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May 12, 2020 | 12:00 am

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How PSEi member stocks performed — May 11, 2020

May 12, 2020 | 12:00 am

Here’s a quick glance at how PSEi stocks fared on Monday, May 11, 2020.

Stocks up on hopes of relaxed lockdown measures

May 11, 2020 | 11:15 pm

LOCAL SHARES closed higher on Monday as investors expect positive news from the government regarding the easing of lockdown measures at the end of this week.

The bellwether Philippine Stock Exchange index (PSEi) picked up 45.99 points or 0.81% to end at 5,667.93. The broader all shares index also grew 22.44 points or 0.65% to 3,426.24.

“Local shares traded higher as investors optimistically awaited the decision of Malacañang regarding the possible lifting or even easing of the lockdown after May 15,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a mobile message.

President Rodrigo R. Duterte was expected to make an announcement last night on whether they will relax or extend the enhanced community quarantine (ECQ) in the National Capital Region. Metro Manila mayors were divided on whether to recommend an extension or lifting of the ECQ as the coronavirus disease 2019 (COVID-19) still lingers.

Despite this, investors were “hopeful that more economic restrictions will be eased especially in our top economically productive regions,” Philstocks Financial, Inc. Senior Research Analyst Japhet Louis O. Tantiangco said via text.

“The easing of restrictions would help mitigate the economic losses we are incurring this second quarter which are already expected to be deeper than the first quarter,” he added.

The market opened yesterday with some selling, which pulled the PSEi to a low of 5,627.19. It eventually rallied and hit a high of 5,681.68 before closing at 5,667.93.

Value turnover was lower at P4.54 billion from P5.86 billion in the previous session. Some 480.05 million issues switched hands.

Most sectoral indices ended with gains, led by industrials, which climbed 178.77 points or 2.44% to 7,505.56. AAA Southeast Equities, Inc. Research Head Christopher John Mangun said this can be attributed to shares in Universal Robina Corp., Jollibee Foods Corp. and Manila Electric Co., which increased 4.88%, 3.31% and 1.35%, respectively.

Mining and oil rose 67.67 points or 1.49% to 4,588.52; financials added 11.98 points or 1.04% to 1,160.06; holding firms advanced 46.68 points or 0.84% to 5,578.95; and property climbed 2.78 points or 0.09% to 2,937.75.

The sole decliner was the services index, which shed 6.30 points or 0.47% to 1,316.38.

Advancers outnumbered decliners, 90 against 80, while 55 names ended unchanged.

Net foreign outflows expanded to P871.52 million yesterday from P771.19 million in the last session.

“Retail investors were active (yesterday) with increased volatility in several second-liners and speculative issues. Confirmation of the lifting of the ECQ will send the PSEi higher and perhaps allow it to test its resistance before the end of the week,” Mr. Mangun said. — Denise A. Valdez

COVID-19 wreaks havoc on a number of industries

May 11, 2020 | 10:05 pm

In order to prevent the novel coronavirus SARS-CoV-2 from spreading uncontrollably all over the land, the country’s health authorities recommended the imposition of social or physical distancing. To ensure the strict observance of the physical distancing protocol, the national government, on the recommendation of the Inter-Agency Task Force on Emerging Infectious Diseases (IATF), ordered the closure of certain establishments while the quarantine was in force.

The government directive virtually shut down the tourism industry, which consists of several segments: Accommodation or Lodging, Restaurants and Bars, Land Transportation or Tours, and Recreation Facilities or Resorts. All segments are heavy in personal contact interaction or face-to-face interaction between provider of service and customer. While the closure of these amenities is only for the duration of the enhanced community quarantine, many of them would eventually close down permanently due to the sharp decline in patronage as the IATF strongly recommends the continued observance of physical distancing even after the lifting of the lockdown.

Even without any directive from the IATF, the fear of contracting COVID-19 from a service provider who might be an asymptomatic carrier will deter people from availing themselves of the pleasures of tourist destinations. That would be unfortunate as the country was counting on the tourism industry to serve as the catalyst of the country’s economy, for which reason both the public and private sectors had invested heavily in the development of the infrastructure required by the booming industry.

The outbreak of COVID-19 caused the suspension of the frenzied building of roads, bridges, airports, seaports, hotels, and recreational facilities. The expected prevalence of SARS-CoV-2 does not portend the resumption of frenzied building of tourism-related infrastructure, maybe not even a soft resumption of it.

Even restaurants that do not cater to tourists will experience considerable loss of business as well. Fear of contracting COVID-19 not only from the establishment’s personnel but from other customers will deter people from eating in those places. Severely affected would be the fast-food type food outlets where customers can share tables or are often back-to-back as tables are set close to each other to accommodate more customers.

Food courts in malls and cafeterias in office buildings will have fewer dine-in or table-served customers and will have to downsize their operations. Convenience stores that serve ready-to-eat meals will most probably discontinue that part of their business due to much reduced patronage.

Many of these food outlets will be converted into take-out counters or take-off points for delivery service — that is if they do not decide to cease operations.

