Balik Scientist Program: enticing Filipino scientists to come home

July 2, 2020 | 2:08 pm

By Patricia B. Mirasol

The COVID-19 (coronavirus disease 2019) pandemic has highlighted the importance of a robust scientific community.

Some of this year’s newly elected academicians and corresponding members of the National Academy of Science and Technology (NAST) are Balik Scientists, a program open to Filipino experts in science and technology who are willing to come back home and share their expertise for the country’s development.

“I have [relatives] who are also scientists. The problem is they are too young and they still want to be developed more before coming back to the Philippines. The Balik Scientist program is already very attractive for me. If you really want to serve, you can do a lot of things. The fee being given is more than enough,” said Dr. Annabelle Villalobos.

According to the Philippine News Agency, incentives include a one-time payment of P500,000.

The Balik Scientist program is open to all science and technology experts who are Filipinos or foreigners of Filipino descent, with graduate/advanced degrees, are internationally recognized experts in DOST’s priority sectors, and are willing to come back and serve either short-term or long-term. The goal is for them to share their expertise in order to accelerate the scientific, agro-industrial, and economic development of the country.

“I went back to Cabuyao to give back and help make more affordable knee implants for local patients,” said Dr. Ramon Gustilo, who went on to describe the attractiveness of a more enabling environment. “There are rich Filipinos in the US that want to come back, but (there has to be) incentives like tax incentives. There are hardly any.”

In an interview with Asian Scientist, Dr. Jaime Montoya of the DOST-PCHRD (Philippine Council for Health Research and Development) mentioned another challenge: applications being declined because the scientist’s family could not be accommodated for short-term engagements. “The program is still evolving … But when you become a Balik Scientist, more than the incentives and the research environment in the Philippines, it is the love for your country that will push you to come back to the Philippines,” said Mr. Montoya.

THE NUMBERS

As of June 30, 2019, 526 Balik Scientists were encouraged to return to the Philippines to share their expertise. These 526 Balik Scientists were able to participate in 659 engagements servicing the requirements of the academe, public/government agencies, and the industry.

For the period 2007–2019, 238 Balik Scientists from 5 continents were convinced to return to the Philippines to deliver 352 engagements benefiting 115 Host Institutions nationwide.

The Balik Scientist Program is spearheaded by the Department of Science and Technology through the DOST-Councils PCAARRD (Philippine Council for Agriculture, Aquatic and Natural Resources Research and Development), PCHRD (Philippine Council for Health Research and Development), and PCIEERD (Philippine Council for Industry, Energy, and Emerging Technology Research and Development).

BALIK SCIENTIST INCENTIVES

According to a 2019 article by the Philippine News Agency, incentives under the short-term program of Balik Scientist include:

• P500,000 one-time incentive upon completion of engagement
• P3 million accident/travel insurance
• reimbursement of excess baggage up to 25 kg
• one round trip airfare between country of origin and the Philippines
• $200 or the prevailing United Nations Development Programme rate (whichever is higher) per day
• attendance to a local conference
• membership endorsement to the National Research Council of the Philippines (NRCP)

For the long-term program, wherein Balik Scientists could opt to stay in the Philippines for at least two years, the benefits are:

• P500,000 one-time incentive upon completion of engagement.
• P3 million accident/travel insurance
• reimbursement of excess baggage up to 25 kg
• reimbursement of excess baggage of his or her spouse and dependents
• round trip airfare for the scientist, his or her spouse and dependents
• one-time relocation allowance of P250,000
• monthly housing (maximum P40,000 per month)
• P5,000 monthly transportation allowance; salary equivalent to at least Salary Grade 24
• attendance to three local conferences
• NRCP membership endorsement

Alibaba Cloud establishes Philippines ecosystem alliance to accelerate digital transformation

July 2, 2020 | 1:57 pm

Leading cloud provider aims to train 50,000 local IT professionals and help 5,000 businesses by 2023

Alibaba Cloud, the digital technology and intelligence backbone of Alibaba Group, today announced the formation of the Alibaba Cloud Philippines Ecosystem Alliance with the vision to speed up the digital transformation of businesses in the country.

Spearheaded by Alibaba Cloud, the alliance is a joint initiative with local ecosystem partners to promote cloud adoption and the use of analytics intelligence among businesses of all types and sizes. It aims to become the country’s leading cloud ecosystem bringing together thousands of Alibaba Cloud’s partners and customers who have benefited from the company’s digitalization expertise, including supporting digital transformation in the different industry verticals, wide range of academic research, technology innovation and marketplace enhancement solutions.

