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The COVID-19 pandemic may change spectator sports forever as stadiums sit empty

IN recent years, some sports facilities have been called “white elephants.” The term dates back to ancient Asia when a king would gift a white elephant to a subordinate he was dissatisfied with because the associated costs of keeping a white elephant significantly outweigh its value.

Today’s white elephants include sports facilities that have experienced substantial construction cost overruns, are underused or present a financial burden to taxpayers. White elephants are so common that sport facility legacies could possibly be the least promising benefit of hosting a major sport event.

However, the term has generally not been applied to sport facilities that professional sport teams call home. The pandemic has further exaggerated these white elephant characteristics of just about all large spectator sport facilities.

For example, the stadium constructed for the 1976 Montréal Olympics — known as the Big O — had an original estimated cost of $250 million. However, it is referred to as the “Big Owe” because construction costs inflated to a $1.4 billion project.

Between 2000 and 2018, there have been substantial cost overruns for hosting the Olympic Games. Much of this can be attributed to sport facilities.

Generally, publicly owned sport facilities have suffered far worse than those that are privately owned. Most sport facilities that were constructed for major sport events between 1996 and 2010 have experienced use and financial challenges. These often become financial burdens for taxpayers.

The problem extends to recently constructed facilities. The 2014 Sochi Olympics produced multiple sport facilities that have struggled with post-event use and cost upwards of US$399 million per year to maintain.

Meanwhile, a judge has ordered the closure of the 2016 Rio Olympic Park over safety concerns. The sport facilities began to fall into disrepair only six months after the Games concluded.

In North America, there have been over 40 professional sport facilities constructed or renovated since 2005 for the five major sport leagues. While the vast majority of these teams are privately owned, the facility projects have received $12.6 billion in public subsidies, or 48% of the cost. Whether it be new construction or renovation, these projects often experience substantial cost overruns and require ongoing maintenance that can be passed down to the taxpayer.

As a result, public administrators and taxpayers can become skeptical of new publicly funded projects. And conflicts around sports facilities can cause owners to threaten to move or negotiate out of paying rent; once construction is completed, facilities can increase the values of sport team franchises.

To amplify the financial repercussions, newly constructed or renovated professional sports facilities received a total of $3.2 billion in tax breaks between 2000 and 2016.

A recent example, the privately funded SoFi stadium in Inglewood, California — with a price tag of US$5 billion — sought to recoup US$100 million in tax reimbursements in its first five years of operation. Despite the capacity to hold up to 100,000 for select events, SoFi stadium opened in September 2020 to zero fans in its stands due to COVID-19.

Underused facilities can also be a concern for stadiums and arenas built with the intention of hosting professional sports. Cities have constructed stadiums and failed to successfully attain an anchor professional sports team; examples include the Alamodome in San Antonio, Texas, and the Videotron Centre in Québec City.

In these cases, cities have had to be creative and reimagine purposes for their facilities. For example, while the Alamodome was built with the intention of attracting an NFL team, it has primarily been used as a convention centre, to host NBA games and the occasional college football bowl game.

Several professional sports teams across North America saw attendance drop by more than 10 per cent between 2008 and 2018. Major League Baseball (MLB) experienced a league-wide decline of 10 percent between 2017 and 2018. Data suggests that younger sports fans may be less likely to attend actual events, instead relying on media for their sport consumption.

Finally, the COVID-19 pandemic has dramatically impacted use and attendance at sport facilities, and the long-term implications are largely unknown. The immediate impact forced the closure of sport facilities and leagues to operate in bubbles and without fans.

There have been discussions and attempts to allow spectators back into facilities that include blocking the first six to eight rows of lower bowl sections, dramatically reduced seating capacities and enforcing physical distancing.

However, consuming sports from the comfort of home currently provides the lowest risk for sport consumers. Virus-proofing sport facilities and convincing fans will be necessary to encourage post-pandemic attendance.

To avoid white elephants, city administrators and planners should consider evidence-based suggestions. The most successful sport facilities are strategically located and linked to urban conditions, demographics and socio-economic status, such as the Aquatics Centre and Copper Box Arena built for the 2012 Olympics in London.

Strategic locations include using brownfields — unused land previously used for industrial purposes — situated within urban regeneration areas that experience high levels of traffic. Brownfields are often occupied by infrastructure that has been deemed obsolete.

Planners should consider repurposing existing facilities and, if there is no immediate need based on the urban conditions, building temporary facilities that will be deconstructed after events.

When new sport facilities align with long-term city plans, strategic partnerships can be explored. For example, partnerships with professional sports teams, because the most successful facilities have a professional sports team as an anchor tenant.

Planners should also consider designing and building adaptable and flexible facilities to create additional opportunity for future use and create spaces for recreation and public use that gives the facility additional opportunities for community attachment and public benefits. It’s crucially important to involve future operators when designing the facility to ensure it suits their needs.

