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Anything can happen

A series of unfortunate events helped the Celtics snatch defeat from the throes of victory the other day. They appeared to be coasting along at home, taking the first quarter by five points, the second by eight, and the third by four against the seemingly disinterested Nets, holders of a dubious streak of four losses. And then, for some reason, fate conspired against them. Even with the visitors keeping just one starter on the court, they found their otherwise-comfortable lead (which went up to as high as 21) being whittled down methodically — until they had none at the buzzer, and until they couldn’t forge one in overtime.

Perhaps the Celtics wouldn’t have been victimized by the bizarre turn of events had they been able to rely on a full complement. Instead, they began the match with leading scorer Jayson Tatum in the sidelines due to an illness, and with fellow All-Star Kemba Walker on a minutes restriction that compelled him to sit out the entire extra period. The likewise lost starters Gordon Hayward and Jaylen Brown to injury, forcing them to regroup from the shock of coughing up an evident triumph with the likes of Javonte Green, Semi Ojeleye, Carsen Edwards, and Brad Wanamaker on the court.

That said, it wasn’t as if the Celtics faced stiff opposition. In fact, the Nets played the payoff period and overtime with only Caris LeVert from the First Five. For some reason, however, he managed to shake off a hitherto-iffy effort and make like Michael Jordan while surrounded by such notables as Rodions Kurucs, Timothy Luwawu-Cabarrot, Chris Chiozza, and the Player Formerly Known as DeAndre Jordan. Simply put, he was unconscious while spearheading the improbable comeback. He scored every which way, never mind that everybody and his mother knew his intentions. It’s telling that his only misses were a layin and three free throws, and that, with a tie to force an extra period in the offing, he calmly sank Points Number 38, 39, and 40 after being fouled on a trey attempt with 0.2 tick left on the game clock.

LeVert would go on to score every single one of the Nets’ 11 points in overtime, winding up with 37 after the third to outscore the Celtics all by himself. And so dominant was he that decommissioned teammate Kevin Durant could not help but publicly praise his work as “magnificent.” And it was — with no small measure of help from his opponents, who were initially cocky, then complacent, then lackadaisical, then desperate, and then deflated. All and sundry knew he would shoot given the lack of viable alternatives, and yet very rarely was he double-teamed. And instead of just letting him take a contested trey at the end of regulation, supposed defensive ace Marcus Smart was anything but smart, fouling him on an ill-advised reach-in to send him to the stripe for the tying charities. No wonder head coach Brad Stevens was incensed in the aftermath of the loss.

Things were back to normal yesterday. The Celtics won against the lowly Cavaliers, though not before getting a scare while undermanned. The Nets lost against the gritty Grizzlies, with LeVert posting a mortal 14 markers on six-of-19 shooting. All is right in the world once more. The way it shook the other day, though, is now part of history, and, if nothing else, proves that anything can happen in the NBA.

 

Anthony L. Cuaycong has been writing Courtside since BusinessWorld introduced a Sports section in 1994. He is a consultant on strategic planning, operations and Human Resources management, corporate communications, and business development.

PwC shares what investors look for in a winning startup

As the Philippine business landscape continues to shift, how are the country’s top investors assessing the startups leading innovation in the region? And how can both groups strengthen their partnerships for mutual gain?

Here are five trends in investor interest from the PwC Philippine Startup Survey 2020.

1. People are the top consideration for entering partnerships…

More than any business model canvas or winning USP, it’s the people behind a startup that investors look at most. In PwC’s startup survey, 71% of respondents claimed that they regard a startup’s founding members above all other factors. The startup’s business model comes in second at 55%, while its scalability is in third place with 45%.

2. … as well as backing out of them.

As much an organization’s people is the top consideration for an investor, this also holds true for bowing out. Of the 84% of investors who have walked away from potential partnerships, 58% and 46% cited mismatch of personalities with the management team and weak management as their reasons, respectively. Lack of market traction comes in third at 42%.

3. Fintech wins in terms of investments and expectations.

Investors clearly have high hopes for fintech: they plan to invest in the sector the most for the next three years, seeing it as the most successful one industry in the next two years. High hopes are likewise staked on e-commerce and healthcare.

4. Improving teams and products are key to growth and innovation.

As more and more startups enter the playing field here and abroad, investors advise that innovation zoom in on technology, products and services, and business model. These will help develop the distinct and competitive solutions investors are looking for.

In terms of growth strategies, startups should prioritize talent acquisition, improvement of existing products and solutions, and expansion beyond the Philippine market.

5. Entering markets with high M&A activity may benefit startups.

While both startups and investors agree that entering new markets in the next five years is a good move, they have different ideas on which ones to work on. Investors prefer Vietnam, Indonesia, and Singapore over Malaysia and other areas in the Philippines. This is likely due to the high number of mergers and acquisitions in these countries.

IBM Works with the Medical Community to Help Fight the Latest Coronavirus Epidemic

The latest coronavirus epidemic has created widespread alarm across the world. Like SARS and MERS, Covid-19 is thought to originate in animals before migrating to humans. At least 28 international locations have confirmed cases of the infection, with mainland China being the most affected country. 3,173 deaths have been reported thus far.

All sectors of society are working to overcome the challenges of this public health emergency. One of the keys to control the outbreak is to accelerate research, development, and access to practical treatment with drugs that are effective against Covid-19. The completion of relevant clinical trials with efficiency and high quality is crucial for drug development. Industry, academia, and government parties are making unremitting efforts to pursue solutions with antiviral drugs.