“Philippines is a booming market with a big group of young and digital savvy population. There is strong demand on digital transformation in accordance with local government’s ‘cloud-first’ initiative. We have established local team and business coverage in the Philippines and will continue to invest in the country,” said Leo Liu, General Manager of Hong Kong, Macau, Korea and Philippines, Alibaba Cloud Intelligence.

Alibaba Cloud currently has over 20 local partners from various industries such as retail, fintech, media, information communications technology (ICT), business process outsourcing (BPO), healthcare and education. The global trusted cloud leader plans to help 5,000 businesses in the Philippines on their digital migration by end-2023.

In line with its efforts to actively prepare young, tech-savvy Filipinos for the impending shift to digital, Alibaba Cloud has also launched a series of training programs dedicated to providing the necessary training in IT. These include the Alibaba Academy Program, the Alibaba Cloud Partner Program and the Alibaba Certificate Program. Alibaba Cloud aims to train 50,000 and certify at least 10,000 IT professionals within the next three years.

“Digitalization will be the global economic bedrock in the post-COVID era. This is why we are determined to enhance our efforts in supporting businesses here in their digital transformation journeys. Through offering our technology know-how and experience in digitalization, Alibaba Cloud is ready to help local businesses accelerate their growth with the support of our partners,” said Allen Guo, Alibaba Cloud’s head for Philippines.

To assist enterprises and SMEs in the Philippines to grow and succeed in a digital society, Alibaba Cloud offers comprehensive localized cloud solutions and products in the Philippines, including leading products in computing, storage, data base, cloud network, cloud security, analytics and artificial intelligence fields, as well as solutions on New Retail, fintech and digital media.

For example, Alibaba Cloud worked with telecommunications giant PLDT, to provide hybrid cloud and security solutions for eSports matches during the 30th Southeast Asian (SEA) Games, delivering high-speed connectivity and efficient handling of high-volume online traffic.

“We are delighted to have joined forces with Alibaba Cloud as we leverage on its proven track record and experience as the Asia Pacific’s biggest cloud service provider. Alibaba Cloud has developed a wide array of solutions across the cloud ecosystem. We are looking forward to fortifying this partnership and cooperation as we face this new era of cloud modernization,” said PLDT Enterprise and International Data Regional Head for Asia Pacific, Jeff Mendoza.

To encourage more enterprises to realize the benefits from the latest cloud and analytics intelligence technologies, Alibaba Cloud has extensively trained its local workforce in the Philippines to support specific needs of clients and provide tailored solutions to address customer pain points or any challenges during digital migrations.

Alibaba Cloud has remained steadfast in its commitment to empower partners and customers as they adapt to the new normal through digitalization. The global cloud leader will invest RMB2 billion (US$283 million) in this fiscal year to bring its partners up to speed with digitalization capabilities and create joint products and solutions to benefit even more customers across all sectors.

Serving 21 regions and with 63 availability zones globally, Alibaba Cloud is ranked the number one public cloud service provider in Asia Pacific and number three globally according to Gartner. The cloud computing giant announced in April that it would invest an additional RMB200 billion (US$28 billion) in the next three years on its cloud infrastructure, from operating systems, servers, to chips and network.

For more information on Alibaba Cloud and its products and solutions, customers may visit www.alibabacloud.com.

WHO warns some nations still face ‘long, hard’ battle with COVID-19

July 2, 2020 | 1:30 pm

GENEVA — Nations who fail to use all mechanisms available to combat the still-raging coronavirus will struggle to beat it, the World Health Organization (WHO) said on Wednesday.

“Some countries … have taken a fragmented approach. These countries face a long, hard road ahead,” Director General Tedros Adhanom Ghebreyesus told a virtual briefing from WHO headquarters in Geneva.

More than 10.5 million people have been infected globally and more than half a million have died since the COVID-19 disease first emerged in the Chinese city of Wuhan.

WHO emergencies expert Mike Ryan told the same briefing that the United Nations body planned to send two experts from its headquarters to join its country team in China to establish the scope for a mission looking into the origins of the coronavirus. — REUTERS

Philippine scientific community discusses its role in addressing COVID-19 pandemic and other national issues

July 2, 2020 | 1:00 pm

by Patricia B. Mirasol

Scientists and academicians discussed the role of the scientific community in dealing with national issues, including the COVID-19 (coronavirus disease 2019) pandemic ravaging the globe. “Partnership with the government and private enterprises is the way to go, at least in medicine. We cannot rely on Western products all the time,” said Ramon B. Gustilo, Ph.D., Orthopaedics, during a virtual conference organized by the National Academy of Science and Technology (NAST) to welcome its newly elected academicians and corresponding members.