Post-pandemic sport facilities will need to be reimagined with alterations to building codes to virus-proof the stands. Return protocols may differ depending on whether it be a professional sport or recreation facility.

The size of facilities should be reconsidered. International competitions need to be reconsidered to prevent unnecessary stadiums and costly renovations.

And finally, the consumption patterns of younger audiences should be studied in order to adapt to and apply new technologies like virtual reality. As technologies advance, the trend of at-home spectator sport consumption will likely increase, reducing the need for large spectator sport facilities. — Reuters

Eagles at crossroads

Depending on perspective, Doug Pederson’s firing by the Eagles was either shocking or but a logical offshoot of a lost season. Around this time three years ago, he stood on top of the National Football League; he was hailed as a progressive head coach who bested the vaunted Patriots, featuring all-time-great bench tactician Bill Belichick, in the Super Bowl. Now, he’s a declared has-been who supposedly performed so badly as to tarnish the franchise’s singular accomplishment. To his critics, he didn’t simply run his charges down to the ground in the league’s worst division; he did so in a manner that embarrassed all and sundry.

To be sure, the Eagles’ 2020 campaign gave the naysayers plenty of ammunition. Pederson presided over an offense that was its own worst enemy; erstwhile cornerstone Carson Wentz got demoted under controversial circumstances, with the development souring relations to the point where he wants out. Meanwhile, replacement Jalen Hurts wasn’t much better, and, in Week 17, ceded the spotlight to third-string Nate Sudfeld — ostensibly to ensure a loss for draft position. The turn of events preceded a meeting with owner Jeffrey Lurie, who then decided enough was enough.

Perhaps, Pederson would have done things differently, had he known he was making his valedictory. At the very least, he would have been more concerned with the immediate outcome in the Eagles’ set-to against the Washington Football Team. He wouldn’t have made the apparent one-step-back-and-then-two-steps-forward move that earned the ire of purists, not to mention bitter Giants fans. In this regard, the Jets’ experience may well have been instructive; with an inspired Adam Gase bent on giving principals the middle finger on the way out, they notched an unlikely victory against the Rams and, in the process, lost their hold on the top draft pick. Never mind that Clemson quarterback Trevor Lawrence is a certified generational talent for whose absolute tanking is justified.

And so the Eagles find themselves at a crossroads. They have sideline positions to fill, crucial rotation spots to secure, and a future to ponder — all while well over the salary cap. The missteps notwithstanding, Pederson could have presented a semblance of stability in transition. Instead, they’ll be crafting strategy under a storm cloud and making hires with great — and certainly unrealistic — expectations. Winning is hard, but losing this way should have been harder.

 

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

Missing chips snarl car production at factories worldwide

Chips used in vehicles are harder to come by because semiconductor manufacturers allocated more capacity to meet soaring demand from consumer-electronics makers such as Apple Inc. Photo via Ford Motor Co./media.ford.com

More than a year after its outbreak, the coronavirus keeps finding new ways to hit carmakers.

After first wiping out auto demand, the virus is now hindering parts supply: chips used in vehicles are harder to come by because semiconductor manufacturers allocated more capacity to meet soaring demand from consumer-electronics makers such as Apple Inc.

The shortage risks dragging on, with lockdowns and travel restrictions prompting housebound consumers to snap up more phones, game consoles, smart TVs, and laptops to get online. Lower down in importance to chipmakers, auto manufacturers from Toyota Motor Corp. to Volkswagen AG risk not getting enough goods to fuel a fledgling recovery in their own industry.

“Customers can’t build because they can’t get parts,” Glen De Vos, chief technology officer of car-component supplier Aptiv Plc, said in an interview. “We’ve avoided a situation where we’re shutting down customers, but we’ve been impacted.”

Semiconductor shortages may persist throughout the first half as chipmakers adjust their operations, researcher IHS Market predicted on Dec. 23. Automakers will start to see component supply gradually ease in the next two to three months, China Passenger Car Association, which groups the country’s largest carmakers, said Monday.

Chipmakers favor consumer-electronics customers because their orders are larger than those of automakers—the annual smartphone market alone is more than 1 billion devices, compared with fewer than 100 million cars. Automaking is also a lower-margin business, leaving manufacturers unwilling to bid up chip prices as they avoid risking their profitability.

And while the newest cars require more chips, so do the latest consumer gadgets. Smartphones using so-called 5G connectivity require 40% more semiconductors than older 4G versions. Chip foundry Taiwan Semiconductor Manufacturing Co. reported record fourth-quarter revenue last week, with new 5G iPhones taking up a large chunk of capacity.

The auto-chip shortage stems from overly conservative demand estimates made early last year as car plants closed to cope with the onset of the pandemic, Mr. De Vos said. Once the plants re-opened, vehicle sales rebounded more strongly than anticipated after governments unleashed stimulus packages and commuters avoided public transport.

