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#COVID-19 Regional Updates

Trade chief says failure to provide transport in MECQ areas not good for a company’s reputation

TRADE Secretary Ramon M. Lopez said failure to provide transportation assistance to employees within areas still under modified enhanced community quarantine (MECQ) does not reflect well on companies. Mr. Lopez sent the statement to reporters on Saturday, withdrawing his initial comments that employees who refuse to work due to public transport limitations could be at risk of losing their jobs. Metro Manila, Cebu City, and several provinces in Luzon remain under the MECQ policy, wherein public transport is still banned but more sectors and businesses are allowed to resume operations. Mr. Lopez, in a briefing Saturday, called on employers to provide onsite or near-site accommodations and transportation to workers. “Kung meron silang mga private vehicles, pwede rin pong gamitin ito (If employees have private vehicles, they are allowed to use these),” he said. The Management Association of the Philippines in April proposed a “demand-driven” transport system in Metro Manila, opening up public transport in phases for employees to gradually return to work. — Jenina P. Ibañez

125 more immigration officers at NAIA negative for COVID-19

ANOTHER 125 Bureau of Immigration (BI) officers posted at the Ninoy Aquino International Airport (NAIA) tested negative for coronavirus disease 2019 (COVID-19). These are on top of the 206 officers at the airport and 150 employees at the BI main office who were also negative for COVID-19 in results released earlier. Commissioner Jaime H. Morente said they are conducting mass testing for frontline officers, especially at the airport, as they are at risk of contracting the disease. “We are initially implementing this at NAIA, as well as our Main Office. We are planning to conduct testing in our other offices nationwide as well,” he said in a statement. Rapid testing has also been conducted at the BI detention facility for 159 at-risk inmates and personnel. “Thankfully, all tested negative during the rapid testing, but this does not mean that we will lower our guard,” Mr. Morente said. — Vann Marlo M. Villegas

Baguio City plans tax relief for local businesses

THE Baguio City council is preparing an ordinance that will provide local tax relief to businesses, including those that were allowed continued operations during the lockdown period. In a statement on Sunday, the local government said the draft law is set for publication, after which it will undergo hearings for consideration of additional suggestions. The current draft gives establishments until Nov. 30 to settle business taxes without interest or surcharges for delayed payment. The city administration said the council has requested the “local finance committee to submit recommendations on the pending measure for possible incorporation in the final version, which shall be tackled on the proposal’s third and final reading.” Section 192 of the Local Government Code of the Philippine (R.A. 7160) authorizes local governments to provide tax exemptions, incentives or reliefs. The tax relief is in line with the city’s economic recovery plan following the disruptions brought about by the coronavirus disease 2019 (COVID-19) outbreak. — MSJ

Nationwide round-up

Neighbors citing PHL court victory vs China in sea dispute

SOUTHEAST Asian nations, both with or without claims in the South China Sea, are now citing the 2016 international court ruling in favor of the Philippines to protest against China’s activities in the disputed waters, an expert said. Nguyen Hung Son, director general and head of the Institute for the South China Sea, Diplomatic Academy of Vietnam, said there is a new trend among Southeast Asian states of showing “greater recognition” of the ruling. The United Nations Permanent Court of Arbitration in the Haque favored the Philippines in its lawsuit against China in 2016, rejecting the latter’s nine-dash line claim to most parts of the South China Sea.“The Philippines after three years of keeping quiet on the tribunal’s ruling, this year did a remarkable thing of officially putting the tribunal’s ruling back onto its official policy in its note verbales sent with the UN,” Mr. Nguyen said Friday at the Virtual Speaker Series: Sailing a Course through Contested Waters, hosted by the United States Embassy in the Philippines. Mr. Nguyen also said the Philippine government’s action showed its neighbors that “the Philippines has not trashed the ruling as many suspected.” The Department of Foreign Affairs recently protested against the establishment of the “Nansha” and “Xisha” district in China’s self-declared “Sansha City,” which is within the Philippine territory. Malaysia and Vietnam had done the same in firing off note verbales against China, in which the two states committed to aligning their respective claims with the tribunal ruling. “What’s remarkable too, the recognition of the ruling of the tribunal also came from non-claimants,” he said, citing Indonesia and Singapore. Mr. Nguyen raised the importance of acknowledging the ruling, on top of demonstrating that the Association of Southeast Asian Nations (ASEAN) is not crippled by the coronavirus disease 2019 (COVID-19) pandemic. “We hear that the Chinese center for contemporary international relations submitted their report to the top leadership in Beijing, warning of an unprecedented international hostility towards Beijing after the pandemic,” he said. This, he said, “would indicate how insecure the Chinese leadership feels and the assessment of the negative strategic environment China is facing at the moment.” Moreover, he said the negotiation on the South China Sea Code of Conduct (CoC), which has been delayed by the pandemic, also lies on the willingness of China to modify its behavior in the disputed sea. China and the ASEAN had agreed to work on the completion of the CoC by 2022. — Charmaine A. Tadalan

