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Meralco, QPPL and expensive solar-wind

In the ongoing woke culture, demonizing fossil fuels and some big corporations while glorifying big government intervention are very common. The lobby against fossil fuels (oil, coal, gas) is based on a confused and irrational belief that fossil fuels, especially coal, cause less rain and more rain, less floods and more floods, less cold and more cold. The lobby against some big corporations is driven by envy and the socialist dream of forced equality.

For many years now there have been sustained attacks against coal power in the country and the world. Then, in recent months, these attacks targeted new and proposed 3,000+ MW coal power contracts by Meralco, the biggest electricity distributor in the Philippines.

Last week, it became an even more focused attack on Meralco by using its Power Purchase Agreement (PPA) with the coal plant Quezon Power Phils. Ltd. Co. (QPPL). The attacks came from the Bayan Muna (BM, which I sometimes call Bayaan Mo Na) Party-list in Congress.

Among the accusations they hauled against Meralco-QPPL are: 1.) overcharging of P2.53/kwh or P4B from January to September 2020; 2.) implying that the PPA is recent and not approved by the Energy Regulatory Commission (ERC); and, 3.) that Meralco is self-dealing and getting its power supply from the gencos it controls. QPPL owner Electricity Generating Public Co. Ltd. (EGCO) of Thailand is a partner of Meralco in San Buenaventura Power Ltd. Co. (SBPLC), another coal plant.

I got interested in these accusations so I checked some numbers, particularly Meralco’s composite generation charge from its various power plant suppliers, using the latest data from the November 2020 billing then going backwards every six months until November 2017. Here is what I discovered.

One, the QPPL share is only about 9% of Meralco’s total power purchase. Two, while QPPL prices are generally higher than the Wholesale Electricity Spot Market (WESM) prices and overall generation charge, there are months and years where QPPL’s prices are lower, like in May 2018 and May 2019. Three, despite big oil-coal tax hikes under the Tax Reform for Acceleration and Inclusion (TRAIN) law of 2017 that pushed upwards the cost of oil-based and coal plants, the generation charge has been declining in 2019 and 2020 (see Table 1).

Meralco’s biggest PPAs are the First Gen Power Corp. (FGPC) Sta. Rita and San Lorenzo plants in Batangas. These two plants alone supply about 33% or one third of the total power purchase by Meralco.

So the BM “study” is twisted to produce two false assertions.

One, that there is overcharging because the PPA of QPPL-Meralco is a sweetheart deal — wrong. The PPA was approved by the Energy Regulatory Board (ERB), the precursor of ERC, way back in 1995 or even before the EPIRA (Electric Power Industry Reform Act) of 2001. No PPA or power supply agreement (PSA) by Meralco and all other private distribution utilities, past and present, can proceed without public hearings and ERC approval.

Two, that QPPL is an indirect affiliate of Meralco and there is self-dealing — wrong. QPPL is 100% owned by Thailand’s Electricity Generating Public Co. Ltd.

The anti-coal, pro-renewable energy lobby still denies that solar-wind is “viable” only because of huge subsidies that are passed on to the consumers. Countries with the highest electricity prices in the world — Germany and Denmark — as shown in the Strom-Report 2020, also have the highest concentration of wind and solar generation (see Table 2).

Bulgaria does not believe in solar-wind mis-promises — its power generation largely comes from coal (in 2019, 0.21 Exajoules EJ or 58.3 TWH) and nuclear (16.6 TWH). And Bulgaria has the cheapest electricity in Europe.

During the BusinessWorld Economic Forum last week, attracting more investments including those that are exiting China was among the topics discussed. It was partly mentioned by National Economic and Development Authority Secretary Karl Chua and ADB’s Philippines Country Representative Kelly Bird.

Vietnam fully understands the value of high power supply from cheap and reliable sources. When it comes to power generation, Vietnam (producing 57.9 TWH) overtook the Philippines in 2006, it overtook Malaysia in 2015 (producing 157.9 TWH), and it overtook Thailand in 2017 (producing 191.6 TWH). And in 2019, Vietnam’s coal consumption of 2.07 EJ was nearly three times that of the Philippines’ 0.73 EJ.

Many self-styled greenie and socialist-leaning organizations like BM are inconsistent in their anti-fossil fuel lobby because they only demonize coal plants, but not gas plants or even diesel plants. It seems that the game plan here is to kill only new big coal plants so that gas plants — which will soon rely on imported LNG when Malampaya gas becomes depleted — will be given priority in the PPAs and PSAs of distribution utilities.

Complementary to rising power supply capacity should be transmission system expansion. Power generation has been deregulated and demonopolized, power distribution also demonopolized via retail competition and open access (RCOA) and many competing retail electricity suppliers (RES). Power transmission remains the only national monopoly, the biggest elephant in the room and where the biggest inefficiencies are hiding.

 

Bienvenido S. Oplas, Jr. is the president of Minimal Government Thinkers

minimalgovernment@gmail.com

Reimagining the ‘Next Normal’ in Philippine business

What if big businesses were to make it their mission to address the leading social problems of the country? What if business leaders were to set the ethical tone from the top of their organizations and build corporate cultures that would make ethical business practice the norm and business scandals a thing of the past? What if business leaders were to have the empathy to know the needs of their customers, employees, and other stakeholders and take care of them accordingly? What if more business practitioners were to abandon the profit maximization mindset and, instead, aim for honoring human dignity and planetary sustainability while achieving their business goals?

