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Coronavirus cases nearing 200,000 as deaths reach 3,038

THE Department of Health (DoH) reported 2,965 new coronavirus infections on Tuesday, bringing the total to 197,164.

The death toll increased by 34 to 3,038 while recoveries rose by 368 to 132,396, it said in a bulletin.

There were 61,730 active cases, 91.6% of which were mild, 6.1% did not show symptoms, 0.9% were severe and 1.4% were critical.

Metro Manila had the highest number of new cases with 1,575, followed by Negros Occidental with 237, Laguna with 151, Cavite with 129, and Batangas with 95, DoH said.

The new cases came from tests done by 86 out of 109 licensed laboratories.

Of the new deaths, 22 came from Metro Manila, four from Central Visayas, three from the Calabarzon region, two from Bicol and one each from Northern Mindanao, Mimaropa and returning overseas Filipinos.

More than 2.2 million individuals have been tested, the agency said.

The coronavirus has sickened 23.8 million and killed more than 817,000 people worldwide, according to the Worldometers website, citing various sources including data from the World Health Organization.

More than 16,000 people have recovered from the virus, it said.

Meanwhile, DoH said fewer children have been immunized for polio in the second quarter, when much of the country was locked down to contain the pandemic.

A Dengvaxia controversy had also led to fewer children being vaccinated against polio, Maria Wilda Silva, an immunization program manager at DoH, said at an online news briefing.

“It is very difficult to do a campaign in the midst of a COVID-19 pandemic,” she said. Only a quarter of polio vaccine candidates had received their third dose, she added.

Metro Manila and the Calabarzon region particularly had lower vaccine coverage, Ms. Silva said.

In contrast,  Mindanao in southern Philippines had a vaccine coverage of 98.1% from July to early August due to strong support from regional offices and local governments, she said.

A polio outbreak was announced in September last year after at least 15 children aged nine years and below getting the virus. — Vann Marlo M. Villegas

Senator flags delay in OFW fund release

THE GOVERNMENT has failed to release about P29.8 million in coronavirus-related funding for overseas Filipino workers (OFW) as of June, according to a senator.

The money was supposed to help migrant Filipinos who have come home, Senator Emmanuel Joel J. Villanueva said at a hearing of the Senate labor committee on Tuesday.

The Senate body was looking at a government plans to re-integrate more than 145,000 overseas Filipinos who returned amid a coronavirus pandemic.

Labor Undersecretary Joji V. Aragon blamed the delay in the fund release to a Luzon-wide lockdown that started in mid-March. He said the agency would look into the matter.

She said the Labor department was working with the outsourcing industry to help give jobs to returning Filipino workers.

The Overseas Workers Welfare Administration said it would offer a group livelihood program to migrant workers worth as much as P1 million. — Charmaine A. Tadalan

Nationwide round-up

Duterte orders newspaper publication of gov’t expenditures

PRESIDENT RODRIGO R. Duterte has ordered government agencies to publish their expenditures and disbursements in newspapers as a means to curb corruption and improve transparency.

In a late night talk aired on Tuesday, Mr. Duterte said he wants public institutions to disclose their plans for procurement as well as actual spendings.

“They must prepare well in advance because I would require them to publish in the newspaper, in three newspapers of general circulation,” he said.

Cabinet officials will also be required to publish every month the disbursement of their departments’ funds.

Mr. Duterte gave the directive after saying in the same speech that he will make sure everyone knows where public funds go, especially those used for the coronavirus crisis response.

“When the time of reckoning comes… we will make everybody account for the money of the government,” he said.

Mr. Duterte also called on lawmakers to set up measures that will prevent corruption such as creating more oversight committees.

“I am urging Congress, as a matter of fact, I am demanding Congress to join us in putting up measures to ensure that the money is spent to its purpose,” he said.

Mr. Duterte, meanwhile, did not take well to Vice-President Maria Leonor G. Robredo’s 11-point recommendation on how the government can boost its crisis response.

“Please do not add fuel to the fire. You will just destroy government,” he said.

Ms. Robredo, who belongs to the opposition, made a televised address Monday where she criticized the administration’s seeming lack of leadership and clear plan to address the coronavirus pandemic’s impact. — Gillian M. Cortez 

Restraining order sought vs anti-terror law implementation

A GROUP of petitioners questioning the Anti-Terrorism Act asked the Supreme Court to immediately issue a temporary restraining order against the implementation of the law.

