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Fewer people getting tested for COVID-19 slows infection rate

THE DEPARTMENT of Health (DoH) reported 891 coronavirus infections on Sunday, bringing the total to 477,807.

The death toll rose by four to 9,257, while recoveries increased by 8,316 to 448,258, it said in a bulletin.

There were 20,292 active cases, 80.9% of which were mild, 8.2% were asymptomatic, 6.7% were critical, 3.6% were severe and 0.58% were moderate.

Davao City reported the highest number of new cases at 65, followed by Rizal at 55, Isabela at 50, Manila at 40 and Quezon City at 37. Eleven laboratories failed to submit their data on Jan. 2, DoH said.

Fewer people being tested during the holidays led to the low case number, it said.

“The DOH reminds the public to be cautious in interpreting these numbers as an increase in cases in the coming weeks is still possible,” it said.

Health authorities said they continue to assess the effects of the holiday season on coronavirus disease 2019 (COVID-19) transmission. “The DOH asks all stakeholders to be vigilant in guarding against complacency in the fight against COVID-19.” The Philippines last week banned foreign travelers from 20 countries where a more infectious strain of the coronavirus has been detected.

The ban initially covered Britain and was expanded on Dec. 29 to include Hong Kong, South Korea, Singapore, Japan, Israel, Lebanon, Canada, South Africa, Switzerland, Italy, Denmark, Spain, Ireland, The Netherlands, Germany, Sweden, Australia, France, and Iceland.

The government extended the ban to the United States on Jan. 1.

Filipino citizens coming from these countries may enter the Philippines, subject to quarantine and testing, according to the presidential palace. The ban will run until Jan. 15.

DoH on Saturday said the Philippine Genome Center  (PGC) had not detected the UK variant in the country and positive specimens of those coming from countries with the new strain would undergo genome sequencing on Monday to check for the new strain. — Vann Marlo M. Villegas

Gov’t looks at wider net for fake products

THE GOVERNMENT may expand the raids of areas selling counterfeit goods, including two commercial centers in San Juan and Manila that authorities failed to monitor amid a coronavirus pandemic.

The Intellectual Property Office of the Philippines is targeting Greenhills Shopping Complex in San Juan Divisoria in the capital, Rowel S. Barba, director general of the Intellectual Property Office of the Philippines (IPOPHL), said in an online interview.

“Enforcement agencies had problems as far as raids are concerned because of limited physical movements,” he said in mixed English and Filipino. “Hopefully we can do something about Divisoria and Greenhills.”

This year’s raids by police and agents of the National Bureau of Investigation (NBI) would depend on information and complaints from brand owners, Mr. Barba said.

The National Committee on Intellectual Property Rights (NCIPR), which includes IPOPHL, seized fake products worth P13.7 billion in the seven months through July 2019. The products included mostly fake brands of cigarette, alcohol, pharmaceutical and personal products. There were also a handful of handbags and wallets.

Greenhills Shopping Center in San Juan was in the United States Trade Representative’s (USTR) 2019 Notorious Markets list. It said vendors in the area sell large volumes of counterfeit goods such as handbags, shoes, clothing, jewelry, electronics and toys.

“The market has been the subject of raids and monitoring by enforcement officials,” it said. “However, sellers have reportedly been able to evade enforcement by moving to new stalls or by discreetly selling illicit goods behind counters and underneath tables.”

“USTR urges the Philippines to enhance and sustain enforcement actions to deter sales of counterfeit goods at this market.”

IPOPHL said online sales of counterfeit and pirated goods surged during the lockdown. — Jenina P. Ibañez

Nationwide round-up (01/03/21)

House leadership stopped plan to probe alleged corrupt officials — Cayetano

PRESIDENT Rodrigo R. Duterte publicly named lawmakers allegedly involved in corruption because the planned legislative investigation on the matter was stopped under the current House leadership, former House speaker Alan Peter S. Cayetano said on Friday. Mr. Duterte earlier presented a list of supposed corrupt members of the House of Representatives that was prepared by the Presidential Anti-Corruption Commission. Mr. Cayetano, who represents Taguig City, said Party-list Rep. Michael T. Defensor and Bulacan Rep. Jonathan Sy-Alvarado planned to hold public hearings on the alleged involvement of some of their colleagues in corruption before he was removed from the speakership post. “Before Mike Defensor and Jonathan Alvarado were removed from being committee chairmen, those were set to be investigated. The new House leadership prevented that from happening. It said, ‘don’t investigate them just yet,’” Mr. Cayetano, who was ousted as House Speaker in October in a session held outside the chamber, said in his Facebook live in mixed English and Filipino. The lawmaker said the President’s action was consistent with his style of taking matters “into his own hands” once an agency failed to act on his “warning shot.” Mr. Defensor and Mr. Sy-Alvarado were both stripped of their chairmanships in the committee on public accounts, and the committee on good government and public accountability, respectively, following Mr. Velasco’s assumption as Speaker. “I expect more names to be named because there are a lot of names circulating. I’m just disappointed that the President revealed it first,” Mr. Cayetano said, adding that the revelation should prompt the House leadership to act on the corruption claims against its members.

