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How PSEi member stocks performed — April 27, 2020

Here’s a quick glance at how PSEi stocks fared on Monday, April 27, 2020.

First-round aid recipients still eligible for next round during GCQ

HOUSEHOLDS that received the first round of social welfare cash assistance will remain eligible to receive the second round even after their communities transition from enhanced community quarantine (ECQ) after April 30 to a less-restrictive general community quarantine (GCQ), the Department of Social Welfare and Development (DSWD) said.

The DSWD said in a briefing that the emerging rules for distributing the remaining assistance, known as the social amelioration program (SAP), are being drafted ahead of the ECQ-GCQ transition which kicks in for some parts of the country at the end of the month.

Social Welfare Secretary Rolando Joselito D. Bautista said April distributions reached over 18 million families and that the department has transferred 97.13% of its SAP funding to local government units (LGUs). He estimated that SAP funds worth P37 billion have reached intended beneficiaries.

The SAP involves monthly grants of between P5,000 to P8,000 to poor households in communities affected by the lockdown over a period of two months.

Mr. Bautista said a technical working group is drafting the guidelines after President Rodrigo R. Duterte announced Friday that some parts of the country will transition to GCQ after April 30, while Metro Manila and other areas deemed high-risk for coronavirus disease 2019 (COVID-19) will remain under ECQ until May 15.

GCQ features fewer restrictions on movement and a gradual return to work for industries that had been classified as non-essential and subject to shutdown orders under the Luzon-wide ECQ.

“Ito ang magiging basehan namin sa paggawa ng guidelines para sa implementasyon ng SAP for the second tranche. Kailangan kasi namin ang approval ng IATF (This will be the basis for creating the guidelines for the second tranche of the SAP. We need the approval of the Inter-Agency Task Force for the Management of Emerging Infectious Diseases for the guidelines,” he said.

Palace Spokesman Herminio L. Roque has said the government will look into corruption and inefficiency in distributing SAP funds, citing reports that qualified households have not been reached by the program and that some “ghost” beneficiaries are still on the beneficiary lists, despite being dead.

“Malinaw po ang babala ng ating President: zero tolerance dun sa korapsyon lalo na kung pagpyepyestahan ay ang ayuda para sa mga naghihirap dahil sa ECQ… pagpaparusahan kayo at hahanapin kayo (The warning of the President is clear: there will be zero tolerance of corruption especially if they are messing with the aid for those who are suffering because of the ECQ… you will be punished and you will be hunted down),” Mr. Roque said in a briefing Monday.

Mr. Roque said the Palace endorses the disbursement of the second round of SAP funds to those that received the first round of aid. — Gillian M. Cortez

Small-firm wage subsidy program receives P51-B in funding — DBM

THE Department of Budget and Management (DBM) has released P51 billion worth of funding for the government’s wage subsidy program for employees of small businesses, which will be rolled out starting next month.

In a mobile phone message Monday, Budget Secretary Wendel E. Avisado said that the DBM released both the Special Allotment Release Order (SARO) and Notice of Cash Allocation (NCA) for the funds intended for the subsidy program.

Mr. Avisado said the P51 billion will be sourced from “unprogrammed funds.”

According to a DBM document obtained by reporters, a P51-billion SARO was issued to the Social Security System (SSS), the main implementing agency, on Friday. The SARO was approved by the Office of the President on April 20.

Payouts for the first tranche of the P51-billion Small Business Wage Subsidy (SBWS) will be given starting Friday, May 1 until May 15, with the second tranche to be distributed on May 16-31.

The application period for the subsidy program was extended until May 8 from the earlier April 30 cutoff after the SSS website went down for a few days after it started accepting applications on April 16.

The government said the program will extend cash handouts worth P5,000-P8,000 to some 3.4 million employees of small businesses affected by the lockdown.

Small businesses are defined as those not belonging to the top 2,745 large taxpayers of the Bureau of Internal Revenue (BIR).

Employees eligible for the program should not have been retrenched or resigned.

Applicants of the COVID-19 Adjustment Measures Program (CAMP) of the Labor department will be transferred to the SBWS program..

CAMP beneficiaries will only be eligible for a one-month wage subsidy. The second tranche of the government’s P205-billion cash aid to 18 million poor families and those belonging to the informal sector will also begin next month. — Beatrice M. Laforga

DA, TESDA to offer training in urban agriculture, rice farming

THE Department of Agriculture (DA) said it has signed an agreement with the Technical Education Skills and Development Authority (TESDA) to offer training in urban agriculture, rice farming and livestock and poultry raising.

The initial areas of joint training were announced as part of a broader food-security effort with parts of the country less than a week away from transitioning to less-restrictive forms of quarantine.

“Our farmers need a complete package of support and technical assistance to enable them to produce more. In this regard, we welcome the TESDA as a partner as together we confront the ‘new normal’ environment as a result of the coronavirus disease 2019 (COVID-19) pandemic,” Agriculture Secretary William D. Dar said in a statement Monday.

Mr. Dar and TESDA Director-General Isidro S. Lapeña reached the agreement recently to jointly design the coursework.

