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Import, export agencies targeted to join TradeNet by yearend

THE Anti-Red Tape Authority (ARTA) is pushing for the mandatory inclusion of government agencies regulating trade to a platform run by the Department of Finance (DoF) by the end of the year.

“By the end of 2020, ARTA seeks the mandatory on-boarding of trade regulatory government agencies involved in the issuance of licenses, permits, clearances and certifications for movement (import-export-transit) of cargo to the Department of Finance’s TradeNet System,” ARTA said in a statement Thursday.

TradeNet — connected through the TRADENET.gov.ph platform — is the customs and trade online platform linking the Philippines to the ASEAN Single Window. This online platform allows trade-related transactions and document exchange within Southeast Asia.

The Philippines joined the ASEAN Single Window in December. The DoF has said the window is expected to reduce communications costs and encourage small enterprises to make use of preferential tariffs under an ASEAN trade agreement.

The government plans to connect 76 regulatory agencies across 18 departments to TradeNet.

The platform is designed to simplify trade processes for around 7,400 regulated products. — Jenina P. Ibañez

NEDA’s Chua tells gov’t statisticians to accelerate digitization process

ACTING Socioeconomic Planning Secretary Karl Kendrick T. Chua has ordered an accelerated process of digitization to ensure faster delivery of economic data to the public.

“In the services sector, effective ICT (information and communications technology) applications accelerate productivity by trimming down lengthy manual processes, which results in cost effectiveness, faster delivery time, better service, and ultimately, better customer satisfaction. This, I think, should be the guiding advice or principle that the (Philippine Statistical System) should adopt,” Mr. Chua said in a speech marking the start of National Statistics Month Thursday.

He said statistics delivery “is not exempted” from the rapid digitization across many sectors taking place during the pandemic and reminded government statisticians to “do more” as their output is crucial in determining the direction of programs and policies.

“In our effort to produce relevant, timely, and quality statistics, let us try to take a lesson from the fast-growing and high-skilled services sector of the country when we produce statistics,” he said.

The PSS consists of the Philippine Statistics Authority (PSA) and other data producing-agencies at the administrative levels.

Mr. Chua cited PSA’s recent move to conduct the labor force survey (LFS) digitally.

“I think we should proceed with utmost urgency and haste to complete or to transition fully from manual processing and collection of data to full automation beginning with the work that we’re doing in the LFS, part of the census, the National ID, and so on,” he added.

He said the integration of ICT and digital tools in the statistical system of the country will spur economic activity and promote more efficient implementation of programs and social services.

“What this crisis has made apparent is the need for us to evolve and improve our systems if we hope not just to outlast, but also build resilience against adversities such as the COVID-19 pandemic. The task ahead of us requires innovative and creative solutions that can effectively mitigate the consequences brought about by the COVID-19 (coronavirus disease 2019) pandemic and allow us to recover faster and better,” he said. — Beatrice M. Laforga

Senate presses Labor dep’t for clear strategy to tackle worker, OFW displacement

SENATORS said Thursday that the Department of Labor and Employment (DoLE) needs a “real, concrete” strategy to deal with workers displaced by the coronavirus disease 2019 (COVID-19) pandemic.

Senator Emmanuel Joel J. Villanueva and Imelda Josefa R. Marcos said DoLE should draft a plan that goes beyond its emergency response measures, such as the COVID-19 Adjustment Measures Program and AKAP para sa OFW (overseas Filipino worker).

“At the end of the day, we need a real, concrete employment recovery plan that relies on employment facilitation, support to MSMEs (micro, small, and medium enterprises), real sustainable livelihood programs,” Mr. Villanueva, the Finance Committee Vice-Chairman, said during DoLE’s budget hearing.

The panel was tackling the department’s P27.53-billion budget for 2021, which is up 53.7%. The budget’s components include P3.53 billion for the Office of the Secretary and P5.81 billion for the Overseas Workers Welfare Administration.

Labor Secretary Silvestre H. Bello III said the department continues to implement long-term employment programs such as the Special Program for Employment of Students (SPES). The 2021 spending plan will allocate P605.7 million to the program.

The department also cited the Integrated Livelihood Program with P809 million in funding and the Government Internship Program among other short-term livelihood programs, which have P9.938 billion in funding overall.

Ms. Marcos, however, said the department needs to come up with a plan designed specifically for the pandemic job losses. 

“I am familiar with SPES and all other programs you have, but it’s very much business as usual,” she said.

“The unemployment crisis that has come out of the pandemic is not business as usual. We need to have new plans, new programs.”