These and other burning business questions of the day were answered during the Eighth National Business and Management Conference (NBMC) on Nov. 27 and 28 on the theme “Reimagining the ‘Next Normal’: Business and Management in the Philippines during times of uncertainty.” The event was co-organized by Ateneo de Manila University’s Jose Fernandez Ethics Center, De La Salle University’s Center for Business Research and Development, Miriam College, and the Philippine Academy of Management (PAoM). Business educators and scholars from around the country joined the virtual event to share and learn about the latest business and management research and to hear from leading-edge international scholars and local business leaders.

Ramon R. del Rosario, president and chief executive officer at Phinma Corp. and former president of the Management Association of the Philippines (MAP), reported how the Phinma Education Network entered the education field committed to delivering quality education at rates accessible to more Filipinos. With about 80% licensure examination passing rates and about the same hiring rates for its graduates, the Phinma schools have had to be quite inventive in supporting the learning needs of economically challenged students while remaining financially viable especially during the pandemic. For example, the group partnered with the telcos to provide mobile data access to students with limited means to access online learning during the pandemic. The Phinma story demonstrates how the private sector can embrace its role in helping meet the tough challenges faced by Philippine society today.

Professor Kirk Hanson, senior fellow of the Markkula Center for Applied Ethics at Santa Clara University and former executive director of the Center, presented his analysis of why corporate misconduct tends to continue and what needs to be done about it. A pioneer in teaching and consulting on business ethics since the late 1970s, when he started teaching at the Stanford Graduate School of Business, Hanson has seen the panorama of business malpractice, which he discusses in his co-authored book with Marc Epstein, Rotten: Why Corporate Misconduct Continues and What to Do about It. Using a helpful apple metaphor, he said that corporate misconduct is a result of bad apples (business leaders whose characters predispose them to act unethically and are allowed to get away with it), bad barrels (CEO leadership and corporate cultures that condone unethical practices), and bad orchards (corrupt business environments that are left unaddressed). He argued for reforms within the corporation, ranging from reviewing its sense of purpose to its ethics promotion systems and transparency practices.

Dr. Michael Pirson, the social entrepreneurship track chair at Fordham University and founding partner of the Humanistic Management Network, explained that the economistic framework often taught in business schools has greatly limited the understanding of human nature as a purely self-interested agent. This portrayal of humans needs to be replaced with the humanistic paradigm, which recognizes that people can aspire to and act upon higher purpose, creativity, and intentionality. This alternative way of thinking replaces the presumption of profit-maximization with the search for optimal business practices that fully respect human dignity and the preservation of the environment for future generations.

Riza Mantaring, former CEO of Sunlife Philippines and former president of MAP, shared her experience in applying empathy for customers and employees in leading her company to new heights. During her stint as head of Sunlife, the company realized that the market did not understand financial products at all, and this severely limited the company’s ability to sell its insurance products. She led an unprecedented campaign to educate the public about the importance of financial planning and security. This move expanded the market for insurance products and led to record success for the company. Her experience proves that taking care of customers redounds to taking care of the business. Relatedly, Mantaring shared the recently launched Covenant for Shared Prosperity, which is supported by more than 20 business groups and which calls on businesses to show care for all their stakeholders by sharing the benefits of business growth and success.

The fresh thinking shared during the NBMC shows a silver lining in the dark cloud of the pandemic. We have a once-in-a-lifetime opportunity to reset business practices to what they should have always been: an honorable service for the good of society.

 

Dr. Benito L. Teehankee is the Jose E. Cuisia Professor of Business Ethics and Head of the Business for Human Development Network at De La Salle University.

benito.teehankee@dlsu.edu.ph

Team effort leads to early series advantage for Kings

By Michael Angelo S. Murillo, Senior Reporter

THE Barangay Ginebra San Miguel Kings took a 1-0 lead in their best-of-seven PBA Philippine Cup finals series over the TNT Tropang Giga following their 100-94 overtime victory in Game One on Sunday.

It was a win the Kings attributed to team effort amid a grind of a battle that the Tropang Giga put up.

“Everybody contributed and it’s really a great team effort. We got a lot of contributions, and that is how things should be if we are to beat TNT in this series,” said Barangay Ginebra coach Tim Cone following their hard-earned victory.

The win moved the Kings a step closer to their first Philippine Basketball Association (PBA) All-Filipino title in over a decade.

In Game One, Barangay Ginebra found itself in close fight throughout the contest, needing to dig deep and hang tough in the end game.

Japeth Aguilar and LA Tenorio stepped up for the Kings down the stretch to help their team get the better of the Tropang Giga in the opener. 

Mr. Aguilar had 14 of his team-high 25 points in the fourth period and overtime. He also finished with 16 rebounds.

Veteran guard Tenorio, meanwhile, was a steadying factor for Barangay Ginebra on his way to a double-double of 12 points and 10 assists, with no turnover to show for.

Stanley Pringle had all-around numbers of 24 points, seven rebounds and seven assists and so did Scottie Thompson, who finished with 15 points, nine rebounds and five assists.

Rookie Arvin Tolentino also came up big in his finals debut, tallying 14 points, including the game-tying basket with five seconds remaining in regulation that sent the game to extra period.