For its part, IBM is taking steps to help hospitals, sponsors, contract research organizations (CROs), and research and development institutions in China that are researching novel coronavirus drugs and conducting related clinical trials. IBM intends to work together with medical institutions and practitioners during this critical period by leveraging its IBM Clinical Development (ICD) system to help support the accelerated development of key drugs in combating the virus.

ICD is a unified SaaS-based data capture solution, designed to provide end-to-end visibility as well as patient, site, and clinical trial management capabilities. ICD is designed to reduce the time and cost of clinical trials by centralizing and organizing clinical trial details, providing 24/7 access to clinical trial data via a single URL from any web-enabled device, and providing a flexible and scalable data management platform to help design and manage clinical trials through the incorporation of optional clinical trial-specific features and services.

Free of charge

As part of IBM’s plan to support the accelerated development of key drugs to combat the coronavirus, the company will:

  • provide its ICD system free of charge to eligible applicable novel coronavirus-related clinical trials in China; and
  • provide commercially-reasonable technology free of charge to support database construction and basic training for the use of ICD.

IBM welcomes inquiries from hospitals, sponsors, CROs, and institutions that are researching Covid-19 drugs and conducting related clinical trials.

IBM shared that they salute all medical staff frontliners, paying tribute to the scientific researchers who are leading the charge of pharmaceutical research and development.

With its medical technology, IBM is dedicated to working with pharmaceutical R&D partners in providing relevant coordinated research and analysis on ICD for Covid-19 clinical trials to help overcome challenges together.

January finds better quality of jobs, though unemployed ranks grow

LATEST official labor data showed the ranks of Filipinos wanting more work to augment income declined, although those that were left without jobs increased, data from the government’s statistical agency showed.

At the same time, the period saw an increase in the number of employed Filipinos even as the ranks of the unemployed went up. This can be explained by the increase in the participation rate, which indicates more Filipinos have entered the labor force.

Preliminary results of the January 2020 round of the Labor Force Survey (LFS) conducted by the Philippine Statistics Authority (PSA) put the country’s unemployment rate unchanged at 5.3% from the same period last year.

A closer look at the data, however, showed the number of jobless Filipinos went up by 106,651 to 2.39 million in January from 2.28 million in the same LFS round last year.

Meanwhile, the underemployment rate – the proportion of those already working, but still looking for more work or longer working hours – improved to 14.8% from 15.4%.

This is equivalent to 6.32 million Filipinos, down by 8,785 from 6.33 million previously.

The latest unemployment and underemployment rates were the lowest among the January rounds of the LFS since the government adopted new definitions for the LFS in 2005.

The size of the labor force was approximately 45.04 million out of the 73 million Filipinos aged at least 15 years old, yielding a labor force participation rate of 61.7%. This was higher than last year’s 60.3%.

The employment rate, which is the proportion of the employed to the total labor force, remained steady at 94.7% in January compared to the previous year.

In absolute terms, the country posted a net employment gain of 1.62 million to 42.65 million during the period from 41.03 million last year. — Lourdes O. Pilar

Inflation slows in February

THE GENERAL INCREASE in the prices of widely used goods and services eased in February due to slower price adjustments in the heavily-weighted food and non-alcoholic beverages, as well as select non-food commodities, the government reported this morning.

Preliminary results from the Philippine Statistics Authority (PSA) showed February inflation at 2.6%, slower than January’s annual rate of 2.9% and 3.8% in February 2019.

The February reading was slower than the three-percent median estimate in a BusinessWorld poll of 17 economists conducted late last week. It was, however, within the 2.4%-3.2% forecast range given by the Bangko Sentral ng Pilipinas’ (BSP) Department of Economic Research for the month.

Year to date, inflation settled at 2.8%, still within the BSP’s 2%-4% target band and below the revised three-percent forecast for the entire 2020.

Excluding volatile food and energy prices, core inflation slowed to 3.2% from January’s 3.3%. So far, it averaged 3.2% for the year.

“The downtrend in the inflation was mainly brought about by the slower annual increase in the heavily-weighted food and non-alcoholic beverages index at 2.1% during the month [from 2.2% in January],” the PSA said in a statement.

The PSA also noted decelerations in the annual increases in alcoholic beverages (to 18.2% in February from 19.2% in January); housing, water, electricity, gas, and other fuels (1.7% from 2.5%); and transport (1.8% from 3%).

On the other hand, the index of furnishing, household equipment and routine maintenance of the house saw an uptick of 3.5% in February from 3.1% a month ago.

Other indices were steady during the month. These were clothing and footwear (2.7%); health (2.9%); communication (0.4%); recreation and culture (1.5%); education (4.7%); and restaurant and miscellaneous goods and services (2.6%).

The food-alone index also remained steady at 2.1% from the previous month, albeit slower than the 4.2% posted a year ago. — Jobo E. Hernandez

TONIK to launch the first digital-only bank in the Philippines

TONIK is powered by BPC

The Philippines is about to welcome its first digital-only bank. TONIK Digital Bank Inc, founded in 2018, received its banking license from Bangko Sentral ng Pilipinas (Philippines’ Central Bank) in January 2020. Preparing for its launch, TONIK has selected BPC as its exclusive payment partner, leveraging BPC’s payments processing centre and its SmartVista solution.