Unemployment and underemployment are respectively at 10.4% and 17.3%, according to the Philippine Statistics Authority. On top of this, the labor department reported some 224,700 overseas Filipino workers have been repatriated over the course of the pandemic.

In response, DoLE’s Bureau of Local Employment (BLE) said it is seeking to develop with the National Economic and Development Authority an employment recovery program.

“Our contribution is the updating of the labor market information,” BLE Director Dominique Rubia-Tutay said.

“Kailangan ma-identify ‘yung mga (We need to identify the) key employment generating sectors… in the new normal, and given the challenges we have.”

She noted the information gathered has been sent to the Technical Education and Skills Development Authority, Commission on Higher Education, and the Department of Education. — Charmaine A. Tadalan

PHL power sector risk increasing amid weak consumption, construction halts

RISKS in the Philippine power sector are increasing as the pandemic pressures both demand and new-build plant construction, Fitch Solutions Group said in a research note.

It said the assessment is based on the industry’s declining performance on its risk-reward index over two consecutive quarters.

With disease containment efforts stretching into a seventh month, the power and renewables sectors will face heightened risk over the near term, it said.

Earlier in September, Fitch Solutions trimmed its power consumption outlook for the Philippines to a decline of 5.9% this year “with further downside risks.” Before the pandemic, its estimate was for growth of 5%.

“We also expect continued headwinds to power capacity growth over the near to medium term,” it said.

Still, electricity usage may rebound “strongly” over the long term, which will require over 40 gigawatts of additional power capacity by 2040, as the Department of Energy projects.

The prolonged pandemic also exposes the Philippines to “increasingly tighter” financial constraints, with more funds expected to be diverted away from infrastructure and towards the labor market and social subsidies.

“An inability to contain the virus could also dampen foreign direct investment and momentum around structural reforms to attract such investment over the longer term,” it added.

Delays are also likely for plant construction due to labor and supply chain disruptions caused by the quarantine.

According to Fitch, the Asian power market remains a “global outperformer” in terms of investment attractiveness because of “strong underlying demand for power and ambitious government expansion plans for their respective power sectors, which create opportunities for the development of power capacity, particularly in emerging markets.”

However, risks vary across countries, depending on their respective “ability to successfully contain their domestic outbreaks, energy intensity of their economic growth, capacity to implement fiscal stimulus measures to support their economies and priorities in place for the power sector.”

“We stress that risks are still skewed to the downside, particularly as the risk of a second wave of infections becomes more apparent,” it added. — Adam J. Ang

NEA resorts to online inspection of rural solar projects

THE National Electrification Administration (NEA) said it has had to resort to online inspections of electrification projects in remote communities as travel remains restricted due to the pandemic.

Recently, the agency conducted a virtual Factory Acceptance Test (FAT) for the solar photovoltaic mainstreaming project of Iloilo III Electric Cooperative, Inc. (ILECO III) for off-grid communities.

“Due to the pandemic, the NEA is forced to look for other means of conducting the FAT without compromising the safety and health of its employees and partner ECs (electric cooperatives), while also ensuring the quality of equipment being procured,” NEA Manager Ernesto O. Silvano, Jr. said.

Mr. Silvano, who heads the agency’s total electrification and renewable energy development department, said the online inspection maintains the “same criteria and standards” observed during physical checks.

In April, NEA said the rollout of its P153-million off-grid solar power program experienced delays due to pandemic. It hopes to provide power to 5,000 rural households over the next five years.

Apart from ILECO III, other beneficiaries of the solar project are Busuanga Island Electric Cooperative, Inc. (BISELCO), Camarines Sur IV Electric Cooperative, Inc. (CASURECO IV), Cotabato Electric Cooperative, Inc. (COTELCO), and Zamboanga del Norte Electric Cooperative, Inc. (ZANECO). — Adam J. Ang

DA sees shortages of pork, tilapia by end of 2020

THE Department of Agriculture (DA) said it is expecting shortages of pork and tilapia by the end of the year.

In a virtual briefing Thursday, DA Spokesman Noel O. Reyes said the best-case scenario for overall fish supply at the end of the year is 41,000 MT, equivalent to five days’ consumption.

Demand for fish such as tilapia and round scad (galunggong) is expected to outstrip supply by 12,036 metric tons (MT) and 51,765 MT, respectively.

Milkfish (bangus) is expected to end the year with a surplus of 57,167 MT. The sardine surplus is estimated at 37,591 MT, and that for mackerel at 11,664 MT.

Pork products will end the year with a 231,030 MT deficit, equivalent to 45 days’ consumption, while chicken is estimated to be in surplus by 464,236 MT, good for 103 days.