At the same time, foundries such as TSMC, United Microelectronics Corp. and Globalfoundries Inc. as well as chip assemblers like ASE Technology Holding Co. weren’t expanding fast enough to meet the pandemic-induced spike in demand for consumer gadgets. Those bottlenecks snarled the flow of chips not just to cars, but also in Xboxes and Playstations and even certain iPhones. The foundries are responsible for making a significant portion of the world’s semiconductors and serve automotive-chip companies such as NXP Semiconductors NV, Infineon Technologies AG, and Renesas Electronics Corp.

The Trump administration’s move to blacklist China’s Semiconductor Manufacturing International Corp. in December drove customers to seek alternatives and further constrained the global chip supply. Some semiconductor buyers have also been building up inventories to hedge against future shortages or disruptions.

“It’ll take some time,” Mr. De Vos said, “but we’re climbing out of it.”

Auto-chip companies cut orders with Taiwanese foundries significantly in the first half of 2020 and when they wanted the capacity back in the second half, the contract chipmakers had allocated it to others, a person familiar with the matter said.

General Motors Co. has asked for the Taiwanese government’s help to secure chip supply, and Taiwanese officials have helped to relay the request to foundries including TSMC, according to the person. The European Union has also approached Taiwanese officials about the same issue, the person said.

There’s no guarantee such requests will yield results—smartphone and gadget customers contribute more to foundries’ revenue and profit and are willing to shell out more.

“Consumer-electronics companies are ready to pay more for chips to ensure their gadgets will get to market on time,” said Jeff Pu, an analyst at GF Securities. “Carmakers are less inclined to do so.”

Meanwhile, it’s not simple to boost semiconductor supply. Chipmakers need to spend years and billions of dollars to build fabrication plants capable of cranking out silicon for a wide range of products. They tend to err on the side of conservative planning because of the risks involved—and the enormous potential losses.

At least one major automotive chip supplier is having a significant volume of its orders turned away by TSMC because of lack of capacity, according to a person familiar with the matter. There are no signs of the situation getting easier for carmakers, the person said. A TSMC spokeswoman declined to comment, saying the company will discuss automotive chips at its investor conference on Thursday.

Such setbacks have left some carmakers with no option but to cut production. Honda Motor Co. will reduce output by about 4,000 cars at a Japanese factory this month, and Nissan Motor Co. is adjusting production of its Note hatchback. VW said last month it would have to change manufacturing plans and Toyota is lowering output of a pickup made in Texas.

“The global semiconductor shortage is presenting challenges and production disruptions,” Ford Motor Co. said in an e-mailed statement. The carmaker is working to prioritize key vehicle lines, “making the most of our semiconductor allocation.”

Carmakers’ predicament is exacerbated by the fact that chips are crucial for the latest features they are touting, be it assisted driving, large displays or connectivity. Semiconductor-based components are set to account for more than 50% of a car’s manufacturing cost by 2030, up from about 35% now, according to a report by China EV 100 and Roland Berger.

“Chips are getting more important for the upcoming software-defined cars,” said Shi Ji, an analyst at Haitong International Securities Co. in Hong Kong. “They are essential to all cars, not just electric ones.” — Debby Wu/Bloomberg

COVID-19 fueling education’s tech disruption, deepening digital divide

The pandemic has deepened not only digital divides but inequities at the household level: people who can’t afford at-home or private learning will be left behind. Women tasked with childcare and home education will be forced or pressured out of the workforce.

TORONTO/NEW YORK — The coronavirus disease 2019 (COVID-19) pandemic deepened inequities in accessing and benefiting from education but the future of learning could be a more equal one, participants told Reuters Next panels on Monday.

The pandemic hastened a rise in virtual learning and a disruption of the status quo already underway but probably won’t eliminate in-person instruction for good, they said.

COVID-19 forced the University of Oxford and myriad other schools online amid COVID lockdowns. “We surprised even ourselves” in their ability to do it, Vice-Chancellor Louise Richardson said.

But in-person learning is not a thing of the past.

“I think the way our undergraduate degree is currently structured wouldn’t allow us to enable something to be online exclusively. We’re doing it now, as we speak, because of the pandemic, but we would always want a serious physical component during the undergraduate degree.”

During the pandemic, online learning company Udacity saw demand for its virtual courses surge, Udacity President Sebastian Thrun said. Its enrollment more than doubled. Its engagement with companies “massively” increased.

“Is online going to replace universities? It’s never going to happen,” he said.

“Can we reach people that are currently not being reached? And there, the answer is a resounding yes.”

Both Mr. Thrun and Ms. Richardson said the divide between those who have digital connectivity and those who lack it continues to make education a mark of privilege even amid efforts to level the playing field.

But the pandemic has deepened not only digital divides but inequities at the household level: people who can’t afford at-home or private learning will be left behind. Women tasked with childcare and home education will be forced or pressured out of the workforce.

“The biggest elephant in the room is the connection between career families, school, where students go, and economy,” said Dwayne Matthews, education strategist and founder of Tomorrow Now Learning Labs.