While happy to get the upper hand at the onset of the series, Mr. Cone said the fight is far from over and TNT will try to bounce back and that they have to be ready.

“This is just the first game. There is going to be a lot of back-and-forth. They have a lot of ways to play the game and we have to adjust throughout this rigorous seven-game series,” said Mr. Cone, who is looking to add a 23rd PBA title to his stellar PBA coaching career and fifth with Barangay Ginebra.

PARKS NOW LEADS
Meanwhile, TNT’s Ray Parks grabbed the statistical race lead, putting him in prime position to take the top individual honors in the PBA’s tournament bubble.

At the end of the semifinals, Mr. Parks, son of legendary PBA import Bobby, raised his total statistical points to 38.3 after averages of 22.5 points, 8.1 rebounds, 3.1 assists and 1.3 steals per game.

Coming in second was comebacking Phoenix Super LPG forward Calvin Abueva (37.1 SPs), followed by league top scorer CJ Perez (35.7) of Terrafirma.

Erstwhile SP leader Matthew Wright of Phoenix, who got injured in the early goings of the semifinals, slid to fourth with 35.6 points, with Northport’s Christian Standhardinger rounding out the top five with 34.6 SPs.

Mr. Parks fouled in Game One of the PBA Philippine Cup finals, but not after putting-up a team-high 20 points to go along with five steals, four rebounds and four assists.

Former skeptic Grosjean praises halo after surviving fiery crash

MANAMA — Romain Grosjean credited the halo protection bar with saving his life in a fiery crash that ripped his car in two on the opening lap of the Bahrain Formula One (F1) Grand Prix on Sunday.

The Frenchman’s Haas speared through the barriers after careering off the track at high speed, with the force of the impact splitting the car in half and setting it aflame.

Grosjean, who clambered out and limped away from the crash, miraculously escaped with only burns to his hands and was being treated overnight at a nearby hospital.

“Hello everyone, just wanted to say I am okay, well sort of okay,” the 34-year-old, his hand swaddled in bandages but his face smiling, said from his hospital bed in a video posted to his social media.

“I wasn’t for the halo some years ago, but I think it’s the greatest thing that we brought to Formula One and without it, I wouldn’t be able to speak to you today.”

Formula One introduced the halo, a three-point titanium structure above the front of the cockpit designed to protect drivers’ heads from flying debris, in 2018 and it initially attracted controversy.

Grosjean, who is out of contract and likely to leave Formula One at the end of the year, was one of those who was against it at the time, terming the day its introduction was announced a “sad day” for the sport.

On Sunday, his gratitude for its existence was echoed by others in the sport.

“There’s absolutely no doubt the halo was the factor that saved the day and saved Romain,” Formula One’s managing director for motorsport Ross Brawn said.

“There was quite a lot of controversy at the time about introducing it and I don’t think anyone now can doubt the validity of that. It was a life-saver today.

“Undoubtedly, we’ve got to do a very deep analysis of all the events that occurred because there were a number of things that shouldn’t have happened,” Brawn told Sky Sports television.

“The fire was worrying, the split of the barrier was worrying.

“I think the positives are the safety of the car and that’s what got us through today.”

F1’S MORE DANGEROUS PAST
Brawn said barriers splitting was a problem from Formula One’s far more dangerous past “and normally it resulted in a fatality.”

Brawn said the sport had not seen such a fire in many years, although the fuel cells were now built to be ‘incredibly strong’ and he suspected it was more likely to be due to a ruptured connection.

“It looked a big fire but those cars are carrying 100 kilos of fuel at that stage. I think if 100 kilos had gone up we would have had a massive fire. For me that was a fire of a few kilos of fuel.”

Damon Hill, the 1996 world champion, said he was ‘flabbergasted’ by what he had seen and it was a miracle that Grosjean, a father of three, was alive.

Seven-time world champion Lewis Hamilton, the race winner for Mercedes, was also thankful the halo had worked.

“I’m grateful that the barrier didn’t slice his head up or something like that. It could have been so much worse,” said the Briton.

Hamilton also paid credit to the marshals and medical car team, the first on the scene.

“It is an amazing job the FIA have done. The marshals are the unsung heroes every weekend that we get to go out. Those guys are there to protect us and they really are incredible in what they do,” he said. — Reuters

Pearl Managuelod pushes for resumption of athletes’ training

WITH THE battle smoke from the recent Philippine Olympic Committee (POC) elections now clear, newly elected executive board member Pearl Managuelod underscored the need to buckle down to work for the national athletes, including helping in having their training resume at the soonest possible time.

Elected to the POC board in proceedings held last Friday, Ms. Managuelod, the Muaythai Association of the Philippines (MAP) secretary-general, said they have to work now to have the athletes back in training for them not to lose more time considering 2021 is expected to be a busy year with a number of international competitions slated.

“Apart from the programs laid down, I think it’s important now to work with the PSC (Philippine Sports Commission) and IATF (Inter-Agency Task Force for the Management of Emerging Infectious Diseases) to resume the training of the athletes because we have a lot of competitions ahead,” said the MAP official following her election win.

Ms. Managuelod went on to say that she welcomes the opportunity to be of service to Philippine sports in an added capacity just as she underscored the need for the POC to put the athletes’ needs front and center.

She ran under the ticket of reelected president Abraham Tolentino (cycling), but was also an adopted candidate of challenger Jesus Aranas (archery).