Garlic is expected to end the year at a deficit of 83,207 MT, or about 221 days’ worth, while onion will end at a deficit of 557 MT, or one day’s worth of consumption.

Mr. Reyes said vegetables are expected to be in surplus by 149,757 MT, equivalent to 19 days.

He added that the year-end rice supply will depend on the arrival of remaining rice imports. The best-case scenario for year-end inventory is 3.42 million MT, equivalent to a 97-day supply.

Mr. Reyes said the best-case scenario for corn inventory is 4.05 million MT, good for 236 days. However, supply may vary depending on the volume of corn imports and domestic production losses. — Revin Mikhael D. Ochave

Google search, risk attitude and government response

We are proud to see the Bangko Sentral ng Pilipinas (BSP) showing its ability to defy pandemic-induced impediments to the actual conduct of consumer and business expectations surveys “to measure investors’ risk attitude and quantify its impact to stock market in a more direct and timely manner.”

Conduct of BSP’s own expectations surveys was hindered during the second quarter of 2020 because of the lockdown. Thankfully, imaginative use of the Google search engine enables one to capture investor sentiment and check the pandemic’s impact on financial markets. This can help policy-makers predict potential market stress and design government response.

This is the thrust of the September working paper prepared by Jean Christine A. Armas and Pamela Kaye A. Tuazon of the Department of Economic Statistics of the Monetary Policy Sub-Sector, Monetary and Economics Sector of the BSP.  The researchers are young bank officers with a great future in central banking. Two and a half years ago, they initiated their foray into data analytics with their paper, “Central Banking and Data Analytics.”

In their review of relevant literature, a number of key events driven by adverse risk attitude of investors were cited. These include the Asian Financial Crisis (1997), Russian debt default (1998), and the dot-com bubble (2000).

Ms. Armas and Ms. Tuazon succeeded in constructing a COVID-19 Risk Attitude (CRA) metric for the Philippines and for some select Asian countries consisting of Indonesia, India, Japan, Korea, Malaysia, Philippines, Singapore, and Thailand. They searched the internet using the following: COVID-19, coronavirus, 2019-n-CoV, and nCov covering the period end-December 2019 to 3 July 2020.

CRA was estimated as the sum of daily search volume terms for each of the nine countries normalized to 100 for comparability. The assumption was that the frequency of searches for these terms proxies for the public’s level of concern on the pandemic and its economic implications.

Public attention to the pandemic was highest in April for most Asian countries. The exception is Singapore, where it was highest earlier in February, right after the World Health Organization declared COVID-19 a global pandemic on Jan. 30. The frequency started to die down in the following months.

The study also followed the suggested calculation of the Government Response Stringency Index (GRSI) in the literature. The GRSI reflects nine governments’ anti-COVID-19 measures. It consists of mean scores of four components: 1.) government response; 2.) containment and health; 3.) stringency of the measures; and, 4.) economic support. As an index, the GRSI ranges from 0 to 100 with the stringency of responses clarified not to be a necessary measure of their effectiveness or relevance.

Data shows that these Asian countries sustained their anti-pandemic responses throughout the period, with most peaking in April alongside the generally highest percentage changes in accumulation of COVID-19 cases.

Another interesting observation is that the Philippines’ stringency index stabilized longest at highest levels among the nine countries in the sample. Peak-wise, India was comparable with the Philippines, but pulled back for most of the second quarter. Vietnam nearly maximized at some point but it was even quicker to do a substantial easing.

In simplified terms, the baseline model of the BSP posits that stock prices are driven by market fundamentals such as crude oil prices and trade-weighted US dollar index and stock price volatility. To test for the impact of the pandemic on the market, COVID-19 cumulative cases and the CRA were considered.

The countries were clustered: higher-income countries of Japan, Korea and Singapore; upper-middle-income countries of Indonesia, Malaysia and Thailand; and lower-middle-income countries of India, Philippines and Vietnam.

Panel regression was employed using the random effects model given the presence of country-specific differences that could affect stock prices in Asia.

Ms. Armas and Ms. Tuazon found that aside from market fundamentals, the CRA index is a good predictor of stock price movements. Having been hit by the coronavirus earlier, mitigating measures were established promptly in Asia compared with those in the US and Europe. Testing and tracing leveraged on technology. And finally, Asia’s previous experience with SARS in 2002-2004 served it in good stead.

The reason why COVID-19 cases did not seem to matter in equities is that their negative impact could have been folded-in with the CRA index.

Another highlight of the BSP research is the impact of income classes. For both high- and upper-middle income countries, the impact of CRA index to stock prices was both positive and statistically significant. This means higher market confidence in these economies because they were considered first to “press digital infrastructures into use…to stem the virus outbreak.”