The petitioners — composed of framers of the Constitution, lawyers, journalists, and human rights defenders — raised concern over the government’s intention to regulate speech on social media, saying this underscores the “chilling effect” the law creates.

They argued that ordinary citizens, news organizations, and dignitaries in government would now have to continuously rethink and self-censor as their speech may be interpreted as “inciting to terrorism.”

“In choosing between incurring a life sentence for posting a 140-character tweet, on one hand, and silence, on the other, the choice to all but the bravest is painfully obvious,” reads the petition.

The law, which took effect July 18, is currently the subject of over 20 petitions before the high court.

Supreme Court Public Information Chief Brian Keith F. Hosaka said oral arguments over the petitions are planned “on the 3rd week of September, at the earliest.”

The Office of the Solicitor General, however, has asked the court to cancel holding the oral arguments saying it is not mandatory and raised concerns due to the pandemic. — Vann Marlo M. Villegas

Duterte dissociates from revolutionary gov’t advocates

PRESIDENT RODRIGO R. Duterte dismissed the renewed call for him to lead a revolutionary government by a group that he claimed he does not know.

“Wala akong pakialam niyan, wala akong kilala na mga tao na ‘yan at hindi ko ‘yan trabaho (I have nothing to do with that, I do not know the people there, and that is not my job),” he said in a taped address aired Tuesday morning.

The group calling itself the Mayor Rodrigo Roa Duterte-National Executive Coordinating Committee called on the President to lead a revolutionary government and amend the current 1987 Constitution for a shift to a federal government.

Photos have resurfaced online showing Mr. Duterte posing with members of the MRRD-NECC in 2018.

Mr. Duterte, who said last year in a speech that he wants to lead a revolutionary government, is on a single six-year term that ends in 2022.

His spokesperson, Harry L. Roque said on Monday that the President is not interested in leading a revolutionary government as he is looking forward to “a quiet life” after his term ends. — Gillian M. Cortez 

P1.9-B USAID-funded education program redesigned after lockdown delays

AN INTERNATIONAL education development group is redesigning its Philippine project for out-of-school youth after quarantine restrictions delayed initial programs.

The Education Development Center launched last week an educational and training program called Opportunity 2.0 in partnership with local government agencies and funded by the United States Agency for International Development (USAID).

The P1.9-billion project was designed months before the pandemic hit, Opportunity 2.0 Chief-of-Party Dave Hall said in an online interview on Tuesday.

“Our project, in common with most if not all of the USAID projects, we were asked to reconsider what we were doing. While maintaining the overall objective, to think about what we needed to do to respond to the COVID-19 (coronavirus disease 2019) crisis,” he said.

Some training programs and industry engagements are being moved online while online learning centers are also being revitalized.

Mr. Hall also said the group is now prioritizing radio-based teaching, accelerating its implementation given the obstacles in face-to-face education.

Some programs have been pushed back such as those involving entrepreneurship work like bootcamps and training as well as work experience opportunities.

“That’s delayed because we’ve got to find ways of doing that virtually. It can be done, just that we haven’t planned to do that so we have to rethink that.”

Mr. Hall said the adjustments in their program reflects how the international development sector as a whole is likely to change due to the pandemic.

“What the nature of what international development work is will change. We’ve never encountered anything on global scale like the COVID-19 crisis… The kind of problems the Philippines is facing in education, the whole world is facing.” — Jenina P. Ibañez

The problem of corruption and corruption of power

Transparency International (TI) has been fighting corruption for 27 years in over 100 countries. Here in the Philippines, I remember their prominent voices such as Randy David, Solita Monsod, Attorney Lilia de Lima, and Judge Dolores Español — all passionate advocates for transparency and accountability, issues that are still very relevant in our society.

Accordingly, TI defines corruption as “the abuse of power for private gain.” By this, corruption has deprived countless citizens around the globe of much-needed public services and benefits of development.

Under the Corruption Perception Index (CPI), corruption indicators pertain to “bribery; the diversion of public funds; the effective prosecution of corruption cases; adequate legal frameworks, access to information; and legal protections to whistleblowers, journalists and investigators.”

But what has corruption caused us?