The decline of the restaurant industry will have a domino effect on industries with close links to the industry. Suppliers of raw materials and consumables (table napkins, food bags, etc.), labor contractors, security agencies, other service providers (maintenance, garbage disposal, laundry, etc.) will lose considerable business.

Shoppers follow social distancing guidelines as they line up outside 168 supermarket in Divisoria to buy essentials for their families on April 2. — *PHILIPPINE STAR/EDD GUMBAN*

The physical distancing protocol will have a great impact on industries that rely heavily on face-to-face interaction. Among these are personal care services such as beauty salons, reducing clinics, fitness centers, and massage parlors. For fear of being infected by the service provider, instructor, or attendant, many regular clients will opt for self-service.

The avoidance of physical contact with other people will also have an impact on establishments that normally draw a large number of customers like department stores, supermarkets, and school/office supplies stores. They will no longer draw window shoppers and consequently lose the impulse buyers among them.

As I had written in my April 14 column, movie houses, live-show theaters, and concert halls will suffer a sharp fall in ticket sales as people would not want to be seated less than six feet away from another person for fear of being infected with SARS-CoV-2 by them. Likewise, sports arenas will draw much fewer spectators even if men’s basketball, whether pro or college, or women’s volleyball, also whether pro or college, is the billed event.

I wonder how the premier hospitals in Metro Manila and prominent physicians will observe the physical distancing rule in the hospitals’ patient waiting halls or in the physician’s office. Physicians have their consulting hours posted on their door or shown in their calling card and prescription pad. But they usually come one hour later than the supposed start of their consulting time. This is deliberate so that their patients fill up the waiting areas before they (the physicians) come. When they have arrived, their secretary calls in the patient one after the other. There is no time gap between patient consultations. A gap of 10 to 15 minutes could mean the loss of a consultation fee worth P1,000.

Public transportation was already chaotic before the imposition of physical distancing rules. The new normal in public transportation may paralyze the entire system. With fewer passengers allowed, and an increase in fare totally unacceptable to the riding public, jeepney and bus operators will incur tremendous losses, forcing many of them to cease operations. That would throw out into the streets hundreds of commuters, which in turn would disrupt commerce. Neither the Metro Manila Development Authority nor the national government is financially and administratively capable of taking over the metropolitan transport system. Both failed miserably in rehabilitating the light railway system. The disruption of commerce in the National Capital Region would approximate the impact on the economy of the imposition of the enhanced community quarantine in Metro Manila.

I am not hopeful at all that the Duterte Administration will be able to extricate the country from the economic mess it has placed the country in, especially with the only independent-minded economist, National Economic Development Authority Director-General Ernesto Pernia (University of California, Berkeley PhD) now gone from the Duterte Cabinet.

Bangko Sentral ng Pilipinas Governor Benjamin Diokno, is also a trained economist, with an MA from Johns Hopkins and a PhD from Syracuse. But his many stints in government during the presidencies of Cory Aquino, Joseph Estrada, and Rodrigo Duterte have turned him into a wily politician. Remember his unforgettable statement in 2017 as Budget Secretary, “The budget is a political tool to reward administration allies and punish political enemies. If you’re with us, then you get something. If you’re not with us, then you don’t get something.” When he was writing a column in this paper, he repeatedly wrote that the use of the budget by President Benigno Aquino III as a political tool had a deleterious effect on the economy.

Oscar P. Lagman, Jr. is a retired corporate executive, business consultant, and management professor. He has been a politicized citizen since his college days in the late 1950s.

Anatomy of a lockdown

May 11, 2020 | 10:04 pm

When the Enhanced Community Quarantine (ECQ) was first put in place, the most nagging question in everybody’s mind was “up to when will the ECQ be?” Or, to be more realistic about it, “when do we start relaxing the ECQ?”

The answer to that question would have been easier to arrive at had we known from the start the ECQ’s objective. But because this was not clearly spelled out, we deduced that since other countries are doing the same to prevent the spread of COVID-19 (coronavirus disease 2019), and that the epicenter of the outbreak, Wuhan City, had successfully contained the virus by way of a lockdown, then the ECQ is the way to go.

It might be worthwhile recalling that during the time COVID-19 was rampaging all over Wuhan City and Hubei province, the World Health Organization (WHO) never suggested to China to do a lockdown; it recommended instead social distancing, proper hygiene, and adequate testing. The stringent lockdown was the sole decision of the Chinese government. So, in a way, it was a bold experiment that succeeded. Other countries or cities like South Korea, Taiwan, and Hong Kong opted for a different approach but they too managed to contain COVID-19. Their mode of control is by way of massive testing, contact tracing, isolation of suspected carriers, and immediate medical intervention.

Since we did not prepare early enough to follow the South Korean model, we have no choice but to pursue the Chinese model. The consequence of adapting the Chinese model is that, unlike the South Korean model, our economy will suffer a big hit from the ECQ.

Why was China successful with its lockdown?