For lower-middle-income countries including the Philippines, CRA index impacts stock prices negatively but not significantly statistically. The BSP officers correctly cautioned against making conclusive inference. What we can reasonably suggest is that these countries’ relatively underdeveloped financial systems deprive them of resilience by way of higher market confidence against the pandemic and its economic implications.

The GRSI was introduced in the basic model as a control variable. Its inclusion could check the consistency of the effect of investors’ sentiment on stock prices. The BSP officers also limited the time period to just the outbreak and the fever phase. They excluded the disease incubation period. These two modifications ensure that empirical results are not tentative by virtue of data selection, sample coverage, and time period. Robustness of results is important.

The inclusion of GRSI confirmed the consistency of relationships among variables. In particular, governments’ actions to step up anti-COVID-19 mitigation measures yielded higher market confidence in most of Asia.

Varying the time period also confirmed the impact of investors’ sentiment on stock prices.

The BSP findings should convince our authorities that firm and smart government action is what investors and the citizenry are looking for. They clamor for clarity of direction and transparency of messaging. The market’s risk attitude, driven by the daily search volume could be managed — and managed well — by the government’s quick and effective response based on sound science, not guess work; evidence, not speculation; with funding, not with lip service.

The chart that correlates COVID-19 cumulative incidence and government response is worth a hundred narratives.

Even as the daily percentage change in the number of COVID-19 cumulative cases seemed to have stabilized in the second quarter for the Philippines, the absolute number is now the highest in Asia minus India. This is the reason for our long, strict lockdown. This is the reason for our deepest economic recession with the exception of Malaysia which brought down its guard only in June.

Our authorities remain caught in a bind. We continue to record 2,000-3,000 daily incidence of COVID-19 while hospitals are still in full capacity. Vaccines will not be available soon. In the latest Social Weather Station survey conducted between Sept. 17-20, 85% of those polled are still worried that anyone in their immediate family might catch the virus. To top it all, the UN chief has declared, “there is still no end in sight to the spread of COVID-19.”  He cited that more than one million lives have been lost worldwide. Health protocols should be non-negotiable.

But the government cannot ignore that because many quarters remain locked down, or partially at least, many small businesses cannot thrive. Jobs continue to be lost. No wonder, the World Bank recently announced that the Philippines faces “a deeper slump, slower recovery.”

We are losing some fiscal space as foreign borrowings for COVID-19 responses are approaching $10 billion or P500 billion, more than 11% of the proposed 2021 budget. In the past, we made the point that the budget for 2021 should be realigned to be consistent with the demand of the times — managing the pandemic and promoting economic revival — but it looks like legislative research and intelligence funds will be the run-away winners of pork.

These bits and pieces of news are the building blocks of both the risk attitude and the stringency of government response.

No, we wouldn’t want to bother John Lennon.  But it was he who said that “Everything will be ok in the end. If it’s not ok, it’s not the end.”

 

Diwa C. Guinigundo is the former Deputy Governor for the Monetary and Economics Sector, the Bangko Sentral ng Pilipinas (BSP). He served the BSP for 41 years. In 2001-2003, he was Alternate Executive Director at the International Monetary Fund in Washington, DC. He is the senior pastor of the Fullness of Christ International Ministries in Mandaluyong.

A cruel irony

Could Senator Leila de Lima be right? Was President Rodrigo Duterte’s speech as “plastic and (as) fake as the dolomite beach”? Did he not really mean what he said?

Senator De Lima was primarily alluding to Mr. Duterte’s pre-recorded speech before the United Nations General Assembly (UNGA), which she compared to the P389.8-million “white sand” folly the Department of Environment and Natural Resources (DENR) had made out of portions of Manila Bay.

A Duterte critic who has been detained in the headquarters of the Philippine National Police (PNP) since 2017 on drug charges she claims to be politically motivated, the senator was outraged by Mr. Duterte’s saying in that speech that the 2016 ruling of the Permanent Court of Arbitration (PCA) denying China’s claims on the West Philippine Sea and recognizing Philippine rights to it is binding, already part of international law, and can no longer be challenged. His declaration, she pointed out, is totally at odds with what she called his four years of “betraying” that ruling “to curry favor” with China.

Mr. Duterte had indeed said in his previous speeches and other statements the exact opposite of what he affirmed in his UN speech. He has argued that the Philippines can do nothing about China’s occupation and militarization of the South China Sea, and declared a number of times that he would not contest it because doing so could provoke a war the Philippines would surely lose.

