Facebook Instagram Linkedin Twitter Youtube
Home Blog Page 8953

DA sees pork shortage by year end, suggests poultry for protein

THE Department of Agriculture (DA) projected that there will be a shortage of pork in the country by the end of the year.

In a food supply outlook released on Friday, the DA estimated that by the end of 2020, the country will not have enough pork for 43 days. It also recommended switching to poultry meat as a source of protein in response to the projection.

“For the country’s protein requirements, we have enough supply of poultry products that can fulfil the potential shortage of pork supply,” the DA said.

However, Bureau of Animal Industry (BAI) Director Dr. Ronnie D. Domingo said that right now the supply of pork supply is adequate to meet the country’s requirements.

“We have actually refocused our agency budgets to support swine production in African Swine Fever-free areas,” Mr. Domingo said in a mobile phone message.

The DA earlier reported that the country’s meat supply remains stable amid the coronavirus disease 2019 (COVID-19) pandemic.

According to the DA, commercial hog raisers said there is an oversupply at the moment, particularly in the Visayas and Mindanao regions. They added that their cold storage facilities are brimming with pork, and there may even be no need to import this year.

The Samahang Industriya ng Agrikultura (SINAG) said that the current oversupply can be credited to the low demand.

SINAG said that the businesses that usually order pork products, such as restaurants, food chains, and resorts, are closed due to the enhanced community quarantine.

“The excess pork products in the Visayas and Mindanao regions must be transported to Luzon,” SINAG said in a mobile message.

The DA regularly interacts with swine industry stakeholders to address issues, particularly the recent African Swine Fever (ASF) outbreaks in several areas nationwide.

“While ASF is being controlled in affected areas, the DA is supporting chicken, ducks, and small ruminant production to augment possible sources of protein,” Mr. Domingo said.

On the other hand, the Pork Producers Federation of the Philippines, Inc. (ProPork) said that the current supply of pork has already been less than normal.

“We are beginning to feel the crunch as some parts of Central Luzon have already less than normal supply of pork even with the enhanced community quarantine,” ProPork President Edwin G. Chen said in a mobile phone message.

Mr. Chen added that a lot of farms, even if they were ASF free, opted to sell their pigs due to the fear of their animals getting infected with the disease.

“We will have an uneven supply of pork in the country. Some areas will have shortages while some will experience an oversupply,” Mr. Chen said.

Agriculture Secretary William D. Dar encouraged consumers to shift to alternative sources of protein like chicken, ducks, eggs, and processed meat products due to the contraction in the pork supply.

Meanwhile, Mr. Dar assured that there is ample food supply in the Philippines amid the extension of the enhanced community quarantine to May 15.

“At the end of December, we will have rice supply good for 94 days; corn, good for 234 days; fish, good for two days; vegetables, good for six days; and chicken, good for 253 days,” Mr. Dar said.

In a briefing with President Rodrigo R. Duterte last Thursday, Mr. Dar said that the country’s rice outlook is positive and adequate despite the extension of the lockdown.

“Mayroon po tayong sapat na pagkain (We have enough food in the country),” Mr. Dar said.

He said that the country’s rice demand is at 14.6 million metric tons (MT) while the committed supply is at 17.9 million MT.

Mr. Dar also reported that despite the extension of the enhanced community quarantine, the agricultural sector will operate at an optimum level while all agricultural personnel are practicing the necessary quarantine measures such as physical distancing and sanitary protocols.

“We remain hopeful for better projections in the coming days as we also implement projects to boost local production, under our Plant, Plant, Plant Program or the Ahon Lahat, Pagkain Sapat (ALPAS) Kontra COVID-19,” Mr. Dar said. — Revin Mikhael D. Ochave

DPWH to convert shipping containers into COVID-19 clinics

THE Department of Public Works and Highways (DPWH) has plans to convert used shipping containers into healthcare facilities for coronavirus disease 2019 (COVID-19) patients.

In a statement released Friday, the department said it is adopting what other countries are doing with regard to modified COVID-19 facilities to help ease the burden on congested hospitals.

“While spread of infection seems to have slowed down because of the enhanced community quarantine, we just have to be ready in the event that the situation worsens,” DPWH Secretary Mark A. Villar said in the statement.

Using four shipping containers that are 40-feet long, eight-feet wide, and nine-feet high, the clinic can isolate and treat up to 16 probable COVID-19 cases. One 40-foot shipping container can be converted into four rooms, each with a toilet and bath of its own. The design is in compliance with Department of Health guidelines.