“There are a few pockets of innovation here and there. COVID-19 cannot throw the momentum out entirely, but there has definitely been a setback on R&D… There is some focus now on how science can ease the pandemic’s effects on health and the economy,” said Gonzalo C. Serafica, Ph.D., Chemical Engineering. “Technology can act as a major player in bringing back the economy.”

NAST is the highest recognition and scientific advisory body of the Philippines under the Department of Science and Technology (DOST). In March, Senator Panfilo “Ping” Lacson called out the government for its lack of support of the Philippine scientific community: “I have repeatedly raised the issue of the minuscule budgetary allocation for research and development (R&D) in the national budget year in, year out — an average of, lo and behold, 0.4% of the annual budget from 2016 to 2020, including 0.39% for 2020. For the same five-year period, the DOST’s average budget is only P20 billion or a meager 0.56% against the trillions of pesos that we pass every year as our national budget,” he said in a statement. “Science entails research. Science can greatly help especially during looming disasters such as COVID-19. It is high time our government throw its support behind our homegrown scientists.”

During NAST’s virtual session, participants shared the projects and initiatives they are working on.

• Francis L. de los Reyes III, Ph.D., Environmental Engineering, is assisting a team in the University of the Philippines (UP)-Diliman in efforts to detect coronavirus in esteros (estuaries) in Manila and Davao using RNA signatures. He is also conducting a related wastewater study in the US to detect the same virus and is relating it to infection rates in the community.

• Christopher P. Monterola, Ph.D., Physics, along with his team at the Asian Institute of Management, is trying to attract from talent from the US and South Korea and giving them the needed resources to maximize their capacity here; assisting a health-tech startup make various projections such as patients’ hospital durations; and teaching farmers how to minimize defaults via their microfinancing fintech company. “Science can help companies be competitive,” he said.

• Arnel N. del Barrio, Ph.D., Ruminant Nutrition, is handling P30M worth of projects as executive director of the Philippine Carabao Center. These projects, aimed at helping dairy farmers improve food productivity and accessibility, include the development of “milkibuns” (akin to the Nutribun bread product developed in the 1970s) from their lab-to-farm technology.

Asked too about pressing issues such as the upcoming challenges of distance learning, Windell R. Rivera, Ph.D., Medicinal Science, said that professors at the UP Diliman College of Science were encouraged to modify their course goals and learning outcomes. “We are focusing on helping students improve their writing skills as well as their critical thinking and analysis. Scientists need good writing skills,” he said.

Maribel G. Nonato, Ph.D., Chemistry, related their experience at the University of Santo Tomas (UST): “We are lucky we have our LMS [Learning Management System] already, but of course it’s still a big adjustment for those who are not tech-savvy or lack funds. We’ve since established a system to provide assistance for our students in terms of loans and Internet connectivity.”

Responding to a question regarding how soon a COVID-19 vaccine could be developed, Annabelle P. Villalobos, Ph.D., Chemistry, replied: “Speaking about the efforts of the US and UK, the earliest we can expect a vaccine is next year, although it may not be at 75% efficacy. It may only be utilized for emergency purposes, like what Dr. Anthony Fauci wants.”

MultiSys launches SchoolBox platform for PHL academe

July 2, 2020 | 10:07 am

Recognizing the power of technology to keep the country’s education system running amid the current health crisis, leading software solutions firm Multisys Technologies Corporation launched its SchoolBox platform that supports online distance learning modalities.

SchoolBox is a digital academic platform of MultiSys that integrates school admin analytics, online enrollment with e-payment, digitized academic records, campus attendance monitoring, school SMS blasting, curriculum, online exams and modules for school administrators, teachers, and students—all in one portal.

SchoolBox User Dashboard. The platform automates lesson plans, exams, and academic records. It features an easy-to-use dashboard for students and teachers, as well as modules and analytic tools that track students’ performance.

With SchoolBox, the academe will be able to provide digital courses and allow online submission of homeworks, as well as enable students and teachers to use laptops and tablets forclass discussions. The platform can be used by schools, including colleges and universities, scholarship organizations and foundations, technical and vocational schools, tutorial centers, and online learning firms.

“The pandemic has been challenging the academe to find ways to enable students to keep studying, and teachers to fulfill their duties as educators. Our situation now may be difficult, but it’s not impossible—with proper tools and technologies in place. Which iswhy we launched our SchoolBox platform. It’s important that we help each other pull through during these difficult times,” MultiSys CEO David Almirol, Jr. said.

