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PHL raises $2.35B from bond sale

THE Philippines raised $2.35 billion from its dollar-denominated bond sale as it seeks to beef up state coffers, fetching a low coupon amid strong demand and despite caution across the globe due to the pandemic.

In a statement, the Bureau of the Treasury (BTr) on Tuesday said it sold $1.35 billion in 25-year dollar-denominated global bonds, and $1 billion in 10-year dollar bonds, marking its second offshore issuance this year.

The offer was met with strong demand after total bids reached $10.5 billion for the two tenors, National Treasurer Rosalia V. de Leon said in a mobile phone message on Tuesday.

This was more than seven times the initial offer of a benchmark-sized issue worth $500 million to $700 million per tenor.

The new 10-year dollar-denominated global bonds were priced at US Treasury spreads of T+180 basis points (bps), or a coupon of 2.457%, while the 25-year bonds were quoted at 2.95%.

Ms. De Leon said the rates fetched were the “lowest ever coupon” for a benchmark issuance of both tenors.

“The transaction was able to achieve the Republic’s lowest ever coupon for a 10- and 25-year benchmark issuance amidst no less than an environment gripped with pandemic fear. This makes the Philippines, at least for the time being, a diamond in the sovereign issuance space for we were able to convert immense pressure into an opportunity to dazzle in brilliant shine,” Ms. De Leon was quoted as saying in the BTr statement.

The Treasury said proceeds of the fundraising activity will be used for “general purposes, including budgetary support.”

Finance Secretary Carlos G. Dominguez III said the strong demand for the issue showed the “resiliency” of investor confidence in the economy amid the coronavirus disease 2019 (COVID-19) pandemic.

“Such support from the investor community is a result of the continued strong macroeconomic fundamentals of the country brought about by the reform agenda of the Duterte administration,” Mr. Dominguez said in the statement.

The BTr said the issuance announced on Monday capitalized on a “short favorable market window amid broader volatility” in the global markets.

The papers will be settled next week, May 5.

Debt watcher S&P Global Ratings on Monday assigned a “BBB+” long-term foreign currency issue rating to the issue, while Moody’s Investors Service assigned senior unsecured ratings of “Baa2” to the dollar-denominated bonds maturing in 2030 and 2045. Fitch Ratings gave the bonds an expected rating of “BBB(EXP).” These are at par with their assessments on the sovereign.

Sought for comment, Rizal Commercial Banking Corp. (RCBC) Chief Economist Michael L. Ricafort said the timing of the issuance was “very much favorable” after benchmark yields offshore eased to record low levels, “thereby enabling the Philippine government to borrow at a very low interest rates and puts it in a good position to save so much on borrowing costs.”

“Any additional US$ or other foreign currency bond issuance by the Philippine government in the coming months remains possible to finance the increased government spending and increased budget deficit spending for the various stimulus measures and other COVID-19 programs, as an immediate and quick source of funding at relatively low borrowing costs near record low levels,” Mr. Ricafort said via e-mail on Tuesday.

The joint bookrunners for the transaction include Citigroup, Inc., Credit Suisse Group AG, Goldman Sachs (Asia) L.L.C./Morgan Stanley, Standard Chartered Bank and UBS Group AG, according to Bloomberg.

The latest issuance followed the January issue where the BTr raised €1.2 billion from two tenors of euro-denominated bonds out of €4.3 billion in bids.

Broken down, the government raised €600 million each for three-year and nine-year papers. The bonds carry coupon rates of 0.1% for the three-year bonds and 0.7% for the nine-year papers, a spread of 40 bps and 70 bps over benchmark rates, respectively.

The last time the Treasury tapped the dollar bond market was in January 2019 when it sold $1.5 billion in 10-year global bonds priced 110 bps above benchmark rates. — Beatrice M. Laforga

Infrastructure spending falls as of end-Feb. — DBM

By Beatrice M. Laforga
Reporter

STATE SPENDING on infrastructure fell by 21% as of end-February on high base effects, with the downward trend expected to continue throughout the first half as strict lockdown measures halted implementation of projects.

Data from the Department of Budget and Management (DBM) showed infrastructure and other capital outlays declined to P93.9 billion in the first two months of 2020, from P118.4 billion a year ago.

“The decrease is mainly attributed to the base effect of high infrastructure expenditures in the same period last year brought about by the payment of prior years’ accounts payable for completed projects of the Department of Public Works and Highways (DPWH),” the DBM said.

The DPWH’s prior years’ accounts payable for projects in January to February slid 57% to P35.2 billion from P82.2 billion during the same period in 2019.

In February alone, infrastructure spending fell 9.3% to P45.6 billion from P50.3 billion recorded a year ago, posting its first year-on-year contraction in four months or since October’s 12.92% decline.