NOT AWARE
Reacting to the lawmaker’s statement, Party-list Rep. Eric G. Yap, one of those tagged in the list, said he’s not aware that an investigation had been planned in the House. Mr. Yap, chairman of the House committee on appropriations, assumed his post under the leadership of Mr. Cayetano. “I’m not aware of that,” he told BusinessWorld in a Viber call on Sunday. “Should an investigation have been filed, I’m sure that it would be pursued by the House committee on good government.” Mr. Yap said his colleagues in the chamber will seek an inquiry into the issue this month. Mr. Velasco has yet to respond to a request for comment as of this writing. — Kyle Aristophere T. Atienza

Regional Updates (01/03/21)

New Pasig BOSS

THE PASIG City government launched another Business One Stop Shop (BOSS) on Sunday, located at the Ayala the 30th Mall, in time for this month’s peak period for business permit renewals. Pasig Mayor Vico N. Sotto, in a post on his Facebook page, said the new facility will decongest the BOSS at the city hall, bring services closer to the businesses that provide the biggest bulk of our city’s local income, and improve the overall ease of doing business. He noted that almost 35% of businesses in the city are based in just two out of the 30 barangays.

Boracay rehabilitation to be completed by May, vows DENR chief

ENVIRONMENT Secretary Roy A. Cimatu said the rehabilitation of the popular tourist island Boracay will be completed by May. “The BIATF (Boracay Inter-agency Task Force) is capping 2020 on a high note, setting us off in 2021 with solid confidence that we will hit our targets within the remaining five months ahead of us,” Mr. Cimatu, who chairs the task force, was quoted in a statement released on December 30. The BIATF’s year-end report showed that the number of structures violating easement rules has gone down to 342, which is 21 % of the 1,569 identified illegal structures around the island. Earlier, the government charged nine establishments for illegally occupying protected forest lands. In 2018, President Rodrigo R. Duterte called the country’s top tourist destination a “cesspool” and ordered its full closure to visitors for over half a year to give way to rehabilitation. In 2020, Boracay was one of the first areas in the country to reopen to domestic tourists following strict lockdowns due to the coronavirus pandemic. — Angelica Y. Yang

China-funded Davao City bridge targeted to start construction in Q3

DPWH-11

CONSTRUCTION of the China-funded Bucana Bridge in Davao City is targeted to start in the third quarter, according to a Department of Public Works and Highways (DPWH) official. “The agreement signed (December 9) was the implementation arrangement for the Bucana Bridge in the coastal road network of Davao City that will be funded through grant by China,” said DPWH Undersecretary Emil K. Sadain through Viber. Mr. Sadain said the Chinese government will provide approximately $60 million or about P2.9 billion financing for the project. The bridge is part of the P19.8-billion Davao Coastal Road project, which complements the Davao City Bypass Road and Davao City Expressway. “The implementation of the project would be on the third quarter (Q3) of 2021,” Mr. Sadain. The bridge, to be located at the mouth of the Davao River, will have four lanes and will be 477 meters long. A statement from the Chinese Embassy indicates that the project will adopt the localized implementation mode, which means the Philippine government will be in charge of technical works and project management. The implementation period is around 30 months, including design and construction phases. — Maya M. Padillo

DENR starts reviving mangrove trees along a portion of Manila Bay

THE ENVIRONMENT department has started planting nilad trees at the Baseco lagoon to revive the mangrove species along Manila Bay, the agency announced last week. “Nowadays, we can hardly find nilad growing in this place.  We lost nilad in Manila primarily because of massive urbanization,” Environment Secretary Roy A. Cimatu said as he led the ceremonial mangrove planting activity on December 29. “This is what we hope to relive in Manila to allow this generation and the future ones to also experience the beauty and bounty of the bay,” he added. The Department of Environment and Natural Resources (DENR), in a statement, said mangroves such as the nilad could successfully capture carbon up to five times better than forests in the mountains. An abundance of mangrove trees in an area can also protect coastal communities from storm surges. The mangrove planting project, titled Nilad for Maynila, is spearheaded by the DENR’s research arm, the Ecosystems Research and Development Bureau (ERDB). The project is part of the ERDB’s contribution to the ongoing Manila Bay rehabilitation program of Manila Bay, ERDB Director Henry Adornado said in a statement.