TONIK faces a significant challenge. The Philippines has a population of over 100 million, spread across a vast territory of 7,600 islands but 70% of that population is currently unbanked.   TONIK intends to boost financial inclusion. Funded by Forum, a fintech venture capital firm in Southeast Asia, it will focus on retail banking products ranging from deposits to consumer loans. The bank estimates it is addressing an untapped market of USD 140 billion for retail deposits, and a USD 100 billion unsecured consumer lending opportunity.

TONIK has chosen BPC with its paytech Radar Payments as its exclusive partner for payments processing activities, delivered through a Software as a Service (SaaS) model. All payments activities such as payment switching, fraud management and card lifecycle management will be handled from BPC’s global payment processing centre powered by its SmartVista range of digital banking solutions. This will enable TONIK to efficiently route transactions and provide a secure environment for its customers while gaining in speed to market and performance.

TONIK provides a great example of how fast neobanks can go to market – in just a matter of months – by using an agile approach. The bank will launch within the year using blocks of best-of-breed solutions to focus solely on delivering a hyper-compelling offer and experience to customers.

TONIK selected BPC for two main reasons. Firstly, BPC will help TONIK operate efficiently and realise economies of scale, in line with its objective to bring fair banking to Filipinos. Secondly, BPC is leveraging 25 years of experience in handling large payment volumes in over 80 countries, an important criterion when addressing a market as vast and spread as the Philippines.

Greg Krasnov, founder and CEO of TONIK, commented: “The banking sector in the Philippines is ripe for digital disruption. With BPC, we rely on a partner that understands how startup digital banks need to operate and to scale efficiently at a fast pace. With BPC, we add a strong asset to our ecosystem to deliver banking and payments the way customers want, fast, affordable, efficient and highly secure.”

Jane Loginova, Chief Commercial Officer, BPC added:“We are proud to join TONIK in this journey to transform the way we bank in the Philippines. More and more, BPC is becoming a partner of choice for digital banks and financial inclusion initiatives. We look forward to making history in the Philippines with TONIK.”

Peter Theunis, Managing Director, BPC shared his enthusiasm, “We welcome TONIK to our newest processing platform. TONIK’s retail customers will experience fast and secure payment services, while the bank signs up for a compliant and future-proof platform which continues to evolve as regulatory compliance and consumer needs evolve too.”

 

Factory output decline persists

Factory output posted its 14th consecutive month of decline in January albeit at a slower pace, the Philippine Statistics Authority (PSA) reported earlier this morning.

Preliminary results of the PSA’s latest Monthly Integrated Survey of Selected Industrie (MISSI), showed factory output – as measured by the Volume of Production index – contracting by 1.6% year on year in January versus the revised declines of 9.1% in December and 4.2% in January 2019.

Factory output has been on a decline since December 2018, extending this losing streak to 14 straight months.

The IHS Markit Philippines Manufacturing Purchasing Managers’ Index (PMI) – which uses a different set of considerations – increased that month to 52.1 from December 2019’s 51.7. A reading above 50 signals improvement in business conditions from the preceding month, while a score below that point indicates deterioration.

The PSA reported year-on-year declines in eleven out of 20 major industry groups in January, of which eight were in double-digits. These were wood and wood products (-42.6%); petroleum products (-39.7%); basic metals (-23.8%); miscellaneous manufactures (-23.2%); tobacco products (-18.3%); paper and paper products (-14.3%); textiles (-11.5%); and furniture and fixtures (-11.3%).

Average capacity utilization – the extent by which industry resources are used in the production of goods – was estimated at 84.4% with 12 of the 20 sectors registering capacity utilization rates of at least 80%. — Carmina Angelica V. Olano

By the numbers: the economic impact of outbreaks like Covid-19

 

Despite the growing clamor around Covid-19, the world is no stranger to outbreaks. In fact, over the last 30 years, the number of infectious disease outbreaks has increased with trade and travel. According to World Bank estimates, the annual global cost of moderately severe to severe pandemics is approximately $570 billion, or 0.7% of the global income.

This latest coronavirus brings to mind the other two that have caused global upheavals this century: SARS (Severe Acute Respiratory Syndrome) and MERS (Middle East Respiratory Syndrome). All affected the travel, tourism, and leisure industries significantly. Fear of catching the infectious diseases discouraged people from visiting places with high foot traffic. Schedules, plans, and decisions were postponed, invariably hurting cruise liners, airlines, event facilities, hotels, and tour operators. 

This mass panic also caused more damage than the zoonotic viruses themselves. An October 2019 paper by the Asian Development Bank mentions the economic losses due to SARS to be “driven by public avoidance, which contributed to a disproportionate aggregate disease prevention cost.” The World Economic Forum (WEF) echoes this view in an article on global health threats: “Remarkably, estimates suggest that only 39% of the economic losses from outbreaks are associated with direct effects on infected individuals. Rather, the bulk of the costs results from healthy people’s change of behavior as they seek to avoid infection.”