“Agriculture has been our top priority. Our training institutions are directed to prioritize the agri-sector in allocating budget for their skills training. In this time of pandemic, we are now seeing the importance of food security. We can utilize both big and small spaces to plant vegetables,” Mr. Lapeña said. — Revin Mikhael D. Ochave

Gov’t rice buffer stock projected at 94 days by end of 2020

THE rice buffer stock held in government warehouses has been projected at the equivalent of 94 days’ consumption by the end of the year, Agriculture Secretary William D. Dar said.

“We would like to inform the public that based on our estimates, the country will enjoy an ending rice inventory of 3.27 million metric tons (MT) by Dec. 31. That means we will have rice to feed the entire country for 94 more days or three months, up to March 2021,” Mr. Dar said in a statement.

The Department of Agriculture said the overall rice supply by the end of the year, including those held by households and commercial traders, is projected at 17.99 million MT, 18% higher than overall rice demand of about 14.67 million MT.

“Let us not create unnecessary panic over our food supply… We remain forward-looking in squarely addressing concerns that threaten our food security,” Mr. Dar said. — Revin Mikhael D. Ochave

Sin taxes to remain in place after collections fall

THE Department of Finance (DoF) said it has no intention to recommend easing the tax regime on so-called “sin products” like tobacco and alcohol after collections fell, saying that the taxes are intended as a health measure.

Finance Secretary Carlos G. Dominguez III said in a Viber message: “Sin taxes are imposed to discourage consumption of products that are detrimental to health. We do wish not to exacerbate the current health crisis,” he added.

The DoF has reported that the “consistent large excise tax collection drawers, tobacco and alcohol” have fallen off in collections.

Between Jan. 1 and April 15, excise tax collections from tobacco products fell 42.5% year on year to P33.19 billion, while excise taxes from alcohol products fell 26% to P17.85 billion.

Across all products, total excise tax collections during the three-and-a-half-month period totaled P76.47 billion, down 33% year on year and 52.75% short of the P161.84-billion target.

Overall, the Bureau of Internal Revenue’s (BIR) tax collections fell 32% year-on-year to P480.64 billion, over a slightly different period, Jan. 1 to April 17.

BIR’s collections fell 89.5% year on year to P25.01 billion in the first 17 days of April.

Mr. Dominguez said withdrawals of cigarette products from factories are not allowed during the enhanced community quarantine but manufacturing, in general, is exempted from quarantine protocols if products are for export.

He said BIR remains “vigilant against illicit cigarettes” as lack of supply may encourage smuggling.

Meanwhile, several local governments have banned the sale of alcoholic beverages during the lockdown to discourage gatherings and minimize the possibility of the virus spreading further.

The Center for Alcohol Research and Development Foundation, Inc. (CARD) has asked the government to lift the ban on alcoholic drink products because liquor companies are feeling the adverse impact of weaker demand and tax hikes. — Beatrice M. Laforga

The power to tax is the power to save more lives

The government has extended the enhanced community quarantine (ECQ) in certain high-risk COVID-19 areas to May 15. In addition, for moderate- and low-risk areas, a modified form of general community quarantine (GCQ) will be implemented beginning May 1. During these extraordinary times, social distancing is the new normal and staying at home is a civic duty. More importantly, more and more people are lending a hand to communities.

The government needs our support to ensure victory against this pandemic now more than ever. However, let us remind ourselves of an equally important civic duty: paying our taxes.

The Supreme Court has held in numerous decisions that taxes are the lifeblood of the nation. Without taxes, the government would be paralyzed for lack of the motive power to activate and operate it.

In Revenue Memorandum Circular (RMC) No. 42-2020, the Bureau of Internal Revenue (BIR) laid down the guidelines for filing and paying Annual Income Tax Returns (AITRs) for the taxable year 2019.

Specifically, the RMC provides the following filing and payment instructions for various types of AITR:

1. Manual filers — use the pre-printed return available in the Revenue District Office (RDO) or the downloadable return found in the BIR website or the return in the Offline eBIRForms Package v7.6

a. With tax due/payment

• Pre-printed return available in RDO

Fill out applicable fields then file and pay the return with any Authorized Agent Banks (AAB) or, in places where there are no AABs, to the Revenue Collection Officer (RCO) under the RDO.

• Return downloaded from the BIR website

Print the return and fill-out all the applicable fields then file and pay the return with any AAB or to the RCO under the RDO

• Return in the Offline eBIRForms Package v7.6

Fill out the return then after successful validation print the return and file and pay with any AAB or to the RCO under the RDO

b. Without tax due/payment

• Manual filing is not allowed. The “no payment” return shall be filed through the Offline eBIRForms Package v7.6 by submitting the return online

2. eBIRForms filers/users — use the Offline eBIRForms Package v7.6 in filling out the return.

a. With tax due/payment — after filling-out the return, submit the return online then print the return and the Tax Return Receipt Confirmation (TRRC) from the eBIRForms System. File and pay the return, together with the TRRC, with any AAB or to the RCO under the RDO (if availing of online payment, the AITR shall be submitted online)

b. Without tax due/payment — file the “no payment” return through the Offline eBIRForms Package v7.6 by submitting the return online

3. Electronic Filing and Payment System (eFPS) Filers/Users of the following:

a. BIR Form Nos. 1700, 1701, and 1701A With or without tax due/payment — file thru the Offline eBIRForms Package v7.6 and pay, together with the TRRC, with any AAB or to the RCO under the RDO by following the procedures stated above on item no. 2 (eBIRForms filers/users)

b. BIR Form Nos. 1702-EX, 1702-MX, and 1702-RT With or without tax due/payment — file and pay thru the eFPS facility by using the old version of the returns in the Efps RMC No. 42-2020 also provides alternative modes of online payment for qualified taxpayers.