“That primarily leans very, very heavily on career women. And those are very big concerns.”

Equity continues to be an issue, said Salman Khan, founder of Khan Academy, “because of COVID kids are getting even larger and larger gaps.” But Khan predicted the future of education would be more equal than the present.

“For the less affluent, before they had nothing… Now, they’re using resources like Khan Academy,” he said. “I think you’re going to see a leveling of the playing field.” As digital learning loosens capacity constraints, that will also make education more equitable, he said. “I think as we go forward, we’re getting to a more egalitarian society.”

In addition to forcing institutions of higher education to change the way they teach and reach students, the pandemic has also highlighted the importance of what these institutions do, Ms. Richardson said—and that goes beyond education.

She pointed to the anti-expert populism that drove Brexit. Now, she said, in the midst of the pandemic and as universities like Oxford create vaccines and discover the importance of dexamethasone, society can’t get enough experts.

“Universities have been advising governments on the efficacy of mask-wearing, social distancing, the whole gamut… In a sense, our case is being made for us, which is not to say we don’t have to constantly work to keep the public on our side.”

PBS’s platform traffic “nearly quadrupled” in the spring, said VP of Education Sara Schapiro.

“That sort of resource will continue to grow and really be important, she said. “We’re in a different space than we were almost a year ago. … It was a paradigm-changing moment for education and I hope that sticks.”

The need for a more nimble and innovative approach to education will remain long after the pandemic ends, said Helen Fulson, Chief Product Officer at Twinkl, an online educational publishing house.

“How many children today will be doing jobs that currently don’t exist? We don’t know how to train for these jobs,” she said.

“If children can solve problems, they can apply that to anything they need to do in future. And that’s the key.” — Reuters

Generation COVID: How the young are working around pandemic-hit job market

Adesola Akerele had just landed an internship at a television production company in London when the coronavirus hit and her dream job was gone.

But as the pandemic halted studies and wiped out employment opportunities for millions of young people around the world, the 23-year-old graduate found a silver lining—using the lockdown to launch her career as an independent screenwriter.

Ms. Akerele had always wanted to write about the experience of being Black in Britain, and as global anti-racism protests spread last year, she found people wanted to listen.

“The pandemic gave me something I didn’t have before: time to write and develop my own ideas,” she told the Thomson Reuters Foundation.

From teenagers coding in their bedrooms to graduates spurning scarce entry-level jobs to set up businesses, Ms. Akerele belongs to Generation COVID—young people who will have to innovate to enter the labor market in 2021 against tough odds.

One in six young people have stopped working since the onset of the COVID-19 pandemic, and about half reported a delay in their studies, according to a survey by the United Nations’ International Labour Organization (ILO).

Labor experts say it is too soon to know exactly how this will impact the generation’s lifelong career prospects, but that their path to work is unlikely to be conventional in 2021 and beyond.

“Young people are being more entrepreneurial and looking at career and employment as well as education in a more non-traditional way,” said Susan Reichle, president and CEO of the International Youth Foundation, a US-based nonprofit.

“The traditional sort of first jobs in the service industry, in the hospitality industry are just not there.”

Bhargav Joshi was hired at the start of the year as a commis chef at a high-end Italian restaurant in Mumbai. When he was laid off due to COVID-19, he took his chef skills into his parents’ kitchen and opened his own takeaway.

“It’s been five months since I started. I have managed to break even and that is a big accomplishment for me,” Mr. Joshi said.

The shift towards entrepreneurship and gig work was underway even before the pandemic among youth, who are three times as likely to be unemployed compared with people aged over 25, according to the ILO.

With so many applicants chasing so few jobs, screenwriter Ms. Akerele realized she could benefit more from pursuing independent projects and freelance work than sending off applications.

In October, she signed with an agency to work on a TV show about the young Black British experience.

Ms. Reichle said many young people lack the means to launch their own companies or pursue creative projects, but with more government support they could.

DIGITAL TOOLS
Kimberly-Viola Heita, 21, thought 2020 would be the year she became a student radio presenter and formed a new political society at the University of Namibia.

She was excited for her classes and debates with peers, but when the coronavirus forced the school to close many of her classmates went home to rural areas with minimal internet access. Online learning became a luxury.

Instead of disconnecting, Ms. Heita took the political science society of nearly 100 students onto WhatsApp messenger, which became a source of debate, motivation, and support, she said.

“2020 has forced us to innovate, collaborate and discover resilience we didn’t know we had,” said Ms. Heita.

As jobs and education moved online during the pandemic, digital skills became in more demand than ever—a trend which will likely continue, said Drew Gardiner, a youth employment specialist at the ILO.

“Young people very much want to get the coding skills, the artificial intelligence skills, but also simpler stuff, like online work translating and editing,” he said.