Meanwhile, 20 foot-long containers can be turned into nurse stations, utility rooms, and separate temporary quarters for male and female healthcare personnel.

“We’re ready to convert these containers into mobile hospitals and install them in any available hospital grounds or open public spaces,” Mr. Villar said.

DPWH Build, Build, Build Chairman Anna Mae Y. Lamentillo said the department wants to be prepared should the country reach a point where other newly built COVID-19 facilities reach overcapacity.

“(It’s a prototype) so we can build as soon as the national government sees a need to build it,” she said in a text message. “It would depend as to whether we’d need it.”

The Philippines has 7,192 COVID-19 cases as of Friday afternoon, 477 of the patients have died and 762 have recovered. Globally, 2.71 million people have come down with COVID-19 which has killed more than 190,800.

The mounting number of cases has resulted in heavy congestion in Metro Manila hospitals, pushing the government to look for alternatives to expand the country’s healthcare capacity.

Aside from DPWH’s converted shipping containers, the Department of Transportation said earlier this week that it is renting two vessels from a private shipping and logistics company to be used as floating quarantine facilities for returning overseas Filipino workers. — Denise A. Valdez

DOST to study the benefits of coconut oil in fighting COVID-19

THE Department of Science and Technology (DoST) will be conducting clinical trials on the effectiveness of virgin coconut oil as a food supplement for coronavirus disease 2019 (COVID-19) patients.

In a Laging Handa briefing on Friday, DoST Secretary Fortunato T. de la Pena said they have been given the go signal by the National Ethics Committee to conduct a clinical study on VCO, which is said to help patients fight the virus.

He said that this was also based on a study made by the late doctor Conrado Dayrit, called the “Father of VCO” and “Dr. Coconut” due to his extensive research on the oil’s anti-viral effects due to its lauric acid.

“Ang hangarin po namin ay maipakita na mas mabilis ang recovery noong mga magti-take ng VCO dahil mayroon po tayo namang mga scientific publications at even earlier researches noon pang panahon pa noong si Dr. Conrado Dayrit. (Our goal is to show that there is faster recovery for those who take the VCO because there are scientific publications and even earlier research on this done by Dr. Conrado Dayrit),” Mr. De la Pena said.

The DoST Secretary said it is important to study the possible benefits of VCO for COVID-19 patients as this is accessible and affordable in the Philippines. If the results show effective results as a supplement, the DoST can conduct further trials so it can be registered as a medicine.

The DoST said they will ask for the consent of patients in the Philippine General Hospital in Manila and the Sta. Rosa Community Hospital in Laguna to participate in the trial.

There have been reports that some patients who recovered from the COVID-19 consumed VCO along with their daily meals although there is no scientific proof that VCO was responsible for their recovery. — Gillian M. Cortez

Remittances to drop this year — BSP

Test tube with fake blood labelled with the coronavirus disease (COVID-19) is placed on dollar banknotes in this illustration taken March 27. — REUTERS

By Luz Wendy T. Noble, Reporter

CASH REMITTANCES are expected to decline this year, as Filipinos living and working abroad face massive layoffs due to the coronavirus-led global economic slowdown.

“Considering that there are already OFWs being repatriated particularly from the sea-based sector, we see that there will be some contraction in remittances by about 0.2 to 0.8 percentage point,” Bangko Sentral ng Pilipinas (BSP) Assistant Governor Iluminada T. Sicat said in an online briefing on Friday.

This estimate is much lower than the already downgraded 2% growth outlook given by BSP Governor Benjamin E. Diokno earlier this month, as well as the baseline 3% growth forecast for cash remittances before the outbreak started.

Cash remittances, which fuel domestic consumption, grew by 4.1% to reach a record $30.133 billion in 2019.

In January, cash remittances rose 6.6% to $2.648 billion, from the $2.484 billion a year ago.

“We believe remittances could also be affected by emerging scenario to the extent that the pandemic problem continues…,” Ms. Sicat said.

World Bank projected remittance flows to lower and middle income countries may drop by 13% to $128 billion this year, amid a drop in wages and employment of migrant workers in host nations due to COVID-19.

In a note sent to reporters on Friday, Nomura Global Research said that the Philippines is likely to suffer the most among remittance markets.

“The Philippines looks the most vulnerable with remittance inflows accounting for 9.9% of GDP in 2019, followed by India (2.8%),” the report said.

Historically, remittances had withstood previous economic crises and has continued to record growth despite challenging situations.