In addition, Revenue Regulations (RR) No. 10-2020 provide for the extended filing and payment of AITR until May 30. To encourage taxpayers to file and pay before the extended deadlines, Section 4 of RR No. 10-2020 provides that taxpayers who file prior to the extended deadline can amend their returns on or before the extended due date without penalty, even if the amendment results in additional taxes. The BIR was quick to advise that eFPS filers filing within the extended deadlines may disregard the penalties automatically computed under the eFPS and pay only the basic tax due.

With the further extension of the ECQ, Section 3 of RR No. 10-2020 will be operative, as it provides that, if the ECQ period is extended further, the filing and payment of returns and submission of reports and attachments falling within the extended period shall be further extended for 30 calendar days from the lifting of the ECQ. Thus, taxpayers will automatically be given more time to file and pay tax returns. Will this further extension also apply to taxpayers located in low- and moderate-risk areas under GCQ? Looking at the provisions of RR No. 10-2020, it may not, since the term used is “ECQ.” But it would still best if the BIR issues a clarification on this, especially for those areas/regions that are currently for reevaluation, such as Antique, Iloilo and Cebu, among others.

The BIR recently issued several guidelines to address further developments and to ensure the safety of taxpayers. Obviously, the government should be credited for doing its best to accommodate all taxpayers to the extent possible. It would not take me by surprise if the BIR issues another set of guidelines for clarity.

Will authorized agent banks (AABs) be able to manage the influx of taxpayers, especially those who need to file and pay over the counter? Is there a contingency plan in case an AAB cannot accommodate the number of filing and paying taxpayers?

Robust tax collection will support our government in the most important fight of our lives. Contrary to the doctrine from a notable case decided by the US Supreme Court that “the power to tax involves the power to destroy,” I truly believe that, during this time of need, the power to tax is the power to save more lives. By continuing to pray and work together as one nation, let us rise up to the challenge by doing our part and showing the world that Filipinos are indeed world-class champions.

Let’s Talk Tax is a weekly newspaper column of P&A Grant Thornton that aims to keep the public informed of various developments in taxation. This article is not intended to be a substitute for competent professional advice.

 

Daryl Matthew A. Sales is a manager of Tax Advisory & Compliance division of P&A Grant Thornton, the Philippine member firm of Grant Thornton International Ltd.

pagrantthornton@ph.gt.com

Politics and Crisis: A discussion series:The COVID-19 pandemic: A failure of global institutions and a test of national leadership

By The Ateneo de Manila Department of Political Science

Part 7 of an eight-part series

THE COVID-19 PANDEMIC exposed vulnerabilities both of developing and industrialized countries in a globalized world. Rich and poor countries alike have found their governments almost, if not, desperately taking unprecedented actions and policy responses to the pandemic. The speed and scale of the disease has overwhelmed even those with most or highly resilient health systems.

Soon after it was declared as a global public health emergency on Jan. 30, the coronavirus outbreak started a contagion of health crisis to practically all continents. It did not take long before the COVID-19 meltdown metamorphosed into a global pandemic creating a health pandemic alongside economic and financial pandemic worldwide.

Truly, globalization has deepened interdependence among countries in the areas of global security, economy, politics, and health. What has become clear over the past few months, however, is that global institutions and rules failed at a timely issuance of guidelines to contain the pandemic. The World Health Organisation (WHO) and the United Nations (UN) for instance, failed to contain the pandemic. Organizational limitations and internal leadership problems incapacitated these international organizations from taking a swift response to the pandemic.

International financial and economic institutions like the International Monetary Fund (IMF), the World Bank (WB) Group, and G20 took some time, too, to provide significant and immediate assistance to poor countries confronting the pandemic. It was only on April 18, more than two months after COVID-19, the disease caused by the novel coronavirus called SARS-CoV-2, was declared a pandemic, when the IMF, the WB Group, and G20 decided on suspending debt service payments of 76 countries for one year including 40 countries in Sub-Saharan Africa. While the debt moratorium is very much welcomed, these institutions should have intervened much earlier to help poor countries prepare for the pandemic.

At a briefing for the WHO in late March, Kristalina Georgieva, Managing Director of the IMF, already sounded the alarm for the onset of an economic recession due to the COVID-19 pandemic. At the 2020 Spring Meetings International Monetary and Financial Committee (IMFC) Plenary on April 16, she described the pandemic as “a crisis like no other” with the expectation that “global economic activity to decline on a scale we have not seen since the Great Depression.”

While the COVID-19 pandemic raised expectations of global governance, it also heightened expectations of the states. Over the past few months, the world witnessed how the COVID-19 pandemic put to test not only leadership at the global level but also political leadership at the domestic level. Described as the largest test of political leadership, the pandemic brings to the fore the question of why some governments are relatively more successful than others in addressing the pandemic.

