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SSS, GSIS directed to prop up PSE with more equities purchases

FINANCE Secretary Carlos G. Dominguez III said Friday that the state pension funds need to double their regular equities purchases to help prop up the stock market after sharp losses triggered trading halts Thursday.

In a Viber message yesterday, Mr. Dominguez told reporters he asked the Government Service Insurance System (GSIS) and the Social Security System (SSS) to double their daily average purchase volume, at the very least, in response to the market rout triggered by the coronavirus (Covid-19) outbreak.

“I have instructed GSIS and SSS to take advantage of the low stock prices as well as to support the stock market by at least doubling their daily average purchase volume of last year,” he said.

The Philippine Stock Exchange index (PSEi) fell 9.71% to 5,736.27 Thursday, its largest one-day drop since the 12.27% decline on Oct. 12, 2008, during the subprime mortgage crisis.

The PSEi dropped by as much as 10.33% intraday, which triggered the circuit breaker that halted trading for 15 minutes.

On Thursday, Mr. Dominguez said the government has “all the tools — medical, financial and monetary — to successfully handle this situation.”

Mr. Dominguez provided no estimates for the two pension funds’ equity positions.

Asked for details, the GSIS and SSS had not responded at deadline time. — Beatrice M. Laforga

Exporters call for gov’t aid to cushion impact of pandemic

THE Philippine Exporters Confederation, Inc. (PhilExport) said the the government needs to help businesses stay afloat during the coronavirus (Covid-19) outbreak and pitched a program of easier financing terms, tax breaks, and unemployment relief for workers.

“With no medical relief in sight to address the virus itself, we call on government’s assistance to help businesses, especially MSMEs (micro, small and medium enterprises), keep afloat through collateral-free loans, moratorium on loan and interest payments and tax breaks,” PhilExport President Sergio Ortiz-Luis Jr. said in a statement e-mailed to reporters on Friday.

He said PhilExport members have expressed their “very serious” concerns about the impact of the Covid-19 on their businesses.

Such concerns include late shipments, cancelled orders, and loss of buyers and suppliers, he said.

“These have resulted in higher cost of logistics and raw materials, as well as lower sales,” he added.

Mr. Ortiz-Luis said four exporters are now considering laying off workers.

“Assistance to displaced workers will be another welcome government intervention, with funds possibly coming from their local governments. Finally, it will be relevant and useful to divert or allot new funds to augment equipment, tools, medical personnel and facilities to support the response, recovery and rehabilitation phases of this crisis,” he added.

Most members, he said, are turning to the domestic market to compensate for lost business.

“There is clearly other work to be done. For example, it may not be the right time to look for raw material suppliers (other than those in China) considering the extensive coverage of the virus. But this is definitely a critical future step as we rebuild,” he said.

Because of the situation, the organization also postponed its 2nd Quarter General Membership Meeting set for April 14.

On Thursday, President Rodrigo R. Duterte announced that Metro Manila will be placed under the so-called “community quarantine” between March 15 and April 14 as confirmed Philippine cases of Covid-19 continue to rise.

The Trade department said the President’s directive does not cover business operations.

Goods are also free to move, according to Trade Secretary Ramon M. Lopez. — Arjay L. Balinbin

NCR residents warned against excessive food stockpiling

THE Department of Agriculture said Metro Manila’s population of around 14 million need not maintain more than their usual supplies of food as major commodities like rice are readily available.

Agriculture Secretary William D. Dar issued the advisory in a news conference after the government adopted a “community quarantine” policy for parts of the capital region affected by the coronavirus (Covid-19).

“Don’t stockpile too much food. There is enough food supply that you can buy during this time of health emergency,” Mr. Dar said.

Mr. Dar said the current rice inventory held by NFA warehouses nationwide is good for at least 80 days and will be further augmented by the current harvest, providing additional stock good for another two to three months.

He added that rice supply is more than enough to meet Metro Manila’s weekly demand of 26,241 metric tons (MT).

“Together with stocks (held by) the private sector and households, there is a 35-week rice supply, amounting to 929,358 MT, in Metro Manila that can last for at least nine months,” he said.