Almirol shared that virtual conferencing will soon be available in the SchoolBox platform.

“Homegrown technology is on the rise. Filipinos’ ingenuity in the IT industry is now being recognized in the global scene. We must patronize our own and see its beauty firsthand,” Almirol said.

SOCResources to hold its virtual stockholders’ meeting on July 24

July 2, 2020 | 9:00 am

Nationwide round-up

July 2, 2020 | 1:00 am

DFA sends ship to bring home 97 seafarers stranded in China

THE DEPARTMENT of Foreign Affairs (DFA) has organized a ship that will bring home 97 Filipino seafarers stranded in another vessel docked in China. Foreign Affairs Undersecretary Brigido D. Dulay, in an online briefing Wednesday, said the crewmen have been stuck at their ship as China still restricts disembarkation of foreigners. “The way that our consulate in Xiamen devised is to bring them home via another vessel. Tuloy na itong vessel na ito, nandyan na ‘yung ibang seafarers, sinusubukan namin magsakay pa ng iba (This vessel is ready to go, some of the seafarers are there, and we are trying to get others on board),” he said. The DFA is also currently working on permits to allow the vessel to enter the Philippines. More than 63,000 overseas Filipinos have come home since February due to the global crisis brought about by the coronavirus disease 2019 (COVID-19). Mr. Dulay said they have been repatriating an average of 1,000-1,500 Filipinos per day, but the department is working to increase the capacity of airports to process more entrants.

REMAINS
Meanwhile, the remains of 274 overseas Filipino workers in Saudi Arabia are expected to be flown in this week, according to Labor Secretary Silvestre H. Bello III. In a separate briefing on Wednesday, Mr. Bello said “we are doing our best” to sort out the long list of requirements, including health protocols and consent from employers and next of kin. There were initially 301 remains to be brought home, but Mr. Bello said some of them were already either buried there or brought back by their respective families. — Charmaine A. Tadalan and Gillian M. Cortez

Police starts probe on J&T Express

THE POLICE Criminal Investigation and Detection Group (CIDG) has started its investigation on the alleged mishandling of cargo by delivery firm PH Global Jet Express Inc. (J&T Express). Brig. Gen. Rhoderick Armamento, CIDG deputy director for administration, on Wednesday said they have discussed with investigators on how to handle the probe. “We have met with our National Capital Region field unit and our legal department,” he said in a text message. President Rodrigo R. Duterte on Tuesday night ordered the CIDG and the National Bureau of Investigation to look into the complaints against the courier firm. J&T Express has been under fire following a viral video showing some of its workers mishandling cargo. Mr. Duterte threatened to close down the firm and “file charges” if needed. J&T Express, in an email to BusinessWorld on Wednesday, said it “appreciates” the President’s concern, particularly during in this time of the coronavirus crisis when delivery services have become crucial. “We appreciate the concern expressed by the President towards our customers’ welfare as well as the well-being of our many partners and employees. Furthermore, we will cooperate with the government in any investigation that it will conduct. We are committed to improving our services for the benefit of the public,” the company said. — Emmanuel Tupas/PHILSTAR and Gillian M. Cortez

Hog raisers told to be extra alert amid new swine flu strain

AN INFECTIOUS DISEASE specialist called on hog raisers and people who are constantly exposed to pigs to take extra caution after a new swine flu strain capable of triggering a pandemic was recently discovered in China. “We should be cautious everyday, especially with the discovery of this new type of influenza on pigs. There is really potential that the virus can infect humans,” San Lazaro Hospital Infectious Disease Specialist Rontgene M. Solante said in a radio interview on Wednesday. Mr. Solante also recommended that government agencies involved in the hog industry initiate testing on pigs to check if the virus strain is already in the country. Chinese researchers have discovered a new type of swine flu named G4. Their study published in the US science journal PNAS indicates that G4 genetically descended from the H1N1 strain that started a pandemic in 2009 and has all the “essential hallmarks” of being highly adapted to infect humans. The tests from the study also showed that the immunity gained by humans from exposure to a seasonal flu does not give protection from G4. Scientists involved in the study said the virus has already passed from animals to humans, but no evidence yet showing possible human to human transmission. “It is of concern that human infection of (the) G4 virus will further human adaptation and increase the risk of a human pandemic,” the researchers said.