NOT DELAYED
The DENR also reported last week that the Manila Bay cleanup was not delayed by the public health emergency as various activities and projects lined up last year were implemented. Among these were the launch of a solar-powered treatment sewage plant in July, regular clean-up activities, and provision of portable toilets to informal settlers living along the bay. — Angelica Y. Yang

Health department investigates diarrhea outbreak in Davao Occidental town

THE DEPARTMENT of Health’s (DoH) Davao regional office is investigating an outbreak of diarrhea in a Davao Occidental town that reportedly claimed one life and sickened 33 others. In a statement on Sunday, Annabelle P. Yumang, DoH Davao Center for Health Development regional director, confirmed reports of diarrheal disease cases in Barangay Butuan in the town of Jose Abad Santos after verifying with Municipal Mayor Jason John Joyce early Sunday. Initial investigation showed that 34 patients were admitted to the Tomas Lachica District Hospital, one of whom died and the cause of death is still subject for further investigation. Another 25 individuals are being closely monitored in the community, the DoH said. Municipal Health Officer Amparo A. Lachicha said the probable source of infection is contaminated water from the community’s source. “A team from the RESU (Regional Epidemiology Surveillance Unit) is set to visit the affected barangay to collect appropriate specimens and continue the investigation together with the Provincial Health Office and Municipal Health Office,” the DoH-Davao said. It added that the mayor assured the regional director that “everything is under control” and no new patients were reported on Saturday night. The DoH said medicines and intravenous fluids were provided to the hospital while jerry cans for water storage and chlorine granules were also delivered to the community. The DoH also reminded the public that safe drinking water, use of improved sanitation, and hand washing with soap can reduce the risk of diarrhea. “If anyone is experiencing three or more loose or liquid stools per day, this must be reported immediately to the nearest facility for immediate health interventions,” it said. — Vann Marlo M. Villegas

Sin tax collection target set at P297.8 billion in 2021, DoF says

THE GOVERNMENT has set a target of P297.8 billion for excise taxes collected on so-called “sin” products this year, driven by higher tax rates, which will offset the expected slump in volumes due to the economic hardship caused by the pandemic, the Department of Finance said.

The target was adopted by the Development Budget Coordination Committee during its 187th meeting in December, Finance Assistant Secretary Ma. Teresa S. Habitan told BusinessWorld via Viber last month.

This year’s target was 29% bigger than the downgraded P230-billion goal for 2020, and the P269.1 billion collected in 2019, by 11%. However, this was 10% lower compared to last year’s original goal of P332.2 billion, before economic managers slashed their revenue projections to consider the impact of the pandemic on consumption.

Ms. Habitan said the Bureau of Internal Revenue (BIR) and the Bureau of Customs (BoC) are expected to collect P177 billion from excise taxes on tobacco products, P81.6 billion from alcoholic beverages, P39 billion from sweetened beverages and P200 million from electronic cigarettes (e-cigarettes).

Excise tax rates on “sin” products have been increased again this year as per the timetable set out in law, with Ms. Habitan noting that sales volumes will be lower in line with the economic slowdown, weighing on projected revenue.

Republic Act (RA) 11346, signed in July 2019, increases the tax imposed on cigarettes to P50 per pack in 2021 from P45 last year.

RA 11467, which was signed into law at the start of 2020, increased the excise tax on heated tobacco products to P27.50 per pack this year from P25 last year.

Vapor products with nicotine salt will be levied a P42 tax per milliliter, up P5 from the 2020 rate.

Tax rates on conventional freebase or classic nicotine vapor products will also increase to P50 per ten milliliters from P45 previously.

RA 11467 also calls for a tax hike for alcohol products, increasing the specific tax of distilled spirits to P47 per proof liter starting 2021 from P66 previously, while keeping the ad valorem tax at 22% of net retail price.

Fermented liquors will also be taxed at P37 per liter, up from P35 last year.

The BIR and BoC collected P212.94 billion in the 10 months to October, exceeding the target by 16.88% but still behind the year-earlier pace by 6.7%.

Tobacco collections fell 3% from a year earlier to P129 billion, while those from alcohol products fell 8% to P57.37 billion. Collections from sweetened beverages fell 19% to P29.56 billion.

Tax collections from these products exceeded the overall target for the period by around 17%. — Beatrice M. Laforga

DoE studying RE, hydrogen, nuclear as alternatives to conventional fuels

ENERGY DEPARTMENT Spokesman Felix William B. Fuentebella said the agency is looking into adding more renewable energy (RE), nuclear, and hydrogen-based power in preparation for any possible supply crunch in conventional fuels.

“We are coming up with more options… We have to look into RE and the other fuels that are emerging such as hydrogen and the nuclear technology,” he said at the Department of Energy’s (DoE) year-end videoconference last week.

“There’s a possibility that conventional fuel can be (depleted)… Hindi lang national, pati international. (Not just on a national level, but international),” he added.

Mr. Fuentebella was responding to a question on whether oil and coal-fired generators will eventually be supplanted by RE.

He said the DoE is studying how RE can be connected to the grid and distribution system.

“Although meron tayong sufficient renewable energy sources, kailangan ikabit natin sa grid… ‘yung pagde-deliver natin ng continuous service 24/7 (Although we have sufficient renewable energy sources, we need to connect them to the grid… in a way that ensures 24/7 services). So these are very technical issues; that is why the DoE is (studying the issue more broadly),” he said.

Mr. Fuentebella also cited the need for further studies into nuclear and hydrogen power — both energy sources which were earlier endorsed by Energy Secretary Alfonso G. Cusi.

In December, Mr. Cusi said that the nuclear energy program inter-agency committee has submitted its recommendations to President Rodrigo R. Duterte. He said that the group “positively expected” that nuclear would be included in the country’s power mix.