He said based on 2015 Philippine Statistics Authority (PSA) data, weekly demand in Metro Manila for vegetables and root crops was 5,000 MT, well below the expected weekly supply of 17,302 MT; for poultry and meat 7,934 MT, against supply of 11,074 MT;for fish 8,000 MT, against supply of 10,264 MT; for eggs 25 million pieces, against supply of 42.5 million pieces.

In addition, Mr. Dar said that the DA’s food resiliency action plan will help ensure equal distribution of goods.

The action plan will include the strategic positioning of basic food commodities around Metro Manila. The effort will be directed by Undersecretary Ariel T. Cayanan.

Mr. Dar said the entry of food products into Metro Manila will continue despite movement restrictions under the “community quarantine” scheme, adding that supplies will continue to come in as usual.

“All vehicles carrying agricultural goods, regardless of volume, will pass without interference,” Mr. Dar added.

However, Mr. Dar said that adjustments may be needed if the situation worsens, including special lanes for vehicles carrying agricultural goods.

Typical precautionary measures will be implemented on drivers carrying produce to Metro Manila such as temperature check.

Suggested retail prices (SRPs) for basic commodities will remain in force, he said. — Revin Mikhael D. Ochave

NEA collects P2.3-B in loan payments from co-ops in 2019

THE National Electrification Administration (NEA) said loan payments from electric cooperatives (ECs) in 2019 totaled P2.297 billion, beating the target by 15% and exceeding the 2018 total of P2.263 billion.

It said the result was propped up by some prepayment activity by ECs.

“The early payment of outstanding loans by some ECs amounting to P94.35 million and increase in advance payment made by ECs of P283 million contributed to the attainment of high collection efficiency,” NEA Finance Services Department Acting Director Milagros Robles said in a statement.

It said the largest payments were received from Occidental Mindoro Electric Cooperative, Inc. (OMECO), Nueva Ecija II Electric Cooperative, Inc. — Area 2 (NEECO II — Area 2), Misamis Oriental II Rural Electric Cooperative, Inc. (MORESCO II), Central Pangasinan Electric Cooperative, Inc. (CENPELCO), and First Laguna Electric Cooperative, Inc. (FLECO).

NEA is responsible for the electrification of rural communities, regulating 121 ECs.

Its lending programs include stand-by credit and short-term loans, which aid them in settling accounts.

The agency also offers 10-year calamity loans at 3.25% annual interest.

In February, the agency provided a total of P51.596 million in calamity loans to six power cooperatives in the MiMaRoPa, Bicol and Eastern Visayas regions to aid the rehabilitation of their distribution systems after typhoon Tisoy in December.

The agency estimated a P911.668-million-worth of damage and losses to 27 ECs in Luzon and Visayas resulting from the typhoon. — Adam J. Ang

Peso deemed among most resilient currencies in Asia — DoF

THE peso was among the more resilient currencies in Asia amid rising uncertainty and volatility in global financial markets, the Department of Finance (DoF) said.

In an economic bulletin posted Friday, Undersecretary and DoF Chief Economist Gil S. Beltran said the peso’s year-to-date performance made it among the currencies in the region that “maintained their value against the dollar.”

As of March 10, the peso strengthened by 0.28% against the dollar, putting it behind only the yen, Hong Kong dollar and renminbi, which gained 4.27%, 1.82% and 0.33% against the dollar, respectively.

“Despite the volatilities in the global economy, made more uncertain by the spread of Covid-19, the collapse of global stock markets and trade restrictions imposed on each other by the world’s top trading economies, the Philippine peso remained firm,” according to the bulletin.

Other currencies depreciated against the dollar including those of India, Singapore, South Korea, Thailand, Vietnam, Indonesia and Taiwan.

“The peso-dollar exchange rate also remains stable throughout the period. Its coefficient of variation at 0.27%, ranked 2nd behind the Vietnamese dong among 12 regional currencies and lower than the 1.19% Asian average,” it said.

Mr. Beltran attributed peso’s “growing strength and stability” to the country’s balance of payments position (BoP) and increasing gross international reserves (GIR) boosting confidence in the currency.

