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Breaking the cycle of poverty

BOAC — It’s the season of Lent and this capital town of Marinduque province is once again in a frenzied preparation for the traditional Moriones Festival on Holy Week.

Provincial tourism officer Gerry Jamilla said local government officials are inclined to push through with the Lenten fiesta but it will be toned down due to the ongoing COVID-19 health crisis. He expects fewer people to participate this year unlike in the past when an estimated 50,000 people would join this world-famous festival annually.

The run-up to Holy Week is considered the only time when small businesses and beach resorts here would come to life. For the rest of the year, economic activity slows down in this fourth-class province income-wise, based on the 2018 Standard Geographic Code of the Philippine Statistics Authority.

Last month, Marinduque’s 100th founding anniversary celebration as an island-province kicked off with the unveiling of the Centennial Monument and the heritage plaque for the Boac Cathedral, which was declared an important cultural property by the National Museum of the Philippines. However, some crowd-drawing events like the centennial concert were canceled for health and safety reasons.

Sadly, Marinduque remains one of the country’s poorest provinces — exactly a century after it was separated from Tayabas (now Quezon province) in 1920. Since the 1960s, it has mostly been ruled by only three families surnamed Lecaroz, Reyes, and Velasco.

Incumbent Governor Presbitero Velasco, Jr. retired as Supreme Court associate justice in 2018 and subsequently ran for public office. Prior to his 20 years in the judiciary, he had a short stint with the government’s executive branch as undersecretary of the Department of Justice (DoJ). He was previously engaged in private law practice for two decades.

In the banking industry, a controversy arose concerning a loan co-signed by Mr. Velasco in 1997 when he was DoJ undersecretary. An import-export firm obtained this loan from Orient Commercial Banking Corp., which was closed by the Bangko Sentral ng Pilipinas (BSP) in 1998 after its president, Jose Go, was found to have “diverted to fictitious and questionable loans” the P3.3-billion emergency financial assistance extended by the BSP to the then ailing bank.

Later, as a sitting justice during the 2010s, Mr. Velasco did not inhibit himself in cases involving Mr. Go whose businesses included the Ever-Gotesco malls and the Evercrest golf club —even when it turned out they used to have a lawyer-client relationship.

Recently, the League of Provinces of the Philippines elected Mr. Velasco as national president. His sudden rise to political prominence is complemented by the rising career of his son, Rep. Lord Allan Velasco. This coming October, the Marinduque congressman is poised to take over as Speaker of the House of Representatives under a term-sharing agreement with Taguig-Pateros Rep. Alan Peter Cayetano.

Of course, poor Marinduqueños are excited at the prospect of having one of their own ascend to the fourth highest position in the national government, as it could be their only way out of perpetual impoverishment. But the father’s controversial past might haunt the son, who himself is currently embroiled in a tug-of-war with Mr. Cayetano over the speakership.

Meanwhile, the average poverty incidence per village in Marinduque stands at around 46.1% as of 2017, according to a study conducted by Arnold Salvacion of the University of the Philippines Los Baños College of Human Ecology.

When will the cycle of poverty in this perennially benighted yet beautiful island ever be broken? Does it have to wait another hundred years?

 

J. Albert Gamboa is CFO of the Asian Center for Legal Excellence and chairman of FINEX Publications.

Your Weekend Guide (March 13, 2020)

Anna and the Tropics

REPERTORY Philippines presents Nilo Cruz’s Pulitzer prize-winning Anna in the Tropics until April 5 at the Onstage Theater in Greenbelt 1, Makati City. In a cigar-making factory, the Alcazar family awaits for the arrival of their new lector. As the workers toil, the lector reads to them Leo Tolstoy’s Anna Karenina. The show is directed by Joey Mendoza. Tickets are available through TicketWorld (www.ticketworld.com.ph, 8891-9999).