LOCAL RESPONSE
The Department of Agriculture’s Bureau of Animal Industry (BAI), meanwhile, urged the public to report any unusual pig deaths to farm veterinarians or the nearest government veterinary or agricultural office. In a statement on Wednesday, the BAI also recommended farm owners to consult their licensed veterinarians to check farm biosafety and biosecurity programs. “Reports on flu-like symptoms have been increasing this rainy season and this could affect both agricultural workers and our swine production,” the agency said. “The public, especially those engaged in animal farming, is encouraged to report to the Department of Health any unusual sickness among farm workers,” it added. The agency also gave assurance that the country has been strictly implementing the ban on pork and swine products from China. — Revin Mikhael D. Ochave

Courts ordered to close based on positive swab test confirmation

THE OFFICE of the Court Administrator (OCA) has prohibited the closure or lockdown of courts if an employee tested positive for coronavirus infection based solely on a rapid antibody test. In a circular signed by Court Administrator Jose Midas P. Marquez, OCA said those who test positive for coronavirus infections should immediately undergo swab test for confirmation. “In the interim, courts exposed to subjects who tested positive using the rapid antibody test shall neither be closed down or locked down,” it said, citing guidelines from the Department of Health. Contact tracing must also be conducted for monitoring of symptoms, it added. Those with symptoms will be quarantined for 14 days or until they become asymptomatic, “whichever is longer.” If the confirmatory test is positive, the court will be closed for 14 days and immediately disinfected. As an additional safety protocol, all visitors and court users are required to register their contact information upon entry for contact tracing purposes. Individual branches and offices within the hall may also require the same. “Court users who are later confirmed for COVID-19 shall likewise immediately inform the court they have visited,” it said. Several courts in Metro Manila recently closed after employees either had a positive rapid test result or had contact with a coronavirus patient. — Vann Marlo M. Villegas

Manufacturing purchasing managers’ index of select ASEAN economies, June (2020)

July 2, 2020 | 12:35 am

FACTORY ACTIVITY fell for a fourth straight month in June, although the pace of contraction eased significantly as manufacturers were able to boost output for the first time since February, according to a survey by IHS Markit. Read the full story.

Manufacturing contraction eases

July 2, 2020 | 12:35 am

By Beatrice M. Laforga, Reporter

IHS Markit in a statement on Wednesday said the Philippines manufacturing Purchasing Managers’ Index (PMI) jumped to 49.7 last month from 40.1 in May, but still remained below the 50 neutral level separating contraction from expansion.

A PMI reading below 50 signals deterioration in operating conditions compared to the preceding month, while a reading above 50 denotes improvement.

“June PMI survey data showed a further considerable easing in the downturn across the Filipino manufacturing sector, as operating conditions were close to stabilization and output levels increased for the first time since February,” IHS Markit said.

IHS Markit said this “signalled a further movement toward stabilization in the Filipino goods-producing sector.”

The headline PMI measures manufacturing conditions through the weighted average of five indices: new orders (30%), output (25%), employment (20%), suppliers’ delivery times (15%) and stocks of purchases (10%).

Easing of quarantine measures helped improve business confidence during the month, as companies hope sales will begin recovering, IHS Markit said.

Among the ASEAN region, the Philippines recorded the third-highest reading despite the slight contraction, trailing Vietnam’s 51.1 headline index and Malaysia with 51.

The country’s latest reading was just above Myanmar’s 48.7 and higher than the regional average of 43.7 for the month.

IHS Markit attributed the improvement in Philippine manufacturing conditions to higher output levels which expanded for the first time in four months, as firms ramped up production as the economy slowly reopened and others restarted operations after months of closure.

Overall demand also “notably improved, with new orders still falling but at a greatly reduced speed” locally, and more so overseas as restrictions were eased across the globe, IHS Markit said. Companies also saw a pickup in demand and orders from customers.

However, businesses said new work “remained weak” on pandemic fears and as other restrictive measures were still in place.

“The change in government COVID-19 (coronavirus disease 2019) rules to the general community quarantine helped the manufacturing sector make large strides towards stability in June,” IHS Markit Economist David Owen was quoted as saying.

Employment, meanwhile, continued to decline last month.

“Firms have noticeably held back from hiring as a result of weak demand, as employment numbers dropped at the steepest rate since March,” Mr. Owen said.

According to the survey, many firms decided to keep their workforce at a minimum and did not hire new workers to replace those who left. Some companies, on the other hand, increased their staff to boost capacity.

“The sharper decline in workforces suggests that manufacturers may need to see a strong rebound in goods demand before job levels can expand,” Mr. Owen added.

