Screening the gene

While the concept of genetic testing is not entirely new in the Philippines, there is an unfamiliarity among Filipinos regarding its availability, accessibility, and relevance here in the country.

 

Genetic testing is a type of medical test that identifies changes in chromosomes, genes or proteins. According to Dr. Carmencita Padilla, executive director of the Philippine Genome Center, genetic testing cannot stand alone, and is in fact part of a bigger picture called genetic services or the activities for the diagnosis, care, and prevention of genetic diseases.

In an interview with BusinessWorld, Dr. Padilla said the results of a genetic test can confirm or rule out a suspected genetic condition or help determine a person’s chance of developing or passing on a genetic disorder.

“Say I have three generations of women with breast cancer: my mother, my aunt, and my grandmother. How does genetic testing help me? Through genetic testing, it is possible to look for a marker linked to cancer that is common to the three of them. If I happen to have the marker, I can conduct the necessary screening and undergo regular testing earlier, compared to other relatives who do not have the marker,” she explained.

More than 1,000 genetic tests are currently in use, she added, and more are being developed.

Several methods can be used for genetic testing, including molecular genetic tests or “gene tests,” in which single genes or short lengths of deoxyribonucleic acid (DNA) are studied to identify variations or mutations that lead to a genetic disorder; chromosomal genetic tests, in which whole chromosomes or long lengths of DNA are analyzed to see if there are large genetic changes �” such as an extra copy of a chromosome �” that can cause a genetic condition; and biochemical genetic tests, in which the amount or activity level of proteins are studied, and abnormalities found in either can indicate changes to the DNA that result in a genetic disorder.

Chromosomal studies are available in only three institutions, namely the National Institutes of Health (NIH), University of the Philippines�“Manila; St. Luke’s Medical Center; and the National Kidney and Transplant Institute, while biochemical testing is available exclusively at the NIH. Molecular testing for some conditions, on the other hand, is available in some institutions, but most are on a research basis.

For Dr. Padilla, these tests are available in the Philippines only “in a limited sense,” primarily because the tests require special equipment and specially trained staff.

She explained that chromosomal and biochemical testing are not free, and the cost of the tests may be deemed expensive by an ordinary Filipino family. “Only NIH provides a charity rate for indigent patients,” she said.

On the other hand, since most of molecular testing is done for the purpose of research, the service is free to patients.

Newborn screening �” a procedure usually covered by PhilHealth which screens a newborn for a select number of metabolic conditions �” is the only population-based testing that is available in all hospitals in the country. Dr. Padilla said it is important for this procedure to be available and accessible to all Filipinos because certain conditions or diseases may still be treated.

“Prompt treatment can reverse the complications like mental retardation or death,” she said.

She noted, however, that other genetic tests should be done only if the patient really needs them. Typically, a geneticist assists in deciding what additional tests are needed, and when genetic tests are done, it is recommended that the patient goes through pre- and post-testing genetic counseling.

“Even a normal result has many implications. It is unfortunate that we have only nine geneticists in the country to serve 90 million people,” Dr. Padilla said.

According to her, the country needs more students and educators to take a special interest in genetics and genomics.

“The next generation of students must realize that these fields are important for the country. Worldwide now, there is a pool of geneticists and genomic experts in every country to study conditions that are of special interest in the population. We need this ‘pool’ also in the Philippines,” she concluded.

source:  Businessworld

Monetary policy for when spending policy is tight

THE MONETARY authorities hiked the reserve requirement ratio (RRR) -- from 18% to 20% -- presumably to reduce the liquidity in the country’s financial system by some P120 billion. That’s a wrong move. In the face of a tight government spending policy, it has the effect of constricting, not stimulating, economic growth.

A celebration after two years of strong growth is premature. More needs to be done to sustain and deepen economic expansion. Those who proclaim that the Philippines is at the cusp of tigerhood have to be delusional. There were many false starts in the past.

Among its ASEAN-5 (Indonesia, Malaysia, Singapore and Thailand) peers, the Philippines has the worst unemployment rate and the highest poverty incidence. One in four Filipinos is poor. For many reasons, including its poor infrastructure and unwelcoming business environment, it has also attracted the least amount of foreign direct investments (FDIs).