“Strong macroeconomic fundamentals support the country’s financial position. Manageable budget deficits and prompt adjustment of monetary settings in response to current developments help maintain investor confidence,” it said.

The BoP was in surplus by $7.843-billion in 2019, the largest since the $9.236 billion posted in 2012.

Meanwhile, GIR totaled $87.84 billion at the end of 2019, equivalent to 7.7 months’ worth of imports of goods and payments of services and primary income.

“Strong foreign exchange inflows from exports of services, remittances, income from investments abroad, direct foreign investments and foreign borrowing all contributed to the strong BoP position. These in turn boosted the confidence in the Philippine peso,” according to the economic bulletin. — Beatrice M. Laforga

Peso weakens but comes off lows after stocks rebound

THE peso weakened against the dollar Friday as the market absorbed news of the further spread of coronavirus disease (Covid-19) in the Philippines, but came off its lows after a stock market rebound.

The currency ended trading at P51.03 Friday, following a P50.85 close Thursday, according to data from the Bankers’ Association of the Philippines.

Week-on-week, the peso declined from its March 6 close of P50.64.

The currency opened the session at P51.25., hitting a low of P51.31 and a high of P50.85.

Dollar volumes rose to $1.416 billion from $1.375 billion Thursday.

UnionBank of the Philippines, Inc. Chief Economist Ruben Carlo O. Asuncion said that the currency’s decline came on the back of an increase in domestic Covid-19 infections.

“The peso was holding up early part of the week until yesterday morning when it was clear that local transmission of Covid-19 in Metro Manila is escalating,” he said in a text message.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said that the peso close on Friday was weakest in more than two weeks.

The drop came a few hours after the announcement of the community quarantine declaration for Metro Manila “as this could lead to slower economic growth and some stockpiling by households,” Mr. Ricafort said in a text message.

Mr. Ricafort also noted that the peso recovered from its intraday weakest of P51.31 reflecting the positive turnaround in the local stock market.

The Philippine Stock Exchange rose 57.67 points or 1% to 5,793.94 after falling 9.71% Thursday, the biggest decline in 12 years at the height of the subprime mortgage crisis.

President Rodrigo R. Duterte imposed one month of movement restrictions into and out of Metro Manila on Thursday to prevent the further spread of the virus. The restrictions cover domestic land, sea, and air travel to and from the National Capital Region starting March 15.

The Department of Health has registered 52 Covid-19 patients as Thursday, with two deaths reported. — Luz Wendy T. Noble

Ricoh Philippines: Celebrating 20 years, three loves, one growing company

Ricoh Philippines, Inc., the local subsidiary of leading global manufacturer of office automation equipment Ricoh Company, Ltd., recently marked its 20th anniversary in the country with the theme of “Prominence”, which expressed the Company’s appreciation for its hardworking employees and loyal partners through the years.

Guided by “the spirit of three loves”–love your neighbor, love your work, and love country–principles formulated by founder Kiyoshi Ichimura that steers how it conducts business around the world, Ricoh Philippines is stronger than ever, growing its operations as the country’s exclusive distributor of multifunction devices (MFD), printers, production printers such as Direct-To-Garment (DTG) machines, and visual communications software solutions including complete after-sales support.

Ricoh (Philippines), Inc. President and CEO Frederic Sulit is shown acknowledging their partners during his opening remarks.

“Our employees and partners have empowered our Company to go from strength to strength,” Frederic Sulit, President and CEO of Ricoh Philippines, said. “We’re further emboldened by their continued support to face even more challenges which we will turn into opportunities to serve the country through various innovative solutions.”

Shown are Ricoh (Philippines), Inc. past and current leaders (l-r) Eileen Michaela Gallardo, RPH CFO, Cecil Bien Sebastian, Frederic Sulit, RPH President and CEO, and Manuel S. Peralta with RPH Milestone awardees.

Directly reporting to Ricoh Asia Pacific Pte. Ltd, which is based in Singapore and is exclusively owned by Ricoh Company, Ltd, Japan, Ricoh Philippines shares its parent company’s commitment to not only supply but also use the most advanced innovations in the markets it operates in and to invest in practices that promote sustainability.