Here’s a more comprehensive breakdown:

Comparisons SARS (Severe Acute Respiratory Syndrome) MERS (Middle East Respiratory Syndrome) Covid-19 (also known as SARS-CoV-2 and 2019-nCoV; formerly known as nCoV or novel coronavirus)
Period of outbreak  2002-2003 2012-2015 2019-present
Source and transmission The primary way that SARS appears to spread is by close person-to-person contact. It is caused by a coronavirus that made a species jump from bats to humans through the intermediate host of farmed civet cats bred for human consumption in China.  Most human cases have been attributed to human-to-human infections in healthcare settings, but current scientific evidence suggests that dromedary camels are a major reservoir host for MERS-CoV and an animal source of MERS infection in humans.  Like the other two coronaviruses, it originated in animals and then migrated to humans. Many of the initial cases frequented the Huanan seafood wholesale market, which also sold live and newly slaughtered animals. China’s national health commission has confirmed human-to-human virus transmission.
Symptoms Symptoms include high fever, chills, headache, a general feeling of discomfort, and body aches. Some people also experience mild respiratory symptoms, diarrhea. Most develop pneumonia. Up to 20% require mechanical ventilation.  Symptoms include fever, cough, and shortness of breath. Pneumonia is common, but not always present. Gastrointestinal symptoms like diarrhoea have been reported. Some laboratory-confirmed cases are reported as asymptomatic. Symptoms include fever,  cough, and shortness of breath. Reported illnesses have ranged from mild symptoms to severe illness and death. 
Vaccine and treatment  There is currently no cure for SARS, but research to find a vaccine is ongoing. Treatment is mainly supportive. No vaccine or specific treatment is currently available; however, several vaccines and treatments are in development. Treatment is supportive and based on the patient’s clinical condition. There is currently no vaccine to prevent Covid-19. Treatment is mainly supportive. For severe cases, treatment includes care to support vital organ functions.
Countries affected From China, it quickly spread to other Asian countries. There were also a small number of cases in several other countries, including 4 in the UK, plus a significant outbreak in Toronto, Canada. 27 countries have reported cases of MERS-CoV. The largest outbreaks were seen in Saudi Arabia, United Arab Emirates, and the Republic of Korea.  28 international locations have confirmed cases of the infection. The 10 most affected places include mainland China, Japan, South Korea, Italy, Iran, and Singapore.
Infections 8098 people 2 494 people 90899 people as of March 03, 2020, 12:15 p.m. Philippine time
Deaths 774  858  3116 as of March 03, 2020, 12:15 p.m. Philippine time

Here’s how different industries were affected by these outbreaks:

Industry SARS (Severe Acute Respiratory Syndrome) MERS (Middle East Respiratory Syndrome) Covid-19 (also known as SARS-CoV-2 and 2019-nCoV; formerly known as nCoV or novel coronavirus)
Sports  The Republic of Korea’s Ministry of Education and the Ministry of Health and Welfare recommended students to refrain from school activities such as field trips and sports events. Covid-19 has cut a swathe through the 2020 Asian sporting calendar, with high-profile postponements including the Formula One Chinese Grand Prix and the Hong Kong Sevens rugby tournament. South Korea’s K-league has also postponed the start of the new football season.
Travel Daily arrivals in Hong Kong plummeted from an average of around 27,500 passengers to roughly 5,000 passengers per day at the end of April 2003. Airlines such as Cathay Pacific canceled over 45% of their scheduled flights during the same month, and ticketing revenues plunged from HK$120 million ($15.3 million) to HK$4 million ($510,000) in the first two weeks of April.  Philippine authorities are considering the possibility of a travel ban to and from South Korea. The Department of Health is urging Filipinos to postpone their travel to some parts of South Korea that have seen a spike in the number of people with coronavirus infection.
Tourism The irrecoverable losses to the tourism sector in Beijing were estimated to amount to around $1.4 billion, or 300 times the direct cost of medical treatment for SARS cases in the city. South Korea saw a 41% reduction in the number of tourist visits to the country, which caused the Bank of Korea to cut its benchmark interest rate to a record low. The US State Department on February 24 advised cruise ship travelers to or within Asia to reconsider their trips. Moreover, the department warned that repatriation flights organized by the US government “should not be relied upon as an option for US citizens under the potential risk of quarantine by local authorities.” This statement came in the heels of the hundreds of passengers (including at least 14 Americans) who were infected with Covid-19 in the cruise ship Diamond Princess.

The virus caused the cancellation of the last two days of the Venice Carnival in Italy. Milan’s Salone del Mobile, the world’s largest and most important furniture fair, has likewise been postponed to June 16-21

Hospitality 25 restaurants in Hong Kong closed within the first two weeks of April and over 1,600 restaurant staff became unemployed. As many as 16,000 staff were forced to take leave or pay cuts.

The SARS outbreak in Canada caused $4.3 billion in losses to its accommodation and food service sector.

Estimated losses in the accommodation, food and beverage service, and transportation sectors in South Korea associated with the decrease of non-citizen visitors were US$542 million, US$359 million, and US$106 million, respectively.
Construction and manufacturing The 2002-2003 SARS outbreak was centered in key electronics production tracts in China, where investors from several countries – including Japan, Korea, and Taiwan – have financed factories.

Meanwhile, Singapore’s government quarantined 305 employees of a local Motorola plant at their homes when an assembly-line worker was found to be infected with SARS. As a precaution, Motorola asked more than 500 night-shift employees not to report to work.

Singapore’s construction firms are seeking legal advice to use the coronavirus outbreak as cause for not fulfilling their contracts, as the government turns away or quarantines Chinese workers. 

Hong Kong’s construction is also expected to slow due to delays in receiving building materials from the mainland. 

This disruption to manufacturing and logistics extends to Australia, where Chinese direct and indirect products account for up to 20% of materials used in building sites.

More supply chain shortage situations: Fiat Chrysler Automobiles NV announcing on February 14 that “it is temporarily halting production at a car factory in Serbia because it can’t get parts from China.” Hyundai made a similar statement and said it “decided to suspend its production lines from operating at its plants in Korea … due to disruptions in the supply of parts resulting from the coronavirus outbreak in China.” 