OFWs required to sign at-your-own-risk form

THE Philippine Overseas Employment Administration(POEA) announced Friday that workers will not be deployed overseas unless they sign a declaration form indicating they understand the risks posed by the global coronavirus disease 2019 (COVID-19) pandemic. In its Advisory No. 60 dated May 15, the POEA said “Overseas Filipino Workers (OFWs) whether land-based or sea-based shall be allowed to be deployed abroad upon the execution of a Declaration signifying their knowledge and understanding of the risks involved as advised by the Philippine Government.” This comes after the national COVID-19 task force announced that OFWs will be allowed for deployment under the eased quarantine policies. POEA also said recruitment and placement agencies are now allowed to resume operations. Health care workers whose contracts were not signed before May 8 are still banned from deployment. — Gillian M. Cortez

Journalists group tells practitioners not to interview suspects without legal counsel

THE National Union of Journalists of the Philippines (NUJP) called on news organizations to include in their reporting manual the prohibition of interviewing persons who have been arrested without the presence of their legal counsels. NUJP noted that the media “may find themselves abetting possible miscarriages of justice” by interviewing those arrested without their lawyer. “As journalists, it is our duty not to cause or minimize harm,” NUJP said in a statement. The statement was prompted by the interviews of the media with Ronnel Mas, who was arrested for posting on Twitter that he will give a P50 million reward to anyone who can kill President Rodrigo R. Duterte. The prosecutor said the warrantless arrest of Mr. Mas was invalid but this defect in the arrest was “cured” when he admitted to the media that he posted the statement. He has been indicted for inciting to sedition. — Vann Marlo M. Villegas

NBA G League welcomes prospects like Kai Sotto

By Michael Angelo S. Murillo
Senior Reporter

MUCH has been said about what the NBA G League could do for Filipino prospect Kai Sotto and his quest to make it to the National Basketball Association. But the organization shared it is happy and excited in return to have the young player on board, seeing how he could further enhance the profile of the league, particularly in attracting more international talent.

Last week, just as he turned 18 years old, Sotto announced that he was joining the NBA minor league organization and becoming the first international player to be part of the G League’s select squad.

The former Ateneo high school stalwart joined top young American talents Jalen Green, Isaiah Todd and Daishen Nix, among others, in the team, which the league will help develop as the players gird for a possible career in The Association.

Seven-foot-two Sotto said he is looking forward to the opportunity to further grow as a player in the G League, honing his basketball skills, building up his body and gaining confidence with the end view of eventually landing in the NBA, which is a dream for him and his family.

On the part of the G League, to have Sotto commit to it is a welcome development and very significant for the organization as it continues with its mission of developing NBA-caliber talent not only from the United States but also outside of it.

“We want to see an NBA-level talent who is willing to be pushed, developed and challenged. There are a lot of talented players around the world, but not all of them would fit in this program because some may not be ready for the commitment of preparing for the NBA,” said Shareef Abdur-Rahim, former NBA All-Star and now G League president, in a video conference call with Filipino media on Thursday.

