for the industry. Car sales rebounded in May with 4,788 units, and slight increases by up to 31.9% were seen until July, which tallied 20,542 units.

The month of August, when Metro Manila and nearby provinces was under modified enhanced community quarantine for two weeks, showed a bump in sales with 17,906 units. Sales were seen to pick up afterwards. Albeit the succeeding figures were below the peak reached in February, total units reached by as much as over 25,000.

The latest CAMPI-TMA figures show that on the first 10 months of 2020, 173,025 units were tallied, down by 42.7%. Commercial vehicles (CVs) still have a bigger share of 119,968 units, while passenger vehicles (PVs) tallied 53,067 units. Meanwhile, Toyota Motors Philippines stays in the lead with 43.25% market share, followed by Mitsubishi Motors Philippines Corp. with 17.07%, and Nissan Philippines, Inc. with 12.15%.

Change among consumers

Changes have not only taken place among manufacturers. Moreover, shifts among consumers were seen.

Daniel Scott, co-founder and chief executive officer of online automotive marketplace AutoDeal, observed that car buyers are leaning more towards affordability.

“The pandemic is just one of many changes that have altered buying preferences over the course of the last few years. What was immediately noticeable from consumers was an increased economic focus; with interest levels for affordable city cars and subcompacts sharply increasing; and larger vehicles like midsize SUV’s decreasing,” Mr. Scott told BusinessWorld in an e-mail.

Their platform noticed that approximately 60% of consumers tend to shop in a price range of P1,250,000 or below, representing around a 5% shift from 2019 when consumers were eyeing pricier purchases. 

Mr. Scott also stressed that many consumers are “gravitating towards small crossover vehicles that offer some of the rugged nature as SUVs but at a lower price”.

“This has given way to steep interest to relatively new players in the market like MG, Geely and Chery which present significant competition in a corner of the market that’s not only rising in interest, but relatively less populated by products from brands who’ve been established for some time,” he added.

A year of recovery

As it moves forward in the new normal, the industry is optimistic enough about its recovery in the long term.


In a report on BusinessWorld‘s motoring section Velocity last December, Atty. Rommel Gutierrez, president of CAMPI, said that this year will be “a year of recovery for the auto industry”, projecting the industry to grow by 20% to 30%. In addition, he finds the availability of the COVID-19 vaccine as a ‘game changer’. “It will definitely help restore confidence in the buying public,” he said.

Tey Sornet, president of Southgatemotors Ventures Corp. and managing director of Auto Transport Ventures, projects a growth of 33%, bringing sales to a 320,000 units level. “It would be a recovery year for the industry… but would still be 22% below the peak level of 2019. This is mainly due to the continued weakness of the economy continuing to affect the demand and the appetite of the banks in approving auto loans,” he was quoted as saying in the same report.

Mr. Sornet also expects a continued increase in the CV segment by 34.60% as “trucks, buses, van, and pickups will continue to be in strong demand”.

While he expects Japanese brands such as Toyota, Mitsubishi, and Nissan to remain at the top, Mr. Sornet also looks forward to Chinese brands such as MG, Foton, Chery, Geely becoming strong players this year.

From an intelligence’s point of view, Fitch Solutions also expects growth for the automotive industry. On December, it revealed that total vehicle sales in the country will expand by 21.5%.

“[O]ur optimistic outlook for sales in 2021 will be driven by low base effects as we expect a 43.1% contraction in sales for 2020 as Typhoon Vamco (local name: Ulysses) dampens November 2020 sales on a [month-on-month] basis.”

Such increase will be driven by purchases of CVs, which the report predicts will climb by 23%. PV sales, meanwhile, are expected to be up by 18%.

“[W]e remain optimistic on Philippines vehicle sales in terms of growth, however we expect sales volumes to remain below pre-pandemic levels until 2024,” the report added.

Online-driven consumers

On the other hand, changes among consumers that are shaped by the pandemic are expected to stick. Mr. Scott of AutoDeal forecasts that online shopping and purchasing will increase in popularity as consumers aim to minimize physical contact and utilize online platforms. 

“Not only will dealers need to transition their workforce to become increasingly competent in accommodating online customers, but due to many financial restraints, dealers may need to re-evaluate strategies so that they can look to maintain their volume through more economic and efficient means,” he added.

This online-driven trend is seen to have repercussions on providing auto loans and auto insurance. “We expect that banks and insurance providers will continue to take steps to increase their accessibility to consumers by being where their customers are when they’re shopping,” the CEO explained.

Also, Mr. Scott expects a strong interest sustained in the entry-level market, while he sees the used-car market becoming “an increasingly viable option for consumers”.

“Brands and dealer groups may continue to further explore certified repossessed programs as a means to diversify revenue. If this happens, then it could also generate stiff competition for your traditional used car dealers,” he advised.

Institutional failures and economic growth

I will state here what is obvious: we are seeing governance and institutional failures that have impoverished Philippine society: Philhealth, the Department of Health, the Philippine National Police, the Bureau of Corrections and Jail Management, the National Telecommunications Commission, the Bureau of Immigration, the Task Force Bangon Marawi, not to mention the usual culprits, Customs, the Department of Public Works, Department of Transportation, etc.