Training in such skills is not always readily available, but initiatives are springing up around the world to meet demand. Aisha Abubakar, a 33-year-old in northern Nigeria, took part in Click-On Kaduna, a World Bank pilot project last year that trained young people in digital marketing, graphics and design and how to access remote online work.

Ms. Abubakar is an interior designer, but did not know how to find clients before the course, she said.

Now her business is flourishing and she has also set up an informal mentoring program via WhatsApp to help other women in her community digitize their small businesses.

COMMUNITY ENGAGEMENT
Out of 12,000 young people surveyed by the ILO, about half said they had become vulnerable to anxiety or depression since the start of the pandemic, with those who had lost their jobs the most affected.

“The uncertainty that the situation has created about their futures is raising really big red flags for us,” said Nikita Sanaullah, senior policy officer on social and economic inclusion at the European Youth Forum.

In many European countries youth have a harder time accessing social services such as unemployment benefits because they have not banked enough work hours, said Ms. Sanaullah. As youth lose their incomes, they may also lose housing, she said.

“This was a big challenge even before this crisis occurred,” she said, adding that despite their difficulties, young people were perhaps becoming more engaged in social activism.

In San Francisco, 17-year-old James Poetzscher found an unusual way to help when he started making online maps of air pollution as a hobby.

When wildfires engulfed California in August, he took his project one step further and built an air-quality data portal for government and non-profit organizations to use—from his bedroom.

He knows finding a job will be tough, but plans to continue doing his research on air pollution and climate change.

“Regardless of age, we can all make a difference,” he said. — Nellie Peyton/Thomson Reuters Foundation

Villar lauds enactment of Organic Agriculture Act

Senator Cynthia Villar expressed gratitude to President Rodrigo Duterte who signed into law Republic Act (RA) 11511 last December 23, a measure that seeks to strengthen organic agriculture in the Philippines. The legislative measure was principally authored and sponsored by Villar, chairperson of the Senate Committee on Agriculture and Food.

RA 11511amends RA 10068 or the Organic Agriculture Act of 2010 and puts in place a more affordable and accessible system of certifying organic products, the Participatory Guarantee System (PGS).  This is an alternative to third-party certification, which  ranges from PhP100,000 to PhP120,000 per crop compared to only between PhP600 to PhP2,000 under the new PGS.

The new organic law will benefit over 165,000 organic farming practitioners in the Philippines, majority of which are smallholder farmers. According to Villar, it is important for small farmers to be able to afford organic certification because they are the major force in the country’s agriculture sector.

“RA 11511 will provide for a more affordable system of organic certification, which will allow small farmers to get the certification they need.  The exorbitant cost in the past prevented small farmers from practicing organic farming and also made organic products expensive for many Filipinos,” Villar added.

The new law, according to Villar provides the impetus in further growing organic agriculture in the country. It will greatly benefit the environment since organic farming is eco-friendly as it promotes the use of natural resources and inputs like organic fertilizer. The senator has been promoting the composting of kitchen and garden wastes into organic fertilizer that farmers can produce on their own, instead of buying this in the market.

RA 11511 also creates the National Organic Agriculture Program-National Program Coordinating Office (NOAP-NPCO) to manage the effective implementation of the National Organic Agriculture Program, and will serve as a planning, secretariat and coordinating office of the National Organic Agriculture Board (NOAB).

The new law also restructures, strengthens, and empowers the Bureau of Agriculture and Fisheries Standards (BAFS), which will provide technical assistance to the NOAB and the NOAP-NPCO

Sen. Cynthia Villar with Cong. Camille Villar during the harvest festival in Villar Sipag Farm School, Bacoor
Villar Sipag Farm School, Bacoor
Sen. Cynthia Villar leads the harvest festival at Villar Sipag Farm School
Sen. Cynthia Villar leads opening of rehab program for drug surrenderees
Sen. Cynthia Villar leads the harvesting of “Upo” at the Villar Sipag Farm School.
Sen. Cynthia Villar look into Organic Fertilizer
Twenty Five future agri entrepreneurs and farm business owners graduated from 10 day facilitators training
Sen. Cynthia Villar leads the harvesting of vegetables planted by the drug surrenderees
Sen. Cynthia Villar leads the launching of Agricultural crops and vegetables production program

ABS-CBN Corporation announces schedule of stockholders’ meeting

NOTICE OF SPECIAL STOCKHOLDERS’ MEETING

To:          All Stockholders of ABS-CBN Corporation

Please take notice that a Special Meeting of the Stockholders of ABS-CBN Corporation will be held virtually or conducted through remote communication via https://abs-cbn.com/investors/SSM2021 on February 2, 2021 at 9:00 a.m. or if prevailing circumstances will allow, at the Dolphy Theatre, ABS-CBN Corporation Broadcast Center, Quezon City to discuss the following:

A G E N D A

  1. Call to Order
  2. Proof of Service of Notice
  3. Certification of Presence of Quorum
  4. Approval of the ABS-CBN Stock Purchase and Stock Grant Plans
  5. Other Business
  6. Adjournment

For purposes of the meeting, only stockholders of record as of January 11, 2021 are entitled to attend and vote in the said meeting.

