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Sriwijaya Air crash puts Indonesia’s aviation safety under a fresh spotlight

SYDNEY/JAKARTA — Indonesia’s poor air safety record is again in the spotlight after a Sriwijaya Air jet carrying 62 people crashed into the Java Sea minutes after take-off on Saturday, marking the country’s third major airline crash in just over six years. There has been no word of any survivors.

Before the crash, there had been 697 fatalities in Indonesia over the last decade including military and private planes, making it the deadliest aviation market in the world — ahead of Russia, Iran and Pakistan — according to Aviation Safety Network’s database.

The crash of the Sriwijaya flight, operated by a Boeing Co 737-500, follows the loss of a Lion Air 737 MAX in October 2018, which contributed to a global grounding of the model.

The Lion Air crash, which killed 189 people, was an outlier in that it mainly revealed fundamental issues with the plane model and triggered a worldwide safety crisis for Boeing. Even excluding the deaths from that crash, Indonesia would rank above Russia if there are no survivors from Saturday’s crash.

Indonesia, an archipelago of thousands of islands, is highly dependent on air travel and its safety issues illustrate the challenge relatively new carriers face as they try to keep pace with unstoppable demand for air travel in developing nations, while striving for standards that mature markets took decades to reach.

From 2007 to 2018, the European Union (UN) banned Indonesian airlines following a series of crashes and reports of deteriorating oversight and maintenance. The United States lowered its Indonesia safety evaluation to Category 2, meaning its regulatory system was inadequate, between 2007 and 2016.

Indonesia’s air safety record has improved in recent years, receiving a favorable evaluation by the United Nations aviation agency in 2018. But in a country with a large death toll from vehicle and ferry accidents, the safety culture is battling against a mindset that makes it inevitable for some crashes to occur, experts said.

Saturday’s “crash has nothing to do with the MAX, but Boeing would do well to guide Indonesia — which has a chequered air safety record — to restore confidence in its aviation industry,” said Shukor Yusof, the head of Malaysia-based aviation consultancy Endau Analytics.

Authorities located the Sriwijaya jet’s flight data recorder and cockpit voice recorder on Sunday but experts said it was too early to determine the factors responsible for the crash.

“There has been a lot of noise made about the speed of its final descent,” said Geoff Dell, an air accident investigation expert based in Australia. “It is indicative of what happened but why it happened is still in many ways a guess really. There are multiple ways you can get an aeroplane to go down at that pace.”

He said investigators would look into factors including mechanical failure, pilot actions, maintenance records, weather conditions and whether there was any unlawful interference with the plane.

Sriwijaya’s operating record will also be placed under scrutiny. 

“Its safety record has been mixed,” said Greg Waldron, Asia managing editor at industry publication FlightGlobal. He said the airline had written off four 737s between 2008 and 2017 due to bad landings that resulted in runway overruns, including one in 2008 that led to one death and 14 injuries.

The airline in late 2019 ended a year-long partnership with national carrier Garuda Indonesia and had been operating independently.

Just before ending the pact, more than half of Sriwijaya’s fleet had been grounded by the Transportation Ministry due to airworthiness concerns, according to media reports at the time.

Sriwijaya did not respond immediately to a request for comment. The airline’s chief executive said on Saturday the plane that crashed was in good condition.

Like other Indonesian carriers, Sriwijaya had slashed its flight schedule during the coronavirus disease 2019 (COVID-19) pandemic, which experts said will be examined as part of the investigation.

“The challenges that the pandemic brings impacts aviation safety,” said Chappy Hakim, an Indonesian aviation analyst and former air force official. “For instance, pilots/technicians were downsized, salaries not paid in full, planes are grounded.” — Reuters

Following Biden win, UN chief seeks to stay on for second term

UNITED NATIONS (UN) Secretary-General Antonio Guterres told the five permanent members of the Security Council on Sunday that he would like to stay on for a second term, according to two diplomats familiar with the matter.

Mr. Guterres, a former Portuguese prime minister, is likely to officially inform the president of the UN General Assembly soon, the diplomats said, speaking on condition of anonymity because the decision wasn’t yet made public.

Mr. Guterres, 71, assumed office in January 2017 for a five-year term that finishes at the end of this year. Diplomats say Mr. Guterres, who managed to avoid Donald Trump’s wrath largely by refraining from criticizing the US president in public, was waiting for the results of the November election before coming to a decision.