However, these governance and institutional failures are not particular to the Duterte administration, but range across the different administrations. Moreover, the failure is present not only in the executive department but also throughout the bureaucracy and other institutions of government, from the legislative to the judiciary.

Governance and institutional failures are one of the reasons the Philippines still lags behind its ASEAN neighbors and why a country like Vietnam, devastated by years of war, can catch up and even overtake us.

Economic underdevelopment, therefore, is both a policy and institutional failure. I laugh at the stupidity of some “leftist” analysts whose knee-jerk reaction to anything that deviates from their Amado Guerrero thinking as “neo-liberal economics.” They imply that all non-socialist economists are market fundamentalists who see nothing but deregulation, privatization, free trade and globalization as the solution. The fact of the matter is that modern day economics has recognized the role of institutions (a matter that Marx himself recognized, albeit from a class standpoint), the rule of law, culture, and human behavior in economic development.

How important are institutions? China’s meteoric rise, for example, is wrongly attributed to economic reforms alone, according to Professor Yuen Yuen Ang of the University of Michigan. In reality, China, under Deng, undertook political and governance reforms that made possible its rapid economic development. These reforms included term limits on China’s rulers and performance ratings and competition in the bureaucracy. The result is that even Microsoft Founder Bill Gates marvelled at the excellence of China’s bureaucracy. The fact that China’s Xi Jinping is undoing these reforms is a different story altogether and may be a harbinger of weaker economic performance ahead. (Watch Prof. Ang’s excellent Youtube video lecture on China’s rise: https://www.youtube.com/watch?v=2_bNB4S_HTw&t=641s)

However, here in the Philippines, why are our institutions weak, inefficient, dysfunctional and corrupt?

First, there’s history. As I had repeatedly said, rent-seeking came early to the Philippines with the government allocating foreign exchange after independence in 1946 due to the loss of exchange rate sovereignty mandated by the Bell Trade Act. The politicization of economic decisions that came with foreign exchange control provided an incentive for weak and politicized institutions.

On top of these weakened and politicized institutions and rent-seeking in foreign exchange allocation, the country built a state guided by protectionism, economic nationalism, regulatory overreach, and statism that only worsened rent-seeking. (Did you know that the Philippine government went into the retail business itself in the 1950s with NAMARCO — the National Marketing Corporation? Or that Marcos authored a law that required permits for all imports?)

Furthermore, the US as the neo-colonial power, extracted through the Laurel-Langley agreement a privileged position versus other foreign nationals that its citizens be treated on equal footing with Filipino citizens, including the ownership of land; therefore, US interests became perfectly aligned with that of domestic rent-seekers and weak institutions.

This history of weak and politicized institutions continues to this very day. The present is a product of its past. Neither have our institutions been tempered in war, such as in Vietnam or South Korea, nor of a long history, as in Thailand.

Second, the political economy partially explains our weak institutions. Weak institutions are in the interest of our oligarchy, which derive much of their wealth in non-tradable, regulated service industries, such as shipping, ports, banking, telecommunications, infrastructure, real estate or in unsolicited PPP projects. “Regulatory capture” is in their interests, even if they deny it.

Third, a monopolistic economy, i.e. one dominated by monopolies and oligopolies, make for weak institutions. For so long as monopolies can extract rent, there’s little interest in innovation or for society to function well. Deteriorating peace and order, poor public education, corruption in Customs, etc. do little to reduce monopoly profit and therefore don’t spur a demand for better governance and public institutions.

Lastly, the Philippine economy is still inward-looking. It is the last among ASEAN nations in the ratio of exports to GDP (gross domestic product). Our export to GDP ratio is about 30% and declining, compared to Vietnam, whose exports are 100% of its GDP.

How does that affect our institutions? Export or outward looking economies, such as Taiwan, Japan, South Korea, and Vietnam have to have strong domestic institutions if their export champions are to compete in the world market. A country, for example, cannot hope to export pharmaceuticals if its drug authority is corrupt and allows substandard pharmaceutical drugs to proliferate. Its transport and port systems must be efficient for its export products to be cost competitive in the world market.

Here, unfortunately, our economic officials cheer a strong peso — a symptom of inward-lookingness — rather than fostering exports and an outward looking orientation. They reflect the elite view that exporting people, via OFWs, rather than goods will be the economy’s savoir and it’s better to do nothing but be a service-driven economy.

Can we strengthen our institutions by changing our form of government to parliamentary or federalist? No, because the root causes of the dysfunction of our bureaucracy is in our political economy. Until that is changed, democracy and good governance will just be formalisms without substance.

So, what do we do? First, we have to make rent-seeking less dominant in the economy. We need to introduce more competition into the economy by removing the foreign ownership restrictions in the Constitution, passing the Public Service Act Amendment, and dismantling all anti-competitive barriers in the economy. There are just too many barriers to competition in the economy, such as the requirement of franchises to offer satellite broadband, to the government being both regulator and operator at the same time, as in the Philippine Ports Authority.

Second, we have to depoliticize the bureaucracy. Presently, the President can appoint officials down to the assistant bureau level. Perhaps the President shouldn’t also be allowed to appoint more than two undersecretaries in a department. (In the Department of Natural Resources, for example, there are nine, of which only four are career.) The rest should be civil servants who must pass stringent regular performance ratings.

