The Weekly Journal - Wednesday, August 12-18, 2020

Puerto Rico and the Caribbean

www.theweeklyjournal.com

>Josian E. Bruno Gómez

Wednesday, August 12-18, 2020 - // no. 068

Debacle Puts Primaries in Limbo P6 FOMB Eyes Manufacturing Opportunities P7 Companies Benefit from Homebodies Economy P8-9

Real-Estate Industry Reports Sales

Surpassing Pre-Virus Numbers Puerto Rico offers mortgage rates as low as 2.75 percent

D Giovanna Garofalo

Make Mental Health a Priority P13

ggarofalo@wjournalpr.com

@giopgarofalo

espite spending around two months under lockdown during the early stage of the coronavirus (COVID-19) pandemic on the island, Puerto Rico’s real estate market has considerably regained strength since the industry resumed operations, with last July’s property sales performance being even higher than last year’s median.

Nick Pastrana, CEO of San Juan Realty Group, provided THE WEEKLY JOURNAL with a rundown of the sales of each month since the first executive order was enacted to implement restrictions and how each compares to median sales reported in 2019, based on the property sales that have been documented in the Puerto Rico Property Registry, a sub-branch of the Department of Justice.

In 2019, there were roughly 2,730 registrations GO TO PAGE 4

The Weekly Journal >Wednesday, August 12, 2020 >

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/ Wednesday, August 12, 2020

a week in review Puerto Rico Casinos Demand Reopening

>Carlos Rivera Giusti

The casino industry warned that the government’s decision to close the 16 casinos that operate in Puerto Rico, due to COVID-19 restrictions, threatens the livelihood of more than 3,000 Puerto Ricans who work in the sector. Casinos contributed more than $145.8 million to the island’s economy in fiscal year 2019, an increase of 3.42 percent over the previous fiscal year, they said.

Puerto Rico Businesses Team Up to Help Plantain Farmers

Tropical Storm Isaias damaged many agricultural crops in Puerto Rico, including the dairy industry. More than 40 percent of the plantain crops were damaged or lost, and a shortage is expected in the coming months.

To help farmers recover, PRoduce is leading an initiative with Puerto Rican social media companies and business owners to buy as many plantains as possible in the coming weeks and mitigate losses.

Powered BY El Vocero de Puerto Rico, 1064 Ave Ponce de León 2nd floor San Juan, PR Postal Address: PO Box 15074, San Juan, PR 00902

Former El Ponce Hotel to Reopen Under Marriott Flag

Gov. Wanda Vázquez announced that, 45 years after its closure in 1975, the former Hotel Ponce Intercontinental, also known as El Ponce, will be a new hotel from Marriott International under the Tribute Portfolio brand.

The project in the southern municipality will create roughly 400 direct and indirect jobs, with an estimated investment of $20 million.

President Salvador Hasbún shasbun@elvocero.com

Human Resources Director Arlene Rolón, PHR arolon@elvocero.com

Multi-Platform Digital Director Stephanie Gómez Álvarez sgomez@elvocero.com

Comptroller Félix A. Rosa frosa@elvocero.com

Traffic Director Ilia M. Pérez Centeno iperez@elvocero.com

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CONTINUED FROM PAGE 1 on a monthly basis. On March 15, 2020, Executive Order 2020-023 ordered an islandwide quarantine that impacted most residents and business owners. Although real estate agencies were able to work for two weeks before the lockdown came into place, the sudden cease of operations caused sales to drop by -41 percent compared to the 2019 median, with only 1,598 units sold.

April represented an even sharper decline because the industry was virtually immobilized during that month, with only 278 new registrations, or a -90 percent decrease to last year’s sales median.

By May, certain economic sectors were allowed to operate again, and federal and state aid was being distributed, which represented more money and stability to residents and investors, as well as a recovery in the real estate industry.

Compared to April 2020, property sales increased by 36 percent, but were still -56 percent below the 2019 median, with 1,205 units sold.

June offered an even more dramatic recovery of 40 percent with 2,298 new property sales, or -16 percent fewer sales than the median last year.

Meanwhile, July even showcased precoronavirus growth. In total, the Property Registry included 2,773 new sales, which is 2 percent higher than those reported in the 2019 median.

Pastrana explained that, even in June, the numbers performed as they normally would in a given year because sales percentages fluctuate

inter-monthly.