Given the current circumstances, stockholders may only attend the meeting by remote communication, by voting in absentia, or by appointing the Chairman of the meeting as proxy, unless otherwise announced by the Corporation that physical meeting will be allowed.

Online participation and voting by remote communication will be available for all stockholders. Stockholders who wish to participate and vote online by remote communication will be required to register starting January 12, 2021 and until  January 26, 2021. Stockholders who are not able to register as of January 26, 2021, can no longer avail of online voting but may still participate by remote communication, provided such stockholders shall register not later than January 26, 2021. The Registration and Validation Procedures for the 2020 Special Stockholders Meeting (Virtual SSM) are set out below as Annex “A”, as attached to the Notice and Agenda. Stockholders intending to participate by remote communication should register at https://abs-cbn.com/investors/SSM2021.

All stockholders who will not, are unable, or do not expect to attend the virtual meeting in person may choose to execute and send a valid proxy in writing to the Office of the Corporate Secretary, at 11F Investor Relations Office, ELJ Bldg. Mother Ignacia St. Quezon City or by email at corporatesecretary@abs-cbn.com or in digital/electronic form at https://abs-cbn.com/investors/SSM2021 on or before January 26, 2021.  Proxies shall be validated beginning on January 27, 2021.

Pursuant to SEC Notice dated April 20, 2020, copies of this Notice, Information Statement, and Other Documents related to the Special Stockholders’ Meeting, shall be published through The Philippine Star and BusinessWorld.

January 12, 2021,

By order of the Board of Directors:

                

 

ENRIQUE QUIASON
Corporate Secretary

Signal sees meteoric rise in daily installs as people look for WhatsApp alternatives

The number of new users installing messaging app Signal every day is on track to cross 1 million, putting it closer to levels seen by larger rival WhatsApp, following an update to the Facebook Inc.-owned app’s privacy policy.

About 810,000 users globally installed Signal on Sunday, nearly 18-fold compared with the download numbers on Jan. 6, the day WhatsApp updated its privacy terms, according to data from research firm Apptopia.

WhatsApp’s new privacy terms reserve the right to share user data, including location and phone number, with its parent Facebook Inc. and units such as Instagram and Messenger.

Privacy advocates have questioned the move citing Facebook’s track record in handling user data, with many suggesting users to migrate to platforms such as Telegram and Signal.

To cope with the number of new users, Signal said on Sunday it had added more servers to handle the traffic. Up until recently, the non-profit app was largely used by journalists and human rights activists looking for a more secure and encrypted mode of communication.

WhatsApp, which saw a 7% decline in daily installs on Sunday compared with Wednesday, was downloaded by nearly 1.2 million users on Jan. 10, according to Apptopia. — Reuters

Starting shots in poor nations by February hinges on vaccine suppliers — WHO

GENEVA — The World Health Organization (WHO) on Monday redoubled pleas for vaccine makers to provide coronavirus disease 2019 (COVID-19) shots to its COVAX program for poor nations, as an adviser said hopes of starting inoculations by February hinge on access to supplies.

The COVAX facility, backed by the WHO, GAVI the vaccine alliance, and the Coalition for Epidemic Preparedness Innovations, has raised $6 billion so far, and ordered 2 billion doses of COVID-19 vaccines with options on 1 billion more.

With nations including China, the United States, Israel, and others dominating early deliveries, however, the WHO fears scant remaining stockpiles could leave 92 lower- and lower-middle-income nations out in the cold when it comes to vaccinating their medical workers in the COVAX program’s initial round.

“We expect, and we have strong confidence that we should be able to begin vaccinating in February in these countries,” WHO senior adviser Bruce Aylward told a press conference on Monday.

“But we cannot do that on our own. We require the cooperation of vaccine manufacturers to prioritize deliveries to the COVAX facility,” he said.

More than 40 countries have begun vaccinating against COVID-19 with a growing number of shots, from Pfizer and BioNTech, Moderna, AstraZeneca, as well as vaccines developed in Russia and China.

“All of that vaccination, or virtually all, was in high-income or middle-income countries so far,” Mr. Aylward said. “We have got to see vaccines going into arms in lower and lower-middle-income countries.”

According to Reuters data, China has administered the most shots, at about 9 million, followed by 6.7 million in the United States and 1.8 million in Israel. 

Mr. Aylward held out optimism that limited COVAX vaccinations in poor nations could even start this month.

“But again, that requires the cooperation of a lot of other players,” he said. “Right now, we have an inequitable situation.” — Reuters

Philippines keeps investment grade rating but Fitch warns vs vaccine rollout delay

Fitch Ratings warned a delay in the rollout of coronavirus disease 2019 (COVID-19) vaccines may hurt the Philippines’ growth prospects. — PHILIPPINE STAR/MICHAEL VARCAS

FITCH RATINGS affirmed the Philippines’ long-term foreign currency issuer default rating at “BBB” with a stable outlook, on the back of modest government debt levels and still-strong growth prospects amid the coronavirus crisis.