As demand remains slow, IHS Markit said factories were able to catch up with their backlog after shutting down during the lockdown.

“Signs from new orders and export orders data are encouraging, but the recovery may still be gradual as the pandemic continues and even accelerates in some regions,” Mr. Owen added.

Buying activity also dropped for four months in a row but at its slowest pace. Inventories of pre- and post-production goods were still curbed as the manufacturers only produced the volume needed to meet the orders.

“On the receipt of purchased items, manufacturers saw a further lengthening of lead times during June which signalled the eleventh monthly extension in a row,” IHS Markit said.

Delivery services were limited, it said, since suppliers were also working with minimal workforces to observe physical distancing.

Meanwhile, IHS Markit said input prices posted a sharp increase last month, with supplier prices rising faster due to difficulties in transportation and costlier freight charges.

While companies increased their selling prices slightly due to higher input costs, IHS Markit said there were companies that offered discounts to attract buyers and boost sales.

“The year-ahead outlook for manufacturing output rose to its highest since February, with companies seeing greater reason for optimism as the government relaxed COVID-19 quarantine measures,” it said.

For Ruben Carlo O. Asuncion of UnionBank of the Philippines, Inc., the higher headline reading in June was expected and will likely sustain the trend as the economy continues to reopen.

Mr. Asuncion said stricter restrictions are still imposed in some parts of the country such as in Cebu due to the rising number of new COVID-19 positive cases.

“With these recent developments, the effectiveness and consequent success of the NPIs (non-pharmaceutical initiatives) may spell the impact on the manufacturing sector’s recovery. Nevertheless, I posit that the potential recovery may be sooner rather than later because of the continued appropriate adjustment of work protocols following necessary health standards to allow the continuation of production without sacrificing health and safety,” he said.

For the Emerging Asia region, think tank Capital Economics said in a note that the improvement in manufacturing PMI across the region is still low, which shows companies are still struggling.

“It appears that the worst has passed for industry,” Capital Economics said, noting there was a “sizable rebound” for the sector in the region especially in the Philippines and Indonesia.

Capital Economics expects business conditions for the manufacturing sector to “continue improving gradually as external demand recovers,” while production will remain below pre-pandemic levels in the coming months on dampened demand.

“PMI readings suggest that a further easing of lockdown restrictions and a nascent recovery in external demand have helped improve conditions for manufacturers. But output is still likely to be well below normal levels for many months to come as domestic and global demand remains depressed,” it said.

BoP surplus widens in May

July 2, 2020 | 12:34 am

A bank employee counts US dollar notes in this file photo from May 16, 2016. — *REUTERS*

THE country’s balance of payments (BoP) saw a bigger surplus in May on the back of the National Government’s foreign borrowings and a narrower merchandise trade deficit.

Data from the Bangko Sentral ng Pilipinas (BSP) released Wednesday showed the country’s BoP position was at a surplus of $2.431 billion in May, its fourth successive month in surfeit. This is wider than both the $928-million surplus recorded a year ago and the $1.666-billion surfeit in April.

The May surplus is also the highest since January 2019’s $2.704-billion surfeit.

The BoP shows the country’s economic transactions with the rest of the world within a given period.

The central bank in June revised its BoP projection to a surplus of $600 million for 2020, slimmer than the $3-billion surfeit estimate it gave in November last year. The new projection represents 0.2% of the country’s gross domestic product.

“The BOP surplus in May 2020 reflected mainly the inflows arising from the National Government’s foreign currency deposits with the BSP as well as the BSP’s foreign exchange operations and income from its investments abroad,” the BSP said.

Inflows were partially offset by foreign currency withdrawals by the National Government meant to pay foreign currency debt obligations.

Year to date, BoP position remained at a surplus of $4.03 billion in May. However, this was thinner than the $5.19-billion surplus logged in the January to May 2019 period.

“The current BoP surplus was supported mainly by foreign borrowings by the National Government in April and May, coupled with lower merchandise trade deficit and by sustained net inflows of personal remittances from overseas Filipinos. These inflows fully negated the impact of lower trade in services receipts, the net foreign portfolio investment outflows and lower foreign direct investments inflows,” the central bank said.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in an e-mail the May surplus reflected “increased borrowings from multilaterals and commercial sources to finance stimulus spending and other COVID-19 (coronavirus disease 2019) programs.”

“Government has been aggressive in building its COVID financing war chest with roughly $5 billion in loans on top of a fresh RoP (Republic of the Philippines) [global bond] issuance, offsetting portfolio outflows linked to the risk-off sell down,” ING Bank N.V. Manila Senior Economist Nicholas Antonio T. Mapa said in an e-mail.