For one, it has an authoritarian government. It can order the citizenry to follow without question. It can mobilize the army to make sure everybody follows the government directives. It can command army personnel to deliver the food and other necessities directly to the people in their homes.

For another, it didn’t have to contend with millions of informal settlers surrounding Wuhan. It also helped that its economy is the second largest in the world; it can afford to provide the supply requirements of the entire province of about 60 million inhabitants effortlessly.

It is worth mentioning, too, that Hubei province does not belong to the top five richest provinces in China, unlike Guangdong and Jiangsu. If it were such, would China have done the same severe lockdown and risk choking the whole economy as we are doing in Metro Manila and other top cities of the country?

After the authorities enforced the ECQ, health experts insisted that we must first flatten the curve before we can lift the restrictions. This means ensuring the number of persons being infected, and those consequently succumbing to COVID-19, does not spike. Otherwise, it will put too much pressure on our health workers and could lead to the total collapse of our health system.

That assertion seems logical. But when the ECQ’s original deadline was about to expire, we still had not instituted enough testing to be confident about where the curve was or where it would be in the weeks to come. Why this was the case was a deep mystery; and since we don’t know where the curve was, our decision on whether to proceed or to terminate the ECQ was based on pure guesswork.

Some experts opined that the decision to extend or to lift the ECQ was a difficult call. If you extend, the economy suffers, affecting not just the livelihood of our citizenry but the very survival of the marginalized sector of society. To lift the ECQ prematurely, on the other hand, means more deaths from infection.

In the final analysis, however, choosing between the two options would have been easier if only we did two things first: one, if we took stock of our resources or the amount of funds we have plus the amount of funds we can borrow without imperiling the economy; and two, we computed the amount needed to feed people who don’t have the money to buy food, the amount necessary to strengthen our health and medical infrastructure to cope with any rise in the number of patients, and the amount required to revive the economy later.

If, for example, given our resources and expected expenditures, we can only tolerate the ECQ for two months, then that ought to be our limit. Even if the curve has not yet flattened, we don’t have the luxury of prolonging the ECQ because doing so would either starve our people or weaken our health and medical systems or sign the economy’s death warrant.

How much would it cost to feed half of our population of 110 million (roughly the number of Filipinos who will need food assistance)?

At an average cost of P200 a day, it will amount to a staggering P330 billion a month, and that’s for food alone. It doesn’t consider yet the logistical requisites or the other basic requirements of the poor, such as water, electricity, medicine, etc. No wonder, many of our people complained that they have not received any assistance from the government. The amount approved by Congress for the sustenance of the needy populace is simply not enough.

As far as the funds to be allotted for our health and medical infrastructures as well as for the economic stimulus are concerned, initial reports from our legislators and the NEDA suggest it will run into the hundreds of billion pesos.

The key variable expense in combating COVID-19 is food assistance. Limiting the duration of the ECQ by just a week can save P82 billion that can then be redirected to the health component. The huge savings can fund the hiring of more health workers, increasing their salaries (the 25% increase given so far is negligible given the risks they are taking — It should be doubled, at least) and subsidizing or completely covering the hospital expenses of COVID-19 patients needing confinement (even the middle-class cringe at this huge unbudgeted expense).

While we are on the topic of government resources, we must consider likewise the grim fact that while expenses will continue piling up, revenues will nosedive. Even if we immediately open the economy, income will likely come in trickles. The hospitality business (hotels, restaurants, airlines, etc.), for example, will take months, if not years, to pick up. Remittances, especially from OFWs, will dry up. Many MSMEs will not be able to reopen for business. Even the country’s top 1,000 corporations will not be immune to the economic downturn. The longer the ECQ, the longer it will take for the economy to gain traction and get back its footing.

In combating COVID-19, our twin goals should be to mitigate the spread of the virus without slaughtering the economy.

There is one serious apprehension with adapting the strategy of “flattening the curve” to address COVID-19.

What if we do flatten the curve but we get hit by a second wave or a third wave of infection? Do we resort to the ECQ again and feed the poor using government funds? Where are we going to get the funds for this kind of protracted warfare?

The worst thing that could happen to us is to blindly use ECQ to address COVID-19 and wait for the curve to flatten only to realize that the virus is still there, and we don’t have enough resources left to feed our people or to re-energize an economy that has gone moribund.

To put ourselves in such a helpless situation would be a terrible tragedy!

This article reflects the personal opinion of the author and does not reflect the official stand of the Management Association of the Philippines or the MAP.

Edgardo C. Amistad is the Chair of the MAP AgriBusiness Committee and the former President of the UCPB-CIIF Finance and Development Corporation.

map@map.org.ph

edgardo.amistad@yahoo.com

http://map.org.ph

Governance of fear

May 11, 2020 | 10:03 pm

“All models are wrong, but some are useful,” declared the statistician George Box.