Among the consequences of that seeming policy have been the hitherto unchallenged intrusions of Chinese military sea craft in the Philippines’ Exclusive Economic Zone, and their driving Filipino fisherfolk away from their traditional fishing grounds. Some 75% of the population have demanded that he do something to stop the behemoth’s assaults on Philippine sovereign rights.

Senator De Lima can’t be blamed for being skeptical of that portion of Mr. Duterte’s speech, the entirety of which, she said, sounded as if he was just delivering it as ghost written for him. She was in effect saying that Mr. Duterte’s ghost writer was just putting words in his mouth and making him say what he thought the UNGA and the international community wanted to hear.

It’s tempting to agree with that view because Mr. Duterte has often said things he later repudiated. He has many times contradicted himself, and even denied that he said what’s already on video, audio recordings, and other means of verification. But what challenges Senator De Lima’s allegation is an apparent shift in regime foreign policy that has been discernible over the past few months in the statements of Secretary of Foreign Affairs Teodoro Locsin, Jr.

On July 3 this year, Locsin — incidentally the most likely candidate for ghost writer of Mr. Duterte’s UNGA speech — warned China of “severe responses,” diplomatic or otherwise, should there be any “spill over” into Philippine territory of Chinese vessels engaged in military exercises in those parts of the South China Sea that are not the Philippines’ own.

The same Locsin — who has ghost written for at least two other Philippine Presidents — said in August that China should “expect the worst” if the missiles fired by its warships during its military exercises enter the Philippines’ Exclusive Economic Zone (EEZ). At about the same time, he also said he would invoke the PH-US 1951 Mutual Defense Treaty (MDT) and ask for United States assistance if China attacks a Philippine vessel in the West Philippine Sea.

And only 10 days ago, Locsin told the House of Representatives during hearings on the Department of Foreign Affairs (DFA) 2021 budget that the Philippines does not agree with China’s demand that Western powers such as the United States be kept out of the West Philippine Sea. He made that statement in the context of the US’ increasingly confrontational military presence in the area that China has denounced as a “provocation.” Locsin said US presence in the area is necessary “as a balancer,” because “the freedom of the Filipino people depends on the balance of power in the South China Sea.”

Equally relevant as a sign of this shift was Mr. Duterte’s Sept. 7 absolute pardon of the US Marine Corps’ Lance Corporal Joseph Scott Pemberton. That decision indicated a departure from Mr. Duterte’s seemingly pro-China course by assuring the US that it can still get what it wants, in exchange for whatever benefits the regime can get from it. Locsin denied that the trade-off involved in the pardon is the Philippines’ being a priority recipient of a US anti-COVID-19 vaccine, and he may be right: what the regime he serves is likely to gain from it will most probably be more than that.

All the above suggest that Mr. Duterte’s affirmation of the 2016 PCA ruling is unlikely to be mere words, or a gesture without meaning. It must be viewed in the context of the shift in his foreign policy, this time away from China, whose occupation and militarization of the West Philippine Sea is completely unacceptable to the United States. The US policy of “full spectrum dominance” over land, sea, air and space and of “containing” China to prevent its rise as another superpower has never wavered whatever party is in power, whether Democrat or Republican, and remains in place today.

Surprised by Mr. Duterte’s declaration of support for the 2016 PCA decision, some may not have believed it, but others may also be wondering what drove him to it. Was it his realization that the US is far, far superior to China militarily, and that the outcome of any confrontation between them is hardly debatable? Was it in anticipation of increased military and economic aid, and continuing US support for his regime despite its despotism and flagrant human rights violations? Was it due to pressure from the pro-US military establishment whose generals have been bridling at Chinese aggression in the West Philippine Sea?

It could be all the above. But that would not preclude the possibility that Mr. Duterte’s claims to implementing an “independent foreign policy” that would “separate” the Philippines from the US and instead bring it closer to Russia and China were from the very beginning calculated to alarm the US enough for it to shower the regime with the military, economic, and political support it needs to keep it firmly in power until, or even beyond, 2022.

If that is indeed the case, it would make Mr. Duterte as shrewd and as cunning as his mentor and idol Ferdinand Marcos. During his 14-year dictatorship from 1972 to 1986, that tyrant played the United States against the now defunct Union of Soviet Socialist Republics (USSR) and the then socialist People’s Republic of China (PRC) to gain political advantage and provoke the three into competing for the regime’s favor in terms of who could best provide it military and economic aid.