Overall, DBM said disbursements reached P244.4 billion in February, down by 12.2% from a year ago, “attributed largely to the base effect of the Internal Revenue Allotment of LGUs for January 2019 which was released in February last year, as well as lower interest payments.”

For the first two months of 2020, national government disbursements rose 5.2% to P516 billion from the P490.7 billion a year prior.

“While disbursements for March, and consequently the first quarter of this year, will be higher year-on-year, spending will likely be lower than the program with the temporary delays in program/project implementation as a result of the imposition of the enhanced community quarantine (ECQ) due to the coronavirus disease 2019 (COVID-19) pandemic,” the department said.

The government placed Luzon under ECQ in mid-March in an effort to contain the spread of COVID-19. The ECQ halted nearly all economic activity in Luzon, which accounts for over 70% of the country’s gross domestic product.

ING Bank N.V.-Manila Senior Economist Nicholas Antonio T. Mapa said the pullback in infrastructure spending, which should have been “a key part of the growth story” this year, could be traced to disruptions caused by the Taal Volcano eruption in late-January and the onset of coronavirus outbreak in China, which may have cut off supply of raw materials and capital goods for construction.

“We expect a sustained period of decline going into March, April and May with only flat growth in second half, despite government’s directive to continue ‘Build, Build, Build’ post-ECQ. Construction activities will be hampered as social distancing limits workers ability to build,” Mr. Mapa said in an e-mailed response.

Security Bank Corp. Chief Economist Robert Dan J. Roces said infrastructure expenditures are seen to continue to decline in March as the construction of big-ticket infrastructure projects were stopped due to the ECQ, as well as the “reprioritization” of the government’s focus to address the health crisis.

“Infra spending in March will be much lower due to a halt in big-ticket infra projects due mainly to the ECQ and a reprioritization of government initiatives,” he said via e-mail.

Mr. Roces said infrastructure spending will likely surge in the third quarter as the “revival of the ‘Build, Build, Build’ will be one of the main drivers of economic recovery.”

DBM said it expects overall state spending to increase in the next few months as the government spends heavily on pandemic responses such as purchase of medical supplies and equipment, implementation of cash subsidy programs and the one-time Bayanihan grant to local governments.

“Spending for rest of the year will continue to be driven largely by the implementation of COVID-19 related programs, activities, and projects (PAPs), as well as other measures or strategies identified and recommended by the Inter-Agency Taskforce for Emerging Infectious Diseases (IATF-EID) Technical Working Group on Anticipatory and Forward Planning (TWG-AFP) on how to move forward with the ‘New Normal’ situation given the pandemic,” DBM said.

BSP waives fees for digital finance applications

THE central bank is waiving fees for financial institutions seeking to establish new digital channels such as online banking facilities and electronic money platforms, amid lockdown measures aimed at containing the coronavirus pandemic.

The Bangko Sentral ng Pilipinas (BSP) said the Monetary Board approved the “suspension of charging of filing, processing, and licensing/registration fees relative to application to provide electronic payment and financial services (EPFS),” as part of relief measures for financial institutions.

The relief measure will take effect for six months, starting March 8, 2020 when the President declared a state of public health emergency under Presidential Proclamation No. 922.

The BSP said the six-month period may be extended depending on developments of the coronavirus outbreak. Luzon is currently under enhanced community quarantine (ECQ), although some provinces will be placed under a general community quarantine

In a separate statement, BSP Governor Benjamin E. Diokno cited the “importance of shifting consumer behavior toward e-payments, considering the limitations on people’s movement and activities during the ECQ.”

“The waiver of fees related to grant of EPFS licenses aims to encourage BSFIs to provide safe, efficient and reliable digital channels that support critical payment use cases such as social benefit transfers, payments to merchants or billers including to the government, payments to suppliers, and remittances,” BSP Deputy Governor Chuchi G. Fonacier said in a memorandum dated April 27.

Processing fees for EPFS is currently at P10,000 for rural banks, P20,000 for thrift banks, and 50,000 for universal and commercial banks.

For nonbanks including electronic money issuers (EMIs) and other financial institutions (FIs), fees could range between P10,000 to P20,000.

On the other hand, licensing fees for banks is set at P10,000 for rural banks, P20,000 for thrift banks, and P100,000 for big lenders.

Licensing fees for EMIs is currently at P60,000 while those for other FIs is at P25,000.

Meanwhile, filing and registration fees for new EMIs are at P1,000 and P100,000, respectively.

This measure came after other regulatory relief initiatives from the BSP, including the suspension of PESONet and InstaPay fees during the ECQ period.