A spokesman for Guterres didn’t immediately respond to a request for comment.

Under Mr. Trump, the US has repeatedly clashed with the UN and its organizations, quitting the World Health Organization (WHO) and angering Security Council members with its effort to kill what remains of the multinational Iran nuclear accord. President-elect Joe Biden has pledged to reverse the go-it-alone approach by returning to the WHO, seeking to repair the Iran deal and rejoining the Paris climate accord.

Mr. Guterres has made climate change his signature issue, pushing countries to up their commitments to reduce carbon emissions. Mr. Biden’s administration has signaled that climate will be a top priority and his pick for UN ambassador, Linda Thomas-Greenfield, is a seasoned diplomat with experience on four continents.

Most recent UN chiefs have served out two terms, and diplomats expected the so-called P5 — Russia, the US, the UK, China and France — to support his re-election bid. Mr. Guterres, who has been criticized for at times for failing to call out world powers for human rights abuses, has had to navigate a turbulent period at the UN as Mr. Trump turned away from the world body while China grew increasingly assertive.

The selection process for a UN chief has been called opaque, with the permanent five members wielding disproportionate influence over who gets selected, though the 2016 election was the first one to be made more open. Critics have also called on the UN to finally name its first woman chief.

Writing on behalf of a group of 25 countries, Costa Rica and Denmark in December called on the UN to ensure that the “upcoming selection process” meets the “minimum standards of transparency.” — Bloomberg

Period tracker is the most popular health app of 2020

Flo, Calm, and MyFitnessPal are the most popular health apps in the world in 2020, according to the Health App Index from Uswitch, a UK-based comparison website. Half of mobile app users relied on health and fitness apps in order to achieve their fitness goals before the pandemic. That number rose to 75% after the coronavirus disease 2019 (COVID-19) outbreak. 

The index gathered data from the Apple App Store, search engine optimization company Ahrefs, and analytics company SimilarWeb from December 12 to 20, 2020, to find out the world’s most popular health apps. 

To determine a seed list to use, Uswitch took the top 20 free health apps from the Apple App Store in 20 countries and gathered the 15 most popular apps across each. These apps were analyzed using their average app store ranking, yielding a list of the most popular apps, and then scored 1 to 15 based on their ranking, with 15 being the highest.

Flo, a period tracker used by more than 153 million women worldwide to monitor their menstrual cycle, scored 15 points and ranks in the top 10 in the app store of every country indexed by Uswitch, apart from Austria. 

Meditation app Calm’s popularity increased after mental health became a global issue. It scored 14 out of a possible 15, and is most popular in Ireland, Luxembourg, and the UK. 

MyFitnesPal, meanwhile, topped the weight management category. Among all the apps studied in the index, it also emerged as having the largest quantity of collected user data.

Australia, Canada, the United Kingdom, the United States, and New Zealand are the countries that are most interested in health apps, Uswitch’s data also revealed. 

In the Philippines, Fitbit was the most popular health app according to Ahrefs’s search volume data, as fitness was found to be the top health concern for Filipinos. — Patricia B. Mirasol

Singapore restricts flexibility for some foreign employees

Singapore is tightening restrictions on intra-corporate transferees, one category of workers brought from overseas offices of multinational corporations, the Straits Times reported.

Intra-corporate transferees are a common feature of free-trade agreements worldwide that, for example, allow professionals to move for short periods to set up offices or for temporary projects, the Straits Times said. Intra-corporate transferees pass holders make up less than 5% of employment-pass holders in Singapore.

The changes could reduce the number of dependents’ pass holders entering Singapore and send a stronger signal that multinational corporations need to give consideration to hiring locals before transferring in a foreign employee, the Straits Times said, citing observers of the situation. The developments could also discourage employers from applying for employment passes via intra-corporate transfers, the paper said.

Employment pass (EP) holders in Singapore declined 2% from December 2019 to June 2020, the paper reported, citing the Ministry of Manpower. EP holders need to earn a monthly salary of at least S$4,500 ($3,390).

Employers need to advertise on a government website for a minimum of 28 days before and give fair consideration to all local applicants before putting in an EP application. The advertising requirements do not apply if the employer has fewer than 10 employees, the fixed monthly salary for the role is S$20,000 and above, or the role is a short-term one not exceeding one month, according to the manpower ministry.

Among the changes to the foreign workforce that have been made recently:

• Transferees won’t be allowed to remain in the country for a limited period to find a new job if their work passes are canceled, while Employment Pass holders are permitted to remain for a short time if they meet specific criteria.