Political scientists, comparativists, and international relations experts weighed in with their observations and analysis on the question. In his column in The Atlantic titled, “The Thing That Determines a Country’s Resistance to the Coronavirus,” Francis Fukuyama, author of the contentious end of history thesis, provides a significant insight on domestic leadership. While recent practices suggest that democracies may be performing better, Fukuyama argued that “[T]he major dividing line in effective crisis response will not place autocracies on one side and democracies on the other. The crucial determinant in performance will not be the type of regime, but the state’s capacity and, above all, trust in government.”

THE FAILURE OF GLOBAL INSTITUTIONS AND RULES
The COVID-19 pandemic revealed the relatively weak operational capacities of international organizations like the WHO and the UN. Recently, various governments expressed calls to exact accountability from the WHO for its institutional failure to respond to the health pandemic and its leadership dereliction of its duty.

Given the alarming speed and scale of contagion of the novel coronavirus across continents, the WHO failed to detect early and assess the crisis situation and committed a costly oversight when it declared the outbreak a global public health emergency only at the end of January, when it should have declared it much earlier. Whatever happened to the WHO’s revised International Health Regulations all aimed at enabling a faster, more effective response to outbreaks and emergencies?

The UN is also guilty of dismal performance in relation to the COVID-19 pandemic. A news headline in the New York Times, “UN Security Council ‘Missing In Action’ in Coronavirus Fight” captures succinctly the failure of the UN to address the health pandemic. The UN Director at Human Rights Watch Louis Charbonneau was quoted saying that “[W]e’re in a situation widely recognized as our most urgent security issue, with a large portion of the global population on lockdown, and the Security Council is incapable of doing anything.” This is not the first time that the UN failed the world. Isn’t it?

The failure of these international organisations is partly due to weak operational capacities and partly due to internal leadership crisis. Between the two, it is the latter that constrains most the effectiveness of the WHO and UN. When the epicenter of the COVID-19 pandemic shifted from China to Italy and then to Spain, and now to the US, an international outcry was aimed at WHO Director-General Dr. Tedros Adhanom Ghebreyesus for being an outspoken advocate for China and his exaggerated, unwanted commendation of Chinese government’s COVID-19 response. Ghebreyesus turned a blind eye to the growing evidence of China’s mishandling of the novel coronavirus outbreak, deliberate manipulation of information about the number of its confirmed cases and deaths, blatant disregard of WHO Interim Protocol to contain the initial emergence of pandemic influenza, and rising domestic Chinese outrage over the central government’s censorship.

The UN General Assembly adopted a resolution titled, “Global solidarity to fight the coronavirus disease 2019 (COVID-19)” only on April 2. The resolution came out when there were already 896,475 confirmed coronavirus cases and 45,525 deaths worldwide.

The 15-nation UN Security Council, the organisation’s most powerful agency designated with the task of maintaining international peace and security (Art. 48 of the UN Charter), however, continues to struggle to come up with its resolution on the pandemic.

UN Secretary-General Antonio Guterres’ plea for the Council to act urgently on what he described as “the most challenging crisis we have faced since the Second World War,” was muted by weeks of disagreement between the United States and China, two of the five veto-wielding powers including France, Russia, and Britain. The US and China had been arguing over the origins of the virus with the former insisting that the Council recognizes the Chinese origin of the virus. On April 14, US President Donald Trump suspended US funding for the WHO.

As of this writing, the COVID-19 pandemic has spread to 210 countries and territories worldwide and two international conveyances. The total number of confirmed cases is now at 2,934,651 and the total number of deaths at 203,684.

A TEST OF POLITICAL LEADERSHIP
The Global Health Security Index (2019) had already predicted the current state of the world. Its analysis finds that “[n[o country is fully prepared for epidemics or pandemics” and that “[m]ost countries lack foundational health systems capacities vital for epidemic and pandemic response,” for example, to prevent, detect, and respond to significant infectious disease outbreaks.

As the COVID-19 pandemic overwhelmed health systems and caused widespread social and economic disruption, governments had no choice but to turn inward, prioritizing saving their own people and protecting their societies and economies. In light of available limited empirical data, the combined effect of state capacity and trust in government offers a plausible explanation to the relative success of some governments vis-a-vis others in responding to the COVID-19 pandemic.

Fukuyama (2004) defined state (or institutional) capacity as “the abilities of states to plan and execute policies and to enforce laws cleanly and transparently.” Accordingly, “the most effective type of state is one that is able to select among a broad range of policies, which it can implement equally well, to attain a broad range of outcomes.”

The capacity to implement depends crucially on trust in the government. Without trust in the government, support for immediate actions will be difficult to mobilise, particularly amid crises like the COVID-19 pandemic where urgent, short-term sacrifices are critical for the abatement of the pandemic. Easton (1965) described trust in government as representing the confidence of citizens in the actions of a “government to do what is right and perceived fair.”

State capacity is not a function of size and scale of the bureaucracy. Rather, it is a function of revenue (resources to pay for government operations and to distribute among members of the society), human capital (a well-trained and reliable government workforce) and information (to determine how policy instruments can be used effectively).