During his almost four years in office, the administration of Benigno S.C. Aquino III has pursued a restrictive spending policy. It allocated a small budget for public infrastructure, even in the face of the widening infrastructure gap between the country and its ASEAN-5 neighbors.

Where more rapid spending for public infrastructure was required to make up for past neglect, the administration responded by budgeting -- and spending -- modestly for public infrastructure.

At a time when higher government spending for public infrastructure is called for, actual budget deficits continue to fall -- from 3% of GDP in 2010 to 1.4% of GDP in 2013.

Fortunately, during the last three years, the conservative spending policy was complemented by a supportive monetary policy. Put differently, the above average GDP growth in 2012 and 2013 has been due largely to the easy monetary policy. Without it, growth could have been lower.

But now comes the Bangko Sentral ng Pilipinas (BSP)’s own pivot, a shift towards a tight monetary policy. A restrictive fiscal policy complemented by an unsupportive monetary policy spells trouble for sustaining economic recovery.

WHAT EXPLAINS AQUINO’S FISCAL CONSERVATISM?
While there is a great need for catching up, the government responded by skimping on public infrastructure. During the last three years, actual public infrastructure spending as percent of GDP was less than 2%. The general consensus is that it should be at least 5% of GDP.

Was the fiscal conservatism due to the desire to garner the administration’s most coveted trophy -- the ratings upgrade? Or was it due to the unfounded confidence that the public-private partnership (PPP) projects would take off with little delay?

If it was the first, that is, sacrificing investment in public infrastructure for lower deficits, then the government was being shortsighted. It sacrificed the long term for the short-term.

The need for public infrastructure is staggering. The harsh truth is that it is not possible for the Philippine to sustain economic growth of 7% in the next 10 years unless there is a dramatic improvement in its public infrastructure. The power supply is sputtering. The existing urban transit system is bursting at its seams. And the roads and highways are not only crumbling, they are also heavily congested. Its airports and seaports are old and decaying.

But the irony is that having an investment upgrade and making up the huge deficiencies in public infrastructure are not mutually exclusive. We can have both. The government may choose to spend another percentage point of GDP to finance public infrastructure, and the deficit would still be manageable.

There’s virtually no risk that financing the higher deficit would crowd out the private sector. Interest rates are at rock bottom. The Philippine may not even have to borrow from abroad since the Bangko Sentral is sitting on hefty gross international reserves and Philippine banks are awash with cash. Thanks to the 10 million Filipinos abroad, the economy is assured of some $20-$25 billion in remittances from abroad yearly.

The Aquino administration grossly miscalculated the impact of the PPP initiative. It thought the program would take off smoothly. But by any standard, its PPP initiative has been a monumental failure. Only seven out of more than 50 PPP projects have been awarded, a majority of which are small social projects, and none has been completed to date.

IS THERE A SOLUTION TO INCOMPETENCE?
The Aquino administration has to face another harsh reality: its incompetence. What little has been budgeted by the Executive and authorized by Congress, has not been spent fully.

In 2011, a measly 1.9% of GDP was budgeted for public infrastructure; only 1.6% was implemented. In 2012, the equivalent of 2% of GDP was budgeted for public infrastructure, only 1.8% was implemented. Finally, in 2013, the equivalent of 2.2% of GDP was allocated for public infrastructure, only 1.9% was implemented. This is not a case where there is efficiency gain, with physical outputs produced at less cost. It is a case where some projects were simply not implemented.

During its first semester in office, from July to December 2010, the Aquino administration rationalized project delays on three grounds: first, the need to review existing rules and procedures; second, the need to clean up the mess left behind by the previous administration; and third, learning by doing. Granted, but after the six-month learning period, one might rightfully blame further delays on pure incompetence.

Sadly, this woeful project implementation performance continues. For example, six months after super typhoon Yolanda devastated parts of the Visayas, the massive reconstruction work has yet to pick up.

Of the more than P100 billion that Congress had appropriated, only P3.7 billion have been released (not necessarily disbursed) to appropriate agencies and local governments. Worse, the Aquino administration has built only 50 houses for the estimated one million families displaced by typhoon Yolanda.