Matilda the Musical

GMG Productions presents the international touring production of Matilda the Musical until March 22 at the Theatre at Solaire. Based on the children’s book by Roald Dahl, the musical follows a telekinesis-gifted five-year-old girl who overcomes struggles in her family and in school. There will be special prices on selected show dates. On March 17, 8 p.m., and March 22, 6 p.m., all orchestra seats will be P4,000 and all balcony seats will go for P2,000. A matinee performance has been added on March 18, 2 p.m., with all tickets at P2,200. Tickets are available through TicketWorld (www.ticketworld.com.ph, 8891-9999).

Duncan Ramos at Robinsons Galleria

JAM with the R&B singer and former lead vocalist of South Border, Duncan Ramos as performs on March 13, 6:30 p.m., at the Level 1, Activity Area of Robinsons Galleria, and on March 29, 3:30 p.m., at the Activity Area of Robinsons Metro East. To see the upcoming performances, events & promos of Robinsons Malls, visit www.robinsonsmalls.com or its Facebook page RobinsonsMalls; or follow @RobinsonsMallsOfficial on Instagram; and @RobinsonsMalls on Twitter.

Leica Conversations

THE Leica Store Manila presents Leica Conversations with Conceiçao Praun presenting “Through Her Lense” on March 14, 2 p.m., at the Leica Store at Greenbelt 5, Makati. In “Through Her Lense,” Praun will present photos of her recent trip in Southeast Asia, as well as images from the trips she has taken since 1995 in the different continents around the world. She will be sharing her observations from a perspective of a woman, her encounters with these cultures, and fascination with emerging societies and other highlights of her travels.

How PSEi member stocks performed — March 12, 2020

Here’s a quick glance at how PSEi stocks fared on Thursday, March 12, 2020.

P108-B stimulus package bill filed in House; P50B for businesses

A HOUSE BILL filed Thursday is seeking to set aside P108 billion for a stimulus package that will address the economic impact of the outbreak of the coronavirus disease 2019 (Covid-19).

Marikina Representative Stella Luz A. Quimbo filed House Bill 6606 which if passed will be known as the 2020 Economic Rescue Plan law.

Under the bill, P43 billion will be allotted to assist the tourism sector, P15 billion for displaced workers “including but not limited to emergency employment assistance and transportation vouchers,” and P50 billion for assistance to businesses, including loan packages and subsidies.

In a Viber message to BusinessWorld, Ms. Quimbo said that the stimulus package will be sourced from “contingency funds” and “savings.”

Ms. Quimbo also assured that the filing of the measure is not “too late” despite the adjournment of Congress for its Easter break.

“Rescue plan is for the entire year. (According) to Speaker, Congress can resume anytime if needed,” she said.

Asked why assistance to businesses has the highest allocation compared to the assistance for the tourism sector and displaced workers, Ms. Quimbo replied: “It covers all sectors other than tourism; there are over 900k SMEs (small and medium-sized enterprises).”

The measure also proposes to create an inter-agency task force “to develop the fiscal stimulus package and manage the use of funds” which will be headed by the National Development and Economic Authority (NEDA), with representatives from the Department of Tourism, Department of Labor and Employment, Department of Trade and Industry, Department of Finance, and the Department of Budget and Management.

NEDA is also tasked to estimate and monitor the impact of Covid-19 on the economy “in order to ensure the proper use of funds” and to submit a quarterly report to Congress.

Appropriations authorized under the bill will be available until funds are fully spent.

“Based on data from the Philippine Statistics Authority, 1% of our Gross Domestic Product is about P186 billion. A stimulus package of P108 billion will compensate for this expected loss, considering multiplier effects, and help keep our economy on track throughout the year.” Ms. Quimbo said in a statement. — Genshen L. Espedido

EO to grant DTI more powers to curb hoarding

THE Department of Trade and Industry (DTI) is proposing an executive order (EO) to increase its powers to monitor establishments to deter hoarding and overpricing as the coronavirus disease 2019 (Covid-19) outbreak spreads in the Philippines.

Trade Secretary Ramon M. Lopez told reporters in a mobile message Thursday that President Rodrigo R. Duterte expressed with the proposed order.

Mr. Lopez said the order would give the DTI, the Philippine National Police (PNP), and the National Bureau of Investigation (NBI) powers to visit establishments to prevent hoarding and profiteering.