However, the global debt watcher acknowledged that the economic impact of the pandemic on the Philippine economy in 2020 was “more significant” than initially expected, “due to the domestic infection rate and government policy measures to curb the spread of the virus.”

“The affirmation of the Philippines’ ‘BBB’ rating and stable outlook balances modest government debt levels relative to peers, robust external buffers and still-strong medium-term growth prospects, notwithstanding the deep pandemic-induced economic contraction, against relatively low per capita income levels and indicators of governance and human development compared to peers,” Fitch said in a note on Monday.

The stable outlook indicates the country’s rating could be unchanged for the next 18 to 24 months.

The government had implemented a strict lockdown in mid-March 2020 to curb the rise in coronavirus disease 2019 (COVID-19) infections, but this severely affected private consumption and investment. As a result, the Philippine economy slumped into a recession, with gross domestic product (GDP) contracting by 10% year on year in the January to September period.

“We estimate full-year GDP to have contracted by 8.5% in 2020, after accounting for an improvement in activity indicators in 4Q,” Fitch said. Government economic managers said GDP likely slumped by 8.5-9.5% in 2020.

The ratings agency said economic activity will continue to recover in the next quarters, with GDP growth estimated at 6.9% and 8% in 2021 and 2022.

However, Fitch warned a delay in the rollout of COVID-19 vaccines may hurt the Philippines’ growth prospects.

“The potential for a delay [in vaccine distribution] poses downside risks to our growth forecasts, while an effective vaccine rollout could result in a faster-than-expected recovery in growth,” it said.

While there was a drop in daily reported COVID-19 cases in recent months, experts have warned of a possible surge after the holiday season. On Monday, the Health department reported 2,052 COVID-19 infections, bringing the total to 489,736.

The government is aiming to start the vaccine rollout as early as February, vaccine czar Carlito G. Galvez, Jr. told the Senate on Monday. However, he admitted most of the vaccinations will begin in the second half of the year. Regulators have yet to approve any COVID-19 vaccine in the country.

At the same time, Fitch flagged downside risks arising from the presidential elections in 2022 and the fiscal impact of the 2018 Supreme Court ruling that requires the National Government to increase revenue allotments to local governments.

“Downside risks could stem from presidential elections scheduled in May 2022 that create some uncertainty regarding the post-election fiscal strategy, or from weaker-than-expected economic growth in the aftermath of the health crisis that could make fiscal consolidation more challenging,” Fitch said but added that it expects the medium-term fiscal framework to remain intact.

Also, the debt watcher said the financing extended by the central bank to the National Government is only temporary. “However, ongoing recourse to direct central-bank financing of the budget deficit beyond the immediate needs of the health crisis could undermine investor confidence and financial stability by raising questions about the independence of monetary policymaking,” it said.

The Philippine banking system, Fitch said, continues to be stable, although lenders will continue to show weaker profits this year due to slim margins and lack of outsized trading gains.

“The deterioration in reported asset-quality metrics is likely to accelerate in early 2021 as debt moratoria expired in December 2020, but large pre-emptive general provisioning taken by banks in the preceding year should help the major banks avert significant capital impairment,” it said.

FACTORS TO WATCH
Fitch cited several factors that could lead to a negative rating action or downgrade, such as the “sustained rise in the government debt-to-GDP ratio associated with a reversal of reforms or departure from prudent macroeconomic policy framework that leads to sustained higher fiscal deficits;” and the failure to return to “historically high” pre-pandemic growth rates.

Another factor that could lead to a negative rating action would be the weakness in external indicators, including dollar reserves, current account deficit, and net external debt — as Fitch said such scenarios reflect deteriorating resilience of the Philippine economy to shocks.

“Fitch will monitor the post-pandemic evolution of the fiscal deficit and debt levels, as the balance between fiscal consolidation and ongoing government spending to support economic growth will be an important consideration for the rating over the medium term,” it added.

On the other hand, the Philippines’ rating could be upgraded if the revenue base is broadened; and governance standards are strengthened.

In a statement, Finance Secretary Carlos G. Dominguez, III said the country’s maintained rating shows it remained credit- and investment-worthy throughout the crisis.

“We continued our commitment to prudent fiscal and debt management even as we start spending big on COVID-19 response measures to revive the economy and restore both business and consumer confidence,” Mr. Dominguez said.

Meanwhile, Bangko Sentral ng Pilipinas Governor Benjamin E. Diokno noted they were “among the first central banks” that responded to the crisis as they slashed rates as early as February.

“We deemed it important to signal to the market that we were ready to act swiftly and decisively to buoy market confidence, as well as to ensure sufficient liquidity and efficient functioning of the financial system,” Mr. Diokno said.