“We always have a plan to have our program to improve international players. We are excited to welcome Kai knowing how big basketball is in the Philippines. We hope Kai is an inspiration to younger Filipino players that aspire to play in the NBA and aspire to be in the G League,” he added.

Mr. Abdur-Rahim, who spent 12 years in the NBA, went on to say that he is high on the development of Sotto, recognizing the kind of skills set he has at this point and his willingness to learn.

“We think Kai in some ways can a little be under the radar and he is just new to the United States and the popular media of evaluating players. Folks have not seen him a lot, and if you have seen him, then you recognize that he has made tremendous progress,” Mr. Abdur-Rahim said.

In the G League, members of the select squad will be provided with NBA-level coaching and be trained and looked after accordingly.

Sotto has been in the United States for some time now and trained at The Skills Factory in Atlanta, Georgia.

He was previously reported to be considering playing collegiate ball there, getting offers from the University of Kentucky, Auburn and Georgia Tech, among others, until he broke the news that he was joining the G League instead.

Chooks-to-Go president roots for Sotto in G League journey

WHEN news broke out that Filipino prospect Kai Sotto was lacing his shoes in the NBA G League, the local basketball community celebrated and got excited, including Chooks-to-Go president Ronald Mascariñas, who said he is rooting for the young player to do well in his new journey.

Long a supporter of Sotto, Mr. Mascariñas commended the former for taking the challenge of making his family and the country proud by representing and parlaying his wares in the National Basketball Association minor league organization on his way to hopefully fulfilling his dream of playing in the NBA.

“In this time of a crisis, the news of him joining the G League was a development that brought light to our country. It is the road less taken but I know deep down that Kai had his family in mind when he made the decision to join the G League,” said Mr. Mascariñas.

“Being a Filipino, he has a sense of responsibility to give back to his parents. For Kai, this is his way of making Ervin and Pamela proud,” the Chooks-to-Go official added.

Mr. Mascariñas went on to say that he is hopeful that Sotto’s journey would be an inspiration to the Filipinos to not stop pursuing their dreams and making things happen just as he reiterated their group’s continued support for Sotto moving forward.

“Many Filipinos are dreaming of playing in the NBA. And Kai is no different. I can only wish that God will continue to bless Kai and his family in this very tough journey,” he said.

“May he continue to be an inspiration to not just Filipinos but all dreamers and aspirants all over the world.” — Michael Angelo S. Murillo

Eerie silence across stadiums on Bundesliga restart

BERLIN — From social distancing substitutes using airport stairs, to disinfected balls and a potential television audience of one billion, the Bundesliga enjoyed a checkered restart as the first major sports league to resume amid the COVID-19 pandemic.

The German top two divisions, suspended since mid-March due to the virus, returned on Saturday, including the Bundesliga’s showcase — the Ruhr valley derby between Borussia Dortmund and Schalke 04 — as football-starved fans around the globe tuned in to watch live action.

Despite the possible global audience of a billion as predicted by Bayern Munich boss Karl-Heinz Rummenigge, and the hope it gave other sports leagues, it was not what fans had been hoping for.

Instead of the 81,000 crowd packing in Dortmund’s Signal Iduna Park, it was a mere 300 people, including players, staff, team officials, broadcasters and security personnel, as in every stadium as part of a strict health protocol.

Fans have also been banned from inside and around the venues to minimize the risk of infection.

Every shout, scream and thud of the ball bounced off the concrete tribunes and was picked up by the pitchside microphones to create a haunting atmosphere.

In Dortmund, Europe’s biggest standing tribune, the Yellow Wall stood impressively empty as the latest episode of the fiercest German football rivalry unfolded on the pitch.

The games sounded more like Sunday kickabouts or high-intensity training sessions than the return to action of highly paid professionals in the world’s best attended football league with normally an average of about 42,000 spectators per game. The Bundesliga is desperate to complete the season for contractual reasons by June 30.