“Our future lies in being able to use our core strengths to address key issues in our society as our parent company has adopted eight of the United Nations Sustainable Development Goals to create a sustainable economy, a sustainable society, and a sustainable environment,” Sulit said.

Officials of Ricoh Philippines are shown receiving the Award of Appreciation from the Philippine Center for Print Excellence Foundation.

To create a sustainable economy, Ricoh Philippines will provide products and services to its customers that will help improve productivity and eliminate waste.

To create a sustainable society, Ricoh will increase investment in CSR activities as well as in internal health and wellness programs for employees, which will further encourage pursuing a healthier lifestyle.

With its technologies, Ricoh aims to improve the overall quality of life and help customers produce only what they need when they need it to create a sustainable environment.

Sulit believes “Ricoh’s business is not only about being profitable, but also about being relevant.”

Shown celebrating Ricoh’s 20th Anniversary are (l-r) Hannah Castillo, Ricoh (Philippines), Inc. Product Management Head; Eileen Michaela Gallardo, RPH CFO; Frederic Sulit, RPH President and CEO; Irene Santos, RPH General Manager for Sales Division, and Orly Closa, RPH General Manager for Customer Service Division.

PSEi’s 9.71% decline marks its biggest one-day percentage drop since 2008

THE STOCK MARKET on Thursday plunged nearly 10% to its lowest since 2012 as investors headed for the exit amid deepening fears over the coronavirus disease 2019 (COVID-19) outbreak. Read the full story.

PSEi’s 9.71% decline marks its biggest one-day percentage drop since 2008

Stocks plummet on coronavirus fears

By Denise A. Valdez
Reporter

THE STOCK MARKET on Thursday plunged nearly 10% to its lowest since 2012 as investors headed for the exit amid deepening fears over the coronavirus disease 2019 (COVID-19) outbreak.

This as the World Health Organization (WHO) on Wednesday officially declared the spread of the coronavirus as a global pandemic.

PSEi’s 9.71% decline marks its biggest one-day percentage drop since 2008

The benchmark Philippine Stock Exchange index (PSEi) gave up 616.99 points or 9.71% to 5,736.27 on Thursday — its biggest single-day decline since the 12.27% drop in Oct. 27, 2008 at the height of the global financial crisis.

Thursday also saw the PSEi close at its lowest since the 5,636.59 finish on Dec. 18, 2012.

The bearish PSEi plummeted by as much as 10.33% to 5,697.13 during the intraday, triggering the circuit breaker and halting trade for 15 minutes until 3:08 p.m.

The circuit breaker, which is activated when the main index drops by at least 10%, was last used on Oct. 27, 2008.

“Calling today a bloodbath would be the understatement of the year,” PNB Securities, Inc. President Manuel Antonio G. Lisbona said in a text message. “As selling pressure from investors stampeding for the exits reached a boil, the PSE’s 10% circuit breaker was hit shortly before 3 p.m.”

Value turnover yesterday stood at P7.96 billion with 981.13 million issues switching hands. Net foreign selling reached P773.90 million, a turnaround from Wednesday’s net foreign buying of P350.50 million.

Philstocks Financial, Inc. Senior Research Analyst Japhet Louis O. Tantiangco said it is harder to deal with the current situation as the core problem isn’t something that can be fixed through fiscal and monetary policies.

“If you’re going to compare it to the past, for example the global financial crisis and the Asian financial crisis, back then those were something that you can resolve through the use of stimulus… This time it’s different. What we really need right now is a cure to the virus,” he said in a phone call.

“We know COVID-19 has already spread throughout the world. Many countries are already affected. There are already threats of an economic slowdown, recessions even. Once these happen, it will likely have a heavier impact on the Philippines than in the past,” he added.

Diversified Securities, Inc. Equity Trader Aniceto K. Pangan said the local stock market “followed the sentiment of the global fears on the epidemic.”

“Its effects are apparently seen in…how it slows down the economic activities of these nations,” he said in a text message. “As we are in the bear market, we could probably expect a slight rebound (today) due to oversold levels… But it may continue to go on a downward bias…depending on the way the government contains this epidemic locally as well as globally.”