In September 2018, the United Nations (UN), citing World Economic Forum (WEF) data, expressed that global corruption eats up 5% of the world’s gross domestic product; in November, the World Financial Review stated that Philippines had lost $10 BILLION annually due to illicit financial flows; in December, the UN and the WEF disclosed that $3.6 TRILLION had been lost due to bribes and stolen money; and in December 2019, the WEF published that “corruption, bribery, theft and tax evasion, and other illicit financial flows cost developing countries $1.26 TRILLION a year.”

In the Philippines, an estimated P1.4 TRILLION has been lost to corruption in the years 2017 (P670 BILLION) and 2018 (P752 BILLION), Deputy Ombudsman Cyril Ramos said, where around 20% of the annual government appropriation goes to corruption. Also, according to a study by Carandang and Balboa-Cahig (2020), “some of the more notable typologies and their accompanying corruption cases in the Philippine context are as follows: non-Compliance with the Government Procurement Reform, technical malversation, political dynasty, ghost project, income and asset misdeclaration, red tape, influencing a subordinate to defy order and protocol, bribery, connivance of government officials with drug lords.”

Further, the wide-ranging impact of corruption could result in a myriad of outcomes. In April 2020, the Global Infrastructure Anti-Corruption Center (GIACC) said that corruption may cause

“inadequate infrastructure, dangerous infrastructure, displacement of people, damage to the environment, reduced spending in infrastructure, reduced public expenditure, and reduced foreign investment.”

The said CPI indicators and data culled to substantiate them, and the gargantuan multi-level impact of corruption represent a formidable platform in instigating institutional reforms to achieve bureaucratic coherence and improve the development capacity of the state. With a multi-stakeholder roadmap against corruption, the plans and investments for economic recovery and development in the new normal will not be for naught. In turn, succeeding economic growths could be dispersed effectively.

Specifically, combating corruption in our country instantly augments the chance of helping the following: the 1.3 million people who have perceived themselves as poor in 2019 (self-rated poverty) and the families suffering from hunger (20.9%) during the pandemic, according to an SWS survey; the 16.7% of the population in poverty (Philippine Statistics Authority); and the additional 1.5 million Filipinos pushed into poverty by the pandemic (Philippine Institute for Development Studies).

But the problem of corruption could dangerously be translated into corruption of power. This happens if political opportunism becomes a trend. Rather than harmonize national unity in a pandemic-ravaged country, division and confusion among the population or a particular sector is instead espoused. In turn, false promises and hopes could frustrate the holistic approach being forged by a wide-range of social actors attuned to the long-standing battle against corruption.

More so, corruption of power could be exacerbated whenever the law is weaponized and used to benefit a new or selected few. Empirically, two examples could be cited. First if more than half of Filipinos agree that “It is dangerous to print or broadcast anything critical of the administration, even if it is the truth,” (SWS, July 3-6, 2020 survey), then what we have now is a terrified citizenry.

Second, the latest political charade in “handling” the country’s elite is not really about dismantling the oligarchy as pronounced. What’s happening is a mere changing of the old guards; the overt creation and empowerment of a new oligarchy, the “Dutertegarchs,” as William Pesek has pointedly raised.

To address corruption, political-institutional and economic reforms beg to be independently and holistically crafted and implemented.

 

Victor Andres “Dindo” C. Manhit is the President of Stratbase ADR Institute.

Free Speech vs Fake News

Article III, Section 4 of the Constitution provides that “no law shall be passed abridging the freedom of speech, of expression, or of the press, or the right of the people peaceably to assemble and petition the government for redress of grievances.” Thus, the right to freely express one’s thoughts is not without basis.

In fact, the freedoms of expression and speech rank high in the scheme of constitutional values, as stated by the Court in Diocese of Bacolod v. Commission on Elections, G.R. No. 205728, Jan. 21, 2015. However, in Chavez v. Gonzales, G.R. No. 168338, Feb. 15, 2008, the Supreme Court explained that freedom of expression is not an absolute nor an unbridled license that gives immunity for every possible use of language and prevents the punishment of those who abuse this freedom. As such, certain types of speech such as slander or libel, lewd or obscene speech, and “fighting words” are subject to regulation, which is justified under the police power of the State.

The COVID-19 pandemic has become a matter of public concern. Information about the disease and its effect on society have been made conveniently available over the internet. Who would have thought a simple touch of the screen would be a gateway to an abundance of information? Now more than ever, the reliance of the people on the internet for information has increased.