Police were present at the grounds prior to the start in order to deter fans from gathering outside to celebrate.

“The derby without fans is a new challenge for us but equally complex as a regular game,” Dortmund police said before the game, urging fans to stay at home. “Make it easy for us and stay at home.”

They did stay away from the derby, officials said as the game got under way.

Inside the stadiums masks were mandatory for everyone apart from the players.

Teams had to change their routines completely with Leipzig having brought in a set of airport stairs to keep substitutes at a distance in the tribunes, some three meters higher up than the bench.

The Bundesliga has allowed five substitutions in total per game to cope with the lack of match practice and the congested fixture schedule. — Reuters

UFC caps week of return to action; Overeem wins

THE ULTIMATE Fighting Championship capped a busy week of return to action with another event in Jacksonville, Florida, on Sunday (Manila time), which was highlighted by the second-round technical knockout victory by heavyweight contender Alistair “The Demolition Man” Overeem.

Its third event in eight days after taking a temporary break because of the coronavirus disease (COVID-19) pandemic, the UFC said it hoped that by staging the fights it could somehow give some semblance of normalcy and jump-start things for the return of sports in the United States, which is still struggling to battle the highly contagious respiratory disease.

Dutch Overeem (46-18) was hurt and busted open by American Walt Harris early in their scheduled five-rounder but managed to survive and swing the tide in his favor as the fight progressed.

In the second round, Mr. Overeem managed to land a solid leg kick to the head of Mr. Harris and followed it with a punch to the face that sent the latter to the canvas.

It signalled the end for Mr. Harris as once Mr. Overeem got on the back of his opponent he pounded him with a barrage of punches before the referee stopped the fight at the three-minute mark of the second round.

The win was a bounce-back victory for Mr. Overeem after losing in his previous fight while Mr. Harris (13-8) saw his two-fight winning streak come to an end.

Meanwhile in the co-main event, Brazilian Claudia Gadelha edged American Angela Hill in their women’s strawweight battle by split decision, 28-29, 29-28 and 29-28.

UFC on ESPN was held anew at the VyStar Veterans Memorial Arena behind closed doors with only essential personnel in attendance in accordance with the protocols set to help stop the spread of COVID-19. — Michael Angelo S. Murillo

Singapore F1 promoters say closed-door race in September not feasible

LONDON — Singapore Grand Prix promoters have ruled out holding their Formula One race without spectators, casting further uncertainty over the likelihood of the September event going ahead.

Formula One plans to start its stalled season in July with races behind closed doors in Austria and Britain due to the COVID-19 pandemic.

The sport has not given up on crowds returning later in the year, however.

Singapore GP promoters told The Straits Times newspaper on Saturday that they were maintaining an open dialogue with Formula One but it was “not feasible to conduct the race behind closed doors.” — Reuters

“The top priority remains the well-being and safety of our fans, volunteers, and all Singaporeans,” a spokesman said.

He added “works typically require three months to complete, and this will depend on whether such activities are permitted under the prevailing government regulations.”

Last year’s race on the Marina Bay street circuit was watched by 268,000 spectators over the three days, with overseas visitors making up 40% of the crowd.

Formula One has yet to publish a revised calendar, with three races cancelled and seven postponed so far, but draft versions have appeared on the internet without featuring Singapore.

The island nation has reported nearly 27,000 cases of coronavirus, the highest per capita infection rate in Asia, largely due to mass outbreaks in cramped accommodation for foreign laborers.

The government has ordered a nationwide lockdown due to run until June 1. — Reuters

Constant Novak

Novak Djokovic was on top of tennis just two months ago. A record eighth Australian Open crown and a fifth Dubai Tennis Championships title followed Serbia’s 6-0 ATP Cup run with him at the helm — all clear indications that he was in the midst of yet another dominant turn to start the year. Unfortunately, the coronavirus disease 2019 pandemic compelled the sport to grind to a halt; competitions were suspended indefinitely, leaving him in the dark as to when he could resume his quest to be the best of the best of all time.