Presently, after every administration change, the bureaucracy has been used to reward political appointees and loyalist followers who have little or no competence.

Third, we have to demand more from our civil servants. Our populist politicians are fond of giving our teachers and men in uniform generous salary increases without demanding anything in return. The result is that the Philippines scores last in the PISA (Program for International Student Assessment) ratings in math and science while our PNP’s reputation is being corrupt, criminal, and functioning as mere tools of public officials despite salary increases.

Lastly, given the reality of the weakness of our bureaucracy, we should resort to solicited PPPs (Public-Private Partnerships) as much as possible. PPPs are a way to harness the private sector to cover for the weaknesses of our bureaucracy in delivering infrastructure or public services. However, unsolicited PPPs must be discouraged because they are another form of rent-seeking and we see unsolicited project proponents try to stifle competition.

We should also try to outsource governance where feasible, such as getting SGS or other internationally recognized bodies to do customs inspection or an international organization to certify mining companies in environmental compliance. I will even be more radical and urge the adoption of Nobel Prize winner Paul Romer’s chartered cities idea — outsource governance in a few export zones to other governments, such as islands north of Cagayan to the Taiwanese.

Political and governance reform — in short, institutional reform — are interlinked to economic reforms. Institutions matter in economic growth. However, the demand for institutional reforms will only rise if the political economy is right. The economy has got to be less dominated by monopolies and become more outward looking.

If nothing is done and the public sees failure after failure, the environment for authoritarianism and populist fascism — cutting democratic corners to produce results (as we are seeing now) — becomes even more favorable. The country could end up both being both poor and unfree.

 

Calixto V. Chikiamco is a board director of the Institute for Development and Econometric Analysis.

idea.introspectiv@gmail.com

www.idea.org.ph

The Vaccine Gold Rush: What is to be done?

The advent of COVID-19 vaccines has created excitement. It engulfs everyone. Finally, after months of waiting while we put up our best defenses to protect the Filipinos, we are given a new opportunity to further our step towards vanquishing the pandemic. But it is not without formidable hurdles.

We see LGU (local government unit) after LGU announcing their plans to procure vaccines for their constituents. Foray through the jungle of social media and a barrage of information threatens to overload an already COVIDized, desensitized public. We are reprimanded for being “choosy” over vaccine brands, yet the government parades one that still has to secure an emergency utilization authority (EUA).

Concerns even among healthcare workers may hound the trust in vaccines, notably for a nation reeling from the Dengvaxia aftermath. This can take form initially as hesitation progressing to downright refusal to be vaccinated. Misinformation, ever present since the start of the pandemic, thickens the plot and aggravates the dissonance that has manifested in what the government says and what the public perceives.

As healthcare workers sworn to primum non nocere, first do no harm to our patients, we are only right and duty-bound to elevate the Filipino people’s health and safety as top priority. The Healthcare Professionals Alliance Against COVID-19 (HPAAC), the 160 member societies of different healthcare workers who called for a time out last August 2020, has promised to do just that: Protect the processes with which these vaccines are authorized to be given to millions of Filipinos.

HPAAC explains the phases of vaccine trials, the pertinent government agencies and expert groups tasked to evaluate its safety, effectiveness and cost efficiency while addressing significant conflicts of interest. HPAAC emphasizes that the Food and Drug Administration (FDA) and the Health Technology Assessment Council (HTAC) are the two agencies recognized by law to assess and evaluate candidate vaccines and authorize them for public roll out.

Sifting through the noise of misinformation and its wake of dissonance, the country’s largest coalition of healthcare workers manifests its role to be monitors or watchdogs to ensure that the key message is heard and followed. Our key message is that the core values and processes are observed and protected in the vaccination program. Dr. Antonio Dans, one of HPAAC’s active leaders says, “People must have access as soon as possible to a safe and effective vaccine regardless of race, religion, or ability to pay. Distribution must be equitable and not become a battle of purchasing power.”

Though vaccines against COVID-19 are a huge and significant development in our quest to end this pandemic, it is important to remember that it is not the silver bullet solving the crisis immediately. The virus is not the only enemy here, and we must hurdle through system challenges in order to mount a sufficient and robust immunity for all Filipinos.

We still need to practice the minimum preventive health standards APAT DAPAT. APAT DAPAT stands for: 1) Air circulation; 2) Physical distancing of one meter or more; 3) Always wear face masks and face shields; AND 4) Time of interactions less than 30 minutes. With or without the vaccines, APAT DAPAT preventive measures must be observed. These are the measures we constantly remind ourselves to observe as accountable and responsible Filipino citizens.

Achieving immunity for our people is not just a whole-of-government strategy. The objective, the strategy, the plan, and the implementation involve the whole of society. Having public trust is thus a sine qua non for sufficient and robust immunity.

 

Maria Angela M. Villa is the past president of Philippine General Hospital – Physicians’ Association and is a leading member of the Health Professionals Alliance Against COVID-19 (HPAAC). Her views in this column reflect the position of HPAAC.

How healthy is the economy and the financial system?