Five months earlier, the President ordered the creation of the inter-agency body which was tasked to conduct a study on adopting a national position on a nuclear energy program.

In December, Mr. Cusi also announced that the department is looking into the viability of harnessing power from hydrogen.

“I have recently formed a team to study its potential for the local industry given that hydrogen is seen as the fuel of the future,” Mr. Cusi said in his message at the DoE’s virtual celebration of National Energy Consciousness Month.

In October, the DoE issued a ban on new coal-fired projects after its recent assessment showed the need to shift to a more flexible power supply mix. — Angelica Y. Yang

DTI says success of pitch to investors hinges on CREATE passage

THE Trade department said the passage of a key tax reform bill, known as the Corporate Recovery and Tax Incentives for Enterprises (CREATE), forms a major part of its investment promotion message.

Trade Undersecretary Ceferino S. Rodolfo in an online briefing last month said that he is hoping for uncertainties over CREATE to be resolved in January, in time for companies to reap the retroactive benefits of the bill by the income tax deadline in April.

Sana lang mabilis. Kasi actually pino-promote na natin ‘yung CREATE eh. (I hope for a speedy passage because we are promoting CREATE to investors) Sinasabi na lang natin sa mga investors (We are telling investors) that we believe that the CREATE bill as passed by the Senate will be the baseline in terms of incentives,” he said.

Legislators will go into a bicameral conference committee to reconcile clashing provisions in the two chambers’ bills. The Senate passed its bill in November, while the House approved its version in 2019.

The Senate bill reduces corporate income tax to 25% from 30% starting July 2020, and then by one percentage point each year between 2023 and 2027. The rate falls to 20% for domestic companies with net taxable income of P5 million or lower and total assets less than P100 million.

CREATE also streamlines the tax incentives system to make it more time-bound and performance-based.

“By February siguro ‘yan, March, nagpre-prepare na ng mga income tax applications ‘yung mga kumpanya (Companies will be preparing their tax returns by February or March)… ‘yun ‘yung window (that’s the window) not just for those with incentives but in general for all establishments,” Mr. Rodolfo said.

Mr. Rodolfo hopes that the provisions on incentives in CREATE, which he said balance the ability to attract investment and generate fiscal revenues, will be carried forward in the bicameral process.

“We trust the legislative wisdom of both houses to merge, consolidate, work on the whatever provisions of CREATE and CITIRA they deemed divergent,” he said, referring to a previous incarnation of the tax reform bill, the proposed Corporate Income Tax and Incentives Rationalization Act. CITIRA was repositioned as an economic recovery measure, CREATE, following the damage done to the economy by the pandemic.

The Finance department has said that CREATE will cost the government P250 billion in foregone revenue over the next two years after the corporate income tax cut was accelerated for small businesses. — Jenina P. Ibañez

Philippines to receive assistance from India in setting up National ID, broadband systems

INDIA has pledged aid to the Philippines as it sets up its national ID system, and also promised assistance in organizing a broadband network to fast-track its digital transformation, the Department of Finance (DoF) said.

In a statement over the weekend, the DoF said Indian Ambassador Shambhu S. Kumaran put forward the offers at a recent virtual meeting with Finance Secretary Carlos G. Dominguez III.

The national ID system program and the development of the broadband network are expected to support broader use of financial technology (fintech) and widen financial inclusion.

India launched a pioneering national ID system in 2009 known as Adhaar, which provided a unique 12-digit identifier to each of the country’s citizens across a population more than 1 billion strong.

Mr. Dominguez also told Mr. Kumaran that Indian private companies can participate in the government’s plan to improve cyber security at government banks and their subsidiaries.

The national ID system seeks to provide a single identification card to all Filipinos and reduce dependence on multiple government-issued IDs. The broadband network hopes to boost adoption of fiber optic networks and wireless technology, while allowing smaller telecommunication companies to enter the market.

Mr. Kumaran was quoted as saying that Indian firms are also seeking to participate more in the country’s “Build, Build, Build” infrastructure program.

The two sides will discuss more possible project partnerships, according to the DoF.

Mr. Dominguez said India’s GMR Infrastructure Ltd. is already involved in infrastructure projects like the Mactan Cebu International Airport project and expansion of the Clark International Airport.

President Rodrigo R. Duterte made official visits to India in 2017 and 2018, and Indian President Ram Nath Kovind paid a state visit to the Philippines in 2019. — Beatrice M. Laforga

Biomass industry lobbying for more FiT-subsidized capacity

THE biomass industry is seeking a larger allocation of renewable-energy capacity eligible for subsidized feed-in tariff (FiT) rates, to broaden participation in the biomass and hydro power segments, a developer said.

Dapat i-increase iyon (the installation capacity) eh…Kasi once you allow them, there will be more players. The difficulty lang is ‘yung development time, matagal ang hydro eh (We should increase the installation capacity eligible for FiT. Once you allow it, there will be more players. The difficulty lies in the development time for hydro, which takes a long time),” Don Mario Y. Dia, president of Biomass Renewable Energy Alliance, Inc. (BREA), told BusinessWorld in a phone interview on Dec. 29.