Is there hope in sight? In its final two years in office, can the Aquino administration transform itself from a slow, dodgy, inefficient implementing machine to a quick-moving, well-oiled and effective one?

(The author is a former Secretary of Budget and Management.)

source:  Businessworld

More requirements likely after stress test

THE BANGKO Sentral ng Pilipinas (BSP) may soon require some banks to submit an exit strategy of sorts under a scenario where their real estate loan portfolio takes a possible hit from rising interest rates, as lending to the sector shows no sign of easing.

BSP Governor Amando M. Tetangco, Jr. said the requirement could be part of stress tests on banks the BSP will be conducting as the regulator wants to determine how lenders’ exposure to the property sector could affect their credit standing.

“We’re just about to start... We want to know the effect is of a change in interest rates and other factors that impact the real estate sector,” Mr. Tetangco told reporters on the sidelines of the 10th ASEAN Finance Ministers’ Investor Summit held in The Peninsula Manila hotel in Makati City yesterday.

“If it is significant, we may ask concerned banks to submit a plan on how to address the impact on its balance sheet,” the BSP chief said.

Rising interest rates potentially could make it more expensive for home borrowers to pay their mortgages, and for real estate companies to raise more capital to finance expansion.

Data released yesterday by the BSP showed the real estate exposure (REE) of universal, commercial and thrift banks stood at P1.006 trillion at end-2013, 7.1% more than the P939.8 billion posted in the quarter ending September 2013.

“The rise in REE was mainly driven by real estate loans (RELs) which grew by 7% to P843 billion at end-2013 from P788 billion a quarter earlier,” the central bank said in a statement.

Included in the BSP definition of real estate exposure are not just property loans but also banks’ investments in debt and equity securities that finance real estate activities. These activities range from the acquisition, construction and development of properties, as well as buying and selling, rental and management.

Property loans alone accounted for 83.8% of the banks’ exposure to the industry at end-December. Bank holdings of property-related bonds comprised the remaining 16.2% last year.

The BSP said that 60% of banks’ loans to the industry was granted to commercial entities such as land developers and construction companies. 

The balance was extended to borrowers buying homes.

Still, the central bank said defaults on home mortgages “remain manageable amid the increase in real estate credit,” with these bad loans accounting of just 2.8% of big banks’ total credit to the sector, lower than the 3.2% posted at end-September last year.

On the other hand, investments in real estate securities went up by 7.8% to P163.6 billion at end-2013 from the P151.8 billion recorded during the third quarter last year.

Together, these loans tied to the real estate industry accounted for 21.8% of banks’ total loan books -- a level the BSP said was “similar” to what was recorded a quarter earlier.

BSP Deputy Governor Diwa C. Guinigundo noted, though, that the current exposure level remains manageable.

“As it is, I think there is still scope for future growth precisely because there is domestic demand for housing. And even for commercial and industrial use, you have BPOs (business process outsourcing) coming up and providing additional demand for office space,” Mr. Guinigundo said on the sidelines of the same forum.

“There is real demand. And you have a backlog in housing for socialized, economic housing, even for medium-sized housing,” he added.

The BSP has an existing 20% cap on banks’ exposure to the real estate industry. However, this limit only includes loans to the sector minus those for socialized and low-cost housing, as well borrowings through debt securities.

The central bank in 2012 widened its scope of monitoring the real estate industry. Under the new rules, banks are required to report all property loans - including those for socialized and low-cost housing developments. 

More importantly, banks now have to report how much property-related bonds they have bought and their equity holdings in real estate developments.

HOME LOANS RISING
Meanwhile, the BSP yesterday also reported that consumer loans by universal, commercial and thrift banks stood at P721.54 billion at end-2013, a 14.65% increase from the P629.34 billion recorded a year earlier. 

This is also 3.57% higher than the P702.56 billion posted a quarter earlier.

The bulk of loans were residential real estate loans, the central bank said.