Filipinos are worried about the future of the economy — and for good reason. The heavy handed lockdown pushed many businesses to bankruptcy, especially micro, small and medium enterprises (MSMEs). While there is no exact data as to how many businesses have closed, a United Nations survey published last October gives us a good idea. According to the survey, 81% of Filipino MSMEs experienced income drops and customer loss. Sixty percent of businesses said they did not receive any support from the government.

As much as 25% reported severe working capital shortages. It is believed that the majority of them ended up closed. This is a cause for worry considering that MSMEs comprise 99.5% of business establishments in the country and are the source of 63% of all jobs. They account for 40% of gross domestic product (GDP).

Meanwhile, medium to large scale businesses involved in travel, hotels and restaurants, live entertainment, sports, transportation, MICE, and retail continue to bleed. Those with limited cash runways have fallen on the wayside. Others must diversify into more lucrative fields.

Joblessness has increased to 8.7% while the poverty rate is still at an uncomfortable 26%. Not helping is the decision of the Department of Finance to appropriate one of the smallest stimulus packages in the region at only 5.88% of GDP. It will hardly help in priming the economy.

Last week, Bangko Sentral ng Pilipinas (BSP) Governor Benjamin Diokno addressed the public to allay our fears. In a one on one discourse with this paper’s editor-in-chief, Wilfredo Reyes, Mr. Diokno assured the public that the worst is over and that our financial system is healthy.

In the past, the Philippines would always run out of foreign exchange whenever it faced an economic crisis. This would compel the central bank to increase interest rates and devalue the peso, both of which choked private enterprises. Hence, the boom-bust cycle. The situation is different now, said the governor. With more than a hundred billion dollars in reserves, the BSP is able to provide the system with adequate liquidity to keep businesses afloat. Our reserves are equivalent to 12 months of imports, nine months more than the minimum requirement.

Early on in the crisis, the BSP cut reserve requirements by 200 basis points which effectively unleashed P200 billion into the system. In parallel, interest rates were reduced by 2%. The two-pronged strategy allowed Filipino companies to avail of cheap loans whilst giving the banks the bandwidth to provide them. The BSP strategy, in effect, made up for the lack of government subsidies and direct cash infusions to MSMEs in distress.

In fact, loans granted to MSMEs are counted by the BSP as part of its reserve requirement. This is a BSP innovation that allowed more cash to be pumped into the system. The governor disclosed that he has standing authority from the Monetary Board to slash reserve requirement rates by a further 200 basis points (2%). This option will be tapped when the need arises. Suffice it to say that by the end of the governor’s term in 2023, he plans to reduce the reserve requirement rate from 18% (pre-COVID) to a single digit.

The reduction of reserve requirements will not weaken the financial system, Mr. Diokno assures. Our banks are generally healthy since their non-performing loans (NPLs) stand at only 3-4%. It will be recalled that during Asian Financial Crisis, NPL’s soared to 18%, which explained the spate of bank closures. This is not the case now. NPLs are manageable and banks are adequately capitalized. Nonetheless, the BSP continues to monitor the financial health of our banks.

As for the macro economy, the governor expects a 9% contraction for the year 2020. This will be followed by an expansion of 6.5% to 7.5% in 2021, despite the lingering effects of the pandemic. The low base effect helps. For 2022, authorities expect the economy to expand by 8% to 10% on the assumption that we achieve herd immunity or widespread vaccination. The national elections will contribute .5 to 1% to growth. The economy will only approximate 2019 levels in the second half of 2022.

Should there be a surge in infections between now and 2022, government agencies agree that the lockdowns will be localized to LGUs or barangays so as not to cause sweeping economic damage. This should have been done in the first place — the IATF only realized it now.

Driving growth this year is the pump-priming effect of Build, Build, Build (BBB), the front-loading of government spending (which is doable since the national budget has already been signed), the recovery of the global economy and the uptick on trade. OFW remittances are also seen to post a 4% growth following a slight contraction of .9% in 2020.

Credit watcher, Fitch, affirmed the country’s debt rating of BBB which is still within the realm of investment grade. Although our foreign debt to GDP ratio increased from 39% (pre-COVID) to around 50%, we are still in a good position to borrow at prime rates.

The governor assured us all that we should not be worried about the economy since ours is one fueled by a young population. While more developed countries grapple with an ageing workforce, the median age of ours is just 24 years old. The challenge we face is to educate and equip our youth so that they may be productive contributors to the economy.

With the advent of artificial intelligence and chatbots, we can no longer rely on our proficiency in English, neutral accent, and ability to understand American idioms as a competitive advantage. Our youth must become competent in technical fields such as engineering, accounting, analytics, cloud technology, artificial intelligence, and the like. In the next decade, Philippine competitiveness will largely depend on the technical skills of the workforce. Is the government doing enough to upskill youth? That is a subject of another piece. Our consolation is that the government is aware of the need to upskill.

So is the economy and the financial system healthy? Yes it is. However, we have a lot of catching up to do given the deep economic contraction of 2020. Sadly, we were overtaken by Vietnam in the region’s development race because of it. The only way to make up for the disastrous 2020 is to install more economic reforms to accelerate growth.

 

Andrew J. Masigan is an economist

andrew_rs6@yahoo.com

Twitter @aj_masigan

Food: Waste not, want not

WHEN I was a very young child, my parents would constantly remind me during meal time of the importance of finishing all the food on my plate.