Despite his declaration of support for the PCA ruling, which has earned him the praise of his critics, the possibility is that as in 2016 when he managed to win the Presidency by pretending not to be interested in it, Mr. Duterte has once again outwitted analysts, his critics and even his allies. The cruel irony is that as assertive of Philippine sovereignty as his affirmation of Philippine rights over its territorial waters is, it is also another sign that the US will continue aiding and abetting tyrannical rule and tightening its grip on these sorry isles.

 

Luis V. Teodoro is on Facebook and Twitter (@luisteodoro).

www.luisteodoro.com

Public morals and the EU GSP+

The United States was recently dealt a disappointing loss by a World Trade Organization (WTO) panel in its case against China. The suit stemmed from alleged Chinese intellectual property violations and that such substantially damaged the interests of US companies.

In a rather interesting twist, the US admitted that its tariff measures were indeed inconsistent with its WTO obligations but justified the same as arising from the need to “protect public morals” (as China’s actions amounted to “state-sanctioned theft”) and thus qualifies for protection under Article XX.a of the General Agreement on Tariffs and Trade (GATT).

Significantly, the Panel agreed with the US that trade related measures can indeed be instituted to protect public morals. Note that in the Seal Products case, it was pointed out that “the content of the concept of public morals ‘can vary in time and space, depending upon a range of factors, including prevailing social, cultural, ethical and religious values’ and that, for this reason, Members should be given some scope to define and apply for themselves the concepts of ‘public morals’ in their respective territories, according to their own systems and scales of values.”

In the present case, the Panel kept consistency: US “standards of right and wrong” could indeed conceivably be appropriate when invoking the said “public morals” clause.

Nevertheless, the Panel ultimately ruled against the US, declaring the latter as not having sufficiently established the nexus between the trade matters sought to be resolved — both in terms of the actions sought to be prevented and the measures imposed to remedy China’s violations — and the public morals objectives being sought. The justifying circumstance being inapplicable, the Panel ruled the US as having violated its commitments under GATT.

The case is interesting, coming as it does at a time when local political leaders and academicians are seemingly intent on excluding public morals as a part of discussions in the public square or in a court of law. But as the US Tariffs and the Seal Products cases show, even a matter as technically pedantic as international trade could involve moral issues.

And even more interesting when one reflects on the European Parliament resolving last week to withhold GSP+ benefits from the Philippines, ostensibly on the ground of the Philippine government’s supposed human rights violations.

The GSP (or Generalized System of Preferences) serves as an exemption to the WTO’s “most favored nation” obligation, with lower tariffs given for poorer countries under certain conditions.

The three biggest GSP providers are the US, Japan, and the European Union. GSP schemes vary according to the provider, resulting in different technical requirements particularly for rules of origin.

As for the EU’s GSP+, the European Commission describes it as a “special incentive arrangement for sustainable development and good governance. It slashes these same tariffs to 0% for vulnerable low and low2er-middle income countries that implement 27 international conventions related to human rights, labor rights, protection of the environment and good governance.”

The EU’s GSP+ privileges do seem substantial. As described by the Foreign Service Institute (“Does the Philippines Need the EU’s GSP+?”): “A record-high P120 billion (EURO 2 billion) worth of Philippine exports benefitted from GSP+ in 2017, most of which were concentrated in the food and agricultural sectors.” The following Philippine products most benefiting were: animal products, fish and related products, prepared foodstuffs, edible fruits, and also automotive parts, leather, textiles, and footwear.

The Philippines has a “GSP+ utilization rate of 71%” and “all in all, the Philippines benefits considerably from the EU’s GSP+.” And although “losing it would be far from a death blow to the economy, and that it could, in theory, be compensated by increased economic ties with other trade partners like China, retaining GSP+ remains the best possible outcome for the country if it is serious about maximizing its growth. Consequently, Manila would do well to ensure that it keeps GSP+.”

This is not the first time the European Parliament voted on such a measure. Reportedly, the same resolutions were made in 2016, 2017, and 2018. Nevertheless, it is not the European Parliament (which represents the different EU member country citizens and is directly elected by them) but the supposedly “politically independent executive arm,” the EU Commission (representing the member governments, each government allowed one representative) that makes the decision on GSP+.

Trade Secretary Ramon Lopez, however, reportedly remains optimistic: “We have an inter-agency working group in place that attend to the regular monitoring visits and respond accordingly to various issues if and when they are officially raised by the EU Commission. The EU Commission has a mechanism in place and process to follow to verify issues before sanctions are imposed.”

Let’s hope so. As the EU Commission tersely points out: the GSP+ is “not negotiated.” This significantly dampens even the minute possibility of questioning before the WTO such withdrawal of benefits, in the same manner as the US’ trade measure, and potentially leaves our exporters with minimum recourse.