“Notice that, typically, you see that the [monthly] variation rises sometimes 9 percent, 10 percent or up to 15 percent. So, by June we can say that it had normalized a lot, and when you get to July, you are 2 percent above the median of what is a normal month. That is, in terms of sales — and this applies to both residential and commercial sales — July behaved as if it were a regular month of real estate property sales,” he stated, adding that the data reflects his experience as a real estate agent.

Lower Mortgage Rates Contribute to Recovery

Peter Torres, president of the Puerto Rico Mortgage Banks Association (ABHPR by its Spanish initials), stated that property sales have increased partially because now clients can qualify for mortgages, thanks to lower rates.

Mortgage buyer Freddie Mac reported in the first week of August that the average rate on the 30-year home loan in the U.S. mainland dropped to 2.88 percent from 2.99 percent in the last week of July. It was the lowest level since Mac started tracking rates in 1971. Meanwhile, the rate averaged 3.60 percent a year ago.

Puerto Rico mortgage interest rates now are even lower than they were stateside before COVID-19, although these are still higher compared to the rates at present in the U.S. mainland. Torres indicated that there are current rates as low as 2.75 percent or 3 percent, with an average of 3.5 percent. By contrast, the typical rate in the months

Nick Pastrana, CEO of San Juan Realty Group, affirmed that the increasing real estate offerings are sustained by high demand. >File photo

Our production in these past months, excluding the month where the industry was paralyzed, increased considerably.

Peter Torres, president of the Puerto Rico Mortgage Banks Association preceding the pandemic was 4.5 percent or 5 percent.

As with the real estate industry, Torres remarked that mortgage banks’ operations were put on hold starting in March, but the economic reactivation of this sector came with competitive rates that allowed these financial institutions to produce greater mortgage closings or settlements.

“Once the governor began giving reopening opportunities to different businesses, mortgage banks began closing all those loans that had been approved but that had been put on hold due to the closure… Honestly, our production in these past months, excluding the month where the industry was paralyzed, increased considerably. I dare say that closings have basically doubled,” he stated.

His comments were echoed by Pastrana, who noted that now more people can qualify and for properties with greater value.

Regarding how long this low rate offer can be prolonged, Torres said that it would depend on further developments with the COVID-19 emergency. Particularly, when the widely hoped for vaccine becomes available to the public, which is generally expected to be out in the market sometime during the first quarter of 2021, at the earliest.

“Rates can be expected to rise when the vaccine comes out and everything begins to change. But at this moment, I can say that if we are talking about the next four, five or six months, those interest [rates] will remain low. We won’t know in the long term how long this issue that we are living right now will last,” the ABHPR president said.

Moreover, evictions are a growing concern stateside overdue to the millions of unemployed workers, the uncertainty on the extension of the $600 in weekly unemployment benefits — which President Donald Trump has now circumvented with his own executive order for $400 a week — and a federal eviction moratorium that expired on July 25.

In Puerto Rico, Gov. Wanda Vázquez ordered mortgage banks to allow clients to extend forbearances until August because of the coronavirus’ impact on the local economy.

Alleviating clients’ concerns, Torres explained that those who applied for the moratorium on their mortgage payments will not be obliged to pay all monthly payments at once. Rather, if they qualify, they can opt for various payment options that will mitigate the possibility of getting evicted.

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Source: Puerto Rico Property Registry

Stagnant Tourism Boosts Long-Term Rentals

One of the most hard-hit industries throughout the government’s emergency measures has been tourism, notably short-term rentals such as Airbnb services. As the tourism reactivation process was postponed until at least August 15 and recreational activities are still restricted for residents and visitors, the owners of these properties have opted to change their model to long-term rentals, which in turn has propelled greater supply that caters to increasing demand in areas such as Old San Juan, Condado, Isla Verde and other local hubs of tourism activity.

Consequently, Pastrana observed that this higher offer could result in lower price points for long-term rentals.

“That can saturate the market and I am already seeing many apartments [listed for rent] and what will happen is that there is greater offer — that is, higher inventory with more apartments — than people looking for apartments, those prices could drop in terms of rent… This is important because it creates an effect on property owners who want to rent long term when they lose Airbnb revenue, and this creates a surplus that is already taking place.

Then, rent prices are more competitive and the prices have to be lowered,” he explained.