The Department of Energy (DoE) extended the deadline once more for FiT applications by developers of run-of-river hydropower projects. It did not set a date, but will declare applications closed once the 250-megawatt  (MW) capacity quota is reached.

He said that the government should let finished hydro projects that exceed the installation capacity subscribe for the FiT program.

Dapat i-allow na iyon…Sunk in na ‘yung cost mo. ‘Yung building, biglang lalampas ka dun sa capacities ng target, papaano iyon, we’ll stop them? Hindi dapat ganun, hindi developmental eh (It should be allowed. These are sunk costs. If the project exceeds the quota, you can’t just bar them? That doesn’t promote the industry’s development),” he said.

He said the industry is requesting an increase of 100 MW on top of the 250-MW installation capacity for biomass projects eligible to apply for FiT.

Kasi ‘yung mga nakatapos exceeded 250 eh, and sana dapat pinapasok na lang iyon. (The finished projects that went over the required 250-megawatt installed capacity should have been allowed),” Mr. Dia said.

In a text message Sunday, National Renewable Energy Board Chairperson Monalisa C. Dimalanta said that the DoE has been adopting the “rule of indivisibility” in its other RE projects.

Should finished output go over the installed capacity, “the entire capacity of the project would be deemed FiT-eligible even if there is a portion that exceeds the 250 MW limit,” Ms. Dimalanta told BusinessWorld.

“That’s how it has been applied to other technologies. We are expecting (the) same treatment for river hydro if and when it happens,” she said.

DoE Spokesman Felix William B. Fuentebella said that the department will adhere to the rule of indivisibility once run-of-river projects exceed the quota.

“If there are 245 MW subscribed already and the last plant is 10 MW, which will go beyond 250 MW, the last plant is given FiT on the whole 10 MW,” he told BusinessWorld in a Viber message Sunday.

He said the adjustment is appropriate for river hydro plants since they are “more challenging to construct and require more permits.”

In a department circular issued in 2015, the installation targets for solar photovoltaic (PV) and wind were raised to 500 MW and 400 MW, respectively.

The DoE has committed to raise the share of RE in the power mix to at least 30%, aided by the FiT incentives and other provisions of the RE Act of 2008. — Angelica Y. Yang

Leading Now, Next and Beyond COVID-19

The lessons we learned in 2020 were undoubtedly challenging, demanding and somewhat painful. The pandemic was indiscriminate, affecting people, businesses and governments the world over. It taught us to address accelerated change and uncertainty with forethought and equanimity. It compelled us to embrace technology with necessary urgency. And it made us rethink, reframe and reimagine the future in a post-pandemic world. As we begin the New Year, we Now have the opportunity to reflect upon the one that just passed, look to the Next year armed with the lessons the pandemic imparted, and plan for recovery Beyond.

The New Normal dictated that we learn to manage our lives safely knowing that the virus will likely be with us for the foreseeable future. Leaders are called upon, more than ever, to lead their organizations with empathy and protect the well-being of their people. This is all while developing proactive measures to resume business operations and to contribute to economic recovery.

Before the government imposed the lockdown, SGV leadership had been preparing for potentially bigger disruptions, partly due to the earlier experience we had when Taal Volcano erupted. Our Business Continuity Management program included a Crisis Management Team (CMT) in place, and it was promptly activated in early March. This team comprises members from critical groups within the firm, including risk management, IT, finance, legal, support services, communications and talent. The CMT was able to project potential problems, address unforeseen ones and anticipate others, all with the goal of protecting the overall health and security of our people, their families, our clients, and all our other stakeholders. This was not an easy task, as there were no precedents to provide guidance nor best practices to speak of — the team continued to rely on evolving government directives and scientific pronouncements while confronting an unseen and unknown enemy.

NOW: LEADING WITH EMPATHY AND PROTECTING OUR PEOPLE
The beginning of the community quarantine saw everyone adjusting to what would become the New Normal, with new risks and challenges arising. This was especially true when several members of the workforce found themselves stranded, mobility severely impeded and some becoming completely unable to work. The situation necessitated that leaders be emphatic in understanding the unique challenges facing their people. Leaders needed to find ways not only to keep people motivated and engaged, but also ways to nurture their strengths and support their continuing development. Sincere empathy also builds trust among an organization’s people, and this trust in turn, builds confidence in leadership. The key is to communicate clearly, constantly and concretely for both internal and external audiences. One needs to be transparent, express understanding, and always speak with confidence.

Most importantly, the organization’s Purpose should be the overarching and guiding principle in overcoming challenges. Our own Purpose “to nurture leaders and enable businesses for a better Philippines” was like a mantra for all of us and which, I believe, continues to unify us in thought and action during this pandemic.

When our offices closed and the need for remote working became crucial, alternative work arrangements were swiftly carried out. IT and technology security policies were updated to address potential risks as well as ease the adjustment to remote working. Assistance was also provided to employees who were stranded or needed additional arrangements to continue working.