The governments of South Korea and Taiwan responded early and successfully to the COVID-19 pandemic. Thanks to their timely and well-planned strategies, both governments are relatively successful in “flattening the curve.” Flattening the curve is potentially spreading out the number of coronavirus cases over a longer period so that health systems can have time to mitigate the impact of the disease.

Steve Sternberg, Assistant Managing Editor for Health Initiatives, captured in his report in US News & World Report the reasons why Taiwan is a model of success in containing COVID-19.

“Following the 2003 SARS epidemic, Taiwan dramatically built up its public health infrastructure to launch an immediate response to the next crisis. Well-trained and experienced public health officials were quick to recognize the crisis and launched an emergency public health response to contain the emerging outbreak. Taiwan has a national health insurance program [and] was able to link its national health insurance database with its customs and immigration records and quickly identify anyone who entered the country from China and sought medical care. By 20 January, the government activated the Central Epidemic Command Center and charged it with coordinating all government efforts to combat the growing health crisis. In an effort to contain the epidemic, Taiwan employed the most powerful tools at its disposal — big data and analytics.”

Taiwan contained the outbreak at the time when the WHO was still downplaying the spread of the virus because of its confidence in China’s “extraordinary measures” to contain the outbreak. Trust in the Taiwanese government by its citizens can never be denied by the 8.17 million voters (or 57.1% of the popular vote) who re-elected President Tsai Ing-wen.

In The Week’s feature on “South Korea’s coronavirus success,” the factors that account for South Korea’s success in addressing the outbreak include “early mass testing, tracking and isolating all contacts of those infected… developing and stockpiling test kits in early January, as soon as Chinese scientists released the virus’s genetic code and before a single Korean had been infected.”

Like Taiwan, lessons from an outbreak of Middle East Respiratory Syndrome (MERS) in South Korea in 2015 caused the government to draw up new rules for health crises, empowering the Korea Centers for Disease Control and Prevention to take full authority to direct local responses.

More extreme measures, however, were undertaken when in mid-February hundreds of people at several services at the Shincheonji Church of Jesus in Daegu were infected by the novel coronavirus. Invasive surveillance tactics to track worshippers at Shincheonji churches across the country were used through phone data and an extensive CCTV network of 8 million cameras. Moreover, anyone who tested positive was sent to one of the quarantine centers set up in hotels and company dorms.

Had the South Korean government mishandled the coronavirus outbreak, the Democratic Party of Korea would have not won by a landslide in the National Assembly elections on April 15. The landslide victory of South Korea’s President Moon Jae-ins’ left-leaning Democratic Party was an endorsement of the people’s trust in the government.

FRAGILE INSTITUTIONS AND RESILIENT STATES?
While COVID-19 has taught us about the fragility of the UN and the resilience of states amid crisis, the institutions of global health governance, such as the global scientific community and global civil society are not lacking in response.

However, in light of the current problems that besiege WHO and the UN, are some unanswered questions about their relevance: Does the COVID-19 pandemic teach us about the fragility of international organisations or the resilience of states amid crisis? Will the pandemic render international organisations irrelevant and obsolete or will it bring the state and trust in government back in? How will states manage the post-pandemic order? Finally, will the world be better prepared after the COVID-19 pandemic?

 

Previous columns in this series can be accessed here:

• https://www.bworldonline.com/politics-and-crisis-a-discussion-series-framing-the-crisis-conversation/

• https://www.bworldonline.com/politics-and-crisis-a-discussion-series-governing-the-pandemic/

• https://www.bworldonline.com/politics-and-crisis-a-discussion-series-power-from-below-social-policy-for-the-people-by-the-people/

• https://www.bworldonline.com/politics-and-crisis-a-discussion-series-re-imagining-asean-in-a-time-of-crisis/

• https://www.bworldonline.com/politics-and-crisis-a-discussion-series-covid-19-lessons-in-east-asia-the-good-the-bad-and-whats-just-right/

• https://www.bworldonline.com/politics-and-crisis-a-discussion-series-global-health-governance-and-covid-19-pandemic/

Keeping COVID-19 in perspective

The results of a study conducted by the COVID-19 Pandemic Response Team of the University of the Philippines showed that the Luzon-wide enhanced community quarantine (ECQ) has been effective in slowing down the spread of the coronavirus SARS-CoV-2 which causes COVID-19. The fatality rate of 5.38% as of April 10 is indicative of the effectiveness of the ECQ. Based on data provided by the Department of Health, the team estimates there would be around 9,000 to 44,000 cases by the end of this month. In a best case scenario there would be 484 deaths, or 2,367 in a worst case scenario.

President Rodrigo Duterte ordered the implementation of the ECQ in Metro Manila starting at midnight of March 15 up to April 14. The ECQ order meant the suspension of travel by land, air, and sea to and from Metro Manila, restricting the movement of the metropolis’ population to their homes. As the President himself put in, he ordered the lockdown of Metro Manila. On March 16, the President ordered the expansion of the ECQ to include the entire island of Luzon as well as Mindoro, Marinduque, Romblon, and Palawan effective March 17.