While an abundance of information is encouraged under the concept of the marketplace of ideas, the exercise of the right to free speech and expression must be exercised responsibly, more especially in the time of a public health emergency. Unverified information about the pandemic can bring about dangers that may prove to be injurious more than it is helpful.

Justified by the police power of the State, the government has laid down policies to curb the proliferation of “fake news.”

Under Article 154 of the Revised Penal Code (RPC), as amended Republic Act No. 10951, any person who by means of printing, lithography, or any other means of publication shall publish or cause to be published as news any false news which may endanger the public order, or cause damage to the interest or credit of the state shall be imposed with the penalty of arresto mayor and a fine ranging from P40,000 to P200,000.

Circulating fake news through the internet is dealt with more heavily. Under Republic Act No. 10175 or the “Cybercrime Prevention Act of 2012,” a penalty one degree higher than that provided by the RPC shall be imposed whenever the crimes defined and penalized by the RPC are committed by, through, and with the use of information and communications technologies.

For the purpose of promoting and protecting the collective interests of all Filipinos in the time of the COVID-19 pandemic, Congress passed the Republic Act No. 11469 or the “Bayanihan to Heal as One Act,” which punishes individuals or groups creating, perpetrating, or spreading false information regarding the COVID-19 crisis on social media and other platforms, such information having no valid or beneficial effect on the population, and are clearly geared to promote chaos, panic anarchy, fear, or confusion.

These laws tending to regulate freedom of speech and of expression are now being put to the test. The National Bureau of Investigation (NBI) became the subject of headlines when news circulated regarding an individual against whom a subpoena was issued for alleged violation of Article 154 of the RPC in connection with a publicly posted article on alleged misuse of government funds.

NBI’s power to investigate and to issue subpoena is not without basis. Under Republic Act No. 10867 or the “National Bureau of Investigation Reorganization and Modernization Act,” the President or the Secretary of Justice is authorized to direct the NBI to undertake the investigation of any crime when public interest so requires. The NBI has, beyond question, the power to investigate the circulation of fake news, more so when it concerns COVID-19 and its incidents, which could possibly be a matter of life or death.

However, neither the RPC nor the Bayanihan Law provides a definition of what constitutes “fake news.” This determination is thus left to the authorities, without a set of clear guidelines. In Disini v. Secretary of Justice, G.R. No. 203335, Feb. 18, 2014, the Supreme Court enlightens on the effect imposed by vague or overbroad laws on free speech: “a person who does not know whether his speech constitutes a crime under an overbroad or vague law may simply restrain himself from speaking in order to avoid being charged of a crime. The overbroad or vague law thus chills him into silence.”

The freedom of expression and of speech must be treated with the highest regard. This preference is justified by the fact that the preservation of all other rights depends upon its free exercise. However, this should not be taken as a license to its arbitrary practice, because the possession of rights carries with it an obligation to its responsible exercise. As with all other rights, one must properly exercise the right to free speech and expression so as not to cause injury to others having equal rights.

This article is for informational and educational purposes only. It is not offered and does not constitute legal advice or legal opinion.

 

Kris Sarah M. Jeruta is an Associate of the Litigation and Dispute Resolution Department (LDRD) of the Angara Abello Concepcion Regala & Cruz Law Offices or ACCRALAW.

(632) 8830-8000

kmjeruta@accralaw.com

The real danger with $26.5 trillion of US debt

By James Clark

AS THE US Treasury Department’s Deputy Assistant Secretary for Federal Finance during the Obama administration, I spent a lot of time talking to the major buyers of our nation’s debt. When I left my job overseeing the government’s finances in 2017, the unpaid tab for the first 240 years of the “American Experiment” was $20 trillion. In less than four years, that number has risen to $26.5 trillion, the result of essential outlays on pandemic relief and completely non-essential tax cuts for the wealthy.

When my team and I met with the biggest buyers of US debt, our conversations centered on the way in which our government functioned. The cost of servicing the debt and the structure of our portfolio took a back seat to questions about how our government operated. After the debt limit crisis of 2013 and 2015, our creditors focused almost exclusively on how we would correct a problematic system that turned fulfilling our financial commitments into a domestic political bargaining chip.