Pastrana said that while it is commonplace in the U.S. mainland and other countries for people to buy properties with the exclusive intent to generate income, here in Puerto Rico most people who purchase these units do so either to occupy them or to hold that property until retirement and move in then, “but it doesn’t make much of a difference to them if they rent it for short or long term.”

Your correspondent asked if this occurrence would have an effect on property values, but Pastrana stated that it is not a concern at the moment because the demand for property sales is “really strong.”

“I am not seeing [a drop in property values] and it is too early to see that… These last three years I have seen more demand than offerings, so I have always seen a spike in prices, be it for sales or rent.

Now I am seeing more offers, but with a strong demand that is absorbing it. If I ever see, and I am not seeing now, that there are more apartments for sale than people looking to buy and these apartments are spending, two, three, five or six months without being sold, then I would say there has been a price correction, but that is not happening now,” he said.

— The Associated Press contributed to this story.

Pastrana explained that former Airbnbs are now being rebranded as long-term rentals.

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Supreme Court to Determine Validity of Botched Primaries

Concerns about impact on investment climate

W

The Weekly Journal Staff

ith mere days before the twice-postponed primaries were rescheduled on Sunday, Aug. 16, voters and gubernatorial hopefuls are eagerly anticipating the Puerto Rico Supreme Court’s ruling on the petitions made by two contenders regarding the botched electoral process last Sunday, Aug. 9.

Senate Minority Leader Eduardo Bhatia, who is competing in the gubernatorial race for the Popular Democratic Party (PDP), and Pedro Pierluisi, who is challenging Gov. Wanda Vázquez for the Executive seat under the New Progressive Party (NPP), issued separate petitions to the Puerto Rico Supreme Court for the State Elections Commission (CEE by its Spanish initials) to count the votes that had been cast on Aug. 9 and publish the preliminary results.

In a fast moving story, the Supreme Court’s resolution consolidated both petitions and gave CEE President Juan Ernesto Dávila, and the electoral commissioners of the PDP and NPP — Lind O. Merle and María Santiago Rodríguez, respectively — until 2 p.m. on Aug. 11, to express their positions on the matter.

Pierluisi’s petition argues that in terms of counting votes, Part H-5 of the NPP’s Primary Regulations establishes that once the people with the right to vote have done so and the ballots of the special emergency compartment of the ballot box (if any) have been deposited in the electronic counting machine, officials will proceed with “the closing of the election” in that particular machine.

Moreover, Bhatia’s lawyer, José Andreu Fuentes, commented that the voting process that began last Sunday should be carried out before Aug. 16, arguing that the process should continue “as soon as possible.”

His statements were echoed by the PDP Governing Board, presided by Aníbal José Torres, who also urged Vázquez to declare Thursday, Aug. 13, a temporary holiday to carry out the primaries rather than wait until Sunday.

The voting process to elect the official gubernatorial candidates for the island’s main two political parties was paralyzed and declared null by the CEE after many voting centers reported that

Gubernatorial candidates Pedro Pierluisi and Eduardo Bhatia petitioned the Puerto Rico Supreme Court for the SEC to count the ballots cast last Sunday. >Josian E. Bruno Gómez

they had not received ballots on time, preventing citizens from exercising their right to vote.

THE WEEKLY JOURNAL watched a televised 2 p.m. news conference on Aug. 9 in which NPP and PDP officials said 59 of the 110 voting precincts in Puerto Rico had still not begun voting because the ballots had yet to arrive.

The primaries were originally scheduled for June but were delayed until Aug. 9 due to the COVID-19 pandemic. Despite having an additional two months to oversee the details, chaos ensued.

Dávila eventually announced that he would resign after the primaries are finally completed.

Debacle Transcends Politics

The chaos transcends the political sphere and could have a direct impact on the local economy, as well as Puerto Rico’s image as an investment destination — an issue that raises concern among some business leaders.

For Puerto Rico’s manufacturing sector, of particular concern is that the island is making a strong effort to become an international manufacturing center.

“We are just over 100 days before the general elections and this chaos that ensued — in a smaller scale electoral event — leaves much to be desired and puts us in the world public arena as a country with a lack of capacity, credibility

and corruption. Given that efforts being made to reactivate manufacturing in Puerto Rico, this situation affects the possibilities of attracting investment and confronting those who criticize our institutions,” said Carlos M. Rodríguez, president of the Puerto Rico Manufacturers Association.