“Online selling of masks and/or medical devices including alcohol, sanitizers, and the like will be strictly monitored and profiteering and hoarding will be dealt with,” he said.

He added that the selling of fake medical devices, including nebulizers, sanitizers, and alcohol, will be “strictly disallowed and dealt with.”

DTI said in a statement that the Consumer Act or RA No. 7394 considers overpricing of face masks an unfair and unconscionable sales practice because doing so would take advantage of consumers in a “time of need.” The Consumer Act places administrative sanctions of up to P300,000 and/or imprisonment of up to one year for violators.

The department said the Price Act or RA No. 7581 also considers these practices to constitute profiteering, an offense which entails a fine of up to P2 million and/or imprisonment of up to 15 years.

Mr. Lopez said the DTI is studying raising the penalties for violators.

The DTI said it also met with manufacturers of basic necessities to check on the availability of key goods.

“According to the manufacturers of basic goods, supply is sufficient while regular stocks in their warehouses are good for one month more or less, and they can produce more as the need arises.”

The National Food Authority (NFA) assured the DTI of sufficient rice stocks, while supermarkets said their inventories are good for two months. The supermarkets also committed to a cap of two bottles of rubbing alcohol per transaction.

The Mercury Drug chain said it maintains a month’s worth of medicines, while disinfectant manufacturers committed to maximize production.

The DTI is also working with the Food and Drug Administration to fast-track the issuance of Certificates of Product Registration for imported disinfectant.

“Consumers need not worry as we have enough stocks of basic goods in the market. The DTI is working closely with the manufacturers and retailers to ensure continued flow of supply in the market and reasonableness of prices of basic goods including disinfectants,” Mr. Lopez said. — Jenina P. Ibañez

Boracay tourist arrivals plunge 80%

BORACAY’S average daily tourist arrivals fell by more than 80% year-on-year to around 1,000 people in early March the wake of the coronavirus (Covid-19) outbreak, Tourism Undersecretary Arturo P. Boncato, Jr. said.

“Last year, average arrival per day 5,600, but almost the same number leave so we (did) not really breach carrying capacity. This time, start of March, that is really down to almost 1,000,” he told reporters on Thursday.

The Department of Tourism (DoT) monitors Boracay tourism numbers via the single port open to visitors.

The DoT strategy, Mr. Boncato said, is to improve destinations experiencing slowdowns pending the return of visitors.

“What we’re doing today is… making sure that when everything has been resolved, when you come back to Boracay, we have systems in place from the destination itself, to the medical services. Everything will be so much better than it used to.”

The department is working with the Makati Medical Center Foundation and the PLDT Smart Foundation to supply the island with satellite phones, pocket WiFi, and medical devices such as stethoscopes, oxygen regulators, and automatic sanitizer dispensers.

President Rodrigo R. Duterte’s plans to visit the island and speak with tourism stakeholders on Thursday were put on hold as the outbreak widened.

The DoT, in a statement Thursday, said it will announce a new schedule for the president’s visit as soon as the information is available.

“The safety and well-being of tourists, tourism frontliners and citizens remain the utmost priority of the DoT.”

Mr. Boncato said that the department is working with national government to form contingency plans in case the outbreak reaches the island.

“It’s not going to be exclusive to Boracay — it’s going to be a national contingency plan,” he said.

“When it comes to tourism, our primary task is to make sure to protect the welfare of our tourists. If they’re already here, we have a regional office, we have a Boracay office. We are in touch with the tourism enterprises. And one good thing about Boracay is that all those doing business for tourism are accredited by the department… in effect they follow the standard, they’re under our regulation, and they always support what the national government is doing.”

Meanwhile, the task force working on the rehabilitation of Boracay is currently on track, he said, with two more major projects not yet completed.

Mr. Boncato said the Tourism Infrastructure and Enterprise Zone Authority, the infrastructure arm of the department, is investing in a drainage system.

“It’s done in parallel with the road network of DPWH (Department of Public Works and Highways).”