Based on Department of Labor and Employment (DoLE) data, 108,620 workers from 2,317 establishments were affected by the ECQ in Luzon. As many as 600 companies closed down their business, rendering 30,796 workers jobless. But on March 31, DoLE Secretary Bello said that the affected workers increased to more than 630,000, covering 15,213 establishments. According to him 169,232 of the affected workers belong to the informal sectors — those who are not registered with any government agency like the Bureau of Internal Revenue. Among them are jeepney drivers, tricycle drivers, construction workers, public market vendors, cottage industry workers, casuals in certain types of business, etc.

Bangko Sentral ng Pilipinas (BSP) Governor Benjamin Diokno said that the Luzon lockdown will slow down the economy with a disruptive impact. The National Economic and Development Authority (NEDA) adjusted its forecast of 6.5% to 7.5% growth to 5.5% to 6.5%. The Asian Development Bank (ADB) said the impact of the COVID-19 on the Gross Domestic Product would be about between 0.0 and -0.5 percentage of the GDP in a best-case scenario and slightly near -0.5 percentage of the GDP in a worst-case scenario.

The almost P400 billion that Congress allotted to sustain the country’s poor is fast running out. President Duterte has hinted that a protracted ECQ would exhaust the government coffers and might force him to sell government assets.

But the greatest impact of the “stay home” order is on the social aspect of the lives of the great majority of the 13 million residents of Metro Manila. And I am not speaking of the hundreds of thousands of poor people who have no home to stay in. I refer to those who live in informal settlements or shanty towns.

Hovels with living areas no larger than the lobby of a bank branch are homes to the great majority of Metro Manila residents. The 30 square meter area is living, cooking, dining, and sleeping area. All members of the family sleep side-by-side, with maybe flattened corrugated boxes as their “bed” or mattress. More than one family live in many of those hovels.

Before the imposition of the ECQ, members of the family went their own way during the day. The men and women went to work, the children went to school. But with the “stay home” order in effect, all members of the family, and in some hovels all members of two families or even three families, are cooped up together all day and all night every day.

With food meager or even unavailable due to the loss of livelihood, the small space occupied by 10 or more people all day long, the summer heat wearing them down and no running water to cool them off, with fear of the virus overcoming them, and the future looking very bleak, mental and emotional breakdowns among members is almost inevitable. Worst if more than one family live in those shacks.

People who leave the hut for a breath of fresh air or to get away from the anger, ranting, or whines of a co-resident are confronted by policemen or soldiers and threatened with imprisonment. In effect, violators of the order would be punished with greater exposure to the coronavirus for not staying home to avoid exposure to the same virus.

In its effort to protect the people from SARS-CoV-2, it put their mental health in jeopardy. The Department of Health (DoH) should also render a count on those whose mental health has deteriorated considerably due to the curtailment of their freedom of movement and on the number of deaths due to suicide or to injuries arising out of the mindlessness of mentally ill people.

The DoH has done 72,000 tests from the start of testing in early March to last week. Among those tested, 7,192 are confirmed to have been infected by the SARS CoV-2 virus. The DoH thinks it has tracked only a quarter of projected infections. Therefore the projected total of SARS-CoV-2 infections is 28,768. There have been 477 deaths out of 7,192 COVID-19 cases or 6.6%. Therefore, of the projected total number of 28,768 COVID-19 cases, there would be 1,898 deaths due to COVID-19. These numbers are not significantly different from those the UP COVID-19 team came up with.

The tremendous effort to protect people from COVID-19 seems outrageously out of proportion to the targeted benefit. More than 20,000 people die due to tuberculosis, a contagious disease though not as easily caught as SARS-CoV-2, yet hardly any preventive measures, if any, are being taken by the government to protect people from tuberculosis.

Smoking in public places is prohibited, cigarettes are heavily taxed to cut down the number of lung cancer cases. To reduce pollution of the environment and consequently to reduce the number of respiratory disease-related cases, exhaust systems of vehicles have to be cleared for the vehicle’s license to be renewed by the Land Transportation Office. Alcoholic beverages are also heavily taxed to cut down the number of cardiovascular and cirrhosis of the liver cases. Sugary beverages are also taxed high in response to the increasing number of diabetes cases. But all these are puny compared to the government’s response to SARS-CoV-2.

Let us compare the SARS-CoV-2 statistics with those of the ten leading causes of death in the Philippines.

There is a great concern for the elderly because their immune system has been much impaired by age-related ailments. SARS-CoV-2 infection could mean intensive medical care for them. But the enhanced community quarantine has had deleterious effect on the health of a lot of people. Precisely because the elderly are afflicted with age-related disease such as hypertension, diabetes, genitourinary disorders, their conditions are monitored. Most of them have to consult their cardiologist, endocrinologist, nephrologist, urologist, every three or four months. But they have to have blood tests so their doctor can better diagnose their state of health.

But the “stay home” order prevents them from going out to have a blood test and seeing their doctor. Also, the lockdown had closed the diagnostic centers.

Likewise, dental clinics have been closed by the lockdown. Infection of the gums could lead to heart disease. Then there are those who have had major operations: open heart surgery, organ transplant, tumor excision, etc. — before the imposition of ECQ. They are prevented from seeing their doctors for check-ups because they are confined to their homes.