Left to cope in a vacuum, Djokovic participated in seemingly mundane events. Even as he admitted being lost in quarantine, he gamely joined the likes of Roger Federer and Andy Murray in social media spectacles and kept busy with conference calls and interviews. Meanwhile, he stayed fit as best he could; at one point, he pushed the envelope and, while in Spain, wrongly used the Puente Romano Marbella Tennis Club’s facilities to practice, a misinterpretation of physical distancing rules then in place.

There can be no silver lining to the extraordinary disruption of the tour schedule, and the inability of even the most dedicated minds in science to get ahead of the virus serves only to fuel the uncertainty. Granted, it’s fair to argue that no one has benefited from the suspension of play. That said, there is also no discounting the negative effects it has had on the momentum he hitherto built. While he will still be World Number One once some semblance of normalcy is instituted, the interregnum has served as a reboot of sorts. He cannot but be starting from scratch.

The good news is that Djokovic continues to be upbeat. In fact, he firmly believes that, regardless of current circumstances, he will be walking away from the sport as the acknowledged first among equals. In last week’s In Depth with Graham Bensinger profile on him, he listed “win[ning] the most Slams and break[ing] the record for [most number of weeks] at Number One” as his “clear goals.” How, when he turns 33 later this month? “I don’t believe in limits,” he argued, while conceding that, as he ages further, “there will probably be a focus on the biggest tournaments and the tournaments that mean the most to me.”

Interestingly, Djokovic’s self-confidence has made for controversial declarations. For instance, he has insisted — particularly on Instagram Live discussions with financial-adviser-turned-supplements-endorser Chervin Jafarieh — that “energetical transformation, through the power of prayer, through the power of gratitude, [can] turn the most toxic food, or maybe most polluted water into the most healing water, because water reacts. Scientists have proven that in experiment, that molecules in the water react to our emotions to what has been said.”

Setting aside the outlandish, if dangerous, claim, Djokovic’s mind-over-matter conviction informs his capacity to perform under extreme pressure. It was certainly how he managed to turn around his career after coming close to retiring from tennis two years ago, and it figures to keep him engaged moving forward. Which is why, in the final analysis, his objectives look to be a matter of when, not if. For all the variabilities life has introduced, he deems himself the only constant that matters.

 

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.

Remittance growth slows in February

By Luz Wendy T. Noble, Reporter

MONEY sent home by overseas Filipino workers saw slower growth in February, as the coronavirus outbreak began to spread around the world.

Data from the central bank showed cash remittances of overseas Filipinos coursed through banks stood at to $2.358 billion in February, up 2.5% from the $2.301 billion seen a year ago. However, the annual growth rate seen in February is much slower than the 6.6% year-on-year expansion seen in January.

Inflows also fell 10.95% from the $2.648 billion recorded in January.

The February cash remittances were the lowest since the $2.372 billion logged in November 2019.

Cash remittances in the first two months of 2020 rose by 4.6% to $5.006 billion from the $4.784 billion recorded from January to February last year.

Bangko Sentral ng Pilipinas (BSP) Governor Benjamin E. Diokno said the remittance growth target has been cut to an average of 2% for this year.

“The BSP staff projects that the OFW remittances would shrink by 0.2 to 0.8% from the original three percent growth forecast, hence the revised forecast is a range of 2.2 to 2.8% or a midpoint of 2.5%,” Mr. Diokno said in a Viber message to reporters on Friday. “To be on the conservative side, BSP adopted an amended forecast of two percent, which is less than 2.5%.”

Meanwhile, personal remittances totalled $2.623 billion, up by 2.6% year-on-year from the $2.557 billion logged in February 2019.

However, personal remittances fell by 10.9% from the January level, and was slower compared to the 7.3% year-on-year pace in the previous month.