How we spent their money mattered, too. Repairing the damage from the 2008 financial crisis, buttressing housing, building infrastructure, and expanding access to healthcare were rightly understood by our creditors to pay dividends over the long haul. Borrowing costs are inversely proportional to the faith in the integrity and competency of the governments seeking cash, and it’s why America can borrow so cheaply, Argentina pays a steep price, and Venezuela can find practically no lenders at all.

It’s for these reasons that I’m now worried. Creditors’ confidence in the US government is being tested on an almost daily basis. President Donald Trump’s tax cuts were supposed to “pay for themselves” and help the middle class, but cost $1.9 trillion and contributed to greater income inequality. Although a few cases of fraud have been uncovered, the full extent of fraud and misuse of funds within the Paycheck Protection Program is unknown, as the vast majority of the recipient names have not been released. Of the data that has been made public, analysis shows that many recipient companies have “retained” far more workers than they even employ.

When the public reads about individuals who are profiting from the Trump administration’s programs, such as one Treasury official who doubled the value of his family’s investment company with the very program he designed, they lose trust in the system — and so do those who buy our debt. Given that we have a President who has fired numerous independent inspector generals tasked with oversight, refused to comply with Congressional inquiries, and refused to commit to accepting the results of the 2020 election, I fear that their trust is in short supply.

The Trump administration’s lack of leadership has not only resulted in tragic and unnecessary loss of life, but also prolonged our economic pain and placed a formidable burden of debt on future generations, leading Fitch Ratings to cut its outlook on the US’s credit to “negative.” Still, with 5.5 million COVID-19 cases and 10.2% of workers unemployed, now is not the time for government austerity, just as belt tightening made no sense after the 2008 financial collapse.

More important than the size of our debt for our creditworthiness is the manner in which our political system operates. We must address the suffering and economic damage through fiscal policy while demonstrating the integrity, procedural safeguards, and transparency that our lenders value. The political polarization that prevents an agreement on further fiscal support and the Trump administration’s lack of leadership, integrity, and competency is far more problematic for US creditworthiness than any additional debt.

Rebuilding confidence in our democratic institutions and transparently demonstrating that any stimulus package is used productively is the best way to ensure the sustainability of our national debt, no matter its size. Should the next round of fiscal stimulus be provided in the opaque and self-serving manner that has defined the Trump administration, Fitch won’t be the only institution with a “negative” outlook on US credit.

BLOOMBERG OPINION

Pharma rivals are fighting COVID together. Why stop there?

By Max Nisen

PANDEMICS make for strange bedfellows and behavior in the pharmaceutical industry.

The world is relying on drugmakers’ expertise to get us out of the COVID-19 (coronavirus disease 2019) crisis — initially with treatments to help lessen the risks from contracting the virus, and then ultimately with a vaccine. The high pressure, enormous need, and global attention are leading companies to try new things on the fly. Just last week, Regeneron Pharmaceuticals Inc. signed a pact with its erstwhile rival Roche Holding AG aimed at substantially boosting supplies of a potential treatment for COVID-19; it even made some monetary sacrifices to do so. And that’s only the latest example.

Much of what’s happening represents a war-time type response to a unique situation, and it may not be repeated. These are for-profit companies, after all, and they will act accordingly. But from an unprecedented vaccine hunt to international manufacturing deals, the drug industry’s response shows the possibilities of what a more collaborative medicine market could bring. 

Take the Regeneron-Roche deal, under which Regeneron will sell its promising antibody therapy in the US, and Roche will handle the rest of the world. The companies will carry their own manufacturing and distribution costs and divide development expenses and profit. Roche’s muscle could more than triple capacity, according to Regeneron.

Typically, Roche would pay a hefty price for a cut of a promising drug’s potential sales. In this case, Regeneron is forgoing that customary upfront payment and surety in favor of maximizing supply during the pandemic. Regeneron won’t be able to satisfy global demand on its own, and Roche is a giant in the field of antibody drugs. The bigger company has a lot of incentive to scale up manufacturing; it will receive between 40% and 50% of gross profit.

Regeneron will get nothing but some of its costs covered if it doesn’t pan out. However, the company can’t sell medicine that it can’t make. Picking volume and patient access over a higher profit margin — a tactic drugmakers too rarely embrace — makes sense from a humanitarian and business perspective.