“Hutda na imong pagkaon, Karlo,” they would say. (Finish your food already, Karlo.) “Swerte ka; daghan kaayong bata nga gigutom diha.” (You are lucky; a lot of children elsewhere are hungry.)

I am certain that I am not the only person to experience this guilt-trip tactic to ensure that food in our household did not go to waste. I have to admit that where food waste in our home is concerned, sometimes I sound like my parents when I chide my children for not cleaning their plates when they eat.

My folks were not wrong; food waste is a problem that plagues not just our country, but the whole world. Globally, about 1.3 billion tons — or roughly one-third of the food produced for human consumption — gets wasted, according to the United Nations Food and Agriculture Organization. That is an enormously criminal amount of food waste given that the United Nations says that the global hunger figure is 690 million people — almost six times the population of the Philippines.

Here at home, we are guilty of contributing to unconscionable food waste. The latest reports from the Philippine Statistics Authority and Philippine Rice Research Institute highlight our own local food waste problem, as exemplified by the fact that we waste more than 900,000 metric tons of rice per year.

Think about it; in 2020, the Department of Agriculture (DA) reports that we produced a record 19.44 metric tons of palay (unhusked rice); the quantity of the rice we waste is 4.6% of the palay we produced last year. When you factor in the fact that in 2020, 21.1% of families in the country experienced involuntary hunger, it becomes clear that food waste is a problem that we can no longer set aside; it is one that we have to address — soon.

INSTITUTIONALIZING ACCOUNTABILITY
Acknowledging this issue is only the first step; addressing it will mean the consolidated effort of both the public and private sectors to ensure that we produce and consume food productively and efficiently.

A major initiative aimed at alleviating food waste has already been introduced in Congress. House Bill No. 3370 or the Food Waste Reduction Act was recently filed by AAMBIS-OWA Party-list representative and House Committee on Economic Affairs Chair Rep. Sharon Garin, and it aims to reduce our country’s food waste via donations and waste recycling. If passed, this will make the donation of edible food surplus for charitable purposes mandatory and will also facilitate the creation of food banks.

Under this proposed law, owners of restaurants, cafes, fast food chains, hotels, and supermarkets with at least 500 square meters of selling space, together with culinary schools, will be required to segregate their edible and inedible food surplus. The local government units will then inspect the food surplus based on standards set by the National Nutrition Council and the Food and Drug Administration, and  food surplus that is certified safe and edible will be sent to food banks and distributed among food-insecure Filipinos.

A similar bill was proposed by Senator Lito Lapid through Senate Bill No. 1242 or the Zero Food Waste Act. It expands on Rep. Garin’s bill by mandating different executive departments to work on addressing the issue. For example, the Department of Education will be required to add materials on the global and local food waste situation in the education curriculum, while the Department of Trade and Industry (DTI) is tasked to encourage the food industry to purchase lower-priced produce that pass food and health standards.

These proposals are crucial steps in addressing our national food waste problem while institutionalizing accountability for our food surplus through multi-sectoral collective action. Both bills are yet to be passed, but I am optimistic that my former colleagues in the Legislature will recognize the merits of the bill and work to pass it before the end of the 18th Congress.

GETTING OTHER SECTORS INVOLVED
Food waste, however, is a concern that not only the government alone should be tasked to tackle. All those who have a stake in reducing food waste should step up and do what is needed to address this problem. In this regard, a multi-sectoral approach is not only ideal — it is necessary.

Last year, photos of surplus vegetables being thrown away circulated online, shocking many of us. But it could not be helped, as farmers had produced harvests that no one wanted to buy; neither could they transport these vegetables to areas where they were in demand.

A potential solution can be found in an example of a strong multi-sectoral approach between the DA and DTI, in partnership with private sector partners and the United States Agency for International Development (USAID). Called Deliver-E, the program was developed by Insight Supply Chain Solutions (InsightSCS). This is a modern marketing process that connects food producers and consumers directly through a digital platform powered by blockchain technology, and brings together all stakeholders in the agricultural supply chain via the integration of e-commerce and logistics capabilities. In short, it reduces middlemen. By reducing the middlemen, efficiencies are achieved on both cost and quality for farmers and consumers.

While it was launched only in December, Deliver-E has already shown massive improvements in the overall delivery process. Transit time has been reduced to two days from five to seven days, and touch points are now down to four from the previous eight. Both refinements resulted in fresher, quality produce that arrived directly at consumers’ doorsteps.

The operational implications show a lot of promise, but the impact on our farmers and, potentially, our food waste problem, is striking: the pilot run alone recorded over 250 tons of produce moved, which means a 100% increase in farmer revenue and 45% reduction in post-harvest losses. The program was even utilized to donate 2,000 kilos of vegetables to frontliners and poor communities amid the pandemic.

Note that this is only the pilot run; with the many potentials of blockchain technology and the continued cooperation between our government, the private sector, and international aid agencies, Deliver-E is poised to become a long-term sustainable solution to benefit our national agriculture value chain while keeping our people fed and our farmers properly compensated.