The inter-agency task force on the rehabilitation of Boracay will be working until April. — Jenina P. Ibañez

ADB offers to fund makers of key goods used in Covid-19 containment

COMPANIES in Asia and the Pacific region manufacturing and distributing products essential to containing the outbreak of coronavirus (Covid-19) have been offered the Asian Development Bank’s (ADB) $200-million Supply Chain Finance Program for capital to support the expected increase in production amid demand for such products.

In a statement Thursday, the Manila-based bank said the funds will be available to firms that manufactures or distributes medicines, personal protective tools and other items needed against the pandemic and will be “provided to selected companies within weeks.”

“The support will target companies in the supply chain that are critical to fighting the virus. We’re looking to support companies that want to ramp up production and therefore need to engage suppliers,” ADB Head of Trade and Supply Chain Finance Steven Beck was quoted as saying.

The multilateral bank said the $200-million facility “could support more than $400 million” worth of projects in the next 12 months if private funding is added.

ADB also said it partnered with commercial banks on a “fifty-fifty risk sharing” basis to boost the funding further and possibly double the pool to $800 million over that period.

The bank did not provide further details.

“ADB is closely monitoring the impact of Covid-19 on trade finance and is in regular contact with client banks to assess whether additional support is required,” the bank added.

So far, the bank has issued $4 million worth of financing support to several countries fighting the pandemic, and a $18.6-million private-sector loan extended to Wuhan-based pharmaceutical distributor Jointown Pharmaceutical Group Co. Ltd. “to support the continued supply of essential medicines and personal protective equipment.”

The World Health Organization on Wednesday officially classified Covid-19 as a pandemic after its spread and intensity rose to “alarming levels.”

The ADB has shut down its headquarters in Manila for disinfection and advised its staff to work from home on Thursday after a “visitor to the Bank tested positive for the coronavirus.” — Beatrice M. Laforga

Government funding to fight Covid-19 deemed adequate

THE Treasury said the government has sufficient cash to support agencies seeking to contain the outbreak of coronavirus (Covid-19) cases.

In a report to its parent agency the Department of Finance (DoF), National Treasurer Rosalia V. de Leon said “cashflow is more than adequate” to support agencies responding to the pandemic.

Asked for details, Ms. De Leon said the government raised more than P300 billion in retail Treasury bonds (RTBs) early last month, while the Bureau of the Treasury (BTr) has been making full awards during recent auctions of government securities.

“(Also), the domestic market is liquid (due to investors’) flight to safe havens especially government securities. We are the (only) game in town,” she said in a mobile phone message.

Budget Secretary Wendel E. Avisado said there is “nothing to worry” about in terms of funding.

“Our crisis management committee has met and set in place the required system to insure that DBM operates and attends to all funding requirements of the government at this time of national health emergency,” Mr. Avisado said in a mobile phone message.

Budget Undersecretary Laura B. Pascua said the Department of Health (DoH) also has P600 million in its quick response fund that it can use for responding to the pandemic, in addition to its regular budget. This can also be replenished from the P16 billion worth of funds from the National Disaster Risk Reduction and Management Council (NDRRMC).

On Tuesday, the Economic Development Cluster approved P2.92 billion in additional funding for the DoH, specifically for “additional testing, augmentation of contact tracing and surveillance and additional personnel protective equipment for health workers at the national and local levels.”

The government has estimated that it could lose P91 billion worth of revenue if disruptions caused by the pandemic linger until June. The government hopes to collect P3.49 trillion this year to fund its P4.1-trillion spending plan, with the remainder to be sourced from borrowing.

Mr. Dominguez has said the government needs to expand its borrowing program to plug any potential funding gaps, with the deficit estimated to rise to as much as 3.6% of gross domestic product (GDP) this year, well above projections. A deficit of 3% of GDP is deemed in many economies to be the ceiling for prudent spending, with the government previously expecting to spend the equivalent of 3.2% to ramp up its infrastructure program.

Ms. De Leon said the BTr has set up remote access for critical operations including its weekly auctions, payments and investments as its main office will shut down Friday to be sanitized.

“Everything is in place for remote access for critical operations like auction, payments and investments. Have assigned rotating skeletal force in case of prolonged lockdown. Have coordinated with PSALM (Power Sector Assets and Liabilities Management Corporation) for a temporary war room and another one in our Pampanga regional office is being readied. Cashflow is more than adequate,” Ms. De Leon said in a text message to the DoF, a copy of which was sent to reporters.