At the same time, the firm provided medical support for employees and maintained salaries and benefits. Health policies were reissued to heighten the awareness on how best to address the pandemic. Mental and emotional health programs were implemented as added support, with webinars and activities held virtually on various platforms to raise morale and foster a stronger sense of camaraderie. We had masses and monthly bible studies as well as daily bible verses to address the spiritual well-being of our people. It was very important to keep our people engaged.

The key takeaway is that organizations need to imagine and prepare for every eventuality. By anticipating possible issues and risks through scenario-planning and business continuity preparation, we became more agile and better prepared to protect our people.

NEXT: PROACTIVE MEASURES TO REOPEN BUSINESS
Understanding that life and business will need to go on during, and after, the pandemic, SGV developed proactive measures on how to safely maneuver in this new working world. Best practices from other EY member firms were consulted and adopted, and the strict compliance with SGV and government policies was enforced.

The firm mandated the regular sanitation and disinfection of all offices as well as provided masks and sanitizers to all employees. SGV also made use of daily health and work location monitoring reports for its workforce and health screening forms for guests. Reminders on how to stay safe were continuously communicated, such as when needing to leave one’s home to work or when working in other locations as potentially required by clients. As an example of one such communication, these practices were all highlighted in a complete guide called A Day in the Life of an SGVean in the New Normal which provided easy-to-understand and engaging guidance on important day-to-day health protocols.

BEYOND: DOING ONE’S PART TO CONTRIBUTE TO ECONOMIC RECOVERY
As part of SGV’s Purpose to enable businesses, the firm actively seeks ways to help companies plan for future recovery. We made it a point to help our clients build resiliency plans, and continuously provided thought leadership to both the private and public sectors. We share our knowledge regularly through webinars and virtual speaking engagements. CSR efforts continued in support of the greater community. They were coursed through the SGV Foundation, which oversaw donations to those deeply affected by the crisis, as well as calamities such as the Taal eruption and the powerful typhoons that hit the country.

In order to look forward, leaders must identify and address weaknesses in their current business models. Our previous articles encouraged C-Suites to urgently reinvent and streamline business practices in light of the pandemic, as well as to take a hard look at revenues and costs with the goal of identifying ways to make them more efficient. Leaders must also explore how technology and digital transformation can be utilized to strengthen businesses.

Furthermore, we encourage leaders to take the time to connect more with the people in their respective organizations. Embody your organization’s Purpose, and let it be the anchor that keeps everyone grounded.

Let us welcome the New Year filled with hope, optimism and faith.

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.

 

Wilson P. Tan is the Country Managing Partner of SGV & Co.

Vaccine ethics

Even with the hopeful news of successive vaccines being approved for use in various countries, a major issue confronting many societies is who should get vaccinated first. The problem exists since it will be months — and in poorer countries, perhaps years — before the supply of vaccines is actually enough to meet demand.

Even rich countries struggle with the issue. While there is a consensus that healthcare personnel ought to be among the first priorities, a good deal of debate and difference follows over who should be next. A good model of careful thinking however is set by the permanent commission on vaccination of Germany’s Robert Koch Institute.* It first lays down the social objectives, namely: to minimize death and hospitalizations; to protect people who are professionally exposed to the disease; to minimize further transmission; and to sustain public life and the continuity of government functions. (Note that if the desired objectives had been different, e.g., minimizing economic disruption, the corresponding vaccination priorities would also have differed.)

In the event, with social objectives set, vaccination priorities consistent with them can be determined. These are roughly as follows: first in line are the elderly, with diminishing priority as age declines to 60; second in line are personnel in medical institutions with priority based on the risk of exposure (e.g., frontline doctors and nurses in hospitals ahead of those in private clinical practice or administration); third, persons with underlying conditions carrying a risk of serious illness, e.g., cancer, diabetes, cardiovascular disease; fourth, teachers, school personnel, and persons doing precarious work; fifth — note only the fifth — are key government personnel at national and local levels; and finally all other persons less than 60 years old.

The science and ethics behind these priorities are clear. If the aim is to minimize deaths and hospitalization, immunizing the elderly is the most direct route, since the effects of infection are known to be most severe among the elderly. (In the Philippines, three-fourths of all infections are among the below-50 age group, but roughly 60% of hospitalizations and 80% of deaths occur in the 50 to 89-year-old age bracket.) The same logic holds for prioritizing frontline health care personnel, who must immediately be protected against the disease if they are to continue working and not infect the people they attend to. On the other hand the lower priority given to teachers is also understandable, since their risk of exposure is lower and contingent on the mode of instruction to begin with. Of course, a diabetic 60-year-old teacher might still get higher priority, not because she is a teacher but because of her age and underlying medical condition.  The fifth priority accorded to high government officials — quite apart from delicadeza — stems from their greater ability to avoid risk and their easier access to quality healthcare if they do get infected. Germany’s chancellor Angela Merkel set an example in this regard during her New Year’s address when she said: “I too will be vaccinated — when it is my turn.”