“For the Philippines, this is consistent with our view that remittances are unlikely to be as resilient as in the past given the slump in host countries and sea-based workers facing layoffs particularly on cruise ships,” it said.

A recent study from the Ateneo de Manila University projects that about 300,000 to 400,000 OFWs may experience pay cuts or repatriation as the COVID-19 pandemic hurts many sectors worldwide.

The Department of Foreign Affairs (DFA) has repatriated a total of 19,048 Filipinos since the first repatriation flight from Wuhan, China last Feb. 9, according to DFA Assistant Secretary Eduardo Martin Meñez. The majority of these are repatriated OFWs are seafarers.

Analysts have flagged that a drop in remittances could have a spillover effect on consumption. Consumption is a key segment of the economy, accounting 70% of its gross domestic product.

The Philippines is the world’s fourth largest remittance recipient in 2018, according to World Bank data. It lags India, China, and Mexico.

ADB lends Philippines $1.5B to fight coronavirus

A health worker gets her temperature checked before getting a COVID-19 swab test in a tent set up in a hospital parking lot in Manila, April 15. — REUTERS

THE Asian Development Bank (ADB) has approved a record $1.5 billion loan for the Philippine government to fund its fight against the coronavirus disease 2019 (COVID-19).

“This assistance is our largest budget support loan to the Philippines ever and reflects our strong commitment to providing cornerstone assistance swiftly and effectively to help the country mitigate the pandemic’s devastating impact on Filipinos, particularly the poor and vulnerable, including women,” ADB President Masatsugu Asakawa said in a statement.

The $1.5 billion loan will be priced similar to ADB’s other policy based loans but at a shorter tenor with the first $500 million to have a maturity period of 10 years, including three-year grace period on repayment. The remaining $1 billion will have a five-year maturity period, inclusive of a three-year grace period.

The Department of Finance (DoF) said the first tranche worth $1 billion is expected to be disbursed this month, while the rest may be credited before June 20.

This follows the ADB grants approved in March — the $5 million used for food packages to some 140,000 poorest households in Luzon, and the $3 million for the government’s purchase of medical supplies and establishment of a new laboratory expected to be fully functional by mid-May.

“ADB is also preparing additional financing for social protection and health projects in April and May this year, respectively,” the statement read.

ADB Philippines Country Director Kelly Bird said the $1.5-billion loan would be the last for the Philippines under ADB’s $20-billion fast-track facility program, but assured that the programmed $3 billion for other pipeline projects this year will continue.

“The pre-existing program associated with ‘Build, Build, Build,” and other initiatives that we were already engaged in is $3 billion. We’re certainly committed in continuing the assistance… It’s a similar situation in other countries, where the COVID-19 assistance is on top of existing program of engagement,” ADB Vice President for Operations 2 Ahmed Saeed said during the online briefing on Friday.

Mr. Bird said approval of all pipeline projects under ADB’s $3-billion lending program this year, including infrastructure ones, remains “on track” and could all be approved by July.

“[The government] will always go through priorization process and we’re working closely with them and monitoring the situation to the extent that will affect our 2020 program. We remain flexible with the government, and in this process, we’ll take the guidance from government in terms of scheduling approval development programs and projects,” he said.

The loans for infrastructure projects up for approval this year are the $1.2-billion South Commuter Railway Project, Angat Water Transmission Improvement Project ($126 million) and the Edsa Greenways Project ($130 million).

Other pipeline projects up this year are the Capital Market Generated Infrastructure Financing, Subprogram 1 ($400 million); the Competitive and Inclusive Agriculture Development Program, Subprogram 1 ($400 million); the Inclusive Finance Development Program, Subprogram 2 ($300 million); the Disaster Resilience Improvement Program ($500 million); the Expanded Social Assistance Program ($500 million) and the Local Government Property Tax Project ($26 million).

ADB announced late last year, before the coronavirus pandemic started, that it will scale up its lending program to the Philippines to average at $2.5 to $3 billion a year from 2019-2022.

Last year, it extended a total of $2.5 billion loans to the Philippines.

CARES PROGRAM
Mr. Bird said the $1.5-billion will partly fund the government’s COVID-19 Active Response and Expenditure Support (CARES) Program, partially worth $12.77 billion (P655.573 billion), or equivalent to 3.6% of gross domestic product (GDP).

“The main impact of the program is to mitigate the adverse impact of the pandemic on the economy and poverty. [The $12.8-billion program is a] selection of the government’s COVID-19 response program, we categorized this in five areas,” Mr. Bird said.