To beat SARS-CoV-2, DoH officials advise people to stay healthy by boosting their immune system, exercising, and eating lots of vegetables and fruits. But residents of a plush condominium tower were threatened with arrest for soaking in the sunshine in the small garden of their condominium. Jogging in the streets is prohibited in most subdivisions in Metro Manila. At the beginning of the ECQ, vegetables and fruits were not available in Metro Manila because the many checkpoints along the way prevented them from reaching the grocery stores. Benguet, a rich source of vegetables, is among those areas under ECQ.

Why not let the people have freedom of movement and just let them take their own precautions? As the DoH had advised, people should wash their hands thoroughly, keep a one-meter distance from other people, avoid gatherings, and boost their immune system by exercising and eating healthy food.

Nobody can predict when SARS-CoV-2 will vanish from our land. Will Metro Manila and some parts of Luzon remain quarantined indefinitely or until the economy has collapsed totally and social order broken down?

 

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.

Some heroes against the virus hysteria

First, the health frontliners in hospitals, clinics, and laboratory centers; and their “support cast” — the people in the groceries and fast food chains, the delivery boys on motorcycles like Grab Food and Delivery, Foodpanda, etc. For the doctors and nurses, patients and their caretakers who have no more time to cook or cannot buy from cheaper carinderias that are also closed, food delivery boys save the day.

Second, the various private citizens and corporate groups that give seemingly endless donations to both poor households and public hospitals. I want to mention our University of the Philippines (UP) School of Economics Alumni Association (UPSEAA). When UPSEAA President Jeffrey Ng called for cash donations from members, deposits quickly and spontaneously came. Among the beneficiaries are: a.) the UP Medical Foundation which received P370,950 worth of PPEs (personal protective equipment) for health workers; b.) the UP Philippine General Hospital which received 200 suit cover gowns and 110 boxes of examination/clean gloves and 460 pieces level 3 PPEs; and, c.) the UP Infirmary/Health Service, P37,500.

Third, some scientists and health officials abroad who produced more realistic findings and conclusions about the China virus (The virus which causes COVID-19 is officially called SARS-Cov-2. — Ed.), particularly focusing on attaining herd immunity or herd protection — which is when most of the population is immune to an infectious disease, providing indirect protection to those who have weaker immune systems (see Table 1).

I am curious to see if the 501 deaths due to the virus which have been reported in the Philippines as of April 26 is a big number compared to projected natural mortality. The first reported death was on Feb. 1, the second was March 11. If we count from Feb. 1, that is 86 days to April 26 or 5.8 deaths/day; if we count from March 11, that is 46 days or 10.9 deaths/day.

I got mortality statistics from the Philippine Statistics Authority (PSA). The latest data is from January-September 2019 with 447,735 deaths over nine months, or an average of 49,748 per month. Extrapolating to 12 months, the estimated number of deaths last year was 596,976.

We need to estimate or project the monthly and daily mortality for 2020. One way to do this is to get the average annual increase of the last four years, 2016 to 2019, which is 9,094. Then use this to project the 2020 numbers (see Table 2).

The projected mortality of 1,684 per day in 2020 is just from regular causes like dengue, cancer, hypertension, accidents, etc. Someday it should be established that six or 11 deaths/day are due to the China virus, all or portion of it is on top of the projected 1,684. With virus comorbidity, these may be deaths from cancer, hypertension, etc. but are counted as ostensible deaths due to the virus. Which were used by the national and local governments to justify all the hysteria, business shutdowns, community dictatorship, huge public spending and the coming high taxes.

We still wait for new medicines and vaccines against this virus. Meanwhile, herd immunity should not be hampered via endless lockdowns. The extension of quarantine for all until May 15 is wrong, a partial quarantine for the elderly and those with existing serious diseases should have been the policy. The continuing hysterical lockdown is a “cure” that is worse than the problem it intends to solve

 

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

minimalgovernment@gmail.com

Bounce back and pivot

There is no turning back. This is the NEW NORMAL. We must accept it and get used to it and most of all, adjust our business, job, or career to adapt to it.

When the lockdown was announced for the National Capital Region (NCR), I thought to myself: This is IT! This is the day we should have prepared for many years ago. Part of our preparation was our business partner’s pronouncements that the “end of A world” was forthcoming. Call it ethereal or weird, we often are tempted to look to those stars when we want to know where the business climate is headed.

As the events were coming to a head — traffic getting worse, the state of the climate getting our environmentalists angrier each day, the Slow Food Movement of consuming good, clean and fair food, Sustainable Tourism, Boracay’s closure… they had to build up to something, and now here it is.

As soon as the malls started confirming their closure, one after another, I was thinking of how to make our business bounce back since most of our stores are located in malls. Was there an end to this? Will we ever reopen again? Meanwhile, the multi-tasking me was directing our staff to pull out sensitive inventory like food — as we did not know how long the closure would take.

Then my partners and I sat down, albeit virtually and told each other: “we knew this day would come somehow.” And that was it. But we had to be the stronger force and calm our staff to just carry on, as much as we could.

What is a retailer to do?

1. Go ONLINE. Many years ago, we started our e-commerce presence and envied how the big players run their sites. Now our online business is doing much better than our brick and mortar stores.