The central bank has also temporarily waived transaction fees for the Philippine Payment and Settlement System where high value interbank payment transactions are processed through accounts maintained with the BSP.

“The same unified action is strongly encouraged to be extended for the fees charged by BSFIs for other fund transfer services and interbank ATM (automated teller machine transactions,” Ms. Fonacier said. “(BSFIs) are therefore urged to channel forward such temporary relief measures to the banking public.”

In a statement on Tuesday, the Bankers Association of the Philippines said they will continue to “provide unhampered banking services and ensure the industry’s resiliency” given the extended ECQ.

“Further to this, the banks have enhanced their operations to adapt to this new normal,” the BAP said. — Luz Wendy T. Noble

BIR’s 2020 collection target slashed

THE Development Budget Coordination Committee (DBCC) slashed the Bureau of Internal Revenue’s (BIR) collection target by 12% this year, as the government expects slower economic growth.

According to Revenue Memorandum Order (RMC) No. 12-2020, which was uploaded on the BIR’s website on Tuesday, the agency’s collection goal was lowered to P2.26 trillion from the previous target of P2.576 trillion.

The BIR now targets to collect P2.206 trillion from its operations, 11.59% lower from the original goal of P2.495 trillion. It also aims to collect P54.584 billion from non-BIR Operations.

The new collection target was approved by the DBCC during its March 26 meeting.

“Collections (target were revised) lower due to lower forecast of gross domestic product (GDP, this year),” Finance Undersecretary Gil S. Beltran said in a mobile phone message.

The government has yet to officially downgrade its growth targets for this year to reflect the economic fallout from the coronavirus pandemic. Luzon, which accounts for over 70% of the country’s gross domestic product, has been under an enhanced community quarantine (ECQ) since mid-March.

Finance Secretary Carlos G. Dominguez III earlier said the economy may contract by one percent or post zero growth this year. The DBCC set a target range of 6.5%-7.5% GDP growth for 2020 last December.

In revising the BIR collection goal, Mr. Beltran said the DBCC also considered lower tax collections from oil products and the change in expenditure priorities of the government.

BIR Deputy Commissioner Arnel SD. Guballa said in a mobile phone message that the DBCC also took into account the ECQ which forced nearly all businesses to temporarily shut down and people were ordered to stay home.

The agency’s tax collection target for the remaining months were revised to: P74.465 billion in April, P320.469 billion in May, P176.39 billion in June, P189.163 billion in July, P189.165 billion in August, P188.19 billion in September, P203.22 billion in October, P259.045 billion in November and P206.389 billion in December.

Preliminary data showed BIR collected P480.64 billion from Jan. 1 to April 17, down by 32% year on year and also short by 45.3% of the P879.18-billion target for that period.

For April alone, BIR only collected P25.01 billion in April 1-17, or 8.66% of its P288.75-billion target for the entire month. This was also 89.5% lower than the P237.93 billion collected in April last year

The lower tax take was attributed to deferment of tax payment deadlines for income tax returns which was moved to May 29 from April 15 initially. Payment deadlines for tax returns were also deferred.

Previously, BIR and the Customs bureau were tasked to collect P3.307 billion this year. — Beatrice M. Laforga

Government sets lower borrowing program in May

THE national government has set a P170-billion borrowing program in May, after exceeding its program in April.

In an advisory posted on its website Tuesday afternoon, the Bureau of the Treasury (BTr) said it is planning to borrow P170 billion next month — P110 billion in Treasury bills (T-bills) and P60 billion of Treasury bonds (T-bonds).

The BTr will offer P5 billion each in 91-day and 182-day papers, and P10 billion for 364-day T-bills every Monday. It will auction off P15 billion worth of 35-day papers again on May 5 and May 19.

For the T-bonds, the Treasury will offer P30 billion in three-year notes on May 12 and another P30 billion via five-year securities on May 26.

The May borrowing plan is lower than the P222.925 billion that the BTr raised from its regular auctions of T-bills and T-bonds in April, along with five instances of opening tap facility options. The BTr had a P190-billion borrowing program for April. — Beatrice M. Laforga

Car importers expect 40% sales slump

By Jenina P. Ibañez

IMPORTED vehicle sales are expected to drop by 40% in 2020 after the car manufacturing and distribution shutdown during the Luzon-wide lockdown caused a 34.4% decline in the first quarter, the Association of Vehicle Importers and Distributors, Inc. (AVID) said.

In a report released on Tuesday, AVID said that imported car sales dropped 34.4% to 14,404 units in the first quarter compared with the level in the same period last year, as most dealerships along with their repair and maintenance facilities have been closed since the lockdown began on March 17.