In his presentation, Mr. Bird said the bulk of the funds will be used for government financial assistance programs to affected sectors — $6.14 billion (P312 billion) for wage subsidy to employees of small businesses access to loans and credit guarantees for small enterprises, and $4.3 billion (P217.6 billion) for direct cash aids to poorest families, displaced workers and repatriated overseas Filipino workers.

The program also includes $986 million (P49.936 billion) for farmers and rice buffer stock, $792 million (P40 billion) as support for local governments, and $708 million (P35.812 billion) for medical supplies and capacities.

With this, Mr. Bird said they estimated the CARES program will have second-round effects for the first 12 months and will translate into $15.2 billion (4.2% of GDP) and by 2021, it could translate into $17.2 billion or 4.8% of GDP.

“The actual package could add about 4.8 percentage points to GDP, if not more, and it does that because the package is well-targeted… Those kind of items generally have quite large multliplier effects and that’s why we expect that this package to add over $17.2 billion to the economy,” he explained. — Beatrice M. Laforga

AMRO slashes GDP growth forecast for PHL

A soldier wearing a protective mask checks a woman’s quarantine pass as the city undergoes a stricter lockdown to contain the coronavirus disease outbreak, in Pasay City, April 22. — REUTERS

By Beatrice M. Laforga, Reporter

THE ASEAN+3 Macroeconomic Research Office (AMRO) on Friday slashed its 2020 gross domestic product (GDP) growth forecast for the Philippines to 0.2%, warning that containing the virus should be the country’s top priority as second wave of infections could lead to bigger toll on the economy.

In a note released to journalists, AMRO forecasts showed the Philippines will grow by 0.2% this year, drastically lower than the 4.5% projection given on April 7 during its ASEAN+3 Regional Economic Outlook (AREO 2020) launch, and the 6.2% penciled in March.

The growth projection for the Philippines is at par with the 0.2% average for the ASEAN+3 region, which has also been downgraded from the previous forecast of two percent.

AMRO Chief Economist Dr. Hoe Ee Khor told BusinessWorld that the “probability of a recession is not ruled out” for the Philippines this year amid an unprecedented global slowdown due to the coronavirus pandemic.

Philippines is among the seven Asian countries projected to have a positive growth this year along with China, Brunei, Indonesia, Lao PDR, Myanmar and Vietnam. Meanwhile, AMRO expects full-year contraction for Hong Kong, Japan, Korea, Cambodia, Malaysia, Singapore and Thailand.

For 2021, AMRO sees the Philippine economy expanding by 7.4%, higher than the 6.7% it gave in the AREO and the 6.6% forecast given in March. This is also faster than the estimated 6.2% expansion for the region next year.

“The biggest risk to the Philippine economy now is the COVID-19 pandemic and the fallout from the containment measures… The Philippines has implemented lockdown and strict social distancing policies. This has led to a sudden drop in economic activity which poses some challenges to the Philippines,” Mr. Khor said in an e-mailed response to BusinessWorld‘s questions.

He also said they expect “unemployment to be high” in the Philippines as lockdown measures and downturn in global economy could have a “significant” impact to the labor market in the short term.

In a separate interview with ABS-CBN News Channel, Mr. Khor said the growth projections for the Philippines are unlikely to be revised due to the extension of the enhanced community quarantine for Metro Manila and some regions until May 15.

“We are concerned about a second wave of infection. If that happens, we will review the forecast again,” he said.

Mr. Khor said the Philippines should focus on containing the virus first and bringing the infection rate to lower levels before opening up the economy again. He noted prematurely lifting the lockdown may cause a second outbreak and lockdown, which may prove to be costlier for the economy.

“Countries should focus on containing the virus first. The Philippines has been quite successful in containing the virus. The infection has peaked but the number of infections is not coming down fast enough. The experience of China and Korea show that the virus can be contained. But we have to be patient and strict with the containment measures,” he said.

As of Friday afternoon, the Health department reported total deaths due to COVID-19 reached 477, while infections stood at 7,192. Total recoveries are now at 762.

For the region, Mr. Khor said countries in ASEAN+3 were able to “manage the crisis well” due to strong economic fundamentals.

“ASEAN+3 countries are keen to open up (trade and keep cooperation robust). The only reason slowing them down in opening up is the risk of a second wave of infections. This is the only uncertainty we see,” he said.

According to Mr. Khor, there should be mass testing, contact-tracing and quarantine protocols to bring the infection rate down.

The National Economic and Development (NEDA) said they are still “calculating” the economic impact of the 15-day lockdown extension for high risk areas, including Metro Manila.