For Philstocks’ Mr. Tantiangco, until an actual cure to the virus is discovered, the market is expected to remain on the down side. “The primary backdrop is still the lingering epidemic,” he said.

PNB Securities’ Mr. Lisbona agrees: “The market will be volatile the next few days with bargain hunters coming in to pick up badly beaten names. Selling pressure on the whole will prevail, however.”

President Rodrigo R. Duterte was scheduled to address the public on Thursday night, amid the increasing number of COVID-19 cases in the country.

The Department of Health announced three new coronavirus cases in the country, bringing the total number to 52.

Finance Secretary Carlos G. Dominguez III, who is under home quarantine after contact with a known COVID-19 case, told reporters yesterday the government has “all the tools — medical, financial and monetary — to successfully handle this situation.”

Meanwhile, the peso sank against the greenback on Thursday due to negative investor sentiment as the COVID-19 continues to spread.

The local unit finished trading at P50.85 against the dollar on Thursday, plunging 30 centavos from its P50.55 close on Wednesday, according to data from the Bankers Association of the Philippines.

The peso opened the session at P50.65. The peso sank to the P51-per-dollar level intraday, dropping to as low as P51.05, while its intraday best was at P50.63 against the greenback.

‘Never before seen’:PHL braces for pandemic

By Norman P. Aquino Special Reports Editor
and Vann Marlo M. Villegas Reporter

A 48-YEAR-OLD Filipino worker at the Philippine office of accounting firm Deloitte was confirmed to have been infected with a novel coronavirus on March 5 after traveling to Japan in the previous month. He was the fourth case in the Philippines.

In the next three days, Philippine health authorities confirmed six more infections, including the first local transmission of the virus between a Filipino couple from San Juan City near the capital.

By March 9, the Department of Health had identified 468 people who may have been exposed to the coronavirus disease 2019 (COVID-19) from cases No. 4 to 10. Six people had been isolated by then, according to the agency.

Jaime A. Almora, president of the Philippine Hospital Association, thinks the government has been doing an admirable job in trying to contain the virus.

“We’ve seen their circulars and their orders, and they’re pretty fast in their response,” he said in an interview. Authorities have also imposed travel bans and quarantine procedures in a timely manner, Mr. Almora said.

On March 9, the government reported 14 new cases of the virus in the Philippines, prompting President Rodrigo R. Duterte to suspend classes in Metro Manila for five days to prevent an outbreak in schools.

To date, at least 49 people have been infected in the Philippines, 46 of them just this month.

DoH raised the country’s alert level to code red sublevel 1 — the fourth in a five-level alert system — on March 7 after the first local transmission was reported and as health authorities “prepare for a possible increase in suspected and confirmed cases.” Mr. Duterte declared a public health emergency a day later.

The last and most severe alert level — code red sublevel 2 — will only be raised if there is evidence of widespread “community transmission” that is more than what the government can handle.

The COVID-19 pandemic — so declared by the World Health Organization on March 12 — was first reported in December in the city of Wuhan in central China’s Hubei Province. The coronavirus strain has since spread to at least 121 countries and territories, killing more than 4,000 people and sickening about 118,000 more, mostly in China.

“We have never before seen a pandemic sparked by a coronavirus,” WHO Director-General Tedros Adhanom Ghebreyesus said Wednesday. “And we have never before seen a pandemic that can be controlled at the same time.”

The novel coronavirus may be less deadly than the severe acute respiratory syndrome (SARS) and Middle East respiratory syndrome-related coronavirus (MERS-CoV) at the start of the century and in 2012, respectively. But it is more communicable, as shown by its rapid spread.

SARS killed a tenth of the people who got it, while MERS was even deadlier, killing 34% of patients. Fatal cases for COVID-19 are lower at 3.4%.

Symptoms for the novel coronavirus can be either mild or severe and can include fever, a cough and shortness of breath. It is also possible to be infected without showing symptoms, according to the WHO.

Before last week, the Philippines had not reported any new cases for almost a month, leading the WHO to commend the country for the way it had handled the contagion.