Sources: WHO, CDC, World Economic Forum, AFP, ScienceDirect, Reuters, Nikkei Asian Review, ADB, QuayCo, CNN, Liebert, Inc., Time, Dezeen, The Channel Company, HBR

Silver linings

Some sectors typically stand to benefit from disease outbreaks, although the picture is not black and white, notes The EIU in its coronavirus outbreak webinar last February 12. Here are the industries that may experience positive economic outlooks under such a scenario: 

  • Pharmaceuticals and medical devices – demand for medications, vaccines, personal protective equipment, and other related supplies will strengthen
  • E-commerce – will experience an increase in sales as consumers shun brick-and-mortar stores to avoid infection
  • Online services – expenditure in online entertainment, education, and other services such as telecommuting software will spike 
  • Insurance – will bring about long-term awareness as people become more interested in health and business risk insurance packages

Mitigating disruptions

Public health emergencies can cause significant economic losses in multiple industries. They can impact even companies without direct operations in affected areas. There is a need to identify the sectors with the most potential for economic losses to encourage the development of preparedness plans and prioritize emergency funding during an outbreak. 

WEF makes the case for the private sector playing a bigger role in the traditionally public sector-led disaster response. Many companies may be compelled to act out of a sense of corporate social responsibility, but it is also good business to intervene and protect operations and markets against these biosecurity threats. The WEF’s Managing Risk Epidemics report presents five key principles for integrating public-private cooperation in order to mitigate the social, economic, and business disruptions associated with disease outbreaks: 

  • Preparedness –  address known challenges and set up mechanisms for collaboration before a crisis strikes to facilitate a rapid, well-coordinated response
  • Value – build collaborations at the intersections of private-sector business interests and public-sector needs
  • Trust – create trust-based relationships in advance of an emergency to enable better ways of working during an outbreak
  • Agility – keep organizational processes and structures flexible for quick action in an emergency
  • Innovation – encourage the ongoing development of innovative ideas and solutions to improve emergency preparation, response, and recovery efforts

Building collaborations and networks through public-private cooperation is critical to enable a more effective response to public health emergencies. 

Overall impacts

Overall, the largest economic impact of SARS was related to overall GDP and investment, says Brown and Smith in their paper The economic impact of SARS: How does the reality match the predictions? (2008). It also put a dent on the hotel restaurant and tourism sectors. The vast majority of losses were experienced in mainland China and Hong Kong, with more minor effects in Canada and Singapore. 

“The said losses, however, rarely affected more than one quarter’s data and often only adversely affected the economy for one month. Additionally, in many cases the losses were succeeded by often equivalent gains in the following month, quarter, or year, such that over a year the effect was marginal at most,” they add. The impact from SARS was thus short-term in the places where it occurred.

MERS, on the other hand, had a considerable impact on South Korea’s economy – even though nearly 90% of infections originated in the Kingdom of Saudi Arabia. In his paper Costly Lessons From the 2015 Middle East Respiratory Syndrome Coronavirus Outbreak in Korea, Sang-il Lee attributes this partly due to a failure in risk communication by the Korea Centers for Disease Control and Prevention (2015). 

This resulted in the public’s overreaction to the outbreak and a loss of US$10 billion, which cut into their gross domestic product growth rate in 2015.  The enormous socioeconomic cost highlights how crucial risk communication is during infectious disease outbreaks. 

As for Covid-19, the global economic effects are likely to be larger than in 2002-2003 – even if this latest virus turns out to be comparable to SARS, shares Hayat, et al, in their January 2020 Rabobank article. 

China has larger and tighter linkages with the global economy nowadays, and represents close to 20% of the world’s GDP. China-dependent industries such as consumer electronics, pharmaceuticals, and automotive will struggle to find alternative suppliers

Economies today are more interconnected than they were 17 years ago. If the coronavirus outbreak persists, the domino effects will be felt through global growth, trade, and value chains as well as in specific sectors like transport and tourism. The Economist Intelligence Unit’s baseline scenario is that the public health emergency within China will be under control by the end of March. It is planning to cut their real GDP forecast for China this year to 5.4% from the current 5.9%.

DoT maps counter-virus measures

THE Department of Tourism (DoT) is allocating P6 billion to help the domestic tourism industry weather the fallout from the coronavirus disease 2019 (COVID-19) outbreak.

This as international tourist arrivals to the country slumped by 42% in February, Tourism Secretary Bernadette Romulo-Puyat said on Wednesday.

At a press conference, she said the government is rolling out several initiatives to promote domestic tourism to make up for the loss of foreign travelers.

“To strengthen this public-private partnership initiative, we have the tourism resiliency program. The DoT will be allocating P6 billion that will span international and domestic promotions, infrastructure, and regional tourism development,” Ms. Romulo-Puyat said.

Of the P6 billion, P2.2 billion will be used for infrastructure development in top tourist spots, including Coron and Puerto Galera, while P1.6 billion will go to upgrading secondary airports to be able to handle night flights.

The DoT is allocating P725 million for tactical programs, international events, and market development initiatives; P467 million for content creation targeting emerging countries not affected by COVID-19; P421 million will be for a new domestic travel campaign; and P400 million to aid the local government in developing tourism master plans.

The government will spend P85 million for training and disaster preparedness for COVID-19, and P11.2 million for the participation fees of the private sector for international trade fairs up to at least June.