It was a circumstance that she is honored to be in, seeing how both parties have good programs for the POC.

Joining Ms. Managuelod in the POC executive board are fellow directors Dave Carter (judo), Raul Canlas (surfing) and Charlie Ho (netball). They begin their four-year term on Jan. 1, 2021.

As for muay thai, Ms. Managuelod said they are hoping to have the sport included in the Olympics down the line, with the MAP strategically working on that end while also shoring up their grassroots program. — Michael Angelo S. Murillo

Herbalife Nutrition finding ways to bring fitness message across

WHILE the coronavirus pandemic and the corresponding protocols put up to guard against it have rendered people’s fitness regimen limited, they have not stopped Herbalife Nutrition from finding ways to bring the message of active and healthy lifestyle across.

One of the ways the global nutrition company is going about its push is tapping digital technology, where it brings fitness to people through videos, virtual events, and other interactive platforms.

Herbalife has started such thrust even before the pandemic hit, but it has become more significant in light of the prevailing conditions.

“Three years ago, we started to work on our digital platform for fitness. It’s a free resource that’s for everybody,” shared Samantha Clayton, vice-president of Worldwide Sports Performance and Fitness and chairwoman of the Fitness Advisory Board of Herbalife Nutrition, in an online session with local media and the blogging community last week.

“Digital has been driving fitness for a long time. It really amplified the average everyday fitness professional’s voice. If you see a lot of the content that’s on YouTube, Twitter, or Instagram, the content that gets the most amounts of likes tend to be fitness-based content, so the digital transformation of the fitness world has been happening for a long time,” she added.

Herbalife’s Fitness Portal, which features workout videos that range from beginner routines to advanced workouts, making fitness an achievable goal for everyone, has gotten much interest, something the company welcomes more so that it is celebrating its 40th anniversary.

Ms. Clayton, an Olympian who competed in the 2000 Summer Games, however, said digital fitness content must be well-thought out so as to bring out the desired effect.

“When the sports world kind of stopped this year, we really had a challenge to put out a really interesting and engaging content with our athletes to meet our consumers in their homes, meet our distributors, and people in the community in a space that we know,” Ms. Clayton said.

This led them to coming up with a 2020 Quarantine Sports and Fitness Content that consisted of athlete cook-off contests, social media workout videos, sports nutrition blog series, Facebook live workout series, and social media workout graphics.

The mother of four, including a set of triplets, went on to highlight that the audience for fitness and sports nutrition has never been wider until today.

“For many years, the fitness industry and the sports nutrition industry, in particular, was all about the athlete… What’s exciting for me today is to share with you that the audience now for fitness and sports nutrition has really expanded. People are truly inspired and interested in what good nutrition has to offer,” she said.

Adding, “It’s about having simple daily habits each and every day so that you could be at your best. So whether that’s having a healthy breakfast or getting your minimum amount of exercise, a healthy active lifestyle is about sustainable healthy habits that last a lifetime.” — Michael Angelo S. Murillo

Hornets announce Hayward sign-and-trade from Celtics

THE Charlotte Hornets announced on Sunday they have acquired forward Gordon Hayward in a sign-and-trade deal from the Boston Celtics.

Hayward joins Charlotte and the team also receives a 2023 and 2024 second-round draft pick in return for a protected 2022 second-round draft pick and also creates a trade exception for Boston.

Hayward signed a four-year contract worth $120 million. The Celtics created a trade exception worth roughly $30 million that must be used within the next year.

“We are thrilled to welcome Gordon and his family to the Hornets organization and Charlotte,” said Hornets President of Basketball Operations Mitch Kupchak said in a statement.

“Gordon is an NBA All-Star, a proven scorer and playmaker and a tough competitor that will fit well into the needs of our team. We believe that his basketball talent, NBA experience and veteran leadership will make a positive impact on our young, talented team as it continues to develop.”

Charlotte finished 10th in the Eastern Conference in 2019-20 with a 23-42 record. Hayward figures to be a building block moving forward.

Hayward has averaged 15.3 points, 4.4 rebounds and 3.5 assists per game over his 10-year NBA career, which has included stops with the Utah Jazz and Boston. He’s career 45.1% shooter, including 36.6% from 3-point range and 82.3% at the foul line.

In 29 playoff games, Hayward averaged 15 points, 4.6 rebounds and 2.9 assists per game.

The Celtics were eliminated in the Eastern Conference Finals in the 2020 playoffs, held in a “bubble” near Orlando this fall due to the COVID-19 pandemic.

Hayward was drafted ninth overall by the Jazz in the 2010 draft after a two-year stint at Butler, where he led the Bulldogs to the championship game of the 2010 NCAA Tournament. — Reuters

Messi salutes Maradona as Barca trounces Osasuna

BARCELONA — Lionel Messi paid a personal tribute to the late Diego Maradona after scoring on Sunday as Barcelona returned to winning ways in La Liga with a resounding 4-0 home win over Osasuna.

Messi adorned a brilliant team display with a thumping strike into the top corner in the second half, after Martin Braithwaite had broken the deadlock and Antoine Griezmann and Philippe Coutinho had scored either side of halftime.

The Argentine then lifted his shirt to reveal a red and black replica kit of his hometown club Newell›s Old Boys bearing the number 10, which Maradona wore during his brief spell at the Rosario side in 1993.