Forty-nine days under quarantine, and authorities remain in a quandary on the best way to address the myriad of issues created by the COVID-19 (coronavirus disease 2019): how do we contain the spread of the virus? Is social/ physical distancing producing the intended effect of “flattening the curve”? What is the best way to help the most vulnerable groups during the lockdown? Can the health system manage the influx of patients? How do we balance the need of the economy and the need to continue with the social-physical distancing? Will there be a second wave of infection after we lift the lockdown? There are no guaranteed answers to these questions. At best, what we have are projections based on mathematical models. The problem, however, is that if data is insufficient and/or inaccurate, mathematical models will be unable to churn out useful guesstimates.

What is clear during this entire period of quarantine is that everyone is afraid. We are all fearful of a threat that is unseen and undefeated. In the absence of a vaccine, everyone is vulnerable to getting infected. Thus, the biggest challenge to people in authority is, how do you run a state under threat of pandemic. How do you manage the affairs of the country if the threat is unseen, and a solution is still not available? In a state of conflict or war, the enemy is identified, and strategies can be devised to defeat the opposing force and protect the population. The current situation, however, is far more challenging since the carriers of the threat are the very same people that the state is supposed to protect.

When an entire population is afraid, those in authority are expected to manage fear — they are expected to lead and appease people’s anxiousness, and prevent fear from escalating into an “artificially heightened apprehension” (Robert Higgs, 2005) and spiral into chaos.

Regulatory systems are put in place. We’ve seen this early on when the government imposed the community quarantine, closed the airports, suspended commercial operations, suspended work, and regulated the mobility of people through the social/physical distancing. The goal is to stop the spread of the virus and give the health care system breathing space by spacing the number of affected persons over time. While the goal is noble, the regulations have consequences.

Intentionally or not, the government has reinforced and reproduced fear. By mobilizing the police and the military to manage the regulatory measures, the government has reframed the pandemic from being a health catastrophe to become an “enemy-centered problem” that needs to be defeated. The government has “securitized” the problem. Binaries are created — between the infected and the not-infected people; between government forces and the population; between the “ECQ” (enhanced community quarantine) areas and the “GCQ” (general community quarantine) areas; between those who follow the dictates of the government and those who criticize government actions. The discursive space where collective assessment and action is shrinking by the day. Submission to government imposition is now being equated with being nationalistic and criticizing government is being labelled as being unpatriotic.

The enemy-centered thinking is reflected in the terminology used: “persons under monitoring (PUM),” “persons under investigation (PUI),” “suspect case,” “probable case” are terms reminiscent of police investigations. The enemy-centered thinking is also reflected on how government responds to the problem — the checkpoints, quarantine and lockdowns, the very stringent interpretation of some police and Barangay officials regarding the use of face masks, and recently, the (narrow) interpretation of some officials that individual rights are trumped by collective welfare. The government is falling into the trap of resorting more on punitive action due to its fear of the uncertain. Intentionally or not, fear is being leveraged by those in authority. The government has emphasized the vulnerability of people instead of capitalizing on the collective capacity of citizens to address the problem. The government presents itself as the protector against the invisible enemy instead of enabling citizens and communities to address the problem.

But the basic motives of the leaders and the governed are different. If the government puts a premium on regulation and obedience, communities put a premium on their day-to-day existence. While the term “herd immunity” is often mentioned as a health terminology, people cannot be likened to a “herd” politically. No matter how much the government imposes rules, hungry people will find ways to move around if not totally discard the rules.

In other words, there is also a “peak” or a breaking point of how much people can tolerate and follow the strict regulation imposed by the state. Fear of the uncertain (virus) will be replaced by fear of hunger when supplies begin to dry up. When hunger growls stronger than the fear of COVID-19 virus, such a situation can begin to turn ugly. And we are already seeing the beginning of such situations: as of April 21, the PNP has reported 136,517 ECQ violators (GMA News).

When an ECQ “violation” is interpreted differently by different localities, the possibility of abuse increases. So our already overcrowded jails will be over-burdened further with ECQ violators.

What then? Echoing what has been said before by colleagues, the government must present a clear plan to get us out of this situation. It must harness the collective capacity of its citizens rather than addressing the problem alone. One thing we have also realized in the current situation is that while people are afraid, there is also a well-spring of courage in each one that moves people to help, sometimes even at the risk of one’s safety. Rather than governing people’s fear, the government must manage fear and transform it into a positive force.

A clear and sound plan on health, economy, and security based on inputs, data, and even mathematical models must be formulated. And it must be done now.

Jennifer Santiago Oreta is the Director of the Ateneo Initiative on South East Asian Studies, and an Assistant Professor of the Department of Political Science of the Ateneo de Manila University. She is also the Executive Director of the civil society organization Human Security Advocates.

An ode to the humble balcony

May 11, 2020 | 10:02 pm

By Bernardo Zacka

MY TODDLER and I have a new favorite activity: craning our necks to catch a glimpse of the neighbors. Since we have been instructed to stay at home in our apartment in a triple-decker in Somerville, Mass., we have gotten quite good at it.

If we place ourselves at the bottom left corner of the living room window around 6 p.m., and press our cheeks hard against the glass, we might just catch them staring blankly at the empty street. The other day, our eyes met across the driveway, yet there was none of the usual awkwardness — being stared at felt more like a relief than an invasion. Before the pandemic, I had never spoken to them, but right now even these stolen glances feel like a precious form of contact.