“For the first time in our history, thousands of people were deprived of their right to vote, at a time when we are facing the crisis of the pandemic that has made the process more difficult than usual. We ask the governor to call an urgent extraordinary session to facilitate that the process can be carried out within the due process of law and there is no room for future challenges,” he added.

Likewise, Juan Carlos Agosto, president of the Chamber of Commerce, expressed shock at the fiasco and urged the CEE and the government to address the situation with the utmost brevity to continue bolstering trade, which has been dropping for months.

“We are dismayed with the severe lack of capacity and execution in the primary processes, which has meant the failure of institutions. We urge leaders to resolve this as soon as possible because it has a negative impact on investment.

We can have a perfect Legislature and the necessary resources, but if there isn’t good execution, we have a problem,” he opined.

/ Wednesday, August 12, 2020

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Oversight Board Presents Report on Manufacturing Opportunities for Puerto Rico Legislation, if successful, could result in thousands of jobs

T

The Weekly Journal Staff

he Financial Oversight and Management Board (FOMB) has presented a report about opportunities for Puerto Rico to take advantage of the current public debate about bringing pharmaceutical and medical device manufacturing back to the United States as concerns regarding supply chain security grow.

The report, prepared by Boston Consulting Group and completed over four weeks, represents a short and focused assessment of how Puerto Rico can best position itself to attract biopharmaceutical and medical device manufacturing companies in the face of COVID-19 and potential federal legislative action.

Puerto Rico exported over $40 billion in biopharma products in 2019, including over $30 billion to the mainland U.S., more than twice the value of any foreign country or U.S. state. It exported about $3 billion in medical technology products.

“This is a unique potential opportunity for Puerto Rico,” said Carlos García, an outgoing member of the Oversight Board. “The current discussion around incentives to support U.S. manufacturing could provide the kind of economic development tool that has been missing in Puerto Rico for some time, particularly given the strong competitive advantages Puerto Rico offers investors.

“Those include a strong existing manufacturing

ecosystem and capacity that minimizes time and capital for product transfer; specialized and cost-competitive labor with a strong pipeline of universities and labs; and a lower cost of manufacturing compared to U.S. states with established manufacturing hubs,” he added.

In the current context, companies that are either medically necessary in the U.S., which have substantial supply chain risk they wish to manage, or that can easily adjust their supply chains should be the first priority, according to the report.

Like the makers of generic drugs, contract development and manufacturing organizations (CDMO), companies that manufacture drugs on a contract basis, also focus on cost and quality.

CDMO, therefore, benefit from the economically distressed zones legislation and could also take advantage of Puerto Rico’s manufacturing ecosystem.

The report also states that Puerto Rico is wellpositioned to compete with U.S. manufacturing locations in the Southeast and U.S. Border States because of its experienced engineers, chemists, and biologists; its track record of reliability in manufacturing; and because of its existing, underutilized sites ready for businesses to use.

“This report shares important insights on the decision-making process of pharmaceutical and medical device manufacturing,” said FOMB Executive Director, Natalie Jaresko. “It outlines the substantial opportunities for Puerto Rico given Puerto Rico’s critical role in the industries and valuable competitive advantages.”

Proactive, Joint Effort Necessary

A proactive effort, however, needs to be made by both the government of Puerto Rico and the federal government. For example, Puerto Rico needs to develop outreach strategies for companies with a higher likelihood of in-shoring in Puerto Rico.

The report further outlines how Puerto Rico is positioned compared to other potential in-shoring locations in the U.S.: labor and workforce, quality and reliability, infrastructure, operations risk, manufacturing ecosystem, manufacturing cost, tax climate and ability to serve the U.S. market.

Taking these realities into context, marketing Puerto Rico should focus on refining the misconceptions in the marketplace, emphasizing specific competencies in areas such as available talent and sites, and working to address persistent challenges such as infrastructure and permitting defined by the necessary structural reforms outlined in the central government’s Certified Fiscal Plan.

On the federal side, the current tax incentive proposals in Congress credits for wage expenses and tax deductions for the decrease of the value of assets in economically distressed zones could have great potential benefit to the U.S. broadly and Puerto Rico specifically. Such credits are most attractive for cost-sensitive generics in small molecules and medical devices, areas in which Puerto Rico compares favorably to other economically distressed zones given its workforce and existing unused sites.