The Catalans had paid homage before kickoff to Maradona, who played for the club in an eventful yet disappointing spell from 1982 to 1984, hanging a framed signed shirt of his above the presidential box while the players held  minutes of silence in front of an old Barca shirt bearing the number 10.

Barca defender Clement Lenglet limped off with an ankle problem, leaving his side with no fit first-team center backs due to injuries to Samuel Umtiti, Ronald Araujo and Gerard Pique.

The win followed Barca›s 1-0 defeat at Atletico Madrid last week and lifted them to seventh in the standings on 14 points after nine matches, nine behind leader Real Sociedad and second-placed Atletico.

“Maradona deserved an emotional tribute like that, we have lost a global idol,” said Coutinho.

“Everyone in football admired him and we’ll all miss him.”

Griezmann added: “We didn’t know what Messi had prepared in tribute to Maradona, it was a beautiful surprise.”

“It was very important to win today because the teams at the top keep winning and we can’t afford to slip up any more. We know it will be difficult, but we showed today we want to win the league and have a team capable of doing that.”

Messi had enjoyed a rare rest in midweek as he and Frenkie de Jong were left at home for Barca’s 4-0 win away to Dynamo Kyiv, which sealed its place in the Champions League knockout stages.

Coach Ronald Koeman gave Martin Braithwaite another start after the Dane impressed against Dynamo, and Barca benefited from having more of a presence in the area, which they have lacked since parting with Luis Suarez.

Barca could have taken an early lead through a sparkling move between Messi, Griezmann, and Coutinho, but Osasuna defender Unai Garcia cleared Coutinho’s shot off the line.

Braithwaite eventually put Barca ahead by bundling the ball over the line in a goalmouth scramble while Griezmann doubled their lead with a ferocious volley from outside the area.

Griezmann, who also scored against Dynamo, then set up the third goal by passing to Coutinho, who could hardly miss from close range.

Ousmane Dembele thought he had got a fourth, but a VAR review ruled the move offside. Instead, and fittingly perhaps, it was Messi who had the final say. — Reuters

Airlines face ‘mission of the century’ in shipping millions of doses of COVID vaccines

IN COOLED warehouses on the fringes of Frankfurt airport, Deutsche Lufthansa AG is preparing its depleted fleet for the gargantuan task of airlifting millions of doses of the vaccines meant to end the global pandemic.

Lufthansa, one of the world’s biggest cargo carriers, began planning in April in anticipation of the shots that Pfizer, Inc. to Moderna, Inc. and AstraZeneca Plc are developing in record time. A 20-member task force is at work devising how to fit more of the crucial payload onto the airline’s 15 Boeing Co. 777 and MD-11 freighters, along with hold space in a vast passenger fleet now flying at just 25% of capacity.

“The question is how we scale it up,” said Thorsten Braun, who leads Lufthansa’s part in the global effort. Laid low by a coronavirus disease 2019 (COVID-19) outbreak that’s decimated passenger demand, airlines will be the workhorses of the attempt to eradicate it, hauling billions of vials to every corner of the globe. It’s an unprecedented task, made more difficult by the carriers’ diminished state after culling jobs, routes and aircraft to survive a crisis that’s reduced air traffic globally by an estimated 61% this year.

“This will be the largest and most complex logistical exercise ever,” said Alexandre de Juniac, chief executive officer of the International Air Transport Association (IATA), the industry’s chief lobby. “The world is counting on us.”

IATA estimates that the equivalent of 8,000 loads in a 110-ton capacity Boeing 747 freighter will be needed for the airlift, which will take two years to supply some 14 billion doses, or almost two for every man, woman and child on Earth. It’s a tall order, given about one-third of the global passenger fleet is still in storage, based on data from Cirium.

Katherine O’Brien, the World Health Organization’s (WHO) head of immunization, likens the task of distributing the vaccines after the months-long development sprint to summiting Mount Everest having reached base camp. “The climb to the peak is really about delivering the vaccines,” she said on Nov. 16.

Here are some of the biggest challenges along the way:

CARGO CAPACITY
There are around 2,000 dedicated freighters in use, carrying about half of all goods moved by air. The remainder typically goes in the bellies of the world’s 22,000 regular jetliners.

While the freighters are full, air-cargo volume has tumbled this year because so much belly capacity is sitting idle. Airlines have drafted about 2,500 passenger planes into cargo-only roles, but the job of distributing the vaccine would be easier if fleets were flying with usual frequencies to their usual destinations.

At the start at least, space will be limited. The massive undertaking is expected to begin at a peak time for cargo carriers, right as the online Christmas shopping frenzy, boosted this year by COVID-19, reaches its zenith.

Pfizer plans to ship 1.3 billion doses of its vaccine by the end of next year, with Moderna producing about 500 million. AstraZeneca has manufacturing capacity for 2 billion doses, half of those targeted to low- and middle-income nations.

“What we have to do is very quickly help the world get up on its feet,” said Dennis Lister, vice-president for cargo at Emirates, the world’s largest long-distance airline. “Part of that is making sure we get vaccines on planes to people that need it, so we get people flying again.”

To allow more passenger jets to be brought back into service, governments should open up travel, says Glyn Hughes, IATA’s global head of cargo, striking a familiar industry refrain.