“Figures suggest a notable increase in the purchase or rent of residences near business districts by young professionals, of luxury homes (condominiums) by high-income expatriates, and of RE (real estate) properties for the use or investment by Overseas Filipinos. Auto loans, credit card receivables and other consumer loans also rose during the period,” it added.

Despite the rise in credit, banks continued to manage non-performing loans, which only represented 5.34% of their total lending to the sector at end-2013, lower than the 6.13% registered during the third quarter last year.

“The BSP monitors consumer and other types of bank lending to ensure the banks’ adherence to high credit standards. This is essential to the BSP’s key objective of fostering financial stability,” it noted. -- B.F.V. Roc

SOURCE:  Businessworld

BSP hikes bank-deposit reserves to 20 percent

The Bangko Sentral ng Pilipinas (BSP) moved to quash latent inflation on Thursday by tweaking banks’ deposit reserves a notch higher to 20 percent, instead of tightening the screws on interest rates, as some had expected, and achieve the same result.

The higher deposit reserve effectively denied banks access to some P60 billion worth of funds they may not now lend but should instead warehouse in the vaults of the BSP, where their influence on inflation may no longer count.

The decision highlights the central bank’s unwillingness to wield a policy instrument as blunt as the rate at which it borrows from or lends to banks, which remain at 3.5 percent and 5.5 percent, respectively. Appropriately adjusting the BSP policy rates would have made the cost of money more expensive and life more difficult for both businesses and households to access funds as domestic interest rates move up.

The decision should also have minimal impact on bank lending, in general, as even the banks acknowledge that P60 billion off their collective loan book represents just a drop in the bucket of loan funds aggregating P3.86 trillion, as of latest.

First Metro Investment Corp.’s Rey B. Montalbo Jr., senior vice president and group head for financial markets at the premier investment banking outfit in the country, for instance, said the Monetary Board (MB) decision sends the signal that while inflation pressures have forced the BSP to act in a preemptive manner, they did so without disrupting the potential for the economy to expand over the next 18 to 24 months down the line.

“Making P60 billion inaccessible is just a drop in the bucket. Bank-lending rates should not be affected at all because the financial system remains very liquid. Loan rates should stay the same,” Montalbo said.

In the past, changes in the policy rates of the BSP directly impacted on inflation, as the levers are moved up or down the policy scale, appropriately impacting on the country’s output measured as its gross domestic product. 

But at its monetary-policy meeting on Thursday, the MB decided to keep its policy rates at record lows but raised banks’ RRR  by another 100 basis points, or 1 percentage point. The decision, according to BSP Governor Amando M. Tetangco Jr., soaked on some of the potentially inflationary liquidity in the system.

“The adjustments in the reserve requirements are expected to help mitigate potential risks to financial stability that could arise from the strong growth in domestic liquidity. The Monetary Board believes that solid domestic economic activity provides room for the hike in reserve requirements,” Tetangco said at the post-policy meeting news briefing.

This was the BSP’s second deposit-reserve adjustment this year; the first was implemented on March 27, when some P60 billion was initially held hostage in the vaults of the central bank.

The RRR—or the percentage of bank deposits that must be kept within the BSP’s vaults as reserves—now stands at 20 percent for universal and commercial banks, up from the 19 percent decision on March 27.

Thrift banks’ RRR is now at 8 percent, from the previous month’s 7 percent.

Rural banks’ and cooperative banks’ reserve requirement, meanwhile, is not covered by the tightening measure and, as such, their reserve requirements will remain at 5 percent.

Key policy rates, meanwhile, remain at 3.5 percent for the overnight borrowing or reverse repurchase facility, and 5.5 percent for the overnight lending, or repurchase facility.  This has been on all-time low rates since October 2012. The special deposit account rate was, likewise, retained at 2 percent.

Tetangco said in his earlier speaking engagements that a hike in policy rates “may not be the appropriate tool” in managing the current liquidity and inflation dynamics.

“The Monetary Board’s decision is based on its assessment that current monetary-policy settings continue to be appropriate given a manageable inflation environment,” Tetangco said.

Money-supply growth has been growing at a pace of 34.8 percent as of March this year, fueled mostly by bank lending, which also grew at a double-digit pace of 20 percent during the period.