The government has so far secured $6.508 billion in loans, bond issuances and grants to fund its response for the pandemic, according to the Department of Finance.

Meanwhile, the trade deficit was at $499.21 million in April, much lower than the $3.8-billion gap in $3.8 billion seen a year ago and the smallest in five years or since the $257.18-million trade gap in March 2015 and the $64.95-million trade surplus in May 2015.

This, as merchandise imports declined 65.3% to $3.28 billion in April while exports fell 50.8% to $2.78 billion.

The BSP also said the BoP reflects the country’s gross international reserves at record high of $93.29 billion as of end-2020, surpassing the $90- billion buffer target for 2020.

“At this level, the GIR represents an ample external liquidity buffer, which is equivalent to 8.4 months’ worth of imports of goods and payments of services and primary income,” the central bank said.

The dollar reserves is also about seven times the country’s short-term external debt based on original maturity and 4.6 times based on residual maturity. — Luz Wendy T. Noble

PHL losses from tourism standstill could reach $22.6B

July 2, 2020 | 12:33 am

By Jenina P. Ibañez, Reporter

THE Philippines could lose up to $22.64 billion (P1.13 trillion) or seven percent of GDP if the tourism standstill caused by the pandemic extends to 12 months, the United Nations Conference on Trade and Development (UNCTAD) said in a report.

The country is already facing a loss of $7.7 billion (P383.7 billion) or two percent of the country’s GDP after the tourism industry was forced to shut down for four months so far this year. If the standstill extends to eight months, the Philippines could lose $15.19 billion (P792.3 billion) or five percent of GDP.

In its COVID-19 and Tourism: Assessing the Economic Consequences report released on July 1, UNCTAD said the world tourism sector’s losses may reach at least $1.2 trillion or 1.5% of the global gross domestic product over the four-month standstill.

UNCTAD said the coronavirus disease 2019 (COVID-19) pandemic has brought to a halt an industry that has tripled in value to $1.6 trillion in the last two decades.

“These numbers are a clear reminder of something we often seem to forget: the economic importance of the sector and its role as a lifeline for millions of people all around the world,” UNCTAD Director of International Trade Pamela Coke-Hamilton said.

An eight-month international tourism break spells a $2.2-trillion loss or 2.8% of world GDP, while a 12-month break increases this to $3.3 trillion or 4.2% of global GDP.

The Department of Tourism said revenues declined by 55% in the first four months of 2020 to P79.8 billion from P180.5 billion in the same period a year ago. Last year, tourism contributed 12.7% to the country’s GDP and employed 5.7 million people.

The decline in tourism arrivals has caused countless job losses. A 12-month standstill is expected to translate to an eight percent decline in skilled wages and a 10% drop in unskilled employment.

A four-month pause is seen to have already caused a three percent drop in skilled wages, and caused unskilled employment to slide by four percent.

The Philippines is the 14^th most-affected country in terms of unskilled employment in the report looking at 65 countries and regions, and the third-most affected among Southeast Asian countries after Thailand and Malaysia.

The Philippines is currently under the longest and strictest lockdowns in the world.

But the Tourism department in a press release said that it expects the reopening of the industry as more areas shift to a relaxed lockdown or a modified general community quarantine (MGCQ).

Areas under MGCQ can have tourism activities up to 50% operational capacity.

“The anticipated resumption of business operations will bring about many opportunities for our kababayans, but we would like to remind our tourism stakeholders that the implementation of health protocols in the new normal should always be a priority because it is only by ensuring the safety of our guests can we regain the confidence of our traveling public,” Tourism Secretary Bernadette Romulo-Puyat said.

The government has, however, placed Cebu City under a stricter lockdown after a spike in COVID-19 cases. Cebu province was reported to have attracted the second-highest number of tourist arrivals in the country last year, after Boracay.

Tourism Congress of the Philippines (TCP) President Jose C. Clemente III in a mobile message said the projected losses would mean a catastrophic year for the tourism industry and the Philippine economy.

“It is near catastrophic already for the industry stakeholders with many companies already ceasing operations or seriously contemplating on doing so. Many in the industry, mostly MSMEs (micro, small, and medium enterprises), cannot survive longer without further assistance from the government,” he said.

Mr. Clemente said recovery will take time as the anticipated shift to domestic travel will depend on local governments, as some are still hesitant to reopen borders until they have adequate facilities and testing for visitors. TCP for now expects limited resumption of domestic travel in September.