BUILDING ON CURRENT MOMENTUM
Food waste is only one of the many complex themes surrounding our problem on hunger. We launched Pilipinas Kontra Gutom (Philippines Against Hunger) last year, understanding that food waste, along with other hunger-related problems, is something that must be tackled from a multi-sectoral perspective. Therefore, we made the movement a collective drive of ideas and action from the government, members of the academe, non-profit organizations, and private corporations to inspire a whole-of-nation approach towards resolving hunger.

Earlier this month, we hosted the private sector kick-off of Pilipinas Kontra Gutom in a bid to educate current and potential partners on our campaign’s aims. The reception and participation are encouraging, with organizations such as Philippine Business for Social Progress and Gawad Kalinga sharing their ongoing projects that are aligned with our own objectives. Seeing their work showed us the many possibilities for integration, and we look forward to forging partnerships that will help us realize our dream of a hunger-free, healthier Philippines.

Efforts from the private sector exemplify the richness of the knowledge and the momentum that is in place. Pilipinas Kontra Gutom will certainly rely on the input of our multi-sectoral partners as we approach our aims with strategic vision, heart, and vigor.

The fact is our country produces enough food to provide for its over 100 million people; it is up to us to ensure that efforts are made to maximize the food resources that we have, so that every kilo of food produced is utilized so that no Filipino suffers from hunger.

 

Cabinet Secretary Karlo Nograles is the Chairperson of the Inter-Agency Task Force on Zero Hunger. Prior to his appointment to the cabinet in November 2018, the former House Appropriations Chair served three consecutive terms in the House of Representatives representing the first district of Davao City.

Shifts among tourists, travel spots expected to stick  

A glimpse of Philippine tourism as it reopens in the new normal

Zoe Ticzon, an associate account manager based in the United States, was one of those tourists who got to experience Philippine tourism in the new normal. She spent a portion of her holidays in Boracay, which reopened last October, and she found it worthwhile in spite of the tedious process.

Before going to the island, she had to get an RT-PCR test strictly 72 hours before her flight, then send its results, together with booking and flight details, to the Boracay local government unit to avail of the QR code that she would use during her stay.

“Although it was a hassle, getting to Boracay was one of the best vacations I had in a while. It felt like you have the whole island to yourself,” Ms. Ticzon told BusinessWorld via online correspondence, adding that she saw how hard it was seeing locals struggle to earn money.

She also saw how travelling in the new normal takes more money, time, and effort. “Before, all we are waiting for was a flight sale announcement, then we’re set to venture. But now, we have to take all of these steps in order to actually board a plane and leave. Also take into consideration the expensive testing with a possibility of efforts going to waste if you’re tested positive.”

This is just a glimpse of how tourism has transformed after the coronavirus disease 2019 (COVID-19) pandemic took a hard hit on the sector.

Latest figures from the World Travel and Tourism Council (WTTC) show that globally, the pandemic caused an estimated 142 million loss in travel and tourism jobs as well as $3.8 trillion lost in the sector’s gross domestic product.

In addition, as Oxford Business Group noted in its Philippines 2021 report, visitor numbers decreased by 62.2% in the first five months of the year compared to the same period in 2019.

Yet, as the tourism industry sees bright spots, with destinations such as Boracay, El Nido, Siargao, and Baguio reopening, it expects the way people travel to be reshaped, along with shifts among tourism businesses.

Prioritizing health and safety 

As experts in the industry see it, the new normal in tourism largely concerns keeping guests safe.

During last November’s BusinessWorld Virtual Economic Forum, Bernadette Romulo-Puyat, Secretary of the Department of Tourism (DoT), noted a survey it conducted with Asian Institute of Management which revealed that 77% of respondents expressed willingness to travel even in the absence of a vaccine, yet 96% said they would like to see the stringent application of health standards and disinfecting protocols in tourist destinations.

“Tourists now have their health and safety as their priority in their travel. In the new normal, the strict implementation of the minimum health and safety guidelines will boost the confidence of tourists. Likewise, it impacts the willingness of destinations to accept guests,” Ms. Puyat said.

Likwise, Tiffany Misrahi, vice-president for policy at the WTTC sees safety and security remaining a high priority among travellers as they look for more flexibility in booking.

“Travellers will want to know that health and hygiene measures are in place and are being followed, and this is particularly important for baby boomers who are keen to see more stringent travel safety protocols,” Ms. Misrahi said in the same forum, adding that cost will be a big factor as well even for those who have been less cost-conscious.

Given this prime on safety, which eventually leads to looking for low-contact experiences, a shift to using more automated processes and biometrics is much expected within the industry and among tourists.

Ensuring safety, however, might be a difficulty, especially if the cost of testing is considered. “Testing is still expensive especially for majority of Filipinos. Most Pinoys would rather spend money on groceries than testing. As long as the options for testing are still expensive, it will be harder for tourism to bounce back,” Ms. Ticzon opined.

Shifts among tourists, businesses

Ms. Misrahi also observed that travellers will be looking for “longer and more meaningful journeys”, citing the organization’s finding that average lengths of stay for short-term accommodation has increased from 3.5-5 days to 8.5-9 days.

Moreover, she stressed that there will be an increased focus on sustainability in the industry, as exemplified by the six-month rehabilitation of Boracay back in 2018.