When I first saw the videos coming from Italy under lockdown, with people quarantined in their apartments connecting through music, my first reaction was one of awe. My second was one of longing for the architectural element that made these gatherings possible: the balcony.

By suspending ordinary social life, the pandemic is teaching us to value what we normally take for granted. For those like me who grew up around the Mediterranean, the balcony is a fact of life — one so woven into the fabric of our cities as to be practically invisible. How I wish I had one now.

As a child growing up in Beirut, it was on the balcony that we celebrated birthdays, that I read my first novels, and that I watched my parents play endless games of backgammon. As an adult returning home for the summer, that is where my feet carry me to sip a coffee, crack open a beer, or smoke a narghile — always in the company of others in surrounding buildings who appear to be doing the same. Even now, with the city brought to a standstill by COVID-19 and a suffocating financial crisis, Beirutis are turning to their balconies for momentary respite and gestures of solidarity.

The genius of the balcony is to assemble people who live within proximity, but who are otherwise strangers, around a common world of events, experiences and issues. The balcony is fulfilling this role to great acclaim today, but that is what it does, silently, in ordinary times.

A balcony is a strip of private property suspended over public space. On a balcony, one is outside, yet at home; exposed, yet secluded. This ambivalence manifests in Beirut in the use of a distinctive sartorial code. The balcony is the domain of the nightgown and the undershirt: items too revealing for the street, yet modest enough to be worn at a distance.

As an intermediary space, the balcony supports a distinctive type of reserved sociability. Its contiguity with the dwelling facilitates access to city life just as easily as it enables withdrawal from it. In my district of Beirut, where most buildings are five or six stories high, the balcony is close enough to the street to greet someone down below, but just too far to hold a prolonged conversation; close enough to witness a dispute, far enough not to have to get personally involved. It offers company without the demands of intimacy.

In the late 1950s, the Dutch architect Aldo Van Eyck used the term “threshold” to designate physical spaces — such as porches, stoops, and balconies — that connect various spatial and psychological registers within the city. Van Eyck thought of such spaces as forming an in-between realm, mediating the encounter between distinct environments, sharing characteristics with each, without dissolving into either.

Van Eyck saw thresholds not just as sites of passage, but as places of dwelling. Such spaces are appealing, he thought, because they capture something fundamental about our inclinations. When confronted with a choice between two options like individual/collective, open/closed, order/chaos, our reaction is often one of ambivalence: we want to linger at the boundary, sampling a bit of both. In this in-between realm, we feel at home and are inclined to stop and loiter. Architecture should recognize this fact, Van Eyck said and “frame our desire to tarry, make places where we can do so.” The balcony is one realization of this vision.

Like theatrical stages, balconies lie dormant until brought to life by people. Consider this: most city dwellers live in apartments they did not design, embedded in facades they cannot alter. In Beirut, balconies are the only spaces in public view that residents can particularize and make theirs. Furniture is displayed; a birdcage is suspended; plants are meticulously arranged and watered — and everything is kept clean, in a Sisyphean battle against the dust. Balconies offer a rare opportunity to leave a personal trace in an otherwise anonymous urban fabric.

In the vicinity of balconies, one is always performing. Ordinary vices are laid bare just as ordinary virtues. Alongside the polite gestures of recognition and the loose sense of community, balconies also invite voyeurism and gossip. Family disputes, love affairs, losses in temper become a matter of common interest. This can be unnerving, but it forces us to come to terms with those who live around us.

Around the Mediterranean balconies are everywhere, yet it would be a mistake to take them for granted. In Beirut, two factors were critical to their popularity: a demand for external space to take advantage of the climate and a favorable construction law that incentivized their creation.

Over the past two decades, however, the growing popularity of air-conditioning units has enabled Beirutis to control the climate inside their apartments all year long. The increasing pressure on existing real estate has also prompted the Lebanese Parliament to amend the construction law in 2004, permitting the enclosure of balconies with transparent curtain walls. This has affected new development, with balconies now frequently conceived and marketed as inward-looking spaces, functioning as extensions of the living room.

Politicians justified the measure by claiming that they were enacting what their constituents wanted — more internal space, climate control, less exposure to noise and pollution. These are indeed salient concerns in Beirut.

Yet the danger in thinking of balconies as private amenities is that it obscures their standing as a public good. As city dwellers, we all benefit from the social life they foster even though we may individually prefer to enclose our own. It is for this reason that public regulation might be called for: not to prevent each of us from getting what we want, but to help avert a collective outcome resulting from such wants — a thinning of the social fabric of the city — that we might, collectively, come to regret.

In the throes of a pandemic, this message may land on sympathetic ears. The videos from Italy are still with us, and who today wouldn’t want the reserved sociability that balconies foster? The challenge will be to keep the sentiment alive once we return to a new normal. The first few weeks after COVID-19 may be all hugs and kisses. But reserved sociability is not a second best, and we should continue to look kindly at the architecture that makes it possible even after the pandemic leaves us.