The United States was the biggest source of remittance in February, accounting for 39% of the total. This was followed by Singapore, Japan, Saudi Arabia, United Kingdom, United Arab Emirates, Qatar, Canada, Hong Kong, and Korea. These countries are the source of 79.4% of total cash remittances, the BSP said.

The central bank said personal remittances from land-based OFWs with contracts of more than a year jumped 3.5% to $2 billion from the $1.9 billion logged a year ago. Meanwhile, personal remittances from sea-based workers and land-based workers with work contracts of less than one year declined by 0.9% to $560 million from the $570 million traced a year ago.

For the January to February period, personal remittances grew by five percent to $5.566 billion from the $5.302 billion seen in the comparable year ago period.

BIGGER COVID IMPACT LOOMS
The slowing pace of remittance growth already reflects the impact of COVID-19 pandemic in some countries with many OFWs, according to Michael L. Ricafort, chief economist at Rizal Commercial Banking Corp.

“There was already some slowdown in tourism- and travel-related industries worldwide in February amid travel advisories as lockdowns in China started after the Lunar New Year Holidays in the latter part of January,” he said in an e-mail.

Mr. Ricafort said remittance flows in March and in April may see much slower growth or even a contraction as more countries implemented lockdown measures that have affected many industries that employ OFWs.

In the first two months of the year, cash remittances from China totalled $4.518 million, which is just about 0.09% of the cumulative $5.006 billion logged during the period, according to Security Bank Corp. Chief Economist Robert Dan J. Roces.

Meanwhile, UnionBank of the Philippines, Inc. Chief Economist Ruben Carlo O. Asuncion said that COVID-related restrictions as of February were only imposed in countries that form a small part of the total OFW remittances.

“The expected decline may be felt when the full impact of COVID-19 health restrictions are factored in with much of the host countries of OFWs,” Mr. Asuncion said.

World Bank has projected remittance flows to fall by 13% in lower and middle-income countries as migrant workers face layoffs and lower wages amid the pandemic and the looming global recession.

BSP’s Mr. Diokno has said that around 20,000 to 30,000 OFWs have already been repatriated in the midst of the current situation.

“Remittances have proven resilient in past downturns. Yet while we all hope for a positive growth, remittances this time may contract year-on-year as the hospitality and cruise ship components being the hardest hit might pull down remittance levels,” Security Bank’s Mr. Roces said.

Among the hardest hit economies is the United States, the top remittance source of the Philippines. As of Thursday, COVID-19 cases in the US reached over 1.42 million, nearly a third of over 4.45 million cases around the world.

“Note that [many] Filipinos in the US are either doctors, nurses and are in other healthcare-related jobs. There are also Filipino teachers that may not be necessarily affected by any work stoppages for some other job types,” Mr. Asuncion said.

Amid tighter finances, RCBC’s Mr. Ricafort believes that some OFWs may continue to send money back home in the spirit of altruism.

“Some OFWs may still send money to the Philippines by tapping their savings for the meantime to tide them over during the lockdowns until the re-start of the economies in various host countries,” Mr. Ricafort said.

A drop in remittance will be significant as it boosts consumption, which accounts for about 70% of the country’s economy.

DBCC slashes proposed budget for 2021, 2022

By Beatrice M. Laforga, Reporter

THE Development Budget Coordination Committee (DBCC) slashed the projected national budget for the next two years, as revenues are expected to take a huge hit from the coronavirus crisis.

According to the latest medium-term fiscal program published late Thursday, the DBCC projected the 2021 budget at P4.2 trillion, equivalent to 19.7% of gross domestic product (GDP), and 8.4% smaller compared to the P4.586 trillion budget proposed during its meeting last December.

For 2022, the DBCC set a P4.451-trillion budget, 13% lower than the P5.12 trillion projected in December.

Budget Secretary Wendel E. Avisado said in a phone message that the smaller budget plan is due to lower projected revenues.

Based on the medium-term fiscal program adopted by the DBCC during a special meeting on May 12, the state revenue projections stood P2.929 trillion for 2021, down 24% from the previously estimated P3.849 trillion.