“The local industry is reeling from this invisible enemy as vehicle manufacturing, importation, distribution, and maintenance have stopped completely. Demand has likewise declined as consumers spend on more urgent needs. With this disruption, we estimate that car sales may drop by around 40% for the year,” AVID President Ma. Fe Perez-Agudo said.

Imported vehicle sales had steadied in full-year 2019, slipping only 0.5% to 87,984 from the year before. The 2018 drop in imported car sales was deeper at 16.8% with the impact of high inflation rates and new tax hikes on the industry.

Passenger car sales in the first quarter fell 43% to 4,506 units, led by Hyundai and Suzuki sales with 2,724 and 1,127 units sold, respectively. March sales dropped by 48% to 1,023 units from 1,954 in February.

Light commercial vehicle sales fell 29% to 9,806 units sold, with Ford leading the segment with 3,479 units and Hyundai following with 2,797 units. Sales dropped 62% to 1,620 units in March from 4,247 the previous month.

Commercial vehicle sales dropped by 62% to only 92 units in the first quarter. Sales of this segment fell 90% month-on-month to six units in March from 61 in February.

Total March sales dropped 58% to 2,649 units, from 6,262 units in February.

AVID said that second quarter sales may fall even further as the enhanced community quarantine (ECQ) was extended to the month of April and at least half of May in major urban areas. The ECQ was extended up to May 15 in areas in Luzon, including Metro Manila and Calabarzon (Cavite, Laguna, Batangas, Rizal and Quezon).

“The industry is no stranger to adversity but this pandemic will be our toughest challenge yet. We estimate that it would take at least 12 months for the local industry to recover once the ECQ is completely lifted. There will be a ‘new normal’ and we must be quick to adapt since Filipino consumers will be even more prudent and looking for more value in their purchases,” Perez-Agudo said.

“We are working closely with our stakeholders so we can resume our operations, especially our repair and maintenance services, in a manner that protects the health and safety of our workforce and customers, once the ECQs and GCQs are lifted,” she added.

AVID said that its 20 member companies have been preparing health protection and safety strategies, including social distancing, the use of personal protective equipment, and the implementation of sanitation measures.

The companies will be conducting antibody testing for its workforce before they re-enter operations, as part of Project ARK — the private sector-led initiative aimed at increasing tests for the virus.

Fitch Solutions in its country risk and industry research had downgraded its projection of automotive industry growth in the Philippines for this year, estimating a 0.4% growth to 371,456 units sold from its previous estimate of 7.4% growth.

The Fitch Solutions report said that the closure of non-essential business activity will negatively impact vehicle sales for the first half of 2020 as customers are unable to make new purchases. They said that most spending will likely go to essential goods, and consumers will hold off on spending on cars.

AVID said several of its member companies had provided free transport for frontliners, as well medical supplies and essential goods.

Philippines AirAsia passenger volume down 9% in Q1

PASSENGERS flown by low-cost airline Philippines AirAsia, Inc. declined by 9% to 1.8 million in the first quarter of the year amid the suspension of its commercial flights due to the coronavirus disease 2019 (COVID-19) pandemic.

“Philippines AirAsia flew 1.8 million passengers during the quarter, down 9% in comparison to the same quarter last year,” the Malaysia-based AirAsia Group Berhad said in its report e-mailed to reporters on Tuesday.

The group added that the airline’s capacity also reduced by 1% year-on-year “as domestic routes and international routes were halted beginning mid-March 2020.”

The load factor for the first quarter of 2020 was “solid” at 84%, the group said, although it was 7 percentage points lower than the 91% posted during the same period last year.

On the general performance of the AirAsia Group, it said its load factor of 80% for the first quarter was better than its expected 77% “despite the weak travel demand amid increasing and unprecedented travel restrictions due to the COVID-19 pandemic.”

“This was achieved through proactive capacity management, particularly in the months of February and March, with the cuts most notable in AirAsia Malaysia and AirAsia Thailand,” it said further.

The group announced on Monday the new rules that its passengers have to follow when flight operations resume after the government-imposed lockdown period.

It said guests will be required to bring and wear their own masks before, during and after flight. Guests without masks will be denied boarding.

Also, only one piece of cabin baggage not exceeding 5 kilograms will be allowed for each guest.

The Air Carriers Association of the Philippines, Inc. has said airlines in the Philippines suffer losses of P7 billion for every month of lockdown apart from their accumulated losses of around P4 billion from travel refunds because of the COVID-19 crisis.

Meanwhile, the International Air Transport Association expects that local airlines will see their passenger revenues drop by $4.481 billion this year. It also expects passenger demand to decline by 47%. — Arjay L. Balinbin

International art fairs go online amidst virus outbreak

By Michelle Anne P. Soliman, Reporter

WHEN COVID-19 started to spread across the globe early this year, big public events in the arts industry were either postponed or canceled. As much of the world went under quarantine, the arts moved online with performers, musicians, theater and entertainment companies offering shows via streaming. This led international art fairs, such as this year’s edition of Art Basel Hong Kong and Art Dubai, to cancel the physical fairs but to push through via their respective virtual viewing platforms.