In an economic research note, Union Bank of the Philippines Economic Research Unit (ERU) said it projects GDP growth to settle at 0.7% this year if some parts of Luzon is still under ECQ while others under general community quarantine until August.

For the worst-case scenario, however, ERU projects the economy to contract by 3.4% this year, assuming that the “return to normalcy is hinged on the availability of an effective anti-viral treatment,” drug or a working vaccine against COVID-19.

“ERU sees Q1 GDP 2020 growth at 4.5%. The Taal eruption last January and the COVID-19 pandemic’s initial impact in last half of March are considered to be the main drivers of Q1 potential growth level. ERU maintains that Q2 will be negative growth due to the collapse of domestic demand and investments,” the note read.

Other organizations have sashed their growth forecasts for the Philippines as well, including World Bank (3% from 3.2% previously), Asian Development Bank (2% from 6.2%) and International Monetary Fund with (0.6% from 6.3%).

Inflation to ease on lower oil prices, slow global growth

INFLATION in the coming quarters could ease further due to the downside risks from the impact of the coronavirus disease 2019 (COVID-19) on oil prices and slower global growth, according to the Bangko Sentral ng Pilipinas (BSP).

“We are closely monitoring the developments in both domestic and global front and so far there are indications that the inflation outlook has shifted to the downside,” BSP Assistant Governor Iluminada T. Sicat said in an online briefing on Friday.

Given the slowdown caused by the pandemic as well as the lockdown in Luzon and other areas, headline inflation could end below the central bank’s target band before a pickup in 2021 on the back of a possible economic recovery, the central bank said.

“We could see inflation decelerating below the two to four percent range target in the third quarter of this year and also in the first quarter of 2021. Then after which, by the second quarter of next year, we see inflation gradually picking up towards the target,” BSP Monetary Policy Sub-sector Officer-In-Charge Dennis D. Lapid said.

In a pre-recorded address, BSP Governor Benjamin E. Diokno said inflation in the first three months of the year averaged at 2.7%, well within the central bank’s target.

Headline inflation averaged 2.5% in 2019, which was within the central bank’s target band.

For the next months, global oil prices are expected to affect the BSP’s inflation outlook, according to Ms. Sicat.

She said oil prices, particularly that of Dubai crude oil, continue to go down despite agreements from authorities to cut production amid falling demand.

“The global crude oil prices were assumed to average $31.56 per barrel in 2020 and $29.22 per barrel for 2021. And comparing these with our earlier assumption, these prices are now $10.8 per barrel lower for 2020 and [lower by] $14.93 per barrel in 2021,” she said.

Another factor for their latest inflation outlook is dimmer prospects for the world economy due to the impact of COVID-19. Ms. Sicat cited the projection of the International Monetary Fund, which sees a contraction of three percent in the global economy this year, which, if realized, would be worse than the 1% contraction seen in the aftermath of the global financial crisis.

A third driver is the decline in non-oil prices, like food and mineral costs, the official said.

Meanwhile, Mr. Lapid said an extension of the lockdown could also lead to the further disruption of economic activities, which may also be a downside to inflation.

On the other hand, Mr. Lapid said upsides stem from factors related to food prices.

“These have to do with things like increase or higher import prices for rice, because of the weather disruption in the region because of dry conditions in major rice-producing countries in ASEAN where we import from,” he said.

Mr. Lapid also cited the African Swine Fever’s impact on meat prices as another factor that may stoke inflation.

“Potential production disruption and logistical bottlenecks or shortages and temporary shortages in supply could [also] affect our domestic food prices,” he added. — L.W.T. Noble

Gov’t says COVID-19 spending has reached P352.7 billion

THE GOVERNMENT has spent P352.7 billion so far in responding to the coronavirus disease 2019 (COVID-19) pandemic and has used up much of the readily-accessible funding from this year’s budget.

In a taped Palace address aired on Friday, Department of Budget and Management (DBM) Secretary Wendel E. Avisado said the government has spent P352.7 billion so far for its COVID-19 response, or 88.84% of the P397 billion in capital outlays it can tap from this year’s budget.

“Ang pwede lang natin galawin (The budget items we can tap around), which we have done, is P397 billion more or less. Ito yung capital outlay ng mga departments at saka yung Congress-initiated. Sa ngayon, ang nagagamit na natin ay P352 billion na. So konting konti na lang ang natitira (These are capital outlays of departments and Congress-initiated items. We have used P352 billion so far, so there’s little left),” Mr. Avisado said.