In 2022, the government expects to collect P3.27 trillion in revenues, 24% lower from the earlier projected revenue of P4.31 trillion.

Finance Secretary Carlos G. Dominguez III said the revenue program were lowered because other macroeconomic assumptions such as gross domestic product, imports, and oil prices were also seen to decline this year due to the coronavirus crisis.

“GDP growth forecast is negative for 2020. All these conspire to lower the taxbase of revenues,” Mr. Domiguez told reporters Friday via Viber message.

“The medium term outlook is more positive than for 2020 though. Overall fiscal program for 2021-2022 follows a realistic trajectory of recovery that allows for growth while maintaining fiscal discipline,” he added.

Despite lower budget plan, DBCC has projected 7.1-8.1% growth in 2021 and 7-8% growth in 2022, which NEDA Acting Secretary Karl Kendrick T. Chua attributed to “across the board” recovery.

“Across the board recovery in consumption, investment and trade,” Mr. Chua said in a text message when asked for the expected growth drivers in the next two years.

Some economists said the spike in GDP growth next year will likely be due to base effects as the country picks up from the projected 2-3.4% contraction this year.

GlobalSource country analyst for the Philippines Romeo L. Bernardo said he expects a worse GDP output this year with a sharp 5-7% decline, downgraded from the 0.5% contraction outlook given last month.

In an online forum on Friday, Mr. Bernardo said the economy is more likely to see a long U-shaped recovery or W-shaped one, rather than the V-shaped recovery path that Mr. Chua earlier said is achievable if policies are used proactively.

With lower revenues, the inter-agency DBCC projected the budget deficit to spike to 8.1% of GDP this year before a gradual decline to 6% next year and 5% in 2022.

First quarter GDP posted a 0.2% contraction. Mr. Chua said “worse” figures should be expected this quarter as the lockdown period made up two-thirds of the quarter, signalling a start of a recession for the Philippines.

Other organizations and think tanks have slashed their growth forecasts for the Philippines this year. Capital Economics projected a six percent full-year contraction after the lockdown in Metro Manila and two other cities was extended until end of the month.

Also recently, Moody’s Investors Service and Fitch Solutions both downgraded their 2020 GDP forecast for the country to a two-percent contraction from the previous projections of 2.5% and -0.5%, respectively.

Meanwhile, World Bank is set to downgrade the three-percent growth projection it gave in April, while the Asian Development Bank’s latest estimate was two percent growth.

Unemployment rate could hit double digits — NEDA

THE Philippines’ unemployment rate could hit double digits this year, as the coronavirus crisis batters the economy.

“We are seeing from our surveys that unemployment will likely be double digit. We are waiting for second quarter LFS (Labor Force Survey),” National Economic and Development Authority (NEDA) Acting Secretary Karl Kendrick T. Chua told BloombergTV on Friday.

Philippine Statistics Authority (PSA) will release official data on June 5.

In 2019, PSA reported unemployment rate declined to 5.1% from 5.3% in 2018, its lowest level recorded in more than a decade or since 2005. The size of the labor force was estimated at 44.7 million last year.

Mr. Chua expects the country to slip into a recession this year. A recession is where two consecutive quarters of gross domestic product (GDP) contraction are recorded.

The second quarter GDP is expected to be worse than the -0.2% recorded in the first quarter, as the enhanced community quarantine (ECQ) in Metro Manila continues through end-May.

Mr. Chua said a hint of recovery should be felt in the second half as the country gradually reopens more parts of the economy, especially Metro Manila.

“By next week, we’re seeing the two thirds of the country in a relaxed quarantine, opened up, so I think we have a very good chance for a quick recovery starting in the second half,” he said.

Despite the grim outlook, Mr. Chua said the government is “ready to address” the “temporary shocks” in employment rates after rolling out the P200-billion cash aid program to poor families and the P51-billion wage subsidy program for employees.