Ms. Romulo-Puyat said the Philippines saw a 41.4% drop in international tourist arrivals to 418,126 in February from 713,394 a year earlier. In January, international arrivals rose 9.8% to 787,307 from 716,716 in the same month last year.

DoT data showed Philippine international tourism revenues in February dropped by 41% to P26.73 billion from P45.6 billion in the same month last year.

The Philippines has imposed a travel ban to and from China, Hong Kong and Macau. It lifted the barely week-long travel ban to South Korea, except for North Gyeongsang Province, on March 2.

South Korea and China are two of the Philippines’ biggest sources of tourist arrivals. Of the 8.26 million visitor arrivals last year, South Korean tourists accounted for 1.98 million, followed by Chinese tourists (1.74 million) and American tourists (1.06 million).

As fears over the COVID-19 outbreak persist, hotel occupancy rates in popular tourist spots have plunged. In February, hotel occupancy rates in Boracay slumped by around 40%, while Cebu occupancy fell by 27% and Bohol occupancy slid by 40%.

“It has not spared any of us in the industry, whether you’re a small company or one of the bigger tour operators,” Tourism Congress of the Philippines (TCP) President Jose C. Clemente III said.

“We’re bleeding already,” he added, saying that the domestic market will not make up for losses in the international market even as the industry cuts prices.

Mr. Clemente said Western market demand, which was previously stable despite the outbreak, is now declining as even travelers from the United States cancel plans.

“We are now experiencing some cancellations and some foregone business from that market,” he said.

The DoT is targeting its promotion efforts to markets in Western Europe, Russia, the Middle East, and neighboring Southeast Asian countries like Indonesia.

Meanwhile, Health Secretary Francisco T. Duque III said the department has enough funds for its efforts to prevent the spread of COVID-19 in the country.

“Yes, we have enough budget. I just received a guidance from the DBM (Department of Budget and Management) during our Cabinet meeting last Monday. He has pointed out to us that we have about close to P530 million available budget of the DoH that we can use in the meantime that we are awaiting the P2 billion plus approved by President (Rodrigo R.) Duterte but which will need Congressional nod. So we’re awaiting that,” Mr. Duque said in a press conference.

He said that the additional budget will also be used in procurement of materials such as personal protective equipment for medical personnel, among others.

The World Health Organization said there are now more than 90,000 cases of COVID-19 globally and more than 3,000 fatalities, most of which are from China where the disease was first detected. The WHO said the death rate is 3.4%. — Jenina P. Ibañez and Vann Marlo M. Villegas

DoF mulls availing of WB loan to fund efforts vs coronavirus

THE government is considering availing a loan package from multilateral lenders to fund efforts to contain the spread of coronavirus disease 2019 (COVID-19) within the country.

This, after the World Bank Group announced on Wednesday an initial $12 billion in immediate financial support for developing countries battling the disease.

”We are currently in discussions with the DoH (Department of Health) on a loan package with multilateral agencies and this announcement of the World Bank is certainly welcomed,” Finance (DoF) Secretary Carlos G. Dominguez III told reporters in a Viber message on Wednesday.

Mr. Dominguez said the loan packages being considered will fund the Health department’s capacity to immediately respond to the COVID-19 crisis and other similar situations.

“[The loan is specific] to the DoH with emphasis on quick reactions to COVID-19 and similar events,” he said.

The Finance chief did not disclose the amount they want to borrow.

Mr. Dominguez, however, assured that the government is “closely monitoring the effects of the contagion on tourism and the supply chain of our industries and preparing the appropriate fiscal responses.”

On the monetary side, he said the Bangko Sentral ng Pilipinas’ policy-setting body will also be “ready with measures to counter” the economic fallout from the COVID-19 outbreak.

In a statement released Wednesday, the World Bank said the $12 billion worth of fast-track grants, loans and low-interest loans will help countries coping with COVID-19 outbreak improve their health systems, provide wider access to health services, strengthen disease monitoring, and boost public health interventions, among others.

According to the multilateral lender, the package will also include advice on policy formulation as well as technical assistance both on global and local levels of expertise.

Of the $12-billion package, $8 billion consists of new financing. The total package is made up of new financing from the International Bank for Reconstruction and Development (IBRD) worth up to $2.7 billion, $1.3 billion from the International Development Association (IDA), $2 billion from the reprioritization of the World Bank’s existing portfolio, and $6 billion in financing from International Finance Corp. (IFC), which includes $2 billion from existing trade facilities.

“We are working to provide a fast, flexible response based on developing country needs in dealing with the spread of COVID-19,” World Bank President David Malpass was quoted as saying in the statement.

The WB said the support will prioritize the “poorest countries and those at high risk with low capacity.”

Currently, the Philippines is classified by the World Bank as a lower-middle income country, with a gross national income per capita of $3,830 in 2018.

“The point is to move fast; speed is needed to save lives,” Mr. Malpass was quoted by Reuters as saying during a teleconference with reporters. “There are scenarios where much more resources may be required. We’ll adapt our approach and resources as needed.”

Poor countries with weak health systems were the most vulnerable in such outbreaks, Mr. Malpass said, but past experience with Ebola and other outbreaks showed that taking the right measures quickly could lessen transmission of the disease and save lives.

He also cautioned countries against taking measures that would further limit trade.

Some countries had already requested aid, Mr. Malpass said, but declined to name them.