The WTTC official also expects a higher demand for “off-the-beaten-path, nature, and outdoor destinations, as well as more remote and lesser known destinations”. “That’s a great opportunity for a lot of countries and governments to spread the benefits of travel and tourism beyond traditional hotspots,” Ms. Misrahi added. 

Other potential features of new normal tourism were noted by Alexander B. Cabrera, chairman and senior partner of PriceWaterhouseCoopers Philippines.

For him, encouraging travellers to come back through promotions, preferably tourist vouchers, is much better in revitalizing the industry than giving businesses more loans to keep their businesses afloat. 

“[I]f you fund tourism establishments and they have no customers, the money will be a sum cost, but if you fund tourists, that will not be their last purchase in that establishment,” Mr. Cabrera said.

He also suggests a transformation taking place in hotel rooms, which can be converted into function rooms where professionals can “break the monotony of working from home”; as well as in kitchens of hotels and resorts becoming what is called ‘cloud kitchens’.

“It’s like an Airbnb where kitchens of hotels can service restaurant chains who have closed down their other locations,” Mr. Cabrera explained. “So, they don’t need to have capital expenditures for these kitchens; and the hotels — with [their] excess capacity, can provide that service.”

Moreover, given the 7,100 islands in the country, he sees an opportunity in maximizing the use of seaplanes.

“You can travel from Boracay to… the bay of Romblon, or from Tagbilaran Bay in Bohol to [the] port [in] Siquijor,” Mr. Cabrera said. “Seaplanes provide tourists the ability to go around quickly and even cheaply because you can do all these things.”

PSC prepared for all scenarios as training ‘bubble’ gets under way

By Michael Angelo S. Murillo, Senior Reporter

THE Philippine Sports Commission (PSC) said it is ready to take on the challenge presented by the training “bubble” of national athletes vying for a spot in the rescheduled Olympic Games, which began at the weekend at the INSPIRE Sports Academy in Calamba, Laguna.

Speaking on The Chasedown on One PH last Saturday, PSC national training director Marc Velasco shared that everything was a go as national team members for boxing, karate, and taekwondo entered the bubble to resume their face-to-face training in preparation for the qualifiers in the coming months for the Tokyo Olympics.

The PSC official, tasked to oversee the conduct of the training bubble, said the agency is fully supportive of the athletes’ push and is hoping for the success of the undertaking.

“In the bubble, we have at least 60 participants composed of athletes, coaches and staff, made up of the secretariat and medical team. All hands are on deck for this because this is the first bubble of the PSC. We’re prepared for all scenarios,” said Mr. Velasco.

How long the athletes will stay at the INSPIRE bubble depends on the preparation schedule of the different national sports associations (NSAs). but Mr. Velasco said the PSC can accommodate them for three months.

In the bubble, safety of the athletes is paramount, which is why the PSC came up with a very strict set of protocols to follow to preserve the integrity of the training facility and guard against the spread of the coronavirus.

The agency’s Medical Scientific Athletes Services (MSAS) Unit led in crafting the protocols, which took into consideration already-established measures by the World Health Organization, Department of Health, and the Inter-Agency Task Force for the Management of Emerging Infectious Diseases (IATF-EID), and done in consultation as well with the local government of Calamba.

Reverse transcription polymerase chain reaction (RT-PCR) testing, upon entry to the bubble and during the training, has been put in place as part of health and safety measures.

An expert group among stakeholders was also formed to aid in the interpretation and give advice on any unusual and expected results of coronavirus tests.

Mr. Velasco said the PSC recognizes that the situation with the health pandemic is fluid and that anything can happen inside the bubble, including the possibility of infection among the participants. But the sports body is committed to be on top of things.

“Of course, there is the possibility of infection. But if there would be none, the better. We have talked to the NSAs, the local government and people of INSPIRE about it,” Mr. Velasco said.

“We have a threshold discussed with them [as far infection is concerned]. If there really is an outbreak, there might be a chance to shut down the training. But if there is a positive case we have protocols in place — transporting them and placing them in an isolation center. And it’s not only the positive cases but also in cases of injuries,” he added.

Among the athletes training in the bubble are boxers Irish Magno, who already qualified for the Tokyo Games; Nesthy Petecio, Carlo Paalam, Ian Clark Bautista, Riza Pasuit, Charly Suarez, James Palicte, and Rogen Ladon.

The taekwondo team, meanwhile, has 2016 Rio Olympian Elaine Alora, Kurt Barbosa, Arven Alcantara and Butch Morrison. Southeast Asian Games gold medallist Pauline Lopez is also set to train there.

Karate, for its part, has Jamie Lim, Sharief Afif, Alwyn Batican, and Ivan Agustin, to be joined later by Junna Tsukii and Joan Orbon, who are both coming from abroad.

The athletes view the training bubble as a welcome development after months of settling for virtual and individual workouts because of the coronavirus pandemic.

Aspirants continue to submit names for PBA rookie draft

THE available talents for this year’s Philippine Basketball Association (PBA) rookie draft continue to grow in number with more players adding their names among the hopefuls.

One of those who recently applied for the draft is the country’s top 3×3 player and strong contender for top selection Joshua Munzon, who is viewed as further shoring up what many deem to be an already-deep draft class.

Mr. Munzon last saw action in the FIBA 3×3 World Tour last year after leading his team to the title in the Chooks-to-Go 3×3 Pilipinas in October.