While the Regeneron-Roche deal focuses on antibody manufacturing, uncommon partnerships and arrangements are forming in other areas as well to meet various pressing needs. Here are just a few:

Ensuring worldwide supply: Gilead Sciences, Inc., the company behind remdesivir —  one of the few COVID-19 treatments available — freely gave away a license so that several generic drugmakers can make a low-cost version for developing countries, something that generally doesn’t happen for a brand-new medicine and will dramatically boost the drug’s availability.

Collaborating on a vaccine: Fierce competitors Sanofi and GlaxoSmithKline PLC formed a historic partnership under which one will provide the core of a vaccine, and the second a type of booster called an adjuvant.

Pricing for access: Instead of leaving prices to the free market as it often does, the US is behaving like other countries that manage to keep drug costs at a reasonable level by negotiating the price of hundreds of millions of doses of vaccine before they reach the market. It’s been helped by non-profit pledges from AstraZeneca PLC and Johnson & Johnson, who are developing two leading candidates. However, the prices negotiated with companies that aim to make a profit are lower than the private-market norm for new shots. Uncle Sam is buying the doses and the first wave of vaccines will be free for Americans. It’s a sharp contrast to ordinary times, where the world’s highest drug prices lead to financial hardship and skipped treatments.

Risk-sharing: At least one of the US government’s Operation Warp Speed vaccine deals includes risk-sharing structures I’ve never seen in a government contract. The US will pay less for Moderna Therapeutic Inc.’s vaccine if the company is slow to deliver it. The company also has an opportunity to get a $600 million chunk of money early if it can meet ambitious manufacturing timelines.

Fixing a broken market: Infectious disease research, the neglected and unprofitable stepchild of drug development, is being lavished with money and attention. The US alone has committed or promised over $10 billion to six companies and many more are working on novel vaccines. Hopefully, the large sums will convince companies to continue to invest.

It’s great that companies and the government are stepping up. But the moment will be wasted if everything snaps back post-pandemic. Better pricing, more focus on patients and public health, and less duplication of effort are all possible and should be the expectation even when there isn’t a crisis.

BLOOMBERG OPINION

PHL recovery seen V-shaped, 9.5% rise in 2021 — J.P. Morgan

THE Philippine recovery is expected to be V-shaped as the economy reopens in the second half of the year, after a record gross domestic product (GDP) contraction at the height of the lockdown, J.P. Morgan said.

The record contraction of 16.5% in the second quarter will bring the bank’s full-year growth forecast for the Philippines to -8%, downgraded from -4.4% previously, it said in a report issued Monday.

The Philippines is thus poised to post the worst economic contraction in Emerging Asia, followed by Malaysia, whose economy is expected to retreat by 7.7%, followed by Hong Kong (-7.4%), Thailand (-7.3%), India (-6.5%) and Singapore (6.2%). Meanwhile, China and Taiwan are expected to expand by 2.5% and 1% this year.

J.P. Morgan said it expects a “more pronounced V-shaped” recovery for the country, with a “large rebound” seen in the last two quarters of 2020 as quarantine rules ease and the output “returning to pre-COVID levels next year.”

It increased its 2021 growth forecast to 9.5% from 7.3% previously, which it said will be among the strongest in the region, assuming the uninterrupted further reopening of the economy.

“While we do expect a strong GDP growth rebound in the Philippines compared to its regional peers, this is premised on the knock-on impact on the economy of this week’s ending of stricter containment measures in the National Capital Region (NCR) following the recent acceleration in cases,” it said.

“The Philippine economy recorded the worst quarterly contraction on record last quarter, in part reflecting the imposition and subsequent extensions of COVID-19 containment measures. Given the 2Q GDP outturn, we now expect GDP to contract 8.0% y/y in FY2020, down from a previous forecast of -4.4%,” according to the report.

The economy plunged into recession after contracting by 16.5% in the second quarter, which included the months when the lockdown was at its strictest. The bank noted a collapse in demand, led by private consumption and investment.

However, there has been a “U-turn in the trajectory of economic activity and manufacturing production” after the second quarter, Acting Socioeconomic Planning Secretary Karl Kendrick T. Chua said Tuesday.

“We are starting to see a U-turn in the trajectory of economic activity and manufacturing production. While we are not yet in positive territory, we are hoping that we can continue to manage this recovery as best as we can,” Mr. Chua was quoted as saying in a statement.

The bank said government borrowing has surged recently, but state spending “has not kept pace” with the growth in debt.