That seems to be changing now, especially after criticisms of slow public announcements about new cases, and after senators found out about the dearth in testing kits.

On March 9, senators criticized health officials for failing to buy enough testing kits for suspected carriers of COVID-19.

The agency only has 2,000 kits and expects to receive 4,500 more from the WHO, Alethea de Guzman, a DoH medical specialist, told a Senate hearing this week.

An imported COVID-19 test kit costs about P6,000.

The department is reviewing a decision it made earlier to limit the use of test kits to travelers from countries with cases of COVID-19, she said.

“I’m a bit concerned because it’s important for us to be able to test as many people as possible, but we only have this limited number of test kits,” Senator Maria Lourdes Nancy S. Binay told BusinessWorld.

Senator Imee R. Marcos said she and her fellow lawmakers “felt a bit nervous” when they learned about the number of test kits available.

“You have a population of 110 million, and you can only test 2,000 people?” she said in an interview.

The Food and Drug Administration (FDA) has since approved COVID-2019 test kits developed by scientists from the University of the Philippines-National Institutes of Health (NIH) to help speed up the diagnosis.

“At least there are now locally made testing kits,” Ms. Binay said. “I hope DoH would be more proactive in addressing the problem moving forward.”

Health Secretary Francisco T. Duque III earlier noted that testing 100 million people was impractical.

ALGORITHM
Rabindra R. Abeyasinghe, WHO representative in the Philippines, has ruled out expanding testing capacity now given a global shortage in testing materials.

“So many countries are doing testing based on the capacity of their laboratory systems and expertise levels,” he told a House of Representatives hearing on March 11.

Mr. Abeyasinghe said there’s an effort on the part of the government to expand capacity, but protocols must be followed to conserve precious resources. “Protocols need to be followed so that we do a risk assessment before testing,” he said.

The WHO representative also said the Health department had developed over the years a “clearly defined algorithm” in evaluating cases and containing infections. That expertise has been shared with the Regional Epidemiology and Surveillance Units of its neighbors, he pointed out.

Mr. Duque said the Philippines is beefing up its testing centers by preparing five more laboratories outside the capital aside from the Research Institute for Tropical Medicine in Muntinlupa City and National Institutes of Health in Quezon City.

“We have expanded our contact-tracing by increasing the number of deployed surveillance teams to respond to the newer cases,” the health chief.

He added that there was a proposal to expand the “surveillance scale” for influenza-like illnesses to “increase the index of suspicion.”

The plan would increase DoH’s surveillance capacity by five times, and it needs a P135-million budget for that, Mr. Duque said.

The agency also needs to level up its management artillery, hospital supplies and equipment, and it’s seeking an additional P2.9-billion budget for the next three months that will be provided by the nation’s charity office and gambling regulator.

DoH is also asking for a separate P2-billion supplemental budget from both Houses of Congress. The House of Representatives approved a lower budget of P1.6 billion before lawmakers went on an almost two-month Holy Week break on March 12.

The Senate might hold a special session during the break to pass the budget bill, Senator Juan Miguel Zubiri said on March 11.

Norman Dennis E. Marquez, associate director of the Health Sciences Department of the Ateneo de Manila University, said health authorities should aggressively test persons under monitoring, not just persons under investigation.

“Asymptomatic individuals may be carriers and infect others,” Mr. Marquez, who said he does not speak for the university, said in an e-mailed reply to questions. “If we can identify them early as positive for the virus, then we can isolate them as well to prevent spread.”

Laboratory testing should also be made available in private hospitals “so we can get results faster,” Mr. Marquez, a medical doctor, said.

FACE MASKS
Aside from test kits, face masks have been missing in most drug stores due to hoarding since January, and the Department of Trade has asked a local manufacturer to increase supply to 4 million face masks a month from 1.6 million, according to Trade Secretary Ramon M. Lopez.

The bulk of the initial volume of 1.6 million had been allocated to health workers and people on the frontline including DoH and Red Cross personnel, he said. “There’s a need to increase allocation to the general public.”

On the other hand, there is enough inventory of alcohol and other types of hand sanitizers, Mr. Lopez said.