Apart from making a name for himself in 3×3, the 6’4” Munzon made waves in the ASEAN Basketball League (ABL) while playing for the Saigon Heat and Westports Malaysia Dragons.

He also saw action in the PBA D-League, where he was selected number one overall by AMA Online Education.

The Fil-Am Munzon, 25, showed what a top-class talent he is in the league after averaging 35 points, 10 rebounds and 4.2 assists in the Aspirants’ Cup in 2019. Along the way, he also put up multiple 40-point games.

Also joining the draft is former De La Salle University captain Andrei Caracut, who was part of the 2016 University Athletic Association of the Philippines champion Green Archers team.

After college, Mr. Caracut became part of the Alab Pilipinas squad in the ABL.

Another player from the collegiate ranks who recently threw his name in the draft is big man Ben Adamos of Perpetual Help.

A two-time National Collegiate Athletic Association champion with San Beda University, Mr. Adamos transferred to the Altas and made a solid impact.

In NCAA Season 95, he averaged 11.6 points, on 45.1% shooting, 8.8 rebounds and 1.4 blocks. He later played for the Bacolod Master Sardines in the Maharlika Pilipinas Basketball League (MPBL).

“I know what I’m capable of and hopefully, the teams would take notice,” said Mr. Adamos in Filipino.

Messrs. Munzon, Caracut and Adamos joined the draft roster which already included Alvin Pasaol, Troy Rike, Santi Santillan, RK Ilagan, Tyrus Hill, and Franky Johnson.

The status of keenly eyed Fil-foreign applicants Jason Brickman, Brandon Ganuelas-Rosser and Jeremiah Gray, meanwhile, is still to be determined as reports have it that documents needed for them to join the draft will not come in time for the application deadline set for Jan. 27.

The PBA rookie draft is slated for March 14, with the Terrafirma Dyip selecting first for the third straight season.

As of this writing, there were already 42 PBA draft applicants. — Michael Angelo S. Murillo

GB Packers carve up LA Rams to reach NFC title game

IN a matchup of the National Football League’s (NFL) top-ranked offense and defense, it was Green Bay’s (GB) offense that carried the day.

Rolling up 484 total yards and scoring on their first five possessions Saturday, the top-seeded Packers advanced to the National Football Conference (NFC) Championship Game with a 32-18 victory over the visiting Los Angeles (LA) Rams.

Green Bay will host either Tampa Bay or New Orleans, who plays Sunday in New Orleans, on Jan. 24 with a spot in the Super Bowl at stake.

Quarterback Aaron Rodgers completed 23 of 36 passes for 296 yards and two touchdowns, finding Allen Lazard for the game-sealing 58-yard score off play-action with 6:52 left in the game. Rodgers earlier scored on a 1-yard run as Green Bay controlled the ball for 36:12.

“It’s all about the offensive line,” he said. “I was barely touched all night. (The Rams) have some really good players on that side of the ball and they were non-factors. Guys made plays and we had some off-schedule stuff that worked, but the run game was key.”

The Packers collected 188 yards on the ground, getting 99 on 14 carries from Aaron Jones. It was Jones’ 60-yard gallop on the first play of the second half that set up his one-yard plunge to make it a 25-10 game less than three minutes into the third quarter.

The sixth-seeded Rams drew within 25-18 at 1:41 of the third on Cam Akers’ powerful 7-yard run and a two-point conversion but couldn’t produce the equalizer. They gained just 244 total yards.

Jared Goff hit 21 of 27 passes for 174 yards and a touchdown for Los Angeles. Goff, playing with a thumb injury that kept him out of the starting lineup for last week’s wild card win in Seattle, absorbed four sacks.

“You could see why they’re the one seed,” said Rams coach Sean McVay. “When you reflect on the game, there was a lot of back and forth, great plays on both sides. We had opportunities to sustain drives and get momentum going and couldn’t do it. That stings.”

Mason Crosby’s 24-yard field goal with 8:39 left in the first quarter initiated scoring. After Matt Gay drilled a 37-yarder just over four minutes later for the Rams, the Packers chewed up nearly eight minutes on a drive that ended with Rodgers’ one-yard touchdown pass to Davante Adams.

Rodgers capped the next march with a 1-yard run, using a pump fake to get Leonard Floyd out of position for the tackle to make it 16-3 with 3:29 remaining in the half. Los Angeles pulled within 16-10 on Goff’s 4-yard scoring strike to Van Jefferson 29 seconds before halftime.

But Green Bay came up with the half’s last word, driving 54 yards to set up Crosby for a 39-yard field goal as time expired to give it a 19-10 advantage at intermission. — Reuters

Bills ride defense past Ravens, advance to AFC championship

TARON Johnson matched the NFL postseason record with a 101-yard interception return for a touchdown as the host Buffalo Bills delivered a 17-3 victory over the Baltimore Ravens in an American Football Conference (AFC) divisional playoff game on a windy Saturday night.

Josh Allen passed for 206 yards and one score. Stefon Diggs caught a touchdown pass, Jerry Hughes recorded two sacks and the Bills’ defense held the Baltimore offense out of the end zone as the franchise qualified for the AFC championship game for the first time since the 1993 season. — Reuters

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