Out of the approved P4.1-trillion spending plan for this year, Mr. Avisado said P1.249 trillion cannot be touched as these were already automatically appropriated to agencies, to local government units for their internal revenue allotment and for the government’s debt servicing bill.

This leaves the national government P2.8 trillion in “new appropriations,” which are used for expenditures on personnel services, maintenance and other operating expenses, financial expenses and capital outlay, he said. Of this, the government can only redirect funds from capital outlays labeled as “for later release,” which Mr. Avisado said is at around P397 billion.

Finance Secretary Carlos G. Dominguez III said the P352.7 billion spent were partly financed by the government’s tax collections — which he flagged to be declining — savings, and loans from multilateral lenders, including the World Bank and the Asian Development Bank.

Mr. Dominguez however assured the government has “sufficient” cash, but noted the government is restricted to expenditures authorized under the P4.1 trillion spending plan, he said in the same address.

With this, the government will have to ask the Congress for a higher 2020 budget when lawmakers resume hearings on May 4. The P4.1-trillion spending plan for this year was approved in December, before the virus outbreak hit the country.

To plug the funding gap, President Rodrigo R. Duterte again floated the possibility of selling state-owned properties if needed.

However, Mr. Dominguez said via Viber that the government has “not reached the point at which we are considering sale of major government assets.”

DBM’s Mr. Avisado said the administration’s economic development cluster, which includes the Budget and Finance departments and the National Economic and Development Authority (NEDA), have been meeting for “forward planning” which he said will again require “a lot of funding.”

He said the plan will help the country transition to “the new normal” to avoid a second wave of infections and would also provide more jobs in the near term.

Earlier, the Budget department said it will no longer release 35% of the budget of state agencies and asked them to adopt cost-cutting measures to shore up funds for the government’s response to the pandemic.

State agencies were ordered to defer non-essential purchases and activities such as buying new vehicles, celebrations, construction or renovations of government buildings as well as unnecessary foreign and local travels, among others.

The government is sourcing funds for COVID-19-related spending from tax collections, savings, dividends from state-owned firms and other contributions. The Department of Finance is also negotiating loans from multilateral lenders to partially fund its emergency measures, and is also looking to tap commercial markets for more funding.

So far, the Asian Development Bank has approved a $1.5-billion loan to aid the government’s response to the pandemic and assistance for affected sectors. The World Bank, meanwhile, approved $100 million recently on top of the $500 million okayed earlier this month for the Third Risk Management Development Policy Loan. — B.M. Laforga

Fitch Solutions sees slower construction industry growth

THE GROWTH of the construction industry is expected to slow to 3.6% as most activity is concentrated in areas affected by the enhanced community quarantine (ECQ), a report said.

Fitch Solutions Country Risk and Industry Research said in a report released on Friday that year-on-year growth in the sector for 2020 is expected to slow from the initial projection of 5.8%.

Most business operations, including construction, have halted throughout the enhanced community quarantine implemented since March 17.

Fitch Solutions said the majority of the total value of projects approved in previous years were concentrated in Luzon, including the National Capital Region.

“With strict ECQ measures imposed on Luzon, a large proportion of projects would have experienced stop work orders, leading to our bearish outlook for the Philippine buildings sector for 2020.”

The report said construction activity will still face challenges even after the ECQ is lifted and work in the sector resumes.

“Certain projects will face supply chain challenges, as the flow of construction materials and equipment will be disrupted, especially if sourced from foreign markets. Projects will encounter delays in delivery due to logistical challenges and shortages in supply due to disrupted business activity.”

The industry’s growth, the report said, will likely be dragged by less construction activity in the buildings sector as growth is expected to be at 2.8% year-on-year.

The value of 2019 building projects fell four percent compared to the previous year, but grew 37.2% compared to 2017.

“Although these figures remain healthy, and the construction activity generated by these projects will feed into our 2020 forecasts, we expect investment in residential, commercial and industrial real estate to take a hit in 2020, due to a deteriorating business and consumer sentiment not just within the Philippines, but around the world,” the report said.

Fitch Solutions said private developers could delay new projects until consumer sentiment improves. Travel bans, the report said, could have also created a drop in demand for residential real estate as foreigners are unable to enter the country to buy properties.

However, the infrastructure sector is expected to exceed overall growth, rising by 5.4% due to a possible 5.1% growth in transport and 5.6% growth in energy and utilities.

This growth is still lower than the 10.6% seen in 2019 after Luzon infrastructure projects halted.