The Philippine International Trading Corp. has also found an Indian face mask supplier that can provide 2.5 million pieces more, he said.

Trade personnel are also monitoring supermarkets to ensure retailers don’t take advantage of the situation by unnecessarily raising the prices of basic goods.

“Because of the declaration of the public health emergency, under the Price Act, the prices of basic necessities are frozen,” Trade Undersecretary Ruth B. Castelo said by telephone.

The country’s major retailers including SM, Robinsons, PureGold and Metro Gaisano have assured the government that they have sufficient supply, she said.

Meanwhile, the National Water Resources Board (NWRB) said it would increase the allocation of the Metropolitan Waterworks MWSS from 42 cubic meters per second to 46 cms from Angat Dam effective March 12.

“This is to ensure steady water supply for Metro Manila considering the declaration of the state of public health emergency and the importance of water in undertaking the preventive measures against COVID-19,” NWRB Executive Director Sevillo D. David, Jr. said in a text message yesterday.

“The NWRB is assuring that water will be sustainably available throughout the whole year. The public is similarly asked to avoid wastage and to use water responsibly,” he said.

LOCKDOWN
Lawmakers have also been busy proposing solutions to contain the outbreak.

Quezon City Rep. Precious Hipolito Castelo has filed a bill that seeks to exempt face masks, sanitizers, antiseptics and other personal protective goods from taxes, duties and other charges.

“There is a need to flood the market with these goods so prices would go down and unscrupulous traders would be discouraged from hoarding them and selling them later at deleterious rates,” she said in the bill’s explanatory note.

Meanwhile, Albay Rep. Jose Maria Clemente S. Salceda wants a lockdown for Metro Manila “to isolate potentially undetected cases and to facilitate detection among those who will begin to demonstrate symptoms of the novel coronavirus once the lockdown ends.”

His proposal is for a seven-day lockdown of the capital and surrounding cities, suspending work, school, and other activities where people congregate.

Mr. Salceda estimates that the economy could lose 1.72% to 3.05% if a lockdown was not enforced and mass transmission occurred.

On the other hand, a lockdown now that could delay COVID-19 transmissions could lead to a loss of 0.21% of the gross domestic product, which can be recovered in six months, he said.

“So here’s the deal: Sure massive losses, or a small loss that you will regain anyway? The choice seems simple to me.”

Mr. Salceda is the author of a House bill that seeks to create a public health emergency framework and a local Center for Disease Control and Prevention that he said would have been capable of addressing an epidemic.

“The likelihood of an easy spread is limited from a geographical perspective,” WHO’s Mr. Abeyasinghe said, noting that the Philippines is an island archipelago made up of more than 7,100 islands.

“We cannot 100% confirm that there is no disease outside the National Capital Region,” he said. “But many factors are favoring the fact that what we have is a localized outbreak.”

The Philippine Health secretary could only hope for the best. “We hope that it doesn’t deteriorate,” Mr. Duque said.

“We hope that the number of cases doesn’t escalate, especially if our current social distancing efforts will result in us hopefully blunting the epidemic peak and extending the epidemic period to another few months,” he added. — with Jenina P. Ibanez, Charmaine A. Tadalan and Genshen L. Espedido

Economic growth may fall below 5% this year

MOODY’S ANALYTICS has lowered its 2020 growth outlook for the Philippines to below five percent on expectations the coronavirus disease 2019 (COVID-19) will affect exports and tourism, among others.

“We are expecting COVID-19 will shave one percentage point off Philippines’ GDP (gross domestic product) growth in 2020, bringing it to 4.9%,” Moody’s Analytics economist Katrina Ell said in an e-mailed response to BusinessWorld.

If realized, this would be much lower than the 5.9% growth logged in 2019, which was below the downward-revised 6-6.5% target.

The government targets GDP growth of 6.5-7.5% this year. National Economic and Development Authority (NEDA) Undersecretary Rosemarie G. Edillon said earlier this week that they are now looking at a 5.5-6.5% GDP growth in 2020 due to the outbreak, with the impact of the virus now expected to be bigger than initially estimated.