Given the central bank already slashed rates by 200 basis points cumulatively last year, Fitch said it will have “very limited” space for further rate cuts in 2021. The key policy rate is currently at 2% which is already below the 2.6% average inflation logged in 2020.

S&P Global Ratings also affirmed its BBB+ long-term credit rating with a stable outlook for the Philippines in May last year. Moody’s Investors Service likewise kept its Baa2 rating with a stable outlook by July. — Luz Wendy T. Noble

SEIPI asks lawmakers to reconsider FIRB cap

Semiconductor and Electronics Industries in the Philippines, Inc. (SEIPI) expects to see 7% growth this year, as global demand recovers. — REUTERS

By Jenina P. Ibañez, Reporter

AN ELECTRONICS exporters industry group is asking lawmakers to reconsider the potential cap on investments reviewed by investment promotions agencies (IPA).

Under Senate Bill 1357 or the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act, IPAs like the Philippine Economic Zone Authority will review investment projects valued at P1 billion or lower, while the Fiscal Incentives Review Board (FIRB) approves larger projects.

Semiconductor and Electronics Industries in the Philippines, Inc. (SEIPI) President Danilo C. Lachica said that the industry group is hoping for a higher threshold for quicker approval processes under the IPAs.

“We will send our inputs to the House of Representatives. Many investments are over the P1-billion cap. Majority will be at or below P5 billion,” he said in a mobile message on Monday.

The Bicameral Conference Committee is set to be convened to reconcile clashing provisions in the bills passed by the House and Senate. The Senate passed its version in November 2020, while the House approved its version in 2019.

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

It would also strengthen the capacity of the FIRB to oversee the grant of incentives by IPAs.

“Historically, expansions and new investments have been around $100 million or roughly about P5 billion, so we’re hoping to approach that number so that you can have more efficient and quick approval,” Mr. Lachica said in an interview with ANC on Monday.

He added that he “would like to understand further” the timeline and criteria for renewal applications for existing projects.

“How long will it take and is the FIRB properly equipped to address those in an expeditious manner?”

Policy think tank Action for Economic Reforms last year said that increasing the threshold would weaken tax reform by removing investments from scrutiny, adding that the Bicameral Conference Committee could not legally insert the proposed amendment.

House Committee on Ways and Means and Albay Rep. Chairman Jose Maria Clemente S. Salceda, the principal author of the House version, in a phone interview said that the SEIPI recommendation “will be on the table.”

“Naka-pitong pre-bicam na kami (We have had seven pre-bicam meetings) and it’s too long, it’s too complicated but definitely it will get attention,” he said.

The industry group expects 7% growth for 2021 with more global demand for industrial, consumer, mobility, and medical electronics, after a projected 5% decline for 2020.

Meanwhile, the Philippine Stock Exchange, Inc. (PSE) and the Philippine Dealing System Holdings Corp. (PDSHC) in a joint statement asked for the immediate enactment of CREATE, which they said would make the country’s tax rates more competitive in the Association of Southeast Asian Nations (ASEAN) region.

They added that the reduction in corporate income tax will benefit the Philippine economy as it leaves more funds for publicly listed companies to expand business or distribute to stockholders.

“The investment of said tax savings in other business undertakings or investment vehicles can set off a chain of positive economic consequences such as employment generation, higher spending, and increased domestic business activity,” the PSE and PDSHC said.

Gov’t says 2 Chinese bidders meet Mindanao railway consultancy terms

By Arjay L. Balinbin, Senior Reporter

THE Transportation department said two of the three short-listed Chinese consultants for the consultancy contract for the Tagum-Davao-Digos segment of the Mindanao Railway Project are compliant with its terms of reference.

“All three submitted on time, but one appeared to fail in one of the requirements indicated in the terms of reference,” Transportation Assistant Secretary Eymard D. Eje, who handles the Mindanao cluster project implementation and special concerns, said in a phone message on Sunday.

He said the secretariat has yet to formally inform all parties, and the company that has failed in one of the requirements can still file a request for reconsideration.

The three short-listed Chinese groups that submitted bids are: China Railways Design Corp. and Guangzhou Wanan Construction Supervision Co., Ltd. Consortium; China Railway Liuyuan Group Co., Ltd.; and CCCC Railway Consultants Group Co., Ltd.

The Transportation department has said the approved budget for the consultancy contract is P3.09 billion.

Detailed design and works must be completed within 17 months, with 33 months set as the period for the contractor to be engaged in pre-construction activities and the defects notification period, the department said in a recent announcement.

The railway project, one of the Duterte administration’s priority infrastructure projects, was originally scheduled to start construction in January 2019, but right of way issues, mainly in Davao City, held back the timetable.

The P82.9-billion railway’s first phase, covering the 100.2-kilometer Tagum-Davao-Digos segment, is financed through an official development assistance package from the Chinese government.

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