 

Jemy Gatdula is a Senior Fellow of the Philippine Council for Foreign Relations and a Philippine Judicial Academy law lecturer for constitutional philosophy and jurisprudence.

jemygatdula@yahoo.com

www.jemygatdula.blogspot.com

facebook.com/jemy.gatdula

Twitter @jemygatdula

Thoughts on adversity

Individuals perceive reality and respond in diverse ways. While some people freeze, rant, or panic, others stay grounded, calm or introspective.

The thinkers become philosophers particularly during the economic fallout of the pandemic.

There are things to ponder. How do we endure the unendurable? How do we find a sense of certainty and order in an uncertain universe? We have to untangle the ethical questions and find the answers to the urgent quandaries.

When we reframe the questions and alter the perspective, we learn (or polish) a new skill that is helpful and invaluable during all kinds of situations.

History has shown that the bad times such pandemics, social unrest, and economic upheavals have produced great thinkers. Philosophers have insights or what is called “earned wisdom.” These thoughts are definitely relevant during this prolonged crisis.

COVID-19 has brought us down to earth. It punctured the self-inflated egos of those superior characters who were self-sufficient and knew everything. The pandemic has removed our anchors and set us free to float on unchartered waters. This generation of Millennials, the Baby Boomers of the 1960s and ’70s, Gen X are adapting and adjusting to new ways of thinking and doing. It takes time to change, but then the passage of time has become subjective.

Socrates was considered the patron saint of Philosophy. He lived and rose to prominence during the era of Athens’ decline as a great power. It was a terrible time. The fall was worse due to military adventurism, and the bubonic plague. Just as the ancient Chinese see a crisis as an opportunity, Socrates had a similar view during his troubled time.

He gathered the Athenians who were well respected and revered — the poets and generals, among them. When he questioned them, they revealed their weaknesses. They were not as wise as he expected. The general could not define courage. The poet could not define poetry. It was a major disappointment to discover that these respected people did not know what they were supposed to know.

In the context of the present lockdowns, we have been forced to pause. We have to think deeply and question the ingrained assumptions and beliefs. Only then will we discover the roots of wisdom.

Although we all crave and yearn for a return to our old life, the accustomed ways, we are disoriented and have yet to define the word “normal.”

It has been said that we need courage but we may not really know what courage means.

One thing is certain in this time of uncertainty. We are undergoing a process of transformation — physically, mentally and spiritually — in the way we think and how we view others. We now include in our list of heroes the frontliners, doctors, nurses, health and humanitarian workers, the guards, the staff of supermarkets and drugstores, the street cleaners, the technicians, the housekeepers and drivers. These are the heroic people who deserve recognition and our gratitude because they are exposed to the invisible dangers — to protect us and to make our world a safer place for us.

PERCEPTION OF REALITY AS A MEANS OF COPING
Pragmatists see things as they are. Black or white. Optimists look at the positive side — the silver lining of dark clouds, “half-full” vessels, th2e possibilities in a dark world. Pessimists, in contrast, see the gloom and doom, the “half-empty” glasses, the void in their gray lives. Romantics view the world through a rose-colored prism. “La vie en rose.” The jaded cynics rarely find pleasure in rainbows and butterflies. Nothing excites them anymore. “Been there, done that.” It’s a defining attitude that is dull, flat and uninspired.

Self-image is a highly subjective, sensitive issue. One’s self-esteem could be affected by someone else’s perception, accurate or otherwise. The mind can play tricks on the eyes. With elective vision, it edits and improves the actual image to conform to the ideal shape. Wishful thinking afflicts people to varying degrees.

The individual with a fragile ego would like to hear only positive compliments. He prefers to project an idealized image, an illusion of perfection.

The mirror may reveal the stark truth. But the human eye could choose to see an altered state, an enhanced virtual reality. Thus there is a disparity between fact and fantasy.

A weight-challenged delusional woman “sees” a svelte, chic, and elegant reflection. A rotund man fantasizes a tall, dashing, macho image. It is an ego-boosting optical illusion. A trompe d’oeil, or trick of the eye. The wardrobe is a minor disaster. Clothes are inappropriate and ill fitting because of the mismatch between fact and illusion.

What would matter, ultimately, should be not form but substance. Attitude of security, confidence and self-confidence and self-worth make all the difference.

French author Malcolm de Chazal commented wryly, “Monkeys are superior to men in this: When a monkey looks into a mirror, he sees a monkey.”

 

Maria Victoria Rufino is an artist, writer and businesswoman. She is president and executive producer of Maverick Productions.

mavrufino@gmail.com

Tokyo Stock Exchange halts trading for the entire day in worst-ever outage

THE TOKYO Stock Exchange (TSE) halted trading for the entire day Thursday on a hardware breakdown, freezing buying and selling in thousands of companies in the worst-ever outage for the world’s third-largest bourse.