THE NEW YORK TIMES

Bernardo Zacka is an assistant professor of political science at M.I.T., the author of When the State Meets the Street and the co-editor of a recent collection of essays, Political Theory and Architecture.

The phony war on the coronavirus

May 11, 2020 | 10:02 pm

By Pankaj Mishra

GOVERNMENTS around the world say they’re engaged in a war against the coronavirus. Indian Prime Minister Narendra Modi invoked the legend of the Mahabharata, fought over 18 days, as he declared, with little warning, a devastating national lockdown.

British Prime Minister Boris Johnson, who always seems to be mentally screening a film of Winston Churchill in World War II, said that “we must act like any wartime government.”

Philippines President Rodrigo Duterte, who has long deployed bellicose language, most notoriously in his violent “war on drugs,” went further, advising the military and police that if quarantine violators “become unruly and they fight you and your lives are endangered, shoot them dead!”

This kill-or-die idiom is more than casual rhetorical overkill. Many governments are symbolically but very deliberately calling, in this time of fear and uncertainty, for general conscription along military lines.

This is so they can, while pointing to an insidious foreign enemy, aim their firepower against some of the most valuable institutions of domestic public life. They have been very successful so far. Last week, Duterte’s government shut down ABS-CBN television and radio, his country’s largest broadcasting service.

Things are not much better in countries with sturdier democratic institutions. Johnson’s Conservative government accused the British Broadcasting Corporation of bias after its flagship investigative program, Panorama, exposed shortages of personal protective equipment among health care workers.

The public broadcaster’s critique of the government was stinging in part because Johnson enjoys a high degree of support among Britain’s privately owned, overwhelmingly pro-Tory press. Nor does Modi, assured of craven public broadcasters, expect much criticism from the Indian media, which has been described, only semi-humorously, as veritably North Korean in its devotion to the supreme leader.

Modi held a virtual meeting with media editors and owners just before imposing his lockdown. According to his website, the attendees committed to “work on the suggestions of the prime minister to publish inspiring and positive stories” about COVID-19.

In addition to economic and military mobilization, wartime measures typically encourage a high degree of political, social and intellectual conformity. The general idea is that, in the face of an existential challenge from a vicious enemy, criticism of the government ought to cease.

The media tends to become more patriotic, as do former political partisans. Such was the case in the United States during the early stages of its wars in Afghanistan and Iraq, when most journalists and even Democratic politicians rallied around the Republican George W. Bush administration.

The trouble is that the “war” against COVID-19 is actually not a war at all. And no one should feel obliged to sign up for it.

The loss of, and separation from, loved ones, and the fear and anxiety that is devastating many lives is not an opportunity to fantasize about heroism in battle. The pandemic is, primarily, a global public health emergency; it is made potentially lethal as much by long neglected and underfunded social welfare systems as by a highly contagious virus.

A plain description like this is not as stirring as a call to arms — and doesn’t justify the more extreme actions governments have taken against critics during the crisis. It does, however, open up a line of inquiry that journalists ought to pursue, now as well as in the future.

According to the Indian government’s own statistics, its public spending on health before the pandemic measured just 1.17% of GDP, lower than Nepal and nowhere near comparable to South Korea’s 8.1%. Duterte no doubt wants his citizens to forget that as late as March 11, he told an audience: “I’ve been told, ‘You folks are too scared of this coronavirus epidemic’ and ‘Fools, don’t believe it.’”

Johnson, whose Conservative party presided over harsh cuts to health services, boasted, on the same day in early March that the UK government’s Scientific Advisory Group for Emergencies warned against shaking hands, “I shook hands with everybody, you will be pleased to know, and I continue to shake hands.”

Awakening late to the pandemic, authoritarian or authoritarian-minded leaders have turned it into an opportunity both to shore up their power and to conceal their stunning ineptitude. To fail to see through their manufactured fog of war, as many in the media are doing, can only further endanger the long-term moral and political health of their societies.

BLOOMBERG OPINION

House panel approves bill on bad-loan transfers to AMCs

May 11, 2020 | 9:58 pm

THE House committee on banks and financial intermediaries approved on Monday a bill providing for the transfer of banks’ bad loans to asset management companies (AMCs) in expectation of a spike in non-performing loans in the wake of the public health emergency.

“We approve (the bill) subject to style and subject to the inputs of DoF (Department of Finance),” Quirino Representative and House banks and financial intermediaries committee chairman Junie E. Cua said at a virtual hearing of the panel.

Mr. Cua filed House Bill 6622 on April 24, which if passed will be known as the Financial Institutions Strategic Transfer (FIST) Law.

“To date, as a result of the pandemic and disruption of economic activity, most financial institutions are facing a period of delayed loan collections and are at risk of recording higher non-performing assets (NPAs) across all borrower segments. NPAs prevent banks and financial institutions from effectively performing their crucial role of financial intermediation,” Mr. Cua said in his explanatory note.