“As a result, the cash balances in the national government accounts have risen sharply, which implies that while public investment has not resumed at full capacity, a quick recovery may be attainable and could lead to a more material widening of the current deficit than we have incorporated in our forecasts,” it said.

It forecast headline inflation to settle at 2.6% this year, slightly higher than the 2.5% in 2019 but still within the 2-4% target set by the government.

Meanwhile, Mr. Chua said the multiplier effects of infrastructure spending and the additional funds allowed by the Bayanihan to Recover as One Act (Bayanihan II) will help with the country’s economic recovery.

Economic managers projected this year’s GDP to shrink by 4.5-6.6%. — Beatrice M. Laforga

ADB approves P6-billion loan for medical gear, protective equipment

THE Asian Development Bank (ADB) has approved a $125-million (P6 billion) loan to the Philippines for the procurement of medical equipment and personal protective equipment (PPE).

In a statement Wednesday, the bank said the loan will help the Department of Health (DoH) maintain a supply of such equipment and fund training programs for health workers.

“This project will help improve the preparedness and resilience of the country’s health systems at the national and local levels in handling current and future public health threats. It will also contribute to the Philippines’ efforts toward implementing universal health coverage,” ADB Vice-President Ahmed M. Saeed was quoted as saying.

The program that the loan will be supporting is known as the Health System Enhancement to Address and Limit (HEAL) COVID-19 Project.

HEAL will also help the government boost its capacity to testing, detect, and prevent threats to public health, according to Sakiko Tanak, a principal social sector specialist for Southeast Asia at the ADB.

The loan will fund the acquisition of electrocardiography machines and defibrillators for 17 major hospitals; ventilators for 17 DoH hospitals and 20 local government hospitals; computed tomography (CT) scan machines for 33 hospitals; test kits, chemicals, and reagents for at least 10 government molecular laboratories; and PPE for health workers and laboratory technicians.

“Health workers will also learn how to provide psycho-social support to patients and families, including pregnant women and other vulnerable groups affected by COVID-19,” it added.

In April the bank provided initial loans for the government’s COVID-19 (coronavirus disease 2019) response worth $1.5 billion.

As of Aug. 5, the government has obtained $8.131 billion via loans, global bond issues and grants from external sources to fund its pandemic expenses. The ADB was the top source among multilateral partners, lending $2.6 billion so far.

The ADB’s lending program for the Philippines this year will be a record $4.2 billion. Next year, it aims to lend another $4.118 billion, including a standby loan of $1 billion for the Bataan-Cavite Bridge project.

The bank is the country’s second biggest source of official development assistance. — Beatrice M. Laforga

ADB urges Philippines to cut reliance on remittances

DEVELOPING COUNTRIES like the Philippines should look into sovereign wealth funds or “diaspora bond” issues to offset possible declines in remittances when major crises disrupt the overseas labor market, the Asian Development Bank (ADB) said.

As “over-reliance on remittances” exposes economies to external shocks and volatility, Matteo Lanzafame and Irfan A. Qureshi, economists at ADB’s Economic Research and Regional Cooperation Department, urged countries to take precautions that will help them stay resilient if cash from overseas workers dries up suddenly.

They said countries could park a portion of any taxes collected on remittances into a fund that will help cushion the blow of reduced remittances as the population ages and fewer people go overseas to work.

“This is particularly relevant for countries such as the Philippines, which have typically had large shares of population migrating abroad at a young age but returning when they retire. Financial instruments akin to the so-called “diaspora bonds” appear suitable as a means to promote intergenerational sharing of the benefits from remittances,” Mr. Lanzafame and Mr. Qureshi said in a blog on Monday.

They said diaspora bonds are aimed to channel the savings of migrant workers “in the adoptive countries towards capital markets in the home economy.”

They cited Norway’s oil-based sovereign fund which serves as a buffer against fluctuating prices of commodities.

“Remittance-dependent economies can consider instruments to hedge against sudden shortfalls in remittance flows,” they added.

The Philippines is among the top recipients of remittances in Asia and the Pacific.

During the financial crisis in 2008-2009, they said remittances were not spared when the global economy slowed down, causing cash sent home to drop by 5%.

“Remittances failed to play their typical role as a stabilizing mechanism since not only recipients but also senders were affected — and it appears this will be the case for the COVID-19 pandemic as well,” they said.

The ADB projected overseas Filipino remittances to drop up to 20.2% this year assuming a one-year normalization period after the crisis.