VIRTUAL ENGAGEMENT
After canceling its scheduled fair at the Hong Kong Convention Centre on March 19 to 21, the 8th edition of Art Basel Hong Kong launched its Online Viewing Rooms which were open from March 20 to 25. The Online Viewing Rooms debuted with an international lineup of 235 leading galleries from 31 countries presenting over 2,000 artworks.

“We have brought forward the launch of the first edition of the Online Viewing Rooms in an effort to provide our Art Basel Hong Kong 2020 exhibitors with an alternative platform and opportunity to showcase the works of art they were planning to bring to Hong Kong at no cost,” Adeline Ooi, Director Asia for Art Basel in Hong Kong, told BusinessWorld in an e-mail.

The pieces in the recently concluded virtual exhibition had an estimated value of $270 million, with 70 items priced at over $1 million.

“As the art market continues to evolve, Art Basel is continually investing into new technologies and opportunities to support its galleries and to foster a healthy art world ecosystem. Art Basel’s Online Viewing Rooms is designed to provide an additional platform for galleries to engage with the highest caliber of audiences worldwide — including Art Basel’s global network of patrons, as well as new collectors and buyers — and promote their artists,” Ms. Ooi wrote.

Meanwhile, the 14th edition of Art Dubai — which was originally scheduled to run from March 25 to 28 at the Madinat Jumeirah resort — also launched a digital program on March 24. This year, it’s programs took a total shift to the digital space with the 2020 Online Catalogue of artworks of more than 500 works, a Global Art Forum live broadcast, and an online performance program curated by Marina Fokidis.

RECEPTION TO GOING DIGITAL
Art Basel Hong Kong’s Online Viewing Rooms were attended by more than 250,000 visitors from across the globe within its seven-day duration (including VIP previews). In 2019, it attracted 88,000 visitors.

Despite limitations, Ms. Ooi noted that the online platform received a positive reception.

“While the Online Viewing Rooms cannot replace the physical fair, we received positive feedback from galleries across all levels of the market in terms of sales and the ability to stay connected with existing and new contacts. For small and mid-sized galleries, the platform provided them with the opportunity to explore the concept of an online viewing room, to cultivate new relationships and to generate positive business leads,” Ms. Ooi wrote.

As online viewing explores other methods of viewing art, Ms. Ooi stressed the value of face-to-face interaction. “Collectors don’t come to fairs exclusively to buy work, just as gallerists don’t solely participate to sell the works on display. Both collectors and gallerists attend our shows to exchange ideas, deepen existing relationships, and to develop new connections and new projects. In a market built on trust, face-to-face interaction remains essential.”

In an e-mail to BusinessWorld, International Director of Art Dubai Chloe Vaitsou noted that during the art fair’s first week, “more than 300 sales enquiries were received for individual works with a number of sales confirmed” and that the 2020 Online Catalogue has received “close to three times more traffic compared to 2019, with over 40,000 views” since its launch on March 24.

Likewise, Ms. Vaitsou agreed that the digital fair “cannot fully replace the physical encounter of attending and experiencing an art fair in person.”

“We already had an Online Catalogue ready to be launched so this didn’t prove challenging. Changing the live physical conference format of the Global Art Forum to a live streamlined experience required the application of relevant technologies and a shift in coordination tactics, which we were quick to achieve. The Performance Program organically shifted to online artist projects, with both existing works and new works created to be available publicly through widely used platforms. We are in ongoing discussions to evolve our digital scope, which will require different solutions and approaches,” she wrote.

The Philippines’ Silverlens Galleries, which had participated in previous Art Basel fairs previously, participated in both art fairs’ online iterations. It featured works by Southeast Asian artists Santiago Bose, Patricia Perez Eustaquio, Mit Jai Inn, Gary-Ross Pastrana, Maria Taniguchi, and Yee I-Lann at Art Basel Hong Kong; while Pio Abad, James Clar, and Nicole Coson were featured in Art Dubai.

“We had about the same number of inquiries on both Art Basel and Art Dubai. Confirmed purchases were by clients already familiar with the artists’ works,” Silverlens Galleries co-founder Isa Lorenzo told BusinessWorld in an e-mail, on their participation this year.

In Art Basel’s Online Viewing Room, exact or price ranges per artwork were presented. “Research shows that works online with price information are exponentially more likely to be sold. We have had great feedback from collectors who appreciated the price transparency,” Ms. Ooi wrote.