Here at home, one must wonder whether the same thoughtful science guided by ethics and local conditions has gone into the government’s own vaccine program. News reports thus far fail to give the impression of a well-thought-out plan. The public is presented instead with a hodge-podge enumeration of supposed priority groups with no detail regarding their relative importance or the sequence of the rollout. Beyond the clear case of medical frontliners, the list seems more attuned to a prioritization not of the civilian population but of government agencies and employees. Hence it first enumerates “personnel” from departments of education, social welfare, jail management, and customs (!) without distinction as to function. But seniors and the poor “will also” be among the first, and — “based on President Duterte’s wishes” — the police and the military as well. Where almost everyone is a priority, one wonders if anyone really is.

One wonders exactly how such priorities will be implemented in practice. Would an able-bodied soldier or policeman get the vaccine ahead of a 65-year-old with diabetes? Would a customs inspector be inoculated before a factory or transport worker? Or a school principal before an elderly urban poor person? More important than one or the other answer is: why or why not?

This need for a painstaking delineation of vaccine-priorities is based on an economic reality: for an extended period, the supply of vaccines will be inelastic and must be quantitatively rationed to those who are most in need. The invisible hand of the market fails to work its wonders in these cases, since even an above-normal price would do nothing to increase supply, nor is a suppression of demand acceptable on humanitarian grounds. For the same reason (i.e., one that should be taught more in Econ 11), price-controls in areas cut off by natural disasters are a justifiable departure from the otherwise reliable course of letting market forces decide the allocation of scarce resources. In such crises, the limited supply of life-preserving means must be allocated based on humanitarian need and explicit social-welfare criteria, rather than through accustomed privilege and buying power. Flouting social priorities during such times of national crisis, e.g., through hoarding or price-gouging, amounts to a crime.

Now zero in on recent events. A slowly-mushrooming scandal is the revelation that members of the President Duterte’s innermost circle — including some cabinet members, his own close-in Presidential Security Group (PSG), and some allege even Duterte himself — had surreptitiously secured the Chinese Sinopharm/CNBG vaccine and had themselves secretly inoculated. Various administration officials have since twisted and turned to play down the incident, seeking to limit the damage by painting it as a purely private matter, where: (a.) the drug was just “donated” (later revised to “smuggled” so its origin is presumably no longer traceable); (b.) the vaccine was “self-administered” by the soldiers themselves (so no physician or other accomplice can be called to account); (c.) the vaccination was “purely voluntary” on the part of the soldiers (to pre-empt the obvious human-rights violation of coercing subordinates to be vaccinated with an unapproved drug); and, (d.) that neither the president nor any of the PSG’s higher-ups knew anything about the matter until after the fact (which strains credulity given the president’s vaunted omniscience and ₱4.5-billion intelligence fund). This leaves the PSG head to take sole responsibility and fall on his sword. (But not to worry, there’s always a safety net and reward for the steadfast. Main thing is to stop the contagion of scandal right there.)

Much of the criticism of these actions has thus far centered on how the vaccine was still FDA-unapproved and therefore possibly unsafe or ineffective. Such criticisms miss the point however. It is precisely because the Chinese vaccine is possibly or likely to be effective that its hoarding, misappropriation, and private use — particularly by key officials — is objectionable. At a minimum, the proper action should have been to entrust the vaccine supply — approved or unapproved, donated, smuggled or otherwise — to the health department for possible future distribution. (As an aside, the Chinese government has since approved the Sinopharm vaccine for general public use; and there is little doubt it will ultimately be approved by the FDA here as well.)

The incident is a scandal because it is a big slap in the face of a government that pretends to any attempt at a fair social prioritization and orderly distribution of scarce, life-saving vaccines. It is specious to reduce the matter to a private action that harms only the participants themselves: in the midst of dire scarcity, each private action has palpable social repercussions; every act of misappropriation is a deprivation of someone more deserving. The most cogent observation that goes to the heart of the matter came from a nurse who said: “Parang inapi naman nila ‘yung health workers. Talagang ipinakita nila na hindi priority. (It is like they abused the health workers. They really showed that they are not a priority.)” To extend the metaphor of a calamity, these actions are tantamount to government workers hoarding and gorging on donated relief goods instead of distributing them to those most in need.

Unless the full truth is revealed and those truly responsible are held to account, this sordid event bodes ill for popular trust in the seriousness of the government’s vaccine distribution plan. It is cold comfort that the plan itself to date is still murky in its principles, priorities, and operational implementation. Even before these details can be sorted out, however, the plan’s credibility has already been tainted. The red flag has been raised that not only may safety protocols be breached, but that the orderly and fair vaccine distribution may be corrupted by queue-jumping, supply-diversion, patronage, deceit, and bribery, with priority given to the highest bidder — or the most connected to the center of power.

Rather than take this credibility issue dead-seriously, however, administration officials have pooh-poohed the matter and addressed it instead by: first covering up the incident and denying it even happened. Second, when that failed, disavowing any knowledge of it and shifting the responsibility entirely upon the lowly soldiers themselves. And finally, deflecting attention away from the embarrassing issue by throwing a smoke bomb regarding corrupt public engineers and congressmen (all noise, with little evidence anyway) meant to crowd out news of the matter.

Oh, well, at least now we know what “Mask, Hugas, Iwas” (Mask, Wash, Avoid) really means.