• Since November, intra-corporate transferees have been told they can’t bring family members to Singapore via dependents’ passes or long-term visit passes, though employment-pass holders can do so if they meet qualifying criteria, the paper said.

— Joanna Ossinger/Bloomberg

From the Cold War to COVID-19: The eight common ways people behave in a crisis

By Jean Slick

A year ago, the world was just starting to learn about a mysterious virus that was killing people in the Chinese city of Wuhan. While the ensuing coronavirus pandemic was unprecedented in current times, human experience with disasters and crises is obviously not new.

As an academic who teaches disaster management programs, I’ve studied how people react during different types of disasters. There are common patterns in the ways people come together to respond to these kinds of events—regardless of whether the trigger was a natural hazard, technologically based, or human-caused.

During the Cold War, fears in the US about the breakdown of social order and widespread panic in the event of an atomic bomb attack led to the study of human behaviors in situations of collective stress.

MYTHS ABOUT SOCIAL BREAKDOWNS
Myths about social breakdown during disasters still prevail and continue to be used by media to frame societal response to certain types of crises, but the way that people actually respond is primarily pro-social.

When communities are impacted by events that threaten life and safety, the response is typified by the convergence of people, information, and materials.

Each of the following eight common types of behaviors associated with citizen response to past crises and disasters have also been seen during the COVID-19 pandemic across the globe. The behaviors are not mutually exclusive, but do reflect different motivations.

1. Helping

In response to the suffering of others, people reach out to help in myriad ways. Altruistic actions during the pandemic have included the establishment of “caremongering” and mutual aid groups to help meet a range of basic needs, including creative initiatives to make personal protective equipment, hand sanitizer, and ventilators. 

With the pandemic, we all are facing the same threat, and so people have also taken action to help reduce the spread of the virus by wearing masks, social distancing, and working from home where possible.

2. Being anxious

Anxiety has been heightened during the pandemic for different reasons. Visitor restrictions that keep family members from seeing loved ones in hospitals or residential or long-term care homes, as well as worry about the conditions in care homes, has created anxiety for many. 

The use of technology has been critical in helping to re-establish face-to-face or verbal contact between those who have been separated. To address uncertainty and risk, tools were developed to help people decide if it is safe to visit someone during the pandemic, or if a family member should be taken out of a retirement or long-term care home.

3. Evacuating/Returning

Events that cause physical destruction often result in the evacuation of people from the affected area. While the pandemic did not destroy physical infrastructure in communities, it did trigger migration. 

People moved to reduce their risk of exposure to the virus or because of indirect impacts of the pandemic, including university closure and job or income loss. Many of the moves were to be with family in other communities. It is too early to tell how many of those who moved will eventually return.

4. Supporting

People often express support and gratitude to those who were part of the formal response effort. Expressions of support for health care and other essential workers were evident, particularly in the early months of the pandemic. 

Forms of support included banging on pots and pans at a set time each day, putting signs in windows, lighting landmarks, and highlighting their stories. Special thanks were also given to groups such as truckers who continued to ensure movement of goods across borders.

5. Being curious

People are curious about threats to personal safety that are outside the realm of their lived experience, with interest being sparked by the novelty of an event and a desire to make sense of the situation. 

Curiosity about a threat and potential impacts leads to information-seeking behaviors, with the method of getting information being influenced by the proximity to an impact zone. 

During the early months of the spread of COVID-19, people turned to the internet, as well as traditional and social media, to learn about what was happening in Wuhan—and then Italy and other countries. As the global spread of the virus brought the threat closer to home, people sought information about what was known about transmission of COVID-19 and preventative actions that could be taken.

6. Witnessing

People who witness an event bear testimony to what took place. Sharing of these kinds of firsthand experiences has been enabled by the ubiquitous use of cell phones and social media. Citizen witnesses play a unique role when they provide access to sites where traditional media is not present. 

Citizen journalists in China took significant risks to share images of the impacts of the novel coronavirus in Wuhan via YouTube. Stories from doctors and nurses on the front lines of the response in Italy and other countries provided warnings to others about the impacts of the virus on people and those caring for them. 

These firsthand accounts allow us to become a secondhand witness to an event, with the rawness of witness testimonies generating an affective response, which then becomes a motive for other actions.