DEEP FREEZE
The Pfizer-BioNTech SE vaccine adds an extra layer of difficulty. It must be transported at minus 70 degrees Celsius, colder than winter in Antarctica, and the companies plan to use GPS-enabled thermal sensors to track the location and temperature of each vaccine shipment.

Upon arrival, the vaccine can be stored in ultra-low temperature freezers (which are commercially available and can extend the vaccine’s shelf life for up to six months), or in a fridge in a hospital for five days at 2-to-8 degrees Celsius, or in a special Pfizer thermal shipper, in which the doses will arrive. That can be used as a temporary storage unit by refilling with dry ice for up to 15 days. Once thawed, the vials cannot be re-frozen.

The choreography will be delicate, with controls in place from factory to clinic and all points between. Virtually no aircraft are capable of keeping items so cold. Airlines will instead rely on Pfizer’s specialized containers to cool the medicine. 

United Airlines Holdings, Inc. has begun flights to ready Pfizer’s vaccine for distribution if it receives regulatory approval, said a person familiar with the matter. The pharmaceutical company and the airline declined to comment on the flights, which were reported earlier by the Wall Street Journal.

Delta Air Lines, Inc. and American Airlines Group, Inc. are among other carriers that said they are prepared to handle shipments of the Pfizer drug. America has both temperature-controlled containers and pre-packaged shipments with cold packs or dry ice.

Delta recently approved use of DoKaSch GmbH’s Opticooler RAP climate-control containers. It also increased allowable levels of dry ice, which is regarded as a “dangerous good,” according to IATA, meaning only about 50% of hold space can normally be filled with vaccine shipments packed this way.

“While distribution needs continue to evolve, a team approach will ensure that there will be enough air cargo capacity to handle demand,” said Vittal Shetty, director of innovation and delivery-airport excellence and cargo for Delta.

United on Friday started operating charter flights to get doses of Pfizer’s vaccine ready for quick distribution, according to a Wall Street Journal report that cited people familiar with the matter.

STORAGE
Despite the hurdles, a well-established global network for pharmaceutical distribution should expedite the flow of doses. Cities ranging from Miami, Dallas and London, to Liege in Belgium, Dubai, Mumbai, Singapore and Incheon in Seoul have well-established deep-freeze capabilities.

United Parcel Service, Inc. has built facilities in Louisville, Kentucky, and in the Netherlands with a total of 600 deep freezers that can each hold 48,000 vials of vaccine at temperatures as low as minus 80 degrees Celsius.

FedEx Corp. has added freezers and refrigerated trucks to its already extensive cold-chain network, and Richard Smith, who’s heading up the delivery firm’s vaccine effort, has pledged to free as much air and ground capacity as needed.

Delivery firms have experience transporting flu vaccines and medical samples at low temperatures. And both UPS and FedEx mobilized earlier this year to fly tons of needed medical supplies into the US when the shortage was acute. They’ve since been coordinating with vaccine makers and government officials to prepare for the vaccine rollout.

“We’re just waiting until they tell us they have a vaccine ready and we will be ready to go out there and deliver it to every ZIP code in the US,” Mr. Smith said. “We’ll be ready to deliver it around the world as well.”

REACHING THE POOR
United Nations humanitarian relief agency UNICEF has been recruiting airlines into its vast effort to distribute the vaccine to more than 170 countries.

While transporting vials from their point of manufacture to a major hospital or clinic in a big, developed city is one thing, the challenge gets steep in emerging nations, where infrastructure to remote villages and towns may be rickety and unreliable, or even non-existent.

UNICEF held a call in November with about 40 carriers to make plans for the global airlift to 92 of the world’s poorest nations, for which it’s leading efforts to purchase and distribute COVID vaccines. With another 80 higher-income countries that have chosen it to procure inoculations they will buy, the agency’s effort will cover 70% of the world’s population.

PT Garuda Indonesia was certified last month to transport vaccines across a country that has Southeast Asia’s biggest outbreak with more than 520,000 confirmed cases. The nation also presents one of the toughest logistical challenges, with a population of some 273 million spread across the world’s largest archipelago.

Singapore, meanwhile, a close neighbor to some of Asia’s poorest nations, should be able to target a disproportionate share of the transit, according to Alex Hungate, chief executive officer of ground-handling giant SATS Ltd. The former Singapore Airlines unit is IATA CEIV Pharma certified in Singapore, Beijing and Bangalore and is in the process of receiving the designation in Jakarta and Kuala Lumpur, he said.

THE LAST MILE
Delivery won’t be just about airlines. Cars, buses, trucks — even motorcycles, bicycles and donkeys — may be required to get the vaccine to rural areas. In some places, it may need to be carried in by foot.

“You just don’t have deep-freezers everywhere,” said Adar Poonawalla, chief executive officer of Serum Institute of India Ltd., the world’s biggest vaccine maker. It’s tied up with five developers, making 40 million doses of AstraZeneca’s vaccine so far. The company aims to start manufacturing Novavax, Inc.’s contender soon.

“These frozen vaccines, which are highly unstable, the developers need to work on stabilizing,” Mr. Poonawalla said.

The possibility of tampering, production of counterfeit shots and even attempts to disrupt distribution are also a concern, according to IATA. Drug companies have responded by requesting end-to-end security escorts, according to Dominic Kennedy, managing director for cargo at Virgin Atlantic Airways Ltd.