“The approval of the Department of Transportation’s request to lift restrictions on certain projects, including utility relocation works, works across 13 rail projects, as well as rail replacement works on MRT-3 in Metro Manila, will provide a small boost to growth, but not enough for it to match 2019 levels.”

The timing of the resumption of government infrastructure projects under Build, Build, Build is uncertain, the report said, expecting more funds to be reallocated after P30 billion out of P534 billion had been diverted.

But there may be some healthcare infrastructure investment in the short and medium term, it said.

“The pandemic has exposed deficiencies in the existing healthcare system, as seen from the country’s relatively high death per confirmed case ratio. This means that the country (is) vulnerable to future episodes of healthcare crises,” the report said.

“We believe more focus will be placed on enhancing existing healthcare facilities, and building new ones, including new hospitals, community care facilities and nursing homes.”

Some areas, including Metro Manila, Region III and Region IVA, will continue to be under enhanced community quarantine up to May 15.

Fitch Solutions Country Risk and Industry Research is a unit of Fitch Group, a division distinct from Fitch Ratings. — Jenina P. Ibañez

PPA defers collection of rent, concession fees

THE PHILIPPINE Ports Authority (PPA) is deferring the collection of rental and concession payments for lessees and port operators by 30 days.

PPA said in a press release on Friday it released a memorandum circular signed on April 23 granting a 30-day payment extension from the last due date within the enhanced community quarantine.

Once the grace period has expired, the 12% interest and 25% penalty charges per year will be imposed on late payments of rental and concession fees.

The memorandum covers all PPA lessees and port terminal operators required to pay rental and concession fees in their lease contracts, agreements, and guidelines.

“This initiative is also part of the ‘Bayanihan sa Pantalan’ as it aims to give the port users and other stakeholders the much-needed relief while the country continues with its struggle from the clutches of COVID-19,” PPA General Manager Jay Daniel R. Santiago said.

Bayanihan sa Pantalan is PPA’s program offering relief goods to port workers, as well as security guards and public transport workers close to the ports, amid the coronavirus disease 2019 (COVID-19) pandemic.

Mr. Santiago said the measure will not affect PPA’s revenue generation as it is only a deferment.

“We will calibrate this measure as we go along with our fight with the dreaded disease,” he said.

PPA on Tuesday turned over the Eva Macapagal Super Terminal Bayanihan We Heal as One COVID-19 Treatment Center to the Philippine Coast Guard to treat patients infected with COVID-19.

Fourteen business groups on Thursday asked government to cut logistics costs by implementing “a moratorium on demurrage/detention fees, port congestion surcharges, and other penalties imposed on cargoes/ shipments stuck at the port due to slow DO issuances/bank processing/customs clearance and apply this retroactively to all shipments affected.”

The business groups also asked the government to extend the free storage period at the ports to 10 days from five days and asked to remove PPA’s share in cargo handling revenues. — Jenina P. Ibañez

Farmers, fishers to receive aid as gov’t extends lockdown

AGRICULTURE Secretary William D. Dar said qualified farmers and fishers will also receive social amelioration from the government amid the extension of the enhanced community quarantine.

The Department of Agriculture (DA) has distributed P5,000 each to rice farmers listed in the Registry System for Basic Sectors in Agriculture.

The aid is under the Financial Subsidy for Rice Farmers (FSRF) program, which is the DA’s existing social amelioration program (SAP), funded under the General Appropriations Act of 2020.

“This is a one-time payment, hence the recipients of FSRF can still receive cash assistance from the Department of Social Welfare and Development (DSWD) during its second tranche of distribution,” Mr. Dar said.

Mr. Dar said only rice farmers in selected provinces are included based on the criteria originally set under the Rice Competitiveness Enhancement Fund.

This means farmers who are not beneficiaries under the FSRF will receive the regular SAP from the DSWD.

The FSRF is the second tranche of the Rice Farmer Financial Assistance program that was rolled out last year for farmers tilling 0.5 to 2 hectares.

“The DA’s SAP focuses on the affected agricultural sector of the country. We are trying to maximize our resources while ensuring no one is left behind. We have been continuously coordinating with the DSWD to ensure that those not covered under the FSRF will still be given assistance,” Mr. Dar said.

FSRF aims to assist rice farmers most affected by the sudden price drop of palay, or unmilled rice, in rice producing provinces.

The DA said there have been 234,586 beneficiaries since the implementation of the FSRF in early April.

Another 591,000 beneficiaries are still expected to benefit from the program.

