Health innovations

The number of dengue cases in the country has reached alarming levels.

The World Trade Organization (WTO) noted in its July 2016 report that the global incidence of dengue has grown dramatically in recent decades and that about half of the world’s population is now at risk.

It admits there is no specific treatment for dengue, but early detection and access to proper medical care lowers fatality rates to below one percent.

The WTO also described last year as characterized by large dengue outbreaks worldwide, with the Philippines reporting more than 169,000 cases, representing a 59.5 percent increase in case numbers from the previous year. In the first half of 2016 alone, there were around 59,000 dengue cases, 31 percent more than the comparable period in 2015. Around 263 have died, compared to 159 last year.

One innovative company is helping the fight against dengue.

Philab Industries, a pioneer in the healthcare business in the Philippines, is expanding to healthcare science and technology bringing in the most advanced diagnostic tools to the country.

According to Philab CEO Hector “Tom” Navasero, they want to revolutionize the healthcare system in the country by providing both simple and sophisticated solutions such as self-test kits.

The company will soon introduce to the Philippine market a dengue test kit. One only has to extract blood from their finger using a lancet provided in the kit, put two to three drops of blood on the test region, and wait 15-20 mins for the result bands to show. Two bands will show positive for dengue, one for negative. If there are no bands visible, the test is invalid.

Test kits costs around P200-P300 and in 20 minutes, the result can be seen. Being tested for dengue in the hospital is more expensive and the results come out only after a number of hours.

In dengue treatment, time is of the essence and the earlier a patient is tested and treated, the higher the chance of recovery.

Meanwhile, Philab is also bringing in genomics into the country. Through this process, individuals will be able to get a picture of what they are made of – a DNA map which will enable one to know what disease one is predisposed to due to hereditary traits.

Genomics will allow individuals to improve prevention of diseases and encourage a lifestyle fit for their genome construction. For instance, kids can stay away from activities, food, chemicals and other external factors that may contribute to acquiring the predisposed disease.

Natural monopolies

Is there really room in this country for a viable third player in the telecommunications industry?

In a small country like the Philippines, it seems monopolies and duopolies are inevitable, if not facts of life. For industries like telecommunications where the barriers to entry are high due to expensive infrastructure costs, natural monopolies develop and encouraging competition would mean a wasteful duplication of resources.

According to economicsonline.co.uk, “natural monopolies are common in markets for ‘essential services’ that require an expensive infrastructure to deliver the goods or services, such as in the cases of water supply, electricity, and gas, and other industries known as public utilities… With a natural monopoly, average total costs keep falling because of continuous economics of scale.”

In the book “Competition Policy for Small Market Economies,” author Michal Gal noted that a rule that rejects condemnation of mere natural monopoly has been adopted by all jurisdictions, and a natural monopolist violates competition laws only if it acquires or maintains its power through means that are exclusionary, unfair, or predatory.

San Miguel Corp., in partnership with Australia’s Telstra, could have been a viable third player in the telco sector. Unfortunately, Telstra backed out of the deal and SMC sold its telco assets to PLDT and Globe Telecom.

PLDT and Globe, which now have a chance to utilize efficiently the valuable radio frequencies that used to be owned by SMC (which SMC had acquired from Liberty Telecom which also failed to use the frequencies), unfortunately cannot proceed with using the frequencies they have acquired because the Philippine Competition Commission is insisting that the acquisition deal is subject to PCC investigation. PLDT and Globe, on the other hand, are claiming that the deal is exempt from PCC scrutiny.

It is not easy to become a third telco player. Telstra planned to invest $1.4 billion for a 40 percent stake in the joint venture with SMC, but even that would not have been enough. Goldman Sachs analyst Raymond Tong estimated the project could cost both parties $3.5 billion over a three-to four-year period.

Fitch Ratings likewise said a “large cash burn for the new entrant is likely in the initial period as it faces significant capital investment to build its network in the absence of infrastructure sharing.”

Building a network in the Philippines is very challenging. Aside from the geographical difficulties, flip-flopping government policies, bureaucracy and red tape, the high cost of permits and fees from local government units, the Philippines is already a mature market with more than 100 percent penetration rate for mobile phones.

Instead of pushing for a third player in an industry that is, in fact, a natural monopoly, government should instead do its part and invest in building a nationwide network. Our laws need to be updated to promote innovation in communications, and to implement a sound national broadband plan. Our Public Telecommunications Act, approved 21 years ago, probably needs to be revisited.

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