NPAs consist of financial institutions’ non-performing loans (NPLs) and real and other properties acquired (ROPAs) in settlement of loans and receivables.

The bill encourages financial institutions to sell NPAs to AMCs, to be known as Financial Institution Strategic Transfer (FIST) Corporations, which specialize in handling distressed assets.

“All sales or transfers of NPAs to a FIST shall be in the nature of a true sale after proper notice… without need for the borrower’s consent,” according to the bill.

In the case of NPLs, AMCs can restructure debt, condone debt and undertake other restructuring related activities to dispose of the debt, including to third parties.

The transfer of NPAs from a financial institution to an AMC, and from an AMC to a third party will be exempt from documentary stamp tax, capital gains tax, creditable withholding income tax and value-added tax.

Transfers are also subject to only 50% of applicable registration and transfer fees, 50% of filing fees on any foreclosure, and 50% of land registration fees. These privileges will be available for up to two years from the date of the effectivity of the bill’s implementing rules and regulations (IRR).

The bill provides that any loss incurred by financial institutions as a result of the transfer of NPAs will be treated as ordinary losses, with the loss carry-over subject to pertinent laws.

Only the Court of Appeals and the Supreme Court are empowered to issue injunctions against the transfer of NPAs.

AMCs will be required to set up consumer protection mechanisms “as may be prescribed in the IRR issued by the appropriate regulatory authority.”

The measure also encourages the private sector, government financial institutions, and government-owned or -controlled corporations to incorporate and invest in FIST corporations and help in the rehabilitation of distressed businesses “with the end view of contributing to economic growth.”

While the proposed measure will result in “revenue erosion” for the government, Finance Secretary Carlos G. Dominguez III said that he supports the bill.

“More or less what we are looking at is in terms of revenue erosion here. But again, it is not revenue we are expecting anyway to begin with because this is a totally unexpected event so we are willing to take some revenue erosion, the thing is we just have to estimate how much it will be in total,” he said.

“While we are 100% supportive of this and we are willing to provide fiscal incentives for this, please give us time to do the estimates, because right now we don’t really know how much of the loans will turn bad and how much of these are covered by assets that would qualify under this law,” Mr. Dominguez added.

National Economic Development Authority Acting Secretary Karl Kendrick T. Chua said that it is “very probable” that the bill will be given a certification of urgency by President Rodrigo R. Duterte.

“I think that is very probable because that is what happened also in the Bayanihan Act (Republic Act 11469) and considering we have very limited session days so we would recommend that approach. The direction I think is to recommend certification of urgency,” he said during the hearing.

If granted, the certification will allow the House to approve the measure on second- and third reading on the same day, doing away with the required three-day interval.

No counterpart measure has been filed in the Senate as of writing. — Genshen L. Espedido

Construction firms will need to provide worker housing under ECQ, GCQ

May 11, 2020 | 9:58 pm

THE Inter-Agency Task Force for the Management of Emerging Infectious Diseases (IATF-EID) will require construction firms to provide worker housing and observe social distancing and other safety rules when work is allowed to resume on public and essential private projects under both modes of quarantine.

In a briefing, Palace Spokesman Herminio L. Roque said Monday that the rules for construction firms released by the Department of Public Works and Highways (DPWH) will also require construction firms to sequence their works to facilitate minimal contact among workers.

The enhanced community quarantine (ECQ) imposed on Metro Manila is due to expire on May 15, with some parts of the country moving on to a less restrictive general community quarantine (GCQ) starting April 30. A decision is due this week on whether ECQ will continue or be downgraded to GCQ.

Mr. Roque said that an “inventory of works” is needed to allow sequencing of construction “para mapatupad ang social distancing (In order to observe social distancing).”

For private projects, Mr. Roque said “Ang mga contractors ng essential private construction projects under GCQ ay dapat magtalaga ng full time safety officer na magsisiguro sa pagpapatupad ng social distancing measures. (Contractors of essential private construction projects under GCQ should hire a full time safety officer to ensure workers comply with social distancing measures).”

The rules require contractors to provide living quarters and personal protective equipment for the duration of the project, as well as daily meals and hygiene products, while regularly conducting health checks. Health conditions of the workers should also be monitored regularly.

DPWH project overseers have been charged with ensuring that all workers are equipped with Personal Protective Equipment.

“Para sa government construction projects, ang DPWH engineers ay dapat magpatupad ng pagsusuot ng Personal Protective Equipment (PPEs) sa lugar na pinagtatrabahuhan, (For government projects, DPWH engineers should enforce PPE rules)” Mr. Roque said.

The Palace announced over the weekend that public and essential private construction projects will be allowed during ECQ and GCQ as long as they follow DPWH guidelines.

The guidelines also call for the regular sanitation of the workers’ quarters and equipment. Mr. Roque said, “Iwasan ang sharing ng construction at office equipment pero kung kailangan, ito ay dapat i-disinfect bago ipagamit sa ibang mga trabahador. Magtalaga ng isolated loading/unloading zone para sa lahat ng mga nagde-deliver ng disposable na materyales at equipment. Lahat ng materyales at equipment na pinapasok sa construction site ay dapat na ma-disinfect.”