7. Mourning

The pandemic has caused a significant loss of life. Restrictions have limited how people can gather to mourn and affected the grieving process. Attention has been given to finding other ways to mourn. 

Public forms of memorialization have included events such as drive-through candlelight ceremonies, as well as place-based memorials created using crosses, flags, photos, and flowers to represent and honor those who have died. Virtual memorials have also been created to recognize health-care workers and citizens who died from COVID-19.

8. Exploiting

While most behaviors in disasters and crises are pro-social, there are people who take advantage of a crisis situation for personal gain. Examples of exploiting behaviors early in the pandemic included hoarding personal protective equipment and hand sanitizer, with the intent of reselling for substantial gain. During the early months of the pandemic, high demand and limited stock or disrupted supply chains led to exploitive pricing for some products.

— The Conversation

Jean Slick is an Associate Professor in the Disaster and Emergency Management Program at Royal Roads University in Colwood, British Columbia, Canada.

Even with a vaccine, we need to adjust our mindset to playing the COVID-19 long game

Incredibly, a whole year has passed since the first emergence of COVID-19. What looked like a temporary inconvenience at first is turning into a permanent fixture that might forever change life as we knew it before 2020.

But how long will people continue to comply with the measures necessary to overcome the virus as complacency and fatigue set in?

As new outbreaks have cropped up in New South Wales, Victoria, and Queensland in recent weeks, governments have responded with stringent new measures to prevent the spread of the virus, including border closures, mask mandates, and temporary lockdowns.

In response, there has been some pushback. In Sydney, anti-mask protests are making a comeback, while hundreds partied on Bronte Beach in violation of distancing regulations. Others have absconded from quarantine hotels and airports.

Are these isolated cases, or signs of an increasingly exhausted public growing less tolerant of restrictions with the knowledge of vaccines on the way?

And could this kind of complacency could cost us the war against the virus?

THE IMPORTANCE OF PSYCHOLOGY TO WINNING THE WAR
The absence of medical science would surely lose us the war against COVID-19. But psychology is no doubt equally important if we’re going to win it.

What ultimately stops a highly infectious disease is people’s compliance with the measures that governments put in place. This is why self-isolation, social distancing, curfews, good hygiene, and face masks have become ingrained in our daily lives over the past year.

One might think these hard-learned behaviors will become habits that stick no matter how long the pandemic continues. But behavioral science warns us that dashed hopes, uncertainty, changing goalposts and broken credibility can play a major role in how long people strictly follow rules and maintain good habits.

A BATTLE OF WILLPOWER
The sacrifices that governments are continuing to ask people to make require self-control. Willpower has been likened to a mental muscle that can tire. There is some evidence that exercising self-control takes so much mental effort, it can eventually deplete people’s willpower.

Evidence also shows that as willpower wanes, people are more likely to make decisions that can pose risks to themselves and harm others.

Participants in one study, for instance, were asked to perform a tedious task. For some of these participants, the task was also designed to require more concentration. These participants later registered a higher willingness to take risks.

In another study, a tedious and complex task made participants more likely to behave dishonestly. Depleted willpower undermined their ability to tell right from wrong.

These controversial results from experimental situations may not be directly applicable to today’s circumstances—they may not tell us anything about people’s long-term determination to fight the virus.

However, they do show us how important psychology is when assessing people’s abilities to comply with rules that go against their natural instincts and inclinations.

SHIFTING GOALPOSTS AND FALSE HOPE
Performing a task, like following complex COVID rules and regulations, also depends on clear and achievable objectives. Vague or shifting goalposts and a lack of feedback on people’s progress toward a specific goal tend to undermine people’s motivation.

Shifting goalposts and mixed messages have been a consistent feature of governmental responses to COVID-19—not just in Australia, but everywhere.

This is partly related to our evolving understanding of the virus and the most effective ways to stem transmissions. For instance, there has been much debate about the effectiveness of face masks, which has sown acrimony and confusion.

Governments have also made plenty of mistakes, such as providing incorrect COVID exposure sites to the public or mistranslated or out-of-date information to migrant communities.

All of this has can affect compliance. From a psychological standpoint, consistency plays an important role when it comes to people’s trust in authority and their willingness to follow rules, particularly when it comes to the type of long-term response required in a pandemic.

What people are willing to sacrifice also depends on their expectations. This is why optimism can be such a powerful tool to help people get through hard times. But if optimistic messages from governments begin to sound like false hope, this can have the opposite effect. Dejection can cause many to abandon good habits.