Legislation to support economically distressed zones could result in 1,000 to 3,000 new manufacturing jobs by 2026 and provide an additional $70 million to $220 million in annual tax revenue for Puerto Rico, the report estimates.

“The report underlines the importance of simultaneously improving Puerto Rico’s business climate,” Jaresko said. “The Puerto Rico government must work fast toward reforms that create ease in doing business, as outlined in the Certified Fiscal Plan, including permitting and property registration reform, continue to transform its energy system to provide more reliable and more affordable electricity, and invest in efficient infrastructure.”

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New Homebound Economy Lifts Liberty’s Performance

Quarantine and lockdown means more streaming

R Rosario Fajardo

rfajardo@wjournalpr.com

@RosarioWJournal

esidential and business customers navigating through the COVID-19 quarantine and lockdown lifted Liberty Puerto Rico’s numbers for the second quarter of the year (Q2 2020).

Liberty added 33,500 revenue generating units (RGU) this quarter, driven by its growth in high-speed data (HSD) subscribers. Revenue for Liberty’s Q2 2020 stands at $109 million, which represents a 4.3 percent increase from Q1 2020 and a 5.1 percent increase compared to Q2 2019 on a reported basis.

“I feel proud that we have had such great results, as these numbers not only reflect our uninterrupted ability to offer connectivity and entertainment services, but also our drive to be a good corporate citizen by helping our residential and business customers maintain their service at a time when they needed it the most, even if they could not afford it,” stated Naji Khoury, president and CEO of Liberty Puerto Rico. “We worked with them to ensure that they would be able to keep working and studying from home for their safety and peace of mind.”

The company put into place several initiatives to help customers facing financial hardship due to the lockdown, such as waived late and reconnection fees, offered temporary recurring discounts and payment plans and gave a 30 percent discount to customers receiving unemployment benefits.

Moreover, the company offered a very basic Internet service for free to 5,284 customers who could not afford it to give them a chance to get back on their feet.

According to the executive, securing Internet access to residential and business customers during the COVID-19 pandemic lockdown was a top priority.

The company, Khoury explained, is continuously investing to make upgrades to its infrastructure and increase its network’s capacity, but the demand during the lockdown became so high that the Liberty team had to advance almost a year worth of work in a couple of weeks. The company increased its distribution network by 24 percent and increased its core network capacity by 1,300

Gbps (Gigabits) to accommodate the increase of up to almost 50 percent in data consumption that emerged during Q2 2020.

employees worked from home with the tools and connectivity they needed to work remotely. Today, about 50 percent of employees remain working from home, while the other half works in the field Netflix and YouTube top streaming choices and at the company’s service centers and kiosks with protection measures in place to ensure their The average usage per household jumped to nearly 400GB per month in April, which represents safety as well as those of customers.

Liberty’s continued growth has led to job a 45 percent increase versus creation on the island. To continue pre-COVID-19 quarantine providing customers reliable numbers. This usage is also service and an outstanding 20 times larger than a mobile experience, Liberty Puerto Rico Internet household using is currently seeking to fill more 20GB per month. Nearly 40 Liberty’s than 25 job positions in fields percent of that usage went to continued growth has such as management, technical streaming video, with Netflix led to job creation service, sales, business, finance, taking 28 percent of that usage, on the island, as the human resources and marketing. and YouTube taking the other company is currently Interested candidates can visit 12 percent. seeking to fill more the jobs section at Liberty Latin “Clearly, this pandemic than 25 job positions.

America’s web page. further demonstrated that “In terms of our reporting families with just mobile segments, Puerto Rico led with devices cannot work or study another tremendous quarter, from home effectively,” Khoury reporting record RGU additions said. “Broadband penetration on the island has increased and we anticipate that and we are looking forward to adding AT&T’s assets in Puerto Rico and the U.S. Virgin Islands it will continue to increase as fixed broadband to further enhance our customer proposition and proves to be a necessity.” prospects,” added Balan Nair, CEO of Liberty Latin Khoury explained that at the start of the America. lockdown about 70 percent of the company’s

In fact,

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Evertec Benefits From Changes in Shopping Habits

Highlight of Second Quarter 2020

E Rosario Fajardo

rfajardo@wjournalpr.com

@RosarioWJournal

vertec’s Second Quarter (Q2) 2020 report was a mixed bag.