Remittances rose 7.7% in June, after a 19% drop in May. In the first half, remittances fell 4.2%.

“Countries must therefore adopt a multi-pronged strategy to deal with shortfalls in remittance flows during critical times, such as the current crisis,” they said.

They said governments can also roll out a more urgent support to mitigate the impact on remittance-reliant families through cash handouts and low-interest loans. — Beatrice M. Laforga

DoF cites Small Business Wage Subsidy as model for digitized cash aid

FINANCE SECRETARY Carlos G. Dominguez III said the government’s various cash aid initiatives can follow the lead of the Small Business Wage Subsidy (SBWS) program in adopting electronic fund transfers, which he said reduces opportunities for corruption.

At a recorded meeting aired Tuesday, Mr. Dominguez said the (SBWS) was implemented in April-June and resulted in the transfer of P46 billion in cash aid via the Social Security System (SSS) to help small firms retain more than 3.1 million workers.

He said future subsidy programs should be digitized starting at the application level, with funds handed out via banks or electronic wallets (e-wallets). He added that implementing agencies should partner with private entities if possible.

“We think all subsidy programs in the future should be digitized. In other words, go through digitalization of all transactions. And number two, the direct distribution of aid should be through banks or e-wallet accounts of the intended beneficiaries,” he said.

“And one of the most important factors that made this a relatively successful program, is close administration oversight of the critical steps of the program,” he added.

President Rodrigo R. Duterte said at the same meeting he is in favor of digitizing  subsidy programs to reduce corruption as it eliminates human intervention.

SBWS was jointly implemented by the Department of Finance, the SSS and the Bureau of Internal Revenue (BIR).

The government also tapped banks and private entities to help with the release of cash, including mobile wallet PayMaya, Union Bank of the Philippines, Inc. (UBP) and remittance center M Lhuillier Financial Services.

“So you have a problem, bring in the private sector to help you and you can solve it very quickly. But (it is important) that every day you’re on top of the situation. Do not let any problem grow big. Kasi pag malaki na, mahirap ng i-correct (because if the issue grows, it is harder to resolve),” Mr. Dominguez said.

The subsidy program used the database of the BIR and the SSS to verify the eligibility of employers and the authenticity of beneficiaries. Upon verification, the names and details of the recipient workers were sent electronically to the Development Bank of the Philippines, which facilitated the payouts through PESONet to banks and other channels.

The government was able to approve the applications of 113,449 employers for the program. — Beatrice M. Laforga

PHL should look beyond infrastructure as supply chains shift — Moody’s

THE Philippines is a potential beneficiary of shifting supply chains after the pandemic, but it needs to look beyond its infrastructure focus and leverage its strong fiscal position to develop its human capital, Moody’s Investors Service said.

The Philippines and Indonesia were fast-growing prior to the pandemic due to their young populations, but developing human capital will be more significant as suppliers reconfigure their manufacturing networks.

“Greater traction on the government’s infrastructure development program and initiatives to improve human capital development will bolster the country’s long-term growth outlook as well as investment prospects,” according to Deborah Tan, an Associate Vice-President and Analyst at Moody’s Credit Strategy and Research Group, said in an e-mail Wednesday.

She added that in other factors considered by manufacturing locators, like trade policy, regulation, wage costs and logistics, the Philippines is at a disadvantage relative to ASEAN.

The Philippines was focused on building up its infrastructure prior to the pandemic and is banking on such spending to drive its recovery in 2021. The government-backed Build, Build, Build program includes 92 infrastructure projects worth P4.4 trillion.

Moody’s said in a note that the Philippines, with a 66% enrolment rate in secondary education, is trailing other emerging-market economies like Indonesia (76%), Poland (93%), and Brazil (82%).

Moody’s added that ASEAN could take advantage of the shift in manufacturing locations by further boosting its own trading networks within the region.

“As its middle-class population grows, household purchasing power will rise and become a significant driver of consumption and investment. But the region will need to address structural challenges to harness its full potential,” Moody’s said.

The Philippines’ main attraction to investors is the young and growing workforce and strong policy position, Ms. Tan said.

“The country also has a stronger fiscal position relative to some of the ASEAN economies — that gives the government more space in terms of supporting policy reforms and encouraging private-sector investment,” she said. — Luz Wendy T. Noble

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