Anyone who took courage from Prime Minister Scott Morrison’s goal of making Australia “whole again by Christmas,” for example, may feel disheartened now that borders are once more closed, just a week into the new year. This could, in turn, sap people’s motivations to continue to behave in the right way

BALANCING THE MESSAGE
As we enter a new year with no end in sight to the pandemic, many will surely wonder what the endgame is. Yes, vaccines will hopefully bring a return to normal life, but this may take considerable time. We may be living with COVID restrictions longer than we think.

What is clear is that government messaging continues to matter greatly. People need to be informed of how we are traveling in the fight against the virus and how long the journey will take.

But this kind of messaging must be done with extreme care. Governments face the unenviable task of communicating enough positivity to motivate people to continue the fight without eventually losing credibility when unexpected bad news or delays occur.

With many more months of lockdowns, mask mandates, and quarantining in our futures, we all need to manage our expectations appropriately, too. We need to remember the long game is what matters. — Robert Hoffmann, Swee-Hoon Chuah/The Conversation

Robert Hoffmann is a Professor of Economics and Chair of Behavioral Business Lab at RMIT University.

Swee-Hoon Chuah is a Professor of Economics at the University of Tasmania.

US Capitol siege a ‘wake-up call’ for democracies, top EU diplomat says

BRUSSELS — The European Union’s top diplomat said on Sunday that last week’s siege of the US Capitol exposed the dangers of allowing the degradation of democratic values to go unchecked and disinformation to spread on social media.

“What we saw on Wednesday was only the climax of very worrying developments happening globally in recent years. It must be a wake-up call for all democracy advocates,” EU foreign policy chief Josep Borrell said in a blog post.

“Everybody needs to understand that if we accept setbacks after setbacks, even if they seem minor, democracy and its values and institutions can eventually and irreversibly perish,” said Mr. Borrell, who speaks on behalf of the 27 EU member states.

President Donald J. Trump is facing a renewed drive by Democrats to remove him from office after he incited supporters to storm the US Capitol, based on the unsubstantiated claim that he lost the Nov. 3 election due to widespread voter fraud.

The resulting assault by rioters left five people dead.

“In case anyone had any doubts, the events in Washington also show that disinformation constitutes a real threat for democracies,” Mr. Borrell said. “If some people believe that an election was fraudulent, because their leader has been once and again telling them, they will behave accordingly.”

Mr. Borrell called for better regulation on social networks, and said this could not be carried out by the companies themselves.

Twitter permanently cut off Trump’s personal account and access to his nearly 90 million followers late on Friday, citing the risk of further incitement of violence. Mr. Trump has repeatedly used Twitter and other platforms to claim the election result was fraudulent and to share other conspiracy theories.

The EU’s executive Commission last month proposed rules to clamp down on fake news on social media. These would force large online platforms to tackle illegal content and intentional manipulation of platforms to influence elections and public health, or face fines up to 6% of global turnover. — Reuters

What investors look for in a post-pandemic world

The reality of the coronavirus disease 2019 (COVID-19) pandemic has thrust the world into the digital age. By necessity, almost overnight, companies and governments have had to adapt, as technologies and innovations like digital payment platforms, online banking, telehealth, remote conferencing, and many more transform every aspect of daily life.

Leading the way in many of these fields are the startups that saw the opportunities that digital technologies provide and have spent years preparing themselves for this exact future. And now that that future is here, what next?

The World Fintech Festival gathered respected leaders in these areas to look beyond the current business landscape of the Philippines and Southeast Asia, in an attempt to scope out the most notable fields to watch out for.

Southeast Asia, particularly the Philippines, has been a hotspot for investments for years before the pandemic, an emerging market that is rife with potential.

Matthew Kolling, head of venture investments at the Aboitiz Group, pointed out that the country’s young, educated, English-speaking workforce, along with its burgeoning startup community, already attracts much interest from investors abroad.

“There’s a lot of wind at our backs, and it is very promising for the Philippines,” he said during the conference.

But this also means that differentiating oneself from the competition is much more important for startups than ever before. Mr. Kolling added that it is significantly more important for entrepreneurs today to have a future-oriented vision.

“When you’re investing, you’re not investing in today. You’re investing in five years from now or 10 years from now,” he said. “I want to see founders who are excited to change lives and the world, but who’s also got the evidence to back it up. They’ve got a roadmap, the right to be there in the conversation, be confident, coachable, be good at what they do. I’d like to hear more from people who think boldly.”