*“STIKO-Empfehlung zur COVID-19 Impfung.” Advance copy of Epidemiologisches Bulletin dated Jan. 14, 2021.

 

Emmanuel S. De Dios is professor emeritus at the University of the Philippines School of Economics.

Pinoy vaccination

An otherwise comedic story if not for its disastrous effect could have well happened in the Philippines.

A clinic in West Virginia blundered and injected 42 people not with a COVID-19 vaccine but with an experimental antibody cocktail. (Also, the procedure for the use of the antibody treatment was wrong. It is administered through infusion, not inoculation.)  This tragedy was attributed to a “breakdown in the process” and to “human errors.”

And across the United States, the vaccine distribution is plagued by the lack of resources and logistical complications. A typical story is that the vaccines are available but are stored in hospitals and not given to the most vulnerable people. Worse are accounts of health workers who have refused vaccination.

As a consequence of all this, the US government sorely missed the goal of having 20 million people vaccinated by end-2020. By year end, the Centers for Disease Control and Prevention reported that 2.8 million people received the first dose of the vaccine. Even assuming that this was a conservative report, we would still conclude that the performance was way below the target.

It goes without saying that such problems pertaining to disorganization, inefficiency, and incompetence are more pronounced in the Philippines.

So, is it a blessing in disguise that Philippine vaccination is not right out of the gate? Not really.  The point though is that we must learn the lessons from the front-runners. But more importantly, we need to internalize lessons from our own experiences in fighting COVID-19, especially our failings.

Many lessons have to be learned in rolling out our vaccination program. I emphasize a few, namely:

First, do not treat the first-generation vaccines as silver bullets. The efficacy of the first vaccines has been established in clinical trials, but the real world is different. By all means, have the approved vaccines, but be prepared for twists and turns. The ultimate success of the vaccine depends on factors that we cannot predict like the actual and long-term effectiveness of the vaccines.

A fine difference exists between efficacy and effectiveness. Here’s a relevant passage from Carl Zimmer, “2 Companies Say Their Vaccines are 95% Effective. What Does That Mean?” This was published in The New York Times on Nov. 20, 2020 and updated on Dec. 4, 2020:

“Efficacy is just a measurement made during a clinical trial. ‘Effectiveness is how well the vaccine works out in the real world,’ said Naor Bar-Zeev, an epidemiologist at the Johns Hopkins Bloomberg School of Public Health.

“It’s possible that the effectiveness of coronavirus vaccines will match their impressive efficacy in clinical trials. But if previous vaccines are any guide, effectiveness may prove somewhat lower.”

The second lesson, which follows from avoiding the temptation to devote all efforts and resources to the vaccination program, is to do well in previous tasks. The truth is, much still has to be done to improve the Philippine capacity for case finding, testing, screening, quarantining the infected and those with symptoms, and contact tracing. The vaccination program must go hand in hand with the above interventions.

The third lesson is to have effective strategic communication. Strategic communication — one that is clear, accurate, transparent, and persuasive — is in fact the strategy.

Again, the Philippines is wanting in this area. Different authorities contradict one another. Worse, some officials are the carriers of fake news. Remember the statement of President Rodrigo Duterte that gasoline can be used as a disinfectant against COVID-19? He was probably joking, but it was a bad joke. Some folks take his every utterance seriously.

Moreover, effective communication must convince the population to get the COVID-19 vaccine. We have to contend with the sad reality that a significant number of our people fear vaccination, borne out of experience. Thousands of families, especially their schoolchildren, suffered from what is known as the Dengvaxia controversy.

Despite the advance warning from some quarters from the scientific and health community, the Department of Health in the previous administration swiftly introduced Sanofi Pasteur’s questionable Dengvaxia vaccine against dengue. Eventually, but with the damage already done, Sanofi warned that the vaccine posed a higher risk of a severe case of dengue for previously uninfected persons.

Fourth, recognizing that the virus cannot be annihilated soon despite the introduction of the vaccine, we have to continue adhering to the protocols of self-protection, especially physical distancing. But social compliance depends to a significant extent on how leaders themselves follow the rules.

A survey and study done by the University College London showed a decrease in social compliance (and Brits typically abide by rules!) when the public found out that their leaders avoided or violated the rules. Making excuses and using loopholes make things worse in gaining trust.

The administration thus should no longer tolerate and should condemn actions such as the Chief of the Philippine National Police having a mañanita (early morning party) and the President’s Spokesperson enjoying the company of dolphins during a strict lockdown or singing loudly in a bar during community quarantine. Pinoys also follow their leaders’ example.

Last but not least, we must recognize that the vaccination program must be a whole-of-society approach. The government, the private sector, and the civil society organizations must coordinate efforts and unite in common strategies for the transparent acquisition and equitable distribution of the vaccine.

Up to now, apart from receiving general pronouncements, the public is not fully informed about the framework, goals, and strategies for vaccine allocation and distribution. We need a bipartisan effort and a broad coalition that will rally around transparency, accountability, equity, and efficiency in the formulation and implementation of the vaccination program. 

 

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

www.aer.ph

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