“The inclusion of prices provides transparency,” Ms. Lorenzo wrote. “In the primary market, it protects the artists from unscrupulous dealers.”

Ms. Lorenzo also noted, however, that the experience of a virtual and actual art fair cannot compare to the real thing as there are “a lot of casual browsers online” and that most of their previous Art Basel Hong Kong sales were made “on the floor with the clients standing in front of the artwork.”

ART FAIRS POST COVID-19
Ms. Ooi and Ms. Vaitsou remains optimistic about the art fair’s future endeavors, despite uncertainties thanks to the situation with the COVID-19 pandemic.

Originally scheduled in June, the 2020 edition of Art Basel has been rescheduled on Sept. 17 to 20, 2020 at the Messe Basel.

“The decision to move the show to September was made in close consultation with a wide range of gallerists, collectors, partners, and external experts. While it is impossible to predict precisely what the situation will be in September, we are currently moving forward with our planning,” Ms. Ooi wrote. “Similarly, we are still planning to host our Miami Beach show from Dec. 3 to 6, 2020.”

Meanwhile, the 15th Art Dubai will be held on March 17 to 20, 2021.

“We have to be realistic about the impact the current situation and the ripple effects it will have globally and across industries. The art market is not immune to this. The majority of cultural events around the world are not going forward which will no doubt have implications to trade and industry as a whole at this moment,” Ms. Viatsou wrote. “However, it is inevitable that there will also be adaptation and we are optimistic that the future will see the art market adjust and continue diversifying and growing.”

DTI’s Lopez to firms: shoulder your staff’s virus test

TRADE Secretary Ramon M. Lopez said companies must pay for the testing of their employees for the coronavirus disease 2019 (COVID-19), which he said will be included in new business health protocols.

“Hindi po sagot ng gobyerno subalit ‘yun na rin po ang magiging practice ng mga kumpanya na gusto masigurado,” he said in a television interview on Tuesday.

(The government will not shoulder the testing cost, but that will become the practice of companies that want to be certain).

He said companies can ask employees to fill out health declaration forms noting travel and contact history, adding that those who have possible COVID-19 symptoms or who have had contact with patients can be prioritized for the PCR test.

The PCR or polymerase chain reaction test checks for the presence of the virus in individuals, unlike rapid tests that check for the presence of antibodies.

“Ine-encourage po ‘yung PCR test, pero ‘yun po ay limitado ang gamit sa ngayon — du’n lang sa may symptoms o kaya PUIs at PUMs,” Mr. Lopez said.

(We encourage using the PCR test but its use is limited to those who have symptoms or are persons under investigation or monitoring).

Mr. Lopez over the weekend said the private sector can set up testing facilities, with the guidance of the Health department.

Presidential Adviser for Entrepreneurship and Go Negosyo founder Joey A. Concepcion had launched Project ARK (Antibody Rapid test Kits), a private sector-led project to increase COVID-19 testing.

Mr. Lopez said in the same interview on Tuesday that while some mall operations are now allowed in moderate or low-risk areas under the more relaxed general community quarantine (GCQ), senior citizens and young people under 20 may be given a window or time period during the day when they will be allowed to leave their homes. Those groups are not allowed to leave their homes under current GCQ guidelines.

He said barber shops and salons are allowed to operate under the GCQ, with “very strict health standards.”

He added that there will be guidelines on minimum health protocols, including the wearing of masks and the use of sanitation stations. — Jenina P. Ibañez

Kominers’s Conundrums: The Warden Has a Brainteaser

By Scott Duke Kominers, Bloomberg Opinion

SOME puzzles are solvable in a blink (https://www.youtube.com/watch?v=0SWgSZdSBjc). Others require deeper dives (https://www.bloomberg.com/news/articles/2020-03-27/eyos-submarine-dive-to-challenger-deep-bottom-mariana-trench). The tale of the prisoners and the light switch is a classic brainteaser that takes several steps to unravel. Are you ready?

One hundred people are being held prisoner. The warden, who is slightly benevolent — and also a mathematician — proposes to have the prisoners play a game in exchange for their freedom. He shows them a room with a single light switch, and explains: “Each day, I’m going to choose one of you at random and bring you into this room. When the first prisoner walks into the room, the switch will be ‘off.’ While you’re in the room, you can flip the switch if you want, and I’ll leave it however you set it for the next prisoner. Any one of you can declare at some point that all the prisoners have been in the room at least once; if you’re right, all of you go free; and if you’re wrong, you stay here until I come up with an idea for a new puzzle!”

Being bizarre, but fair, the warden lets the prisoners confer beforehand to agree upon a strategy — but once the game has started, the prisoners have no way to communicate except (possibly) by flipping the switch.