Ron Hose, CEO of coins.ph, mentioned that beyond profitability, more investors are looking for startups that have the leadership team and the values to make an impact.

“Most importantly, what differentiates successful companies consistently is going to be the people that are running the company. The values and motivations, skills and expertise they bring to the table,” he said.

Leadership matters in the new world of investments

Leadership matters more than ever. Joan Yao, vice-president of Kickstart Ventures, Inc., noted that the new world of investments puts much more emphasis on the kinds of leaders that can quickly adapt and change with the world.

“2020 has been an exceptional year, subjecting companies, founders, and teams to extreme pressure. Whether it’s because of hypergrowth, particularly if you are in the digital space, or the opposite if you are in spaces like travel or offline retail. It revealed a lot about founders and what they were made of,” she said.

“The most responsive and mature founders have been able to be honest with themselves at the start of this pandemic.”

Kickstart Ventures was chosen by Ayala Corporation, one of the biggest conglomerates in the country, to manage a $150 million venture capital fund to support startups pursuing innovations along with key technology areas in data and analytics, machine learning, artificial intelligence, cloud computing, fintech, automation, real estate, retail, transport, energy, water, health and wellness, and food.

As sole manager of ACTIVE Fund, Kickstart is responsible for seeking companies that offer innovative, scalable, sustainable solutions for the seamless integration of digital and traditional channels such as On-Demand Services, IoT, FinTech, Blockchain, E-Commerce, and Omni-Channel as well as the automation and augmentation applications for Artificial Intelligence, Machine Learning, Robotics, Big Data and Analytics, and Cloud Computing.

In all of these various fields of innovation, Ms. Yao added, good leadership with a workable vision of the future will differentiate the winners from the losers.

“I think 2020 has been a year that has only accelerated the future. A lot of these things, digital payments, remote work, e-commerce, digital health, you could see them coming. 2020 has brought things that were a bit further away closer to us now in the present,” she said.

“For us at Kickstart, and the Ayala Group, we’re excited about these things. Digital will be what will pervade every aspect of our lives and there will be multiple winners in this space across multiple sectors.”

House prioritizes economic ‘Cha-cha’

Economic managers expect Philippine gross domestic product to have contracted by 8.5-9.5% last year. — PHILIPPINE STAR/MICHAEL VARCAS

By Kyle Aristophere T. Atienza

HOUSE SPEAKER Lord Allan Q. Velasco on Sunday said there is an urgent need to amend the restrictive economic provisions of the 1987 Constitution to help the Philippine economy recover from the coronavirus disease 2019 (COVID-19) pandemic.

In a statement, Mr. Velasco said the Committee on Constitutional Amendments will open deliberations this week on the proposed Resolution of Both Houses (RBH) No. 2, which seeks to change the economic provisions of the 33-year-old Charter.

“When I filed RBH 2 in July 2019, the Philippines was poised to become one of the fastest-growing economies in Asia. The World Bank gave the country a projection of 6.6% GDP growth in the years 2020 and 2021. No one could have predicted the onset of a global pandemic, along with the devastation it has brought upon the economies around the world,” he said.

The World Bank projected the Philippine economy to have shrank by 8.1% in 2020 due to the impact of the pandemic, but expects it to grow by 5.9% this year. Economic managers expect gross domestic product (GDP) to have contracted by 8.5-9.5% last year.

RBH No. 2 seeks to insert the phrase “unless otherwise provided by law” to several sections of the Constitution, namely on national patrimony and economy; education, science, technology, arts, culture and sports; and general provisions on media and advertising.

“The addition of this phrase will allow Congress to enact laws to free up the economy to foreign investors, or maintain the status quo. Foreign investment plays a crucial role in the Philippine economy by supporting domestic jobs and the creation of physical and knowledge capital across a range of industries. The need to attract foreign capital is critical to support our economy’s recovery from COVID-19,” Mr. Velasco said.

The addition of the phrase “will give the Congress the flexibility and leeway to amend those provisions to conform with present economic and technological conditions,” Ako Bicol Party-list Rep. Alfredo A. Garbin, Jr., the chairman of the Committee on Constitutional Amendments, told BusinessWorld in a Viber message on Sunday.

Mr. Garbin said the business sector has been pushing for amendments to the economic provisions of the Constitution for the last three Congresses.