 BSP Deputy Governor for the Monetary Stability Sector Diwa C. Guinigundo said the tightening move should be enough for domestic liquidity growth to normalize back to 15 percent  to 17 percent within the year.

 “We expect that the growth of M3 will continue with its path by the middle of this year, and it will be closely approximate to a 15-percent to 17-percent growth—which would represent the normal trend in the trajectory of total domestic liquidity,” Guinigundo said.

 Despite the manageable inflation assessment, the BSP said it will continue to watch the risks in the liquidity conditions in the country, and expressed readiness to tweak policy measures, if deemed necessary.  “The BSP will continue to pay close attention to the outlook for inflation and growth to ensure that monetary-policy settings remain consistent with price and financial stability,” Tetangco said. “The BSP also remains prepared to implement policy actions as needed to prevent a potential buildup in inflation expectations and financial imbalances.”

source:  Business Mirror

Gov’t debt increases 6.57% to P5.63T in Q1

The outstanding debt of the government rose 6.57 percent in March as it continued to rely on borrowings to partly fund its expenditure requirements.

The Bureau of Treasury, a unit of the Department of Finance, reported that the country’s debt stock reached P5.63 trillion as of end-March.

The amount was also P37 billion higher from the P5.59 trillion recorded the previous month.
Of the outstanding liabilities, a bigger portion or P3.66 trillion was accounted for by peso-denominated liabilities. This represented an increase of 7.36 percent year-on-year.
Domestic borrowings are done mainly through the sale of Treasury bills and bonds.

The Aquino administraton has maintained a policy of borrowing more from the domestic market rather than from foreign sources to avoid incurring too much foreign exchange risks.

The balance of P1.97 trillion was accounted for by debt denominated in foreign currencies. This was 1.02 percent higher.

Foreign borrowings comprise loans secured from development lenders such as the World Bank, Asian Development Bank and the Japan International Cooperation Agency.

Borrowings by the government are aimed at plugging the country’s budget deficit.
Total guaranteed debt stood at P471 billion, down 1.88 percent year-on-year.  This is largely due to the reduction in external guaranteed obligations – a product of net repayments and currency adjustments.

Despite the continued increase in government’s outstanding debt, the country’s liabilities remain manageable as it has been able to keep its budget to two percent of gross domestic product (GDP).

The government’s debt stock as of the end of 2013 went up by only 4.5 percent to P5.68 trillion.
Given this, the ratio of debt to GDP stood at P4.53 trillion or 39.2 percent, lower than the P40.6 percent (P4.28 trillion) recorded in 2012 as a result of the ongoing fiscal consolidation.

The country’s deficit also accounted for 1.3 percent of GDP last year.

source:  Philippine Star

Congressmen, except one, laugh off Trillanes proposal on government pay hike

A MEMBER of the House of Representatives over the weekend admitted that the government does not have enough sources of funds for the proposed salary increases of state workers and government officials.

Liberal Party Rep. Isidro Ungab of Davao City, chairman of the House Committee on Appropriations, said the proposal to increase the wages of state workers and elected high-ranking officials is only a good “political propaganda” for the 2016 presidential elections.

Ungab was reacting to Sen. Antonio Trillanes IV’s Senate Bill (SB) 1689, or the proposed salary standardization, which seeks to make the government compensation system competitive with the private sector.

““Expect more weird ideas as the 2016 election is fast approaching,” Ungab said.

“I cannot reconcile the ‘praise releases’ of some officials who wanted to reduce taxes and here comes another who want to raise salaries. Even a small business will collapse if you have more expenditures than your revenues,” he added.

According to Trillanes his proposal is aimed at curbing corruption, attract competent civil servants and prevent exodus of professionals seeking better paying jobs abroad. Trillanes also said the government shall adopt an omnibus compensation and position classification system for civil servants and military and uniformed personnel.

Under the bill the base pay of the lowest government rank, Job Grade 1, should increase to P16,000 a month from the current rate of P9,000.

The bill also proposed that the base pay of the President, the highest government rank, will increase to P500,000 from the present rate of P120,000 monthly. For military and uniformed personnel, base pay ranges from P23,000 (private) to P282,800 (four-star general).