Can you figure out a strategy that guarantees the prisoners their freedom?

The word “guarantees” is important in this puzzle: It means that the full solution is not just a strategy the prisoners should use, but also a logical argument (a “proof”) convincing us that the strategy will work for every sequence of room entries that might arise.

(If you want to try the problem yourself without any hints or guidance, stop reading here for now.)

So how to even start figuring this out? First, try making the problem smaller. If there’s only one prisoner, they can just declare victory upon entering the room for the first time. If there’s two, the problem becomes more subtle: Each prisoner knows when they’ve been in the room, but nothing else.

(Again, perhaps pause here and try to work it out for yourself.)

But what if the prisoners decided beforehand that one would flip the switch as soon as he or she entered the room while the other would merely wait until that happened? This strategy might take a long while to work. But there’s no time limit in this game. At some point, the first prisoner will enter the room, and sometime after that, the second prisoner will enter and learn that the first prisoner has already been there.

This is- the first major logical leap in solving the puzzle: Prisoners can have different roles.

So what happens with three prisoners? And can we get from saving three prisoners to 100? Brett Berry of Math Hacks has a beautiful write-up (https://medium.com/i-math/100-prisoners-and-a-light-bulb-573426272f4c) of a solution (along with a slightly different approach to solving).

For a modern — and very nearly post-modern — version of the puzzle, here’s one from my personal vault. In 2008, Paul Kominers (my brother), Justin Chen and I asked what happens when the warden gets a prison so large it feels like something out of a Greek myth:

Now the warden has a labyrinthine prison with 111 indistinguishable rooms, each of which has the same number of light switches in them — and all the switches in all the rooms start “off.”

He’s going to lead his 100 prisoners into the rooms at random (one at a time, like before) and the prisoners win their freedom if — and only if — one of them correctly declares that each prisoner has been in each of the 111 rooms at least 17 times each.

The question is: How many switches do the prisoners need to have per room in order to find a strategy guaranteeing them their freedom?*

As before, the solution will involve developing a strategy and a proof that the strategy works. But now there’s the additional wrinkle that you can adjust the number of switches to make the game easier or harder for the prisoners.

Give it a try. We’ll go over the solution next week.

In the meantime, if you come up with something — even partial progress — please let me know at skpuzzles@bloomberg.net before midnight EDT on Wednesday, April 29. (If you’re stuck, there’ll be a hint announced in Bloomberg Opinion Today on Tuesday, April 28. Sign up here.)

LAST WEEK’S CONUNDRUM
The Fudd was the word. Our foray into wordplay included two puzzles challenging readers to fill in the blanks with words that are spelled the same way but have different meanings. First, we were “BEFUDDLED” that any hunter would want to “BE FUDD-LED” — Elmer Fudd from Looney Tunes never quite manages to catch the wascally wabbit, irrespective of whether it is rabbit or duck season.

Then, I challenged you to find a seven-letter word that could fill in both blanks in a second verse:

Stuck at home another week:

a child past SEVEN?

“Not at all,” he said to me,

“I’ve got my game SEVEN!”

In total, 13 people came up with the intended solution, “CONSOLE.”** Zoz and James Flynn were first — within minutes of each other, and less than two hours after the column hit the web. Other solvers (selected randomly***) included Matthew Dickstein, Nancy Glaeser, Alex Newman-Smith, and Rianne Rowlands.****

THE BONUS ROUND:
MORE PUZZLES AND PASTIMES

A perpetual energy paradox puzzle (https://www.quantamagazine.org/how-to-design-a-perpetual-energy-machine-20200401/). You can turn colored pencils into a gigantic doughnut (https://www.youtube.com/watch?v=i0aNETdn6sw) and/or subdivide certain right triangles into more right triangles (https://twitter.com/AlgebraFact/status/1252573276867624961?s=03). Try your hand at Roy Leban and Emily Dietrich’s Almanaq adventures (https://www.almanaq.com/), or this sudoku with only four given digits (https://www.youtube.com/watch?v=hAyZ9K2EBF0). Celebrate Sondheim’s birthday (https://www.broadway.com/buzz/199128/jaw-dropping-lineup-of-stars-to-salute-stephen-sondheim-in-broadwaycom-birthday-concert-event/) (hat tip: Ellen Kominers); dance with Tabla Maestro Sandeep Das (https://www.youtube.com/watch?v=aE78dVzV2SM); or watch a world-class Julie Andrews impersonator perform SuperBadTransmittableContagiousAwfulVirus (https://web.facebook.com/watch/?v=832790830549840). Explore Quanta Magazine’s map of mathematics (https://www.quantamagazine.org/the-map-of-mathematics-20200213/), or just have some fun at home with dominoes (https://www.youtube.com/watch?v=D5ZVMVyN6Bc). And inquiring minds want to know: Did supernovas really kill off the megalodon? (https://www.quantamagazine.org/did-supernovas-kill-off-the-monster-shark-megalodon-20190115/)

*As in the one-room puzzle, the prisoners can confer beforehand to agree upon a strategy.