He said the resumption of construction works for infrastructure projects once lockdown is lifted will serve as the “key” to the country’s recovery.

NEDA’s recent survey showed more than 2.2 million estimated jobs were lost as around 75% of the affected businesses were forced to close due to lockdown measures.

S&P Global Ratings earlier projected that the country’s jobless rate could hit 6.8% this year.

The inter-agency Development Budget Coordination Committee (DBCC) projected a two to 3.4% GDP contraction this year as the economic impact of the lockdown and pandemic is seen to reach P2 trillion.

In that same interview, Mr. Chua said among the programs included in the proposed recovery plan will include a time-bound, targeted equity infusion to large firms hardest hit by the crisis “to match whatever the bank will lend them.”

Without citing details, Mr. Chua said the program will also include conditions to “address the problem faster and minimize the fiscal risk for the government.”

Finance Secretary Carlos G. Dominguez III earlier said the government will need an additional P130-P160 billion to finance the programs under its three-phased recovery program. — Beatrice M. Laforga

80% of SB Corp clients have problems with their loans due to COVID-19

ABOUT 80% of Small Business Corp. (SB Corp.) borrowers have said that they cannot continue their loan agreements due to the coronavirus disease 2019 (COVID-19) pandemic, SB Corp. President and Chief Executive Officer Ma. Luna E. Cacanando said.

Ms. Cacanando was speaking during the virtual hearing of the House committee on trade and industry on Friday when she was asked by Nueva Ecija Rep. Rosanna V. Vergara how many of their clients are on the verge of bankruptcy due to the pandemic. “Only 20% of our existing borrowers have expressed that they can continue their loan agreements based on the amortization schedules existing for them. So 80% po actually may problema na (already have problems),” she replied.

“The way we address it now is to provide nga the moratorium during the ECQ (enhanced community quarantine), and then for the six months after the ECQ, interest rate lang po ang babayaran nila (they will only pay the interest rate),” she added.

SB Corp. has lent about P5.64 billion to 119,621 borrowers as of December 2019, according to Ms. Cacanando’s presentation to the panel.

Of this amount, P1.40 billion has been released for retail lending while P4.24 billion was released for wholesale lending. Meanwhile, P216 million was released to about 4,300 micro enterprises in the National Capital Region under the Pondo sa Pagbabago at Pag-asenso (P3) program.

Ms. Cacanando said that these existing borrowers can avail of the recently launched COVID-19 Assistance to Restart Enterprises (CARES) program, a P1-billion lending facility aimed to support micro-, small- and medium-enterprises (MSMEs) in addressing the economic impact of the pandemic.

“Yun pong CARES program, kung saan mas mababa ang interest, eligible rin po yung existing borrowers natin (Through the CARES program, where the interest is low, our existing borrowers are eligible) to get additional loans so that they can also restart their businesses, Actually we are making it 1.5 billion because we still have excess funds under P3,” she said.

The loan is open to micro and small businesses which have been in at least a year of continuous operation by March 2020, and whose businesses “suffered drastic reduction” during the epidemic.

Loans can be used to recover losses such as updating loan amortizations for vehicles and other fixed asset loans, inventory replacement for damaged perishable stocks, and working capital replacement to restart the businesses.

Micro enterprises with an asset size of up to P3 million may borrow between P10,000 to P200,000, while small enterprises with assets not bigger than P10 million may borrow up to P500,000.

The interest rate is 0.5% per month, and payments will have a grace period until the end of the community quarantine.

Ms. Cacanando asked Congress’ assistance in implementing an “equitable distribution” of the CARES fund by taking into consideration the level of impact and the strategies developed by each local government unit (LGU) in the country.

“We’d like to propose to Congress, we also consider the socio-economic recovery plans per district and we use this to map out the utilization of whatever funds that will be given to us,” she said.

Ms. Cacanando said that this proposal can ensure that all distressed micro and small businesses in each LGU will be equally addressed. — Genshen L. Espedido

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