Mr. De Juniac, the IATA chief, insists that the industry is ready. “We will not disappoint,” he said. —  Bloomberg

Twitter suspends Thai royalist account linked to influence campaign

BANGKOK — Twitter has suspended a Thai pro-royalist account linked to the palace that a Reuters analysis found was connected to thousands of others created in recent weeks spreading posts in favor of King Maha Vajiralongkorn and the monarchy.

The Reuters review found tens of thousands of tweets that an expert said appeared to be from accounts amplifying royalist messaging in a push to counter a months-long protest movement that has swelled from opposing the government to breaking a longstanding taboo by challenging the monarchy.

Internal army training documents reviewed by Reuters showed evidence of a coordinated information campaign designed to spread favorable information and discredit opponents.

The pro-monarchy @jitarsa_school account was suspended after Reuters sought comment on Wednesday from Twitter on the recent royalist campaign on the social media platform, where protesters have long had a strong presence. Protesters and royalists have cited the importance of social media in propelling the protest movement, which has become the biggest challenge in decades to the monarchy as well as the government of former junta leader Prayuth Chan-ocha.

Created in September, the @jitarsa_school account had more than 48,000 followers before its suspension.

“The account in question was suspended for violating our rules on spam and platform manipulation,” a Twitter representative said on Sunday. She said the suspension was in line with the company’s policies and not a result of the Reuters request for comment.

The account’s profile had said that it trained people for the Royal Volunteers program, which is run by the Royal Office. A Facebook page for the Royal Volunteers School, which posts pro-monarchy videos and news of the program, also identifies the Twitter account as its own.

Neither the school nor the Royal Volunteers headquarters responded to requests for comment on the suspension. The “Volunteer Spirit 904” program was established during the current king’s reign, which began in 2016, to build loyalty to the monarchy.

The palace did not respond to a request for comment. It has a policy of not speaking to media and has not commented since the start of protests in July that initially targeted the government before breaking taboos by calling for curbs to the king’s powers. 

ROYALIST FIGHTS BACK
In recent weeks, royalist hashtags have begun trending on Twitter, an important platform for opponents of the government even before protests began in July.

The Reuters analysis found that more than 80% of the accounts following @jitarsa_school had also been created since the start of September. A sample of 4,600 of the recently created accounts showed that all they did was promote the royalist hashtags — an indication of the kind of activity that would not be associated with regular Twitter users.

A sample of 559 retweets of the account’s tweets were virtually all from accounts with bot-like characteristics, according to research by social media consultancy Drone Emprit for Reuters.

“Government forces have been trying to counter the protesters,” said Saijai Liangpunsakul of the independent Social Media Monitoring for Peace group. “Twitter has taken down some accounts, but there are many more.”

Hashtags promoted by the suspended account, usually alongside pictures of the king and other royals, included those that translate as: #StopViolatingTheMonarchy, #ProtectTheMonarchy, #WeLoveTheMotherOfTheLand, #WeLoveTheMonarchy, and #MinionsLoveTheMonarchy.

Royalist group leader Warong Dechgitvigrom declined to comment on the account’s suspension, saying he was unaware of it.

He told Reuters there were more pro-monarchy messages on Twitter because royalists increasingly recognized the need to counter protesters’ messages and had encouraged each another to join the platform.

“Pro-monarchy hashtags are authentic, born out of true feelings,” he said.

PROTESTERS ACCUSED BY ROYALISTS
Royalists have accused protesters of inauthentic activity on Twitter, with coordinated campaigns around hashtags.

But Parit “Penguin” Chiwarak, one of the protest leaders, said protesters using the platform were genuine and he welcomed the suspension of the pro-royalist account.

“They’re not recruited to trend hashtags like the army and they don’t use taxpayers’ money,” he said.

Although not directly linked to the @jitarsa_school account, a 28-page army document reviewed by Reuters showed an organized information operation to target “opponents” and spread pro-monarchy messages on Twitter.

The document says 17,562 Twitter accounts run by 9,743 army officers are split into a “White Team” and a “Grey/Black Team” that were instructed to tweet with coordinated hashtags, as well as to like, retweet and follow one another.

The document suggests measures to appear more like authentic accounts.

The army on Saturday acknowledged the document is genuine, saying in a Facebook post it was used in a training session to strengthen the army’s public relations efforts.

In early October, Twitter announced it had taken down 926 accounts linked to the Thai army for violating its platform-manipulation policies by amplifying pro-government content and targeting political opposition figures.

The army at the time denied that the accounts belonged to army officials. — Reuters

Trump to add China’s SMIC and CNOOC to defense blacklist

WASHINGTON — The Trump administration is poised to add China’s top chipmaker Semiconductor Manufacturing International Corp. (SMIC) and national offshore oil and gas producer China National Offshore Oil Corp. (CNOOC) to a blacklist of alleged Chinese military companies, according to a document and sources, curbing their access to US investors and escalating tensions with Beijing weeks before President-elect Joseph R. Biden takes office.

Reuters reported earlier this month that the Department of Defense was planning to designate four more Chinese companies as owned or controlled by the Chinese military, bringing the number of Chinese companies affected to 35.

It was not immediately clear when the new tranche would be published in the Federal Register. But the list comprises China Construction Technology Co. Ltd. and China International Engineering Consulting Corp., in addition to Semiconductor Manufacturing International Corp. (SMIC) and China National Offshore Oil Corp (CNOOC), according to the document and three sources.