2. Use an inventory system software. We invested in software which everyone thought was so expensive for an MSME like ours. Today, we are thankful, we know exactly what we have and where it is located.

3. Learn tech. I had to understand terms like User Experience (UX), Interface, Traffic, and other techie terms used by IT people, especially for an e-commerce and website or Search Engine Optimization.

4. Understand your supply chain. I was tutored by a very respected Supply Chain Professional (thanks to MAP) and was assured I had the right ingredients for a distribution system.

I am speaking for MSMEs. We cannot afford top-notch supply chain executives. We cannot afford a CFO or a COO. We are just simple people managing a social enterprise and making sure we have stocks that arrive just in time and that we are able to manage cash flow. All these while conducting our NGO work on our non-profit organization teaching MSMEs how to reach new markets.

Today, we have to learn how to manage our business without a back office or having many locations.

Pivot to another side of the business or a new way of doing business.

HYPERLOCAL IS THE TREND. What has happened for the last month? I joined Viber marketplaces and introduced our products to a hyperlocal market — that’s your next door neighbor, your apartment mates, your village colleagues and friends you never though lived near you.

VIRTUAL MEETINGS. People will be scared to go back to the traditional ways — malling, dining out, and having personal meetings or meet-ups. Learn to use Google Hangouts, Zoom and other meeting platforms.

STRAT PLANNING — is it still relevant? We have to take it a week at a time but imagining the long haul — maybe six to 12 months. We have to be on our toes and ever ready for whatever may come.

DIVERSIFY and RESKILL. We can no longer be what we used to be. We have to learn new skills or hone the ones we have put off so many times before. “I will learn that someday!” you used to say. It’s time to do it now — learn how to pay your bills online, learn how to transfer money with GCash or PayMaya. There is no secretary or accountant to do it for you.

And remember, age is not or never will be a barrier to learning something new, except maybe learning a foreign language or playing the piano. But not making your own letters, and using Google for almost anything.

Everyone must bounce back and pivot. Learn to call Grab or hail a Lalamove. There are no assistants, only children who themselves are learning new skills (how not to get bored with parents).

And accept the new reality. Most of all, pray and think of how this is changing our world.

Everything we have been working on as an advocacy is now a reality — cooler temperatures, no traffic, a greener planet. Maybe this is what we have all been waiting for, albeit in a very precarious manner.

And best of all, pray and be thankful we are alive to see this new world. Stay safe and stay COVID-19-free.

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.

 

Pacita “Chit” U. Juan is the President of the Philippine Coffee Board, Inc.

map@map.org.ph

pujuan29@gmail.com

http://map.org.ph

PSEi ends lower as investors assess ECQ impact

By Denise A. Valdez, Reporter

THE MAIN INDEX closed lower on Monday as investors kept assessing the economic effect of the extended enhanced community quarantine (ECQ) and the earnings reports of listed companies.

The bellwether Philippine Stock Exchange index (PSEi) dropped 14.53 points or 0.26% to close at 5,450.45 on Monday. The broader all shares index also slid 8.01 points or 0.23% to 3,342.72.

“Local shares logged in another loss as investors digested economic data, mixed corporate results, and the extension of the ECQ past April 30,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a mobile message yesterday.

Bangko Sentral ng Pilipinas Governor Benjamin E. Diokno said Monday the central bank is still considering further monetary easing to support the economy amid the extension of the ECQ until May 15.

Since the government announced the ECQ extension in Greater Metro Manila and the nearby regions of Central Luzon and Calabarzon on Friday, investors continued digesting its effect on the economy on Monday, which resulted in profit taking at the market.

The PSEi opened at 5,493.21 and shed gains intraday to hit a low of 5,390.97 before it closed at 5,450.45.

The PSE also extended the implementation of shortened trading hours at the market for the duration of the extended ECQ. The market will open at 9:30 a.m. and close at 1 p.m. until May 15.

Earnings season kicked off yesterday, starting with UnionBank of the Philippines, Inc. and Manila Electric Co., which reported mixed results in the first quarter. These financial results are being evaluated by investors to assess how the coronavirus disease 2019 (COVID-19) pandemic is affecting business performance amid operational and demand disruptions.

“Some investors expect either lower earnings or losses in most companies’ books due to the rapid spread of coronavirus, which adversely affected its businesses, so this pushes investors to profit take for now,” Philstocks Financial, Inc. Research Associate Claire T. Alviar said in a text message.

Despite a drop in the PSEi, four out of six sectoral indices closed higher after Monday’s session: mining and oil rose 242.41 points or 5.27% to 4,834.86; services gained 17.66 points or 1.35% to 1,318.23; property picked up 16.98 points or 0.62% to 2,732.44; and industrials added 40.19 points or 0.55% to 7,249.67.

On the other hand, financials lost 26.08 points or 2.19% to 1,162.61; and holding firms slipped 49.20 points or 0.91% to 5,312.58.

Some 568.77 million issues valued at P4.07 billion switched hands on Monday, lower from 829.26 million issues worth P5.24 billion in the last session.

Decliners outnumbered advancers, 112 against 88, while 32 names ended unchanged.

Net foreign outflows dropped to P823.64 million yesterday from P1.02 billion on Friday.

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