Meanwhile, various government offices have suspended work and closed down offices Thursday to disinfect their premises to help contain the outbreak from spreading further.

This includes offices of the Department of Budget and Management, Department of Finance and the National Economic and Development Authority, among others. — Beatrice M. Laforga

Transport dept’s Tugade joins other Cabinet officials in self-quarantine

KEY OFFICIALS of the transportation department, including its Secretary, have quarantined themselves alongside other Cabinet officials following potential exposure at an event where one of the attendees is believed to have since contracted the coronavirus (Covid-19).

The Department of Transportation’s (DoTr) Assistant Secretary Goddes Hope O. Libiran said in a statement that “our officials led by Transportation Secretary Arthur Tugade have taken the initiative to place themselves under self-quarantine.” Those observing the quarantine include Ms. Libiran.

She said the self-quarantine is “in observance of protocols set by the Department of Health in the event of a possible exposure to Covid-19… In addition, the DoTr has also started the temporary closure of some of its offices and agencies for cleaning and disinfection.”

According to reports citing Mr. Tugade and Ms. Libiran, and confirmed by a DoTr source to BusinessWorld, the potential exposure happened at a March 5 inspection of the NLEx Harbor Link toll road, which was attended by President Rodrigo R. Duterte, Finance Secretary Carlos G. Dominguez III and Bangko Sentral ng Pilipinas Governor Benjamin E. Diokno, and Executive Secretary Salvador C. Medialdea; and officials of NLEx Corp., Metro Pacific Tollways Corp., and Metro Pacific Investments Corp. including its chairman, Manuel V. Pangilinan.

The Philippine National Railway also issued an advisory, saying: “In adherence to the protocols set by the DoH (Department of Health), the Philippine National Railways (PNR) will conduct cleaning and disinfecting of the PNR Executive Building from today March 12, 2020 until Sunday March 14, 2020. All office works are also suspended during the said period.”

Senator Christopher Lawrence T. Go, a former aide to the President, announced late Wednesday that he and Mr. Duterte had opted to be tested for Covid-19.

Mr. Dominguez told reporters in a Viber group chat Wednesday evening: “I was told that a fellow I met with Thursday and Friday last week tested positive for Covid-19. I have no symptoms but am self-isolating until I get tested. You may wish to follow suit.” — Arjay L. Balinbin

ATI issues positive outlook for Manila, Batangas ports

LISTED PORT operator Asian Terminals, Inc. (ATI) said cargo flow at the Manila South Harbor and Batangas Port is expected to improve by mid-March even as the region grapples with the outbreak of coronavirus (Covid-19).

In a statement sent to reporters Thursday, the company said: “Manila South Harbor has experienced signs of improvement compared to the latter part of February with vessel calls, especially those from Chinese ports, starting to pick up. Inbound and outbound container flows have likewise (picked up the) pace, with more container inventories recorded at the terminal.”

It said it has also observed a ”positive improvement trend” at the Batangas Port.

It said ports in China have been returning to normal.

ATI said it hopes the trend continues at Manila South Harbor and Batangas Port.

“Contingency measures (are) in place to ensure unimpeded cargo flow and the safety of its stakeholders,” it said.

The Philippine Ports Authority (PPA) recently said the yard utilization rate at the Port of Manila dropped from 65% average to 50% in February due to the outbreak.

It said cargo ships directly or indirectly from Hong Kong and China represent “about 70%” of all inbound cargo vessels.

PPA General Manager Jay Daniel R. Santiago said the Port of Manila was just recovering from the Chinese New Year which dampened shipping activity when the coronavirus began to affect cargoes from southern China, including Macau.

ATI reported that it handled more than 310,000 twenty-foot equivalent units (TEUs) at the Batangas Container Terminal (BCT) in 2019, up 25%.