Mr. Garbin provided reporters with a copy of a matrix showing the position of the American Chamber of Commerce Philippines, Inc. (AmCham), Joint Foreign Chambers of the Philippines (JFC), Makati Business Club (MBC), Management Association of the Philippines (MAP), Philippine Mining and Exploration Association (PMEA), among others, on specific amendments to the Constitution.

The Constitution bars foreign investors from owning more than 40% of certain industries. Business groups said the provisions on exploration of natural resources, land ownership and restrictions on foreign ownership in public utilities, mass media and educational institutions should be amended, adding that “specific restrictions” should be left to the legislature.

“Even though the Philippines has experienced an increase in foreign investments in recent years, it still pales in comparison with its more affluent neighbors in this regard,” AmCham said in its position paper.

The group, however, said it “takes the position that there’s no need to allow foreign ownership of lands” as extending the years for leasing lands “may already suffice for purposes of investments.”

The Foundation for Economic Freedom (FEF) also expressed support for Charter change but only to amend the economic provisions.

“Enabling Congress to amend the restrictive economic provisions in the Constitution will send a positive signal to investors and fuel the economy’s transition to an investment-led growth… We caution that amendments to the Constitution be confined to the economic provisions only. This will lessen the risk of political controversy and division that could derail the speedy passage of these much-needed amendments to the economic provisions of the Constitution,” the FEF said in a statement on Sunday.

Constitutional expert and lawyer Antonio Gabriel M. La Viña, meanwhile, said convening as a constituent assembly to amend the Charter would split the lawmakers’ time and focus between their regular duties in the Congress and their “new task of proposing revisions to the Charter.”

The Charter change may also not push through because the “election season is about to begin,” he said.

“Liberalizing the economy in a world that is so unstable right now is the most reckless thing to do. It’s an ideological solution without an empirical basis at this time when everyone is seeking to protect their domestic economies and companies,” Mr. La Viña said.

The House committee is expected to finish its deliberations before the end of 2021, in time for a plebiscite coinciding with the 2022 national elections, Mr. Velasco said.

Banks’ bad loans rise for 10th straight month

BAD DEBTS held by big banks continued to edge higher for the 10th straight month in November, as borrowers have difficulty in repaying loans amid the economic slowdown.

Preliminary data from the Bangko Sentral ng Pilipinas (BSP) showed the gross nonperforming loans (NPL) ratio hit 3.81% as of end-November, picking up from the 3.72% in October as well as the 2.19% logged a year earlier.

Based on BSP projections, the industry-wide bad loan ratio could reach 4.6% by end-2020. It peaked at 17.6% in 2002 in the aftermath of the Asian financial crisis.

Soured loans reached P404.687 billion as of end-November, up 2.43% from the P394.432 billion in October and surging 73.6% from the P233.064 billion recorded a year ago.

NPLs cover debts left unpaid at least 30 days beyond the due date, which are considered as risky assets as these have high risk of default.

The increase in bad loans outpaced the buildup in lenders’ credit portfolio, which rose 0.14% to P10.625 billion from P10.61 billion in October but slipped by 0.09% from the P10.635 billion in November 2019.

Meanwhile, past due loans surged 63.3% to P507.687 billion from P310.883 a year ago. This brought the ratio to 4.78% from 2.92%.

Restructured loans reached P139.614 billion, soaring 241% from the P40.857 billion a year ago. This pushed the ratio to 1.31% of the total loans, from 0.38% a year ago.

As asset quality continued to deteriorate, banks beefed up their loan loss reserves by 65.4% to P352.733 billion from P213.276 billion last year.

Industry-wide NPL coverage ratio, which gauges the allowance for potential losses due to bad loans, settled at 87.16%, lower than the 88.03% the prior month as well as the 91.51% in November 2019.

“The trend in NPL ratio would be a function of the further pick up/recovery in the economy, in terms of improvement in sales, income, and livelihood,” said Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort.

Mr. Ricafort noted the further reopening of the economy would allow more businesses to operate at higher capacity and hire more workers, which would in turn, temper the rise in banks’ NPLs.

Banks tightened their credit standards to guard against bad loans amid the crisis. Outstanding loans disbursed by big banks grew by 1.9% year on year in October, the slowest since the same print was logged in September 2006.

Based on the Banking Sector Outlook Survey released last week, lenders remain wary of the impact of the crisis on the loan portfolio.