Japan Exchange Group, Inc., the operator of the TSE, gave no time frame for when trading would resume, and said it would announce plans for tomorrow’s session later. The stoppage means buying and selling in thousands of shares will be frozen on the first day of the new quarter. Previous suspensions had only affected part of the trading day.

The issue damps investor sentiment following a positive US stock market performance overnight and closures in other major markets in the region, including China, Hong Kong, South Korea and Taiwan. The shutdown could also have implications on investor confidence in the Japanese markets system.

“This is very problematic — when things like this happen, investor confidence in the Japanese market get impacted,” said Ryuta Otsuka, a strategist at Toyo Securities Co. “It could later weigh on Japanese stocks.”

There were no indications that the outage was related to hacking, the exchange said. The halt prompted a reaction from Chief Cabinet Secretary Katsunobu Kato, the top government spokesman, who said it was “extremely regrettable” that trading opportunities have been restricted.

Global markets are on a heightened state of alertness to any glitches, after a cyber attack in New Zealand that spurred trading halts over four days in August.

Other markets in the country, including exchanges in Sapporo, Nagoya, and Fukuoka, have also suspended trading. Derivatives, including futures, trade on the Osaka Exchange, which is not impacted by the system issue. Futures on the Nikkei 225 Stock Average were up 0.2% in Osaka as of 12:44 p.m. local time. Japan Exchange shares on Japannext’s PTS platform fell as much as 4.7%. 

The benchmark Topix index fell 2% yesterday, trimming its gain for September to 0.5% and closing the latest quarter with a 4.3% advance. A Tokyo-based equity trader at a local brokerage said mutual fund flows for the beginning of the month and second half of the fiscal year will now be queued up, which could add to volatility tomorrow if the bourse does not open today.

Japan’s $6.15 trillion stock market is the third-largest in the world behind the U.S. and China. There are 2,167 stocks listed on the the top section of the Tokyo Stock Exchange, where total daily turnover has averaged about $22 billion over the past year.

Makoto Sengoku, a market analyst at Tokai Tokyo Research Institute Co., said he’ll be watching the reaction in the TSE Mothers Index, the main performance gauge for start-up companies in Japan. “For retail investors that are trading everyday, today might be a shock, but for those who aren’t frequently trading its not as impactful,” he said.

The system issue is the largest since a series of computer issues in the mid-2000s that led to the resignation of the exchange president. Trading was halted for 4 1/2 hours in 2005 due to a botched system upgrade, the first time equity trading had been completely suspended. In January 2006, the exchange halted trading early after a surge in orders, triggered by an investigation into high-flying internet company Livedoor Co., overloaded its computer systems. That resulted in shortened trading hours for three months.

The Tokyo exchange introduced its faster Arrowhead system, developed by Fujitsu Ltd. and other companies, in January 2010, but that didn’t solve the issues entirely. A computer glitch in 2012 halted trading in 241 securities, while a system error later than year took took derivatives trading offline. — Bloomberg

After six months, Germany lifts blanket world travel warning

BERLIN — Germany lifted its blanket warning against travelling to all countries outside the European Union early on Thursday, although little is likely to change for most travellers under the new regulation.

The cautious reopening, agreed by the German cabinet three weeks ago, comes as Europe faces an uptick in COVID-19 cases, with many warning the continent is on the cusp of a second wave of the coronavirus pandemic.

Germany imposed a global travel warning in March, when the virus was raging in northern Italy, but lifted it for most European countries in June. In September, Berlin began reissuing warnings for regions within Europe when infections rose above the level of 50 cases per 100,000 people over a week.

In future, the same standard will be applied to the rest of the world. This means that provided the prevalence of the virus is below that threshold, travellers will be able to return to Germany without going into quarantine pending a negative test. At present, entry and exit without restrictions will only be possible in parts of Europe and Georgia.

But with more warnings being lifted in the near future, the change could prove significant for non-European tourist destinations that have traditionally received large numbers of visitors from the EU’s most populous country.

Special provisions for Turkey, with which Germany has close ties as a result of being home to almost 4 million citizens of Turkish ethnic background, will remain in place. Travel to several coastal destinations will be permitted so long as travellers take a coronavirus test in Turkey before returning.

The foreign ministry will continue to warn against travel to countries which have imposed restrictions on people arriving from Germany due to their own low prevalence of coronavirus. These include Australia, China, Canada, Rwanda and Uruguay. — Reuters

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