On Feb. 26, the Asian Development Bank approved another $2 million worth of funding to help its member countries deal with the COVID-19 outbreak, after it launched an initial $2-million assistance earlier last month to help selected countries respond to the fast-spreading disease. — Beatrice M. Laforga with Reuters

‘Total fail’: How communication breakdown broke Ballet Philippines’ leg

By Sam L. Marcelo
Associate Editor

IF the Ballet Philippines (BP) controversy was used as a case study in change management, a professor at the Ateneo de Manila University in Quezon City would have given its board an F.

“A total fail,” said Manolet M. Siojo, a part-time faculty member at the university’s John Gokongwei School of Management.

The latest chapter in the imbroglio was a one-night concert titled Alice & Friends, held on Feb. 21 at the Main Theater of the Cultural Center of the Philippines (CCP). Supported by the cultural community, National Artist Alice Reyes, BP’s outgoing artistic director and founder, mounted the show in a matter of days after the BP Board, chaired by Antonio O. Cojuangco, announced that it was canceling the entire run of Itim Asu & Other Dances, the originally scheduled production, as a precautionary health measure against COVID-19.

Using the coronavirus as a reason was deemed spurious by insiders since other productions — among them Batang Mujahideen by Tanghalang Pilipino (another CCP company also chaired by Mr. Cojuangco) — continued their runs, albeit with fewer shows.

Coronavirus or no, Alice & Friends pushed through. To perform and pay tribute to Ms. Reyes, dancers had to go on leave since the show was produced outside the auspices of BP. (Alice & Friends was given a venue and production grant by CCP.) Eric Cruz and his CCP production design team worked overtime to create new sets and costumes after the existing ones — those to be used in the canceled Itim Asu production — were whisked to a warehouse and made unavailable for Ms. Reyes’s use.

Albeit hastily put together amid much drama, the resulting show filled the Main Theater’s 1,800 seats, with about 300 more people watching on a screen set up in the lobby. People who flew in from New York, London, and Paris expecting to see Itim Asu & Other Dances were treated to a program that featured all the numbers in the canceled production — along with three more.

BP alumni dressed in red turned out in full force and were joined by bold-faced names such as National Artist for Visual Arts Benedicto “BenCab” Cabrera; visual artist Jaime De Guzman, who designed the original sets for Itim Asu; and playwright Virginia Moreno, whose play, The Onyx Wolf, was the basis of Ms. Reyes’s choreography.

It should be noted that Feb. 21 is a significant date: it is exactly 50 years to the day that Alice Reyes & Dance Company in a Modern Dance Concert closed its groundbreaking run at the CCP Main Theater and laid the foundation for Ballet Philippines, a company now being sundered by conflict (Related story: “The Russians are coming, the Russians are coming: How a piece of paper tacked to a bulletin board fueled a rumor mill,” https://www.bworldonline.com/the-russians-are-coming-the-russians-are-coming/).

More than a week has passed since Alice & Friends. The curtain has fallen. The standing ovations have receded into recent memory. The adrenaline has worn off. Dancers are deep into rehearsals for Rama Hari, which closes BP’s 50th season. And come end-March, they will have to decide whether to renew their contracts with BP. What was once a formality is now a life-changing decision.

“The anticipation between now and that point is making people anxious. People don’t know how to decide. People don’t know what to do. People are lost. People are confused,” said dancer Sarah Alejandro in a Feb. 19 interview, two days prior to the Alice & Friends concert.

Ms. Alejandro and the rest of the BP dancers are weathering an emotional maelstrom triggered by the shock announcement of Mikhail Martynyuk, a Russian dancer steeped in the Vaganova tradition, as Ms. Reyes’s successor after the BP founder steps down this month.

This bombshell was followed by a two-hour meeting on Feb. 11 with BP board member Marianne “Maan” B. Hontiveros, which did nothing to reassure the dancers who were repeatedly told it was the board’s prerogative to select Ms. Reyes’s successor. The next bombshell: the cancelation — later worded as “postponement” — of Itim Asu. “What they did broke us,” said Ms. Alejandro of the board’s actions.

Prior to the controversy, BP was on an upswing. Ms. Reyes returned in 2017 as artistic director, after membership dwindled to nine dancers because of internal issues. Today, the company is at a healthy 25 members; subscriptions are up thanks to the Board’s efforts, led by BP President Kathleen “Maymay” Lior-Liechtenstein; BP is more viable than it’s ever been; the curtain goes up on schedule; and Ms. Reyes’s seasons have all been produced below budget.

Numbers provided by the accounting office show that the 48th season had a budget of about P9.7 million; the 49th, P11.9 million; and the 50th, P13.9 million. Savings, meanwhile, were tallied at P2.2 million; P800,000; and P5.7 million, respectively, with one last show remaining in the 50th season.

“Everything was so smooth. The company became so much stronger,” said Ms. Alejandro. “There is no problem in terms of how everything is running. Why is there a need to fix anything? That’s one question that bothers us.”

Ms. Reyes, the dancer continued, is a motherly figure who will be missed when she leaves. “She guides us. She’s like our mama. We know that her door is always open and we know that we can always talk to her,” Ms. Alejandro said. “Whenever we have a problem, personal issues, no matter how small, we go to the artistic director. We look to them for guidance and strength. That’s why this means a lot.”

‘SO DID STEVE JOBS AND HE WAS FIRED’
While Ms. Reyes’s relationship with the dancers is, by their accounts, a nurturing one, her relationship with the Board — at least a very important faction of it — has soured.

“I respect her for founding the company. But to run the company? I don’t think she’s capable of running a company. Why should she choose her successor?,” said Mr. Cojuangco, BP Board chair, on the sidelines of an event in Okada Manila on Feb. 13. “She founded the company — so did Steve Jobs and he was fired. … You know what I’ve learned in my life? Nobody is indispensable. Even me.”