Total revenue was $118 million, a decrease of 4 percent compared to 2019, the company reported.

Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) was $50 million, a 13 percent decrease as compared to the prior year. And adjusted earnings per share was $0.38, a decrease of 25 percent compared to last year.

“Despite the headwinds, we generate significant operating cash flow year-to-date of $87 million, $11 million above prior year due to our results and effective cash management,” said Mac Schuessler, president and CEO of Evertec during the earnings call on the company’s Q2 2020 results.

“We were encouraged to see transaction volumes improve sequentially throughout the quarter as businesses reopen in Puerto Rico.

Additionally, we continued to focus on new innovative solutions such as launching our contactless payment solution and expanding our gateway product in Latin America to further accelerate the consumer preference for digital solutions. Despite the near-term pandemic impact on our results, we produced $87 million in operating cash flow year-to-date, $11 million ahead of prior year,” he reported Schuessler noted that at the Puerto Rico government started to ease restrictions due to COVID-19 in early May, “there was continued improvement in sales volume and transaction volumes with significant uplift after June 16.

Despite the near-term pandemic impact on our results, we produced $87 million in operating cash flow year-to-date, $11 million ahead of prior year.

Mac Schuessler, president and CEO of Evertec

Most businesses were allowed to reopen at that time, including entertainment venues, with some restrictions such as required masks and limitations on the maximum capacity.

“Our merchant acquiring revenue increased from our trough in April to more than a 20 percent increase year-over-year in June. Likely due to pent up consumer demand and the benefits from federal programs such as the CARES [Act] and other funding from the government of Puerto Rico,” he added.

400 percent increase in digital payments

On the plus side, the need to maintain physical distancing due to the coronavirus crisis has forced Puerto Ricans to change their shopping habits, resulting in a significant increase in the use of digital payment platforms and a decrease in using cash for their purchases.

Mike Vizcarrondo, Evertec’s executive vice president of Payment Services for Puerto Rico and the Caribbean, explained to THE WEEKLY JOURNAL that the pandemic has changed the behavior of consumers, who now prefer to complete their payments digitally. The use of digital payment

platforms on the island, including ATH Mobile, has increased by 400 percent.

“Whereby Puerto Ricans used to make a single electronic transaction, in 2020 they were doing it four times. We have seen in the pandemic a change in behavior and many are now preferring digital payments for the convenience and security.

In view of this, businesses that were able to survive the situation also made the transition to digital platforms,” Vizcarrondo said.

In the case of ATH Mobile, he said they have experienced exponential growth in the customer and business base in the past few months.

Evertec currently has more than 1.5 million users, primarily from ages 20 to 50 years, from 100 banking institutions and more than 400 merchants accept payments through their platform.

“We were on the road to changing consumers’ mindsets, but the pandemic accelerated it and advanced our growth metrics. No one doubts that every day less cash is used and more digital cards and similar methods. The reality of the case is that the pandemic forced that change and forced those who resisted change,” the executive added.

This change is also supported by a recent Visa study in which the international financial services company revealed that more than 13 million people who had credit cards but were reluctant to make digital transactions were forced to do so as a result of the COVID-19 pandemic.

The growth in digital payments was also reflected in Banco Popular, which reached over one million users on it’s My Bank digital platform with many customers making the switch in recent months.

About 30 percent of newly enrolled users in May were customers over 65 years old, the bank said.

To date, more than 70 percent of all Banco Popular customers have enrolled in Mi Banco, and 77 percent uses the platform on a monthly basis.

-Reporter Christian Ramos Segarra contributed to this story.

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College Education May Never Be the Same

Remote learning requires major investments in technology

A Christian G. Ramos

cramos@elvocero.com

@cramossegarra

lthough local universities had been increasingly adopting online education, the COVID-19 pandemic has accelerated the need for remote study and institutions have been forced to move all their programs from face-to-face to digital in a matter of months.

A report published by the Pardee RAND Graduate School argues that the pandemic will change universities forever — both public and private — and that the remote model will prevail.

They warn that in the coming years, interaction with teachers and other students — a central aspect of the college experience — will be largely lost.

However, they also argue that the situation could be challenging as high tuition costs are maintained for an education that does not require the use of physical spaces. “This could mean a financial crisis for universities and even lead to a change in the quality of education. The consequences would be especially difficult for private universities,” the study notes.