Majority of respondent banks said they expect NPL ratio to go beyond 3% this year until 2022. Meanwhile, nearly half of banks estimate restructured loans will make up 3-5% of the total portfolio.

Urgent enactment of Financial Institutions Strategic Transfer (FIST) bill and the Corporate Recovery and Tax Incentives for Enterprises (CREATE) bill will help banks reduce NPLs by freeing up nonperforming assets, Mr. Ricafort said.

“These reform measures would help reduce NPLs and provide a solid foundation for stronger economic recovery prospects in the coming months from COVID-19,” he said in a text message.

The FIST measure, under reconciled House Bill No. 6816 and the Senate Bill No. 1849, has already been approved by the Bicameral Conference Committee. Meanwhile, the CREATE bill will be scrutinized by the bicameral panel when session resumes on Jan. 18. — Luz Wendy T. Noble

BoI-approved investment pledges hit P1-T in 2020

THE Board of Investments (BoI) hit its P1-trillion target for approved investment pledges last year despite the coronavirus pandemic, Trade Secretary and BoI Chairman Ramon M. Lopez said on Saturday.

While it met the downscaled target, this was still 10% lower than the P1.14 trillion in BoI-approved investment pledges recorded in 2019.

“Even in our investments, even in the pandemic, naka-hit pa tayo ng P1 trillion and this is the second highest since 2019, which was P1.14 trillion, first in the history,” Mr. Lopez said at the “SMe Bayani: Beating the Odds” webinar on Saturday.

“That shows the confidence pa rin sa atin mga investors na nagpapa-register sa BoI (This shows the confidence of investors who are registering with the BoI),” he added.

Mr. Lopez said the BoI, which accounts for the bulk of planned projects registered with investment promotion agencies (IPA), has achieved its target every year under the Duterte administration. BoI-approved investment pledges reached P617 billion in 2017, P915 billion in 2018, and P1.14 trillion in 2019.

“We can heal as one but we can say also that Philippine businesses not only recover, but surge for 2021. We can build back better for a stronger, responsible, and more dynamic Philippines,” the Trade chief said.

Last month, BoI Managing Head Ceferino S. Rodolfo said the agency has approved P905 billion in investment pledges as of Dec. 18.

Mr. Rodolfo said the bulk of approved investments came from infrastructure projects, including

San Miguel Corp.’s P740-billion airport project in Bulacan, along with toll roads and telecommunication towers.

The impact of these investment pledges will not be immediately felt, although Trade officials see this as a sign of how confident investors are in the Philippines’ economic prospects. — Arjay L. Balinbin

Beauty behind a mask

JUST because vaccines are rolling out to some officials do not mean that the general public can be lax about their own restrictions.

Thankfully, the prolonged necessity to use masks are made a bit lighter by designer Randy Ortiz and this year’s crop of beauty queens. Miss Universe Philippines Rabiya Mateo, Miss Universe Philippines First Runner Up Bella Ysmael, Miss Universe Philippines Third Runner Up Pauline Amelinckx, and Miss Universe Philippines Sorsogon Maria Isabela Galeria have all been seen wearing masks designed by Mr. Ortiz, in cooperation with Aerian Essentials — itself an initiative of a beauty queen.

Aerian Essentials came to be when Valerie Lim, Miss Universe Singapore 2011 and current National Director of the Miss Universe Singapore Organization, donated masks with the help of Miss Universe Philippines. The masks, according to Aerian’s website, are made with a patented nanosilver fabric (silver being known for its antimicrobial properties). The fabric was developed by scientist Dr. Liu Hongjun.

The Randy Ortiz x Aerian Face Masks are made of waterproof, and washable microfiber, with a pattern of Baroque foliage and swags set against a contrasting background, either off-white, black, blue, and fatigue green and maroon. Another design is that of a black and white rose. Each mask has a filter slot that holds the Aerian nCam Layer for effective protection against viruses and bacteria. The Aerian nCam Layer has been lab-tested and adheres to the standards of the International Accreditation Cooperation (ILAC) and the China National Accreditation Service for Conformity Assessment (CNAS). According to its website, “After rigorous testing, Aerian nCam has been certified and proven to help eliminate 99% of disease causing germs, viruses, including the H3N2 virus (a flu strain), and air pollutants from the air.”

The Randy Ortiz masks sell for P499, while the filters can be bought separately at P199 at aerianessentials.com but also through https://shopee.ph/aerianessentials. —  JLG

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