The Vice President, the Senate president and the Speaker will have a base pay of P432,800 a month as they are categorized under Salary Grade 32.

Members of the Congress will have a base pay of P352,800 under Salary Grade 31.

“The intention to increase the salaries of government employees and officials is good but must be backed up by fund sources. It is easier said than done. We cannot do it without new sources of funds,” Ungab said.

On his part, Liberal Party Rep. Gus Tambunting of Parañaque said that he does not believe that the SB 1689 will address corruption.

“I don’t agree with this proposal. No matter how high a salary you give an official, if he or she wants to commit corruption, he/she will commit corruption,” Tambunting said.

Liberal Party Rep. Ben Evardone of Eastern Samar, meanwhile, backed the senator’s proposal to help uplift the standard of living of government workers.

Jovee Marie N. dela Cruz

source:  Business Mirror

Billions of public funds strangely deviated

TALKS these days on corruption associated with non-governmental organizations (NGOs) could have been avoided if the Department of Budget and Management (DBM) and the Commission on Audit (COA) had not been remiss in safeguarding public funds.

In 2012 the DBM, COA and other implementing agencies (IAs) inordinately deviated from their conscientious and prudent role in handling the discretionary spending program authorized by Congress involving the controversial Disbursement Acceleration Program (DAP).

That year the Executive branch spent a whopping P21.3 billion in equity, unbelievably way above the P2.1 billion authorized by Congress. This represents an increase of P19.3 billion, or a 926-percent deviation.

Also in 2012, the branch spent P24.1 billion for subsidy, P6 billion more than the P18.2 billion authorized by Congress. This clearly represents a 32.7-percent deviation.

My researchers were not the first ones who discovered these huge deviations while gathering materials for my book, Trail of Graft and Plunder, due for publication before the year ends.

University of the Philippines (UP) economist and former Budget Secretary Benjamin E. Diokno was the first when he vetted, in particular, the 2012 General Appropriations Act (GAA).

“Strictly speaking,” Diokno said, “the GAA allows the transfer of funds [not only the Priority Development Assistance Fund, or PDAF] to civil-society organizations [CSOs], NGOs or people’s organizations [POs] as implementors of programs and projects, but under well-defined conditions.”

According to him, the GAA requires that fund transfers to CSOs shall be made only when earlier fund releases, if any, availed of by the CSOs shall have been fully liquidated pursuant to pertinent accounting and auditing rules and regulations.

Public funds are strictly covered by COA rules on budget releases and project implementation.

Under COA rules, public funds are never released directly to NGOs, CSOs or any other PO, whether they came from the unconstitutionally declared PDAF or other sources of appropriations, like the DAP.

Fund releases are only made to IAs, which could be a department, an agency or a local government unit under the Executive branch.

Funds are never released to members of the Senate and the House of Representatives.

“The choice of the NGO as the implementing service or supply contractor is the responsibility of the agency head, not the senator or [House representative], even in the case of PDAF or other off-budget public funds,” Diokno said, adding that “the contract cannot be provided to an NGO at the whim and caprice of the head of the implementing agency.”

“If the legislator insists on awarding the service/supply contract to his [or her] chosen supplier or contractor, it is the responsibility of the head of the IA to advise the legislator that it can’t be done, since it would violate some existing rules, mainly the Government Procurement Reform Act,” he said.

The ex-budget chief also said “a general provision in the GAA requires that a report on the fund releases indicating the names of CSOs shall be prepared by the agency concerned and duly audited by the COA, and shall be submitted to the Senate Committee on Finance and the House Committee on Appropriations, either in printed form or by way of electronic document.”

Diokno emphasized that it is the responsibility of the head of the IA to require no less than an audit by the COA.

The questions are: “Has the COA audited the concerned IAs? Has the agency concerned submitted the COA-audited reports to the Senate Committee on Finance and the House Committee on Appropriations?”

“What have these two powerful congressional committees done to the reports? Did they review or promptly refer them to the archives, where they might quickly fade into oblivion?” the budget expert from the UP School of Economics asked.

source:  Business Mirror / Database - Cecilio T Arillo