In Puerto Rico, universities increased their respective investments in technology infrastructure in order to increase the capacity of their remote education platforms. Starting this month, the vast majority will offer students a more flexible education that does not require physical interaction.

Under the federal CARES Act, Congress allocated $323.48 million to some 100 universities and higher education institutions in Puerto Rico for student grants and to invest in technology needed for remote learning.

The president of Interamerican University, Manuel Fernós, assured THE WEEKLY JOURNAL that they are ready to start classes online this month, even though they have a plan outlined to also operate a hybrid model — half-face, half online — or completely face-to-face once the coronavirus infection rate goes down.

“These changes are here to stay. Right now, 90 percent of our students prefer to study remotely.

Even if the new Executive Order allows us to

operate in a hybrid [model], if the student prefers to stay at home, we will allow it. Whoever wants to be in person may be in person,” Fernós said.

He said that the institution’s 66 academic programs and more than 4,000 pre-pandemic online courses facilitated the transition to a fully digital education.

“Last semester was almost entirely digital. We saw positive results. Improved student retention by 2 percent. There are students who have expressed that the direct relationship with the teacher has improved because at a distance they give them more follow up and personalized treatment. These students were born with a computer in hand and like to study like this,” Fernós added.

Human Interaction Still Necessary

Although the president of Sacred Heart University, Gilberto Marxuach, does not rule out that the educational changes implemented in the wake of the pandemic will remain, he believes that the interaction between student and teacher is necessary and a key piece in the philosophy of the institution.

“From Sagrado’s point of view, what came to stay is flexibility. In-person interaction between students and teachers or other students is very important and the main learning scenario.

Good education requires human interaction and dynamism. We use technology to streamline that interaction and bring education to more people,” Marxuach said.

Starting in August, their academic courses will be classified into five modalities: flexible face-toface, videoconferencing, flexible hybrid, virtual hybrid and fully online. “This gives the student the alternative of coming to campus or participating remotely. In addition, there will be spaces at the university so that students who want can reserve them to study and do their work in peace and quiet. The same with services,” he said.

Both Inter and Sagrado have invested heavily to convert their classrooms into transmission centers.

If students cannot physically go to classes, they will be able to see their professors “live” and interact with them from home. In case they are unable to connect online, classes will be recorded and students will be able to access them at any time.

The increased investment in technology has not resulted in increased tuition for students.

Yashira Torres, spokesperson for NUC University, said they bet on the hybrid model for the start of the university year. NUC has an online education division that has the largest population of remote students in Puerto Rico. Last year they invested nearly $10 million in their digital platforms.

“Our hybrid model assumes that all theoretical classes will be remote and that laboratories and practices are face-to-face. Our distance education division is robust and the largest in Puerto Rico.

We’ve always had face-to-face, digital and hybrid classes. That experience has made the process easier for us,” Torres said.

11 < The Weekly Journal >Wednesday, August 12, 2020

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Brad Dean

CEO of Discover Puerto Rico

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The Newest Endangered Species: Small Businesses

essential products and services.

Without small businesses, With fewer businesses, thousands our tourism industry cannot 020 is a year none of of people will remain unemployed, fully recover. Think of the many us will forget. A competition will decline and prices restaurants, “paradores,” retailers year that began will rise.

When small businesses and independent hotels that sustain with earthquakes struggle, so too, do communities and our visitor economy.

And consider soon gave way to an workers. the essential support of pharmacies, unprecedented public At Discover Puerto Rico, the printers, florists, cleaners, plumbers health crisis that has island’s official destination marketing and mechanics.

Where would we affected millions of people worldwide. organization (DMO), we recognize be without these and other small No words can adequately describe the importance of small businesses businesses? the tragic loss of life caused by In recent months, there have in everything we do.

Of the 4,800 COVID-19. Likewise, the strain placed been some efforts to help local businesses listed on our website, on our public systems (e.g. education, businesses cope with COVID-19. The 97 percent have 100 or fewer health care) and quality of life have recovery package passed by the local employees.

One reason we choose taken a toll, too. government was a good first step. not to charge for advertising or But perhaps the most overlooked The Payroll Protection Program and participation is because we know consequence of COVID-19 is the CARES Act, authorized by the U.S. that when small businesses succeed, threat of permanent harm to small Congress, were both helpful.

But everyone wins.