The selection of Mr. Martynyuk, he continued, is a chance to improve the technique of BP. “We’re not the best in ballet. We may be good but we’re not the best. You go to a country which is superior to you in level of performance and you get techniques from them. You have to bring in somebody who’s exposed to that level of dance to explain to you how it’s done. And that’s what we’re trying to do.”

In the two-hour conversation with Ms. Hontiveros that took place after Mr. Martynyuk’s appointment, dancers voiced their opinion, saying that the Vaganova technique — which is highly selective when it comes to anatomy (it favors open hips and perfect turnout) — will tax their bodies to the point of breakage.

Mr. Cojuangco, who has been issuing statements to address the accusations leveled at the Board, characterized Ms. Reyes as “malicious.” “I don’t care how this plays out,” he said. “Alice can jump up and down for all I care. She can do her pirouettes. I’ve been with Ballet Philippines for 27 years either as president or chairman and I have never encountered a situation like this. Never.”

‘A TOTAL FAIL’
This hullabaloo could have been avoided if only the Board communicated with the dancers and prepared the organization for the arrival of its new artistic director.

“Right now, it’s blown up because the leadership did not do what they had to do to prepare for everyone,” said Mr. Siojo, who has been a consultant on organizational behavior and human resources for 20 years (aside from being a part-time faculty member at the Leadership and Strategy Department of the John Gokongwei School of Management at Ateneo de Manila University in Quezon City).

“It’s not a complicated problem. If I were to look at it from the corporate side, [what happened] was a total fail. You initiated a radical change but you did it from just one side. How do you expect to get support from your stakeholders? Your big stakeholders are your dancers.”

Based on reports and facts available to him on Feb. 22, Mr. Siojo — who has no interest in ballet and therefore has no dog in this fight — identified communication (or the lack thereof) as the villain in the story. The dancers, despite not being the decision makers, should have been consulted much earlier in the search for a new artistic director.

“Communication is your most critical skill in any organization. Communication is about knowing about the other, knowing how they think, knowing how they feel, knowing where they come from,” he said. “I don’t think that was done here. I don’t think they [the Board] did their homework. If this was an academic exercise, I would have given them an F: You failed in communication, which is the foundation of a change management process.”

Mr. Martynyuk represents culture change, Mr. Siojo continued, and culture change is the most difficult kind of change to manage especially when it involves an organization like BP, which is proud of its 50-year legacy and its unique identity.

“They could have had a little more heart,” Mr. Siojo said of the Board. “A little heart could have done a lot in making the change less painful. It’s the same for any human situation.”

A FANTASTIC COMPANY
Ms. Reyes, who turns 78 this year, didn’t expect that the company she founded would celebrate its golden anniversary embroiled in controversy, its fate in question. Although she is not on social media, she is aware of the discussion (which has devolved into rude ad hominem attacks in some corners of Facebook).

“What is sad is that the dancers see it the way I see it, and it seems the rest of the community sees it the way we see it. And what they cannot understand is why our Board sees it differently. That’s the question, why? If we were on the same page and people on the outside were not — that would make a little more sense, even if we were on the wrong page together. At least we’d be together,” she said.

“I want to stop all the rumors because I want the dancers to concentrate on the work. I have been trying to calm everybody down. I think that it’s very sad that as far as the Board members have been told, I am the bad person. And that’s really sad to have that kind of portrait of me being painted. That’s okay. I accept it. It doesn’t bother me,” she said. “I go down to the rehearsal hall and I get inspired by the dancers. It’s a fantastic company.”

They may not see eye to eye anymore but on the last point, Ms. Reyes and Mr. Cojuangco agree.

Rice prices expected to fall further

THE Duterte administration expects the price of rice to decline further on the second year of the law lifting import restrictions that brought prices to a seven-year low.

During a Palace briefing on Wednesday, Socioeconomic Undersecretary Mercedita A. Sombilla said the price of rice could fall to around P34 to P35 per kilo this year, from the current price of around P36 per kilo — the lowest since 2013.

She said prices are seen to drop with the implementation of the Rice Tarriffication Law (RTL) and measures to boost production of rice farmers, particularly through the Rice Competitiveness Enhancement Fund (RCEF).

Ngayon pumalo na tayo at P36…The lowest one that we saw was in 2013 which was P33.70 and ito ngayon ang pinakamababa after six years, seven years. Hopefully, talagang bababa pa rin tayo with the intercession of the RCEF that will increase production of rice… We are hoping that the retail price will go down,” Ms. Sombilla said.

“It depends on how all of these will work out, but we are hoping it could still go down to P34 or P35 this year. There are so many factors, including how the world market will be evolving in the coming months.”

Agriculture Secretary William D. Dar said during the same briefing that P2.3 billion for the RCEF has already been approved by President Rodrigo R. Duterte and is expected to be released soon in order to assist farmer beneficiaries under the RTL.

“P2.3 billion is awaiting to be fully accessed and through the program’s steering committee of the rice competitiveness enhancement fund, We are going to request the allocation of P1.3 billion for crop diversification and P1 billion for crop insurance….Again, for the very purpose of helping rice farmers increased their levels of productivity, competitiveness and profitability,” Mr. Dar said.

The Agriculture secretary assured that the rice inventory is currently good for 80 days, and no shortage in rice is expected. — Gillian M. Cortez