(Avoid sharing construction and office equipment but if needed, they should be sanitized before this is used by other workers. There should also be an isolated loading/unloading zone for those who deliver disposable materials and equipment. All materials and equipment entering the construction site should be disinfected)

Non-essential personnel and visitors will not be allowed on-site under the rules, while workers will be restricted from leaving the site. Personnel entering the site on a temporary basis such as truck drivers and site inspectors will be subject to health checks.

The ECQ was first imposed by President Rodrigo R. Duterte on March 17 in order to contain the spread of the coronavirus disease 2019 (COVID-19). High-risk areas are required to observe ECQ rules until May 15 while low to moderate-risk areas have been placed under GCQ. — Gillian M. Cortez

Supplemental budget, job creation key to recovery — Diokno

May 11, 2020 | 9:57 pm

BANGKO Sentral ng Pilipinas (BSP) Governor Benjamin E. Diokno said fiscal stimulus needs to catch up with the aggressive monetary measures adopted by the central bank to effect a recovery from the coronavirus disease 2019 (COVID-19) emergency.

“As the government moves into the next phase of the road to the New Economy, it should focus on a quick-disbursing, employment-creating program. It needs a supplemental budget, the size of which can be decided upon by the President with the recommendation of his economic managers,” Mr. Diokno said in a text message in reply to a query from BusinessWorld Monday.

Mr. Diokno said in an interview with ABS-CBN News Channel that monetary policy is not the only tool available to the government and that a supplemental budget may be needed during this crisis.

Pressed for details, Mr. Diokno said that every percentage point increase in the deficit would represent P200 billion in ‘new’ spending.

“Some of the ‘new’ money can be used for emergency employment aimed at creating two million new jobs,” he said.

Mr. Diokno said barangays could put residents to work on green projects, public works or health projects to keep people employed until December.

“Emergency employment is quick-disbursing and will have a high multiplier effect. It is pro-poor and egalitarian,” Mr. Diokno said.

UnionBank of the Philippines, Inc. Chief Economist Ruben Carlo O. Asuncion said that the realignment of the budget for current and more urgent priorities is welcome.

“However, an exogenous injection to the economy should be done on the fiscal side to help further the creation (and/or protection) of jobs and health care,” he said in an e-mail.

Finance Secretary Carlos G. Dominguez III has said that he expects the budget deficit to hit P1 trillion this year amid emergency spending on the pandemic. This total is over 5% of gross domestic product (GDP). Economic managers have set a 5.3% cap for the deficit this year, higher than the 3.2% cap set before the outbreak.

Mr. Dominguez said last week that there are no plans to ask Congress for a supplemental budget despite rising expenditures.

Security Bank Corp. chief economist Robert Dan J. Roces noted that stimulus legislation so far filed has been “comprehensive” in terms of structure and targets.

“Even with a budget deficit, instituting these complementary fiscal initiatives will insulate taxpayers from the costs of the crisis in the long run. It will also strengthen the policy responses being undertaken,” Mr. Roces said.

The House of Representatives is currently putting together a bill that if approved will become the Philippine Economic Stimulus Act (PESA). It seeks to provide P475 billion to help businesses recover from the effects of COVID-19 between 2020 and 2022. It also includes wage subsidies and cash for work through the Department of Labor and Employment.

ING Bank NV-Manila Senior Economist Nicholas Antonio T. Mapa noted that fiscal measures from the government during the pandemic came through the social amelioration program, income subsidies and cash grants issued via local governments. He also noted that the government stuck to its pre-COVID-19 playbook by pushing for tax reform and infrastructure to help effect a recovery.

“We are now in need of a fiscal rescue package as the economy is on the brink of recession. Focus should be on one thing and one thing alone: job retention or job replacement,” Mr. Mapa said.

Mr. Mapa cited the German government, which opted to subsidize worker incomes while the economy is recovering.

“Thus we believe that investing a little more now, running up the budget deficit in these dire times will be the more cost-effective strategy than to hold on to fiscal targets today, only to spend more tomorrow to retrench and retrain the scores of unemployed,” he said.

Mr. Diokno has said that the central bank will assess how banks have so far responded in order to gauge the next monetary policy moves, which could be directed at supporting the financial markets as well as the broader economy.

“But I think it will be prudent on our part to pause at this time and see how the economy is responding to the series of policy moves being done by the Monetary Board,” he said.

So far, the BSP has brought down policy rates by 125 basis points this year, lowering the overnight reverse repurchase, deposit and lending to 2.75%, 3.75%, and 2.75%, respectively, in a bid to cushion the impact of the virus on the economy.

The central bank has also reduced the reserve requirement ratio of big banks by 200 basis points to 12%. The reserve requirement has been maintained for thrift and rural banks at 4% and 3%, respectively.

Mr. Diokno has been authorized by the Monetary Board to reduce the RRR by up to 400 bps this year. — Luz Wendy T. Noble

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