It said its expansion program for the BCT in 2019 had resulted in “higher capacity and greater efficiency” for port users in the region. — Arjay L. Balinbin

DA to pre-position key food items within NCR

AGRICULTURE Secretary William D. Dar said the Department of Agriculture (DA) will strategically position stockpiles of key food items around Metro Manila in the event of supply disruptions arising from the outbreak of coronavirus (Covid-19).

Mr. Dar said apart from the rice in government warehouses, the food supplies to be prepositioned include rice, vegetables, fruits, eggs, fish, and pork.

“We are anticipating something that might cause the disruption of food supply. Strategically positioning means ensuring that supply is available and enough. Sapat ba ang bigas dito sa Metro Manila say, for the next one month (The Metro Manila rice supply is good for about a month)” he said.

The department considers the pre-positioning order a pre-emptive measure in the event that the outbreak worsens.

“Let’s have a plan on how to sustain the food supply for Metro Manila initially, and the whole country, eventually,” Mr. Dar said.

Mr. Dar has said stocks of many foods are ample because of the harvests in March and April.

Moreover, the Philippine Statistics Authority reported recently that the national rice inventory rose 10.9% year-on-year in February amid increased holdings by the National Food Authority. — Revin Mikhael D. Ochave

Auto industry seen hardest hit by coronavirus outbreak

IHS Markit expects the automobile and auto-parts industry to be the most severely hit sector globally this year by disruptions caused by the outbreak of coronavirus disease 2019 (Covid-19), with the industry estimated to suffer a 4.4% drop in value added terms.

“The motor vehicles & parts industry will contract in most regions in 2020 — with the biggest declines seen in Japan, China, South Korea and the United States,” IHS Markit said in a note Thursday.

Other industries to be severely hit are the computer and electronics sector which is expected to take a 1.9% hit to value-added, while the impact on restaurants will be a fall of 1.3%.

IHS Markit estimated that global economy will likely expand by 1.7% this year, less than its previous estimate of 2.5% made in February.

According to its Global Output Index February 2020 data table, IHS Markit said only five out of 20 sectors studied posted growth in activity last month, led by the pharmaceuticals and biotechnology sector, other financials, real estate, software and services as well as telecommunication services.

Meanwhile, the sectors that contracted the most last month were automobiles and auto parts, metals and mining, chemicals, industrial goods, household and personal use products, transportation, as well as tourism and recreation.

“By 2021, all industry segments will see a return to growth. Regionally, Japan, the Euro area and Latin America show weakest growth across a range of industries,” it said.

Asked to comment, Rajiv Biswas, Asia Pacific chief economist of IHS Markit, said the tourism industry will be the most affected sector in the Philippines as it accounts for an estimated “12.7% of total GDP and 8% of total exports, as well as 13% of total employment.”

He said the “severe disruption” in the country’s tourism sector will likely drag on until the second quarter, at the very least, and could indicate possible temporary job losses, which official estimates by the government project at 30,000-60,000.

“Consequently the Philippine tourism industry will experience a significant economic slump during coming months, resulting in financial stress for many segments of the tourism sector, including hotels, restaurants, tour operators, retail stores and airlines,” Mr. Biswas said in an e-mail Thursday.

Domestic tourism could help mitigate the economic shock from the drop in international travel, he added.

However, Mr. Biswas said the domestic manufacturing sector has shown “considerable resilience” amid the pandemic, “with the composite indicator continuing to indicate expansion” in the sector, according to IHS Markit’s latest manufacturing purchasing managers’ index (PMI) survey.

The Philippine PMI index improved to 52.3 in February, the highest level in Southeast Asia last month, and outperforming other economies whose supply chains were disrupted more severely by the pandemic.

“With the Covid-19 epidemic increasingly hitting many other economies in Asia and in Europe, some moderation in new manufacturing orders from abroad is likely in coming months, until the epidemic is brought under control,” he added.

Mr. Biswas also warned that a slump in global financial markets could lead to “negative economic shocks” for the country as global investors shift to safer assets such as US Treasury bonds and “away from growth assets such as Asian emerging markets equities.”

“The negative investor sentiment is resulting in portfolio capital outflows from Asian emerging markets, at least in the short term, until the Covid-19 pandemic can be brought under control,” he said. — Beatrice M. Laforga

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