**Admittedly, I took a bit of poetic license in the second line.

***If you don’t see your name listed here, please don’t despair — we’re keeping track of all the solvers and will feature callouts to both new and recurring solvers as Conundrums continues.

****Ross Berger came up with an alternate solution — “CONTENT” — which doesn’t fit the verse quite as well but isn’t too far off.

In addition to solutions, please send paradoxes, paraphernalia and/or your favorite puzzles to skpuzzles@bloomberg.net.

MVP Group, partners build quarantine center at Philippine Arena

MVP Group of Companies, Department of Public Works and Highways (DPWH), and religious group Iglesia ni Cristo have partnered to complete a 300-bed coronavirus disease 2019 (COVID-19) quarantine center at the Philippine Arena in Bulacan, NLEX Corp. said.

“Under the leadership of DPWH Secretary Mark A. Villar and Chairman Manuel V. Pangilinan, the latest large-scale health and safety initiative made available by the Iglesia Ni Cristo in Ciudad de Victoria, Bocaue, Bulacan, will be completed on schedule by Wednesday, April 29, as part of President Rodrigo Roa Duterte’s Bayanihan to Heal as One Act,” NLEX Corp. said in a statement on Tuesday.

The quarantine center intended for returning overseas Filipino workers will be turned over to the Inter Agency Task Force on COVID-19 (IATF) medical teams once completed, NLEX Corp. added.

Mr. Pangilinan, who heads the business group, was quoted as saying: “This is another testament to the effective collaboration among the public and private sectors. Our group will continue to support the government’s COVID-19 emergency response programs and help the country recover from this pandemic. During this health crisis, everyone must pitch in.”

Metro Pacific Tollways Corp. (MPTC) and NLEX Corp. also vowed to provide “special and exclusive access” along the North Luzon Expressway to the Philippine Arena quarantine center for the IATF quarantine teams and medical support groups.

NLEX Corp. said the North Luzon Expressway will be toll-free for medical frontliners, ambulances, medical service vans and buses of the Health department.

The center will be managed by the government with personnel from the Health department, Armed Forces, and the National Police, NLEX Corp. said.

“The MVP Group is the country’s leading conglomerate of infrastructure utilities with diverse assets in power, electricity distribution, water supply, logistics, tollways operations and management, telecommunications and digital services,” it also noted.

NLEX Corp. is under MPTC., a unit of Metro Pacific Investments Corp., which is one of the three Philippine units of Hong Kong-based First Pacific Co. Ltd. The two others are PLDT, Inc. and Philex Mining Corp.

Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., maintains interest in BusinessWorld through the Philippine Star Group, which it controls. — Arjay L. Balinbin

PETA launches YouTube channel

THE Philippine Educational Theater Association (PETA) has launched its YouTube Channel featuring works by and inspired by English poet and playwright William Shakespeare.

Shakespeare in the Time of COVID is online series celebrating the works of William Shakespeare, in commemoration to the renowned poet and playwright’s 404th death anniversary on April 23, 1616.

The series includes Sonnets & Songs, a reading of Shakespeare’s sonnets and their reimagining into Filipino songs. Participating artists include Michael Williams, Menchu Lauchengco-Yulo, Noel Cabangon, Myke Salomon, and Bituin Escalante. The series culminates with the streaming of Ron Capinding’s 2011 play William, directed by Maribel Legarda.

Set in a high school in Metro Manila, the story focuses on five young students who are forced to study Shakespeare’s plays by their terror class adviser. While studying, the students realize the beauty of Shakespeare’s works and also re-discover themselves through the Bard’s characters.

The show features 10 original rap songs composed by Jeff Hernandez and choreographed by John Tan.

William won Outstanding Play, Outstanding Ensemble Performance in a Play, and Outstanding Original Script at the 2011 Philstage Gawad Buhay Awards.

Viewers can access the free 72-hour livestream of William on PETA’s YouTube Channel (www.youtube.com/petatheateronline) starting April 26, 7 p.m.

Sessions of PETA’s Let Get Creative! online workshops, which stream live every Monday, Wednesday, and Friday, and highlights of #TalkTuesdays, which stream live every Tuesday on PETA’s Facebook page, will be available after the livestreams at the PETA YouTube channel.

For more information, visit https://www.facebook.com/PETATHEATER/. — MAPS

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