Moody’s Analytics in January had a 6.7% growth outlook for the Philippine economy for this year.

Earlier, Moody’s Investors Service also downgraded its 2020 growth outlook for the country to 6.1% in February from a previous 6.2% estimate.

In a note sent to reporters on Thursday, Moody’s Analytics said the economic cost of the virus will largely depend on the length of time it would take to contain it, as well as the number of confirmed cases.

“While a health epidemic typically brings a strong revival in activity after containment, the COVID-19 outbreak has not reached that point, and the economic toll has increased,” Ms. Ell said in the report.

Moody’s Analytics also downgraded its global growth forecast to 1.9% from its 2.6% estimate in January. Likewise, it cut its outlook for China’s expansion to 4.6% from the 6.2% it gave in January.

TOURISM TAKES A HIT
“The Philippines is exposed to COVID-19 via a number of channels, with a particular hit expected from a loss of service exports, including tourism,” Ms. Ell said.

The NEDA estimates the local tourism industry could sustain foregone gross value of about P93 billion to P187 billion this year on the back of the virus spread. With the country’s top tourism markets China and South Korea being the most hit by the virus, the Philippines may possibly see a 1.42-million reduction in foreign tourist arrivals this year.

“There would also be a blow to remittances from abroad that hurt consumer spending and investment,” Ms. Ell added.

Foreign direct investment (FDI) inflows to the Philippines fell by 23.1% to $7.647 billion last year from $9.949 billion in 2018. The 2019 inflows went beyond the downgraded $6.8-billion target for 2019. This year, the government eyes to secure $8.8 billion worth of FDI inflows.

Meanwhile, cash remittances from overseas Filipino workers (OFW) inched up by 4.1% in 2019 to a record $30.133 billion from $28.943 billion in 2018.

Although analysts have said the COVID-19 outbreak could dampen remittance growth, with a quarter of inflows coming from parts of Asia, they said the diversity of OFW deployment across different jurisdictions could cushion the impact. — Luz Wendy T. Noble

Metro Manila water providers to adjust rates in second quarter

METRO MANILA water concessionaires secured the go signal from the Metropolitan Waterworks and Sewerage System (MWSS) to adjust rates in the second quarter.

In a statement, the board of trustees of the MWSS approved the implementation of the foreign currency differential adjustment (FCDA) for Manila Water Company, Inc. and Maynilad Water Services, Inc.

Customers of east zone concessionaire Manila Water will face lower water bills, while those of west zone concesisonaire Maynilad will see a slight increase in their monthly bills.

Manila Water will implement an FCDA of 1.69% or P0.48 per cubic meter (cu.m.) of its average basic charge of P28.52 per cu.m.

Residential customers of Manila Water who consume 10 cubic meters or less will see their monthly bills reduced by P1.11, while those who consume 20 cu.m. and 30 cu.m.will see a P2.46 and P5.02 reduction in their bills, respectively.

On the other hand, Maynilad will implement an FCDA of negative 0.21% or P0.08 per cu.m. of its average basic charge of P36.24 per cu.m.

This would mean Maynilad residential customers who consume 10 cms or less will see a P0.18 increase in their monthly bills. Customers who use 20 cms and 30 cms per month can expect their bills to rise by P0.69 and P1.40, respectively.

Water concessionaires are allowed to recover losses or give back gains through the FCDA tariff mechanism that factors in the movements of the peso against foreign currencies. The FCDA mechanism has been set because the water concessionaires pay foreign currency-denominated concession fees to MWSS as well as loans to fund service improvement projects that will expand and upgrade water and wastewater services.

Meanwhile, the National Water Resources Board (NWRB) is increasing the current water allocation for the two water concessionaires in Metro Manila, amid the continuous spread of the coronavirus disease 2019 (COVID-19).

In a text message yesterday, NWRB Executive Director Sevillo D. David, Jr. said they would hike the allocation from 42 cu.m. per second to 46 cu.m. per second from Angat Dam effective March 12.

“This is to ensure steady water supply for Metro Manila considering the declaration of the state of public health emergency and the importance of water in undertaking the preventive measures against COVID-19,” he said. — R.M.D.Ochave