“We have asked for the deferment of taxes, possible waiving of rentals and utilities, wage subsidies and more,” he added, noting that TCP expects 12-24 months before a return to “normalcy.”

Rizal Commercial Banking Corp. Economist Michael L. Ricafort in a mobile message said he expects tourism recovery after the pandemic to take longer than other industries.

While most industries may recover in 18 months, he cited the International Air Transport Association’s estimation that global air travel could return to its pre-pandemic levels in 2023. He said the decline in global tourism led to the repatriation of overseas Filipino workers.

“Some job losses and business closures around the world could also slow the recovery of the tourism industry locally and worldwide, on top of health considerations,” he said.

“Tourism accounts for at least 10%-20% of the local economy and could remain a drag on GDP amid social-distancing measures, travel restrictions/constraints, and other stringent measures as the risk of new COVID-19 cases remain, until a cure/vaccine is developed. Thus, recovery in tourism could be relatively slower and would take longer,” Mr. Ricafort added.

Governments should help protect workers, including offering wage subsidies for workers in enterprises that are not likely to recover, UNCTAD said.

The report also recommended offering low interest loans for tourism enterprises and applying quarantine procedures for travelers in a post-pandemic scenario.

But in the medium and long term, UNCTAD is suggesting that governments decrease reliance on a single industry.

“Governments should support economic diversification where possible. A high dependence on one sector increases vulnerability,” the report said.

“For some countries diversification away from tourism may be difficult. Avenues for economic diversification may include increased regional integration, education and training programs in targeted economic sectors to boost resilience and mitigate the cost of shocks.”

Mr. Clemente of the Tourism Congress said he believes the recovery of tourism can be “tremendous.”

“People are looking to travel after months of isolation and lockdowns. They want to go. It all depends on how we control our COVID-19 situation and how effective our protocols and guidelines are,” he said.

Central bank plans maiden securities offer within 3rd quarter

July 2, 2020 | 12:32 am

THE Bangko Sentral ng Pilipinas (BSP) is planning to conduct its maiden securities issuance within the third quarter.

“The BSP is looking forward to its first issuance of the BSP Securities this quarter. It took many years to finally amend the BSP Charter and with it, restore the BSP’s authority to issue its own freely negotiable securities,” BSP Governor Benjamin E. Diokno said during the signing ceremony on Wednesday.

“Thus, the prospect of an additional market-friendly instrument in the BSP’s policy toolkit is something to look forward to as we continuously enhance our monetary policy implementation and liquidity management under the Interest Rate Corridor framework.”

The BSP signed a memorandum of agreement to link its monetary operating system (MOS) and the National Registry of Scripless Securities (NRoSS) of the Bureau of the Treasury (BTr).

“The connectivity of the MOS and the NRoSS is the main infrastructure that would allow the issuance to be possible and would make the features of the BSP,” Mr. Diokno said.

BSP’s MOS is an electronic platform that allows counterparties to take part in the central bank’s liquidity tools. Meanwhile, the NRoSS of the BTr serves as an electronic registry system for government securities.

Reuters quoted Mr. Diokno as saying the central bank is looking to offer a small volume of securities with short-term maturities.

BSP Deputy Governor Francisco G. Dakila, Jr. said the amount of the initial issuance will be based on the BSP’s forecast of the total amount of excess liquidity that needs to be absorbed.

The BSP will coordinate with the BTr to ensure the issuance will not overlap with the schedule and tenor of government bonds.

“The determination of frequency of auction [of BSP issuances] will depend on market conditions,” Mr. Diokno said.

Mr. Diokno clarified that BSP securities are meant to manage liquidity “to support monetary policy transmission” which differs from the government securities issued by the BTr meant to fund government spending.

He said the BSP securities will form part of risk-free assets alongside government securities.

“The funds will remain locked away at the BSP until the securities….In particular, the issuance of BSP securities is expected to facilitate the construction of benchmark yield curve at the short end, which the market can refer to when pricing loans to finance debt instruments,” he said.

Once the central bank securities are issued, secondary market trading will be done through the Philippine Dealing and Exchange Corp.

The BSP’s authority to issue its own securities is provided under Republic Act 11211 or The New Central Bank Act signed into law in February 2019.

“By being able to issue debt securities, the BSP is empowered with a more targeted approach to achieving desired monetary policy outcomes. Should there be excess structural liquidity in the financial system, the BSP will be able to respond more effectively,” Finance Secretary Carlos G. Dominguez III said. — Luz Wendy T. Noble

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