The Defense Department (DOD) did not respond to a request for comment.

The move, coupled with similar policies, is seen as seeking to cement outgoing Republican President Donald J. Trump’s tough-on-China legacy and to box incoming Democrat Biden into hardline positions on Beijing amid bipartisan anti-China sentiment in Congress.

The list is also part of a broader effort by Washington to target what it sees as Beijing’s efforts to enlist corporations to harness emerging civilian technologies for military purposes.

Reuters reported last week that the Trump administration is close to declaring that 89 Chinese aerospace and other companies have military ties, restricting them from buying a range of US goods and technology.

SMIC was already in Washington’s crosshairs. In September, the US Commerce Department imposed restrictions on exports to the company after concluding there was an “unacceptable risk” that equipment supplied to it could be used for military purposes.

The list of “Communist Chinese Military Companies” was mandated by a 1999 law requiring the Pentagon to compile a catalogue of companies “owned or controlled” by the People’s Liberation Army, but DOD only complied in 2020. Giants like Hikvision, China Telecom, and China Mobile were added earlier this year.

This month, the White House published an executive order, first reported by Reuters, that sought to give teeth to the list by prohibiting US investors from buying securities of the blacklisted companies from November 2021.

The directive is unlikely to deal the firms a serious blow, experts said, due to its limited scope, uncertainty about the stance of the Biden administration and already-scant holdings by US funds.

Still, combined with other measures, it deepens a rift between Washington and Beijing, already at loggerheads over the coronavirus and China’s crackdown on Hong Kong.

Congress and the administration have sought increasingly to curb the US market access of Chinese companies that do not comply with rules faced by American rivals, even if that means antagonizing Wall Street. — Reuters

Catch-up spending seen to lift Q4 GDP

STATE AGENCIES will have to significantly ramp up spending in December to boost fourth-quarter gross domestic product (GDP), after the government continued to underspend amid the coronavirus pandemic.   

“The agencies were asked to implement catch-up plans to meet their original spending plans for the year. The catch up [spending plan] is intended to shore up the economy this Q4,” Budget Undersecretary Laura B. Pascua said via Viber on Friday.

Finance Secretary Carlos G. Dominguez III told various departments to ramp up spending in the remaining weeks of 2020, during a meeting of the Economic Development Cluster (EDC) two weeks ago.

Representatives from the Departments of Public Works and Highways (DPWH), Transportation (DoTr), Education (DepEd), Tourism (DoT), Trade and Industry (DTI), and Agriculture (DA) attended the EDC meeting, said Ms. Pascua.

Anemic government spending was blamed for the 11.5% GDP contraction in the third quarter, which was worse than most analysts expected but slightly better than the -16.9% GDP in the second quarter.

Government spending remained weak in October, declining by 6.84% year on year to P290 billion. Year to date, spending remained higher by 12.75% from a year ago to P3.312 trillion.

While some have suggested more fiscal stimulus is needed to ensure economic recovery, economic managers are not keen on another Bayanihan package.

Acting Socioeconomic Planning Secretary Karl Kendrick T. Chua said the government will have to focus on spending this year’s P4.1-trillion budget and the P140 billion allotted under Bayanihan II first, before another stimulus package is considered.

“Let’s prioritize spending fully the 2020 budget and Bayanihan II. Congress is also thinking of reallocating the 2021 budget to priority areas,” Mr. Chua told reporters in a Viber message on Nov. 25.

Two bills proposing another stimulus package, Bayanihan III, have been filed at the House of Representatives. A measure co-authored by House Ways and Means Committee Chair and Albay Rep. Jose Maria Clemente S. Salceda would provide P247 billion for stimulus measures, while another filed by House Defeat COVID-19 Committee Chair and Marikina Rep. Stella Luz A. Quimbo allocates P427 billion for recovery efforts.

“Another double-digit decline in GDP is possible this quarter if the government continues to underspend,” said Emilio S. Neri, Jr., the chief economist at the Bank of the Philippine Islands (BPI), in a note issued on Friday.

“The latest GDP report suggests that consumer confidence remains weak and its recovery will likely take a long time. Meanwhile, private businesses will not spend on expansion activities in an environment where consumer demand is weak. The government is the only institution right now that has the capacity to spend,” he added.

Mr. Neri noted state spending fell drastically in the third quarter from its 50% jump in the second quarter — when huge emergency grants and wage subsidy programs have been launched during lockdown. Government expenditures dipped 4.3% year on year in the third quarter, which also contributed to the 28% decline in public construction.

He said the economy could have recorded a softer decline in the third quarter if public construction and state spending on infrastructure did not contract.

Government spending on infrastructure declined by 33% to P153.5 billion between July and September, but was 12% higher than the P137-billion reduced target for the period.

Even the release of stimulus funds under Republic Act No. 11494 or the Bayanihan to Recover as One Act (Bayanihan II) has been delayed. The law will expire on Dec. 19.

As of Nov. 24, only P92.35 billion has been released or two-thirds of the P140-billion budget for Bayanihan II, while the remaining P25 billion in standby funds have not been tapped.

The economic team remained firm on maintaining fiscal prudence in anticipation of a prolonged battle against a coronavirus pandemic.

The Development Budget Coordination Committee (DBCC) will meet this week to review macroeconomic projections. — Beatrice M. Laforga

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