“We do not want to discriminate against other farmers, and also fishermen, from the financial assistance being given by the government to the marginalized sector of our society. It just so happened that the fund and implementing guidelines of the FSRF has already been finalized and approved early this year, even before the coronavirus disease 2019 pandemic,” Mr. Dar said. — Revin Mikhael D. Ochave

Ayala maps out post-ECQ plan

AYALA CORP. (AC) is mapping out a “much more short-term” approach to business, focusing on employee management and business resiliency amid the coronavirus pandemic.

AC Chairman and Chief Executive Officer Jaime Augusto Zobel de Ayala unveiled the company’s three-phased approach to the evolving COVID-19 situation at the annual meeting held online on Friday.

“We’ve always thought long-term, we’ve always focused on the future, but you get a crisis of this nature… (with) no existing playbook… we had to shorten our cycle of planning…,” he said.

The plan, which runs until the fourth quarter of 2020, has three phases — workforce re-entry, market re-evaluation and business repositioning.

Phase 1 involves preparations for the continuation of work once the enhanced community quarantine (ECQ) is lifted. As the government announced the extension of ECQ in the Metro Manila and other regions until mid-May, Mr. Zobel said this period will be spent planning for the post-ECQ work environment of Ayala units.

“We’re worrying a great deal and thinking through how do we get our employee force back to be productive, but at the same time, healthy and safe in this new environment,” he said.

Mr. Zobel noted part of AC’s workforce continues to work in the frontlines, particularly those working in its banking, telecommunications, water utility and healthcare units.

Phase 2 would cover covers the months until June after the ECQ is expected to be lifted. Mr. Zobel said AC intends to spend this time studying consumer behavior, market behavior, industry regulatory issues, and basically “how the world has changed for us.”

“Technology is really a hugely transformational issue in this next period, and we will have to see over the next two months after the ECQ how things evolve,” he said.

Mr. Zobel said the conglomerate wants to focus on how it can strengthen its digital infrastructure to support the renewed role of technology. He cited the overwhelming take-up of its digital platforms, like the mobile application of Bank of the Philippine Islands (BPI) and mobile wallet GCash of Globe Telecom, Inc. as the ECQ forced consumers to turn to electronic payment platforms.

“Maybe just one statistic: our BPI online banking had more online users in just one month than all the online users we’ve had for the full year last year… We’re very happy about the infrastructure that we’ve built up to support this over many years. It’s taken some pain in the past but we’re sure glad that we took the time to do that in the past,” Mr. Zobel said.

For Phase 3, which will cover the second half of 2020, AC may start planning for the “new normal.”

“As we start to understand the situation a little better, (we) then adjust our work force and our market tactics to this new reality that we’ve engaged,” Mr. Zobel said.

The company aims to balance well-being and productivity for employees,

retaining customers, and ensuring operational and financial sustainability.

While the plan is very short-term in nature, Mr. Zobel believes this is the best way to “really tackle this new environment in a productive, innovative and intelligent way as we move on.”

Meanwhile, AC’s healthcare unit Ayala Healthcare Holdings, Inc. (AC Health) is eyeing to play a bigger role in helping the country’s healthcare system address the COVID-19 situation, and support whatever will be the post-pandemic environment.

AC Health President and Chief Executive Officer Paolo Maximo F. Borromeo said the company is looking to strengthen its clinical network through FamilyDOC and Healthway clinics to accommodate non-COVID-19 patients while triaging COVID-19-related cases.

It is also planning to revamp clinics to accommodate other patients, like converting its Healthway Greenbelt clinic into a chemo facility for cancer patients.

The company likewise plans to boost its health technology platforms AIDE and MedGrocer, which give customers remote access to at-home services and online medicine delivery.

Its pharmacy distribution and retailing business is also primed for expansion in capacity, as Mr. Borromeo said he expects reliable access to medicines and vitamins to be essential.

Following AC Health’s partnership with QualiMed to convert its Sta. Rosa facility into a COVID-19 hospital, Mr. Borromeo said the companies are in talks to explore more enhancements in other QualiMed hospitals.

AC is the parent company of Ayala Land, Inc.; Globe; BPI; AC Energy, Inc.; Manila Water Co., Inc.; AC Industrials; and AC Health, among others. The conglomerate booked a net income of P35.28 billion in 2019, up 11% year-on-year.

Shares in AC at the stock exchange lost P13 or 2.31% to P550 each on Friday. — D.A.Valdez

1...8,9528,9538,954...13,574Page 8,953 of 13,574
© 2024 BusinessWorld Publishing.
All rights reserved.
Read our privacy guidelines
Facebook Instagram Linkedin Twitter Youtube