We also include small businesses throughout our island. much remains to be done. businesses in every sales mission and Of course, protecting public Small businesses, especially those familiarization tour we host, because health and safety is (and must be) in tourism, are facing the worst they are essential to growing tourism our top priority. Health and safety crisis in their history. If we fail to in Puerto Rico. are essential to any success we might desire. But today, we face an economic crisis far worse than any in our past. For example, COVID-19 will have three times the economic impact on our local tourism industry as compared to Hurricanes Irma and Maria. That was unimaginable until now.

Larger, well-established businesses may be able to weather this storm, somewhat. Their profitability will decline or disappear altogether, but established businesses that maintain adequate capital and insurance will survive. Unfortunately, the same is not true for many small businesses.

Most small businesses run with a tight operating margin and limited cash reserves during normal times.

Imagine their plight after a marginal high season followed by extended months of depressed economic activity.

This is bad news for many reasons.

Small businesses pay hundreds of millions of dollars of taxes to local government, which funds essential services that you and I rely upon. According to the Small Business Administration (SBA), small businesses create nearly half of all jobs.

Small businesses make the world go round.

Small businesses also provide

In fact, Without small businesses, our tourism industry cannot fully recover.

Think of the many restaurants, “paradores,” retailers and independent hotels that sustain our visitor economy.

And consider the essential support of pharmacies, printers, florists, cleaners, plumbers and mechanics.

take bold, decisive action to support them, many local businesses will not survive. Small businesses need access to capital, reduced regulation and economic growth strategies to succeed.

While our top priority must always be protecting public health, we must also address the looming financial disaster and its impact on local businesses. Either we help our small businesses win today, or we all lose tomorrow.

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/ Wednesday, August 12, 2020

Coping with Stress Amid the Pandemic Helpful tips in challenging times

S

Enrique Muchacho

tress has always been an aspect of life. A person can get stressed with either work or daily life. With the COVID-19 pandemic, stress has become a greater part of what is affecting people of all ages.

Recently, Puerto Rico also experienced the impact of Tropical Storm Isaias, which increased our already high stress levels.

As medical experts warn: Fear and anxiety can be overwhelming and cause strong emotions.

The Centers for Disease Control and Prevention (CDC) has taken note of this and has offered information about dealing with stress in this “new normal” and healthy ways to cope with it.

A new pandemic can be particularly stressful.

“The fear and anxiety about a new disease and what could happen can be overwhelming and cause strong emotions on adults and children. The public health actions, such as social distancing, can make people feel isolated and lonely and can increase stress and anxiety, even though these actions do help reduce the spread of Covid-19,” states the CDC in its website.

When Dr. Enrique Gelpi, a child psychologist at the San Jorge Children’s Hospital, was asked what is the main source of stress during this pandemic, he replied that “one of the most significant of these stress producing variables is the feeling of uncertainty that the pandemic has brought in almost every aspect of our lives. From daily living routines to academic, social and job-related

dynamics, basically every important part of our existence has been negatively impacted by the COVID-19 virus.”

Some other signs, according to the CDC, that a person is suffering stress during the pandemic can be: — Fear and worry about your own health and the health of your loved ones, your financial situation or job, or loss of support services you rely on.

— Changes in sleep or eating patterns.

— Difficulty sleeping and concentrating.

— Worsening of chronic and mental health problems.

— Increased use of tobacco, and/or alcohol, or other substances.

Not all people react the same way to stress.

A person’s response “can depend on their background, social support from family or friends, financial situation, health and emotional background, the community a person lives in, and many other factors. The changes that can happen

because of the pandemic and the ways we try to contain the spread of the virus can affect anyone,” according to the CDC. An example of how people react differently to stress can be seen in children, as they react to what they see from their parents or caregivers. If parents are dealing with the issue in a calm and confident matter, they can help their children cope better. Parents who are better prepared can be more reassuring to others around them.

Now, the good thing is that with stress, there’s always a healthy way to cope. Gelpi advises that some positive ways of coping with stress include: — Stick to routines and, if necessary, establish new ones.

— When feeling desperate, look for help or talk to someone.

— Try to exercise or do some physical activity daily.

— Be sure to expose yourself to the sun and do not stay for too long in a close and dark area.

— Establish good eating habits.

— Reduce the exposure to screens, video games and technology.

— Integrate applications that can coach you daily to maintain good mental health, establish positive thoughts and use other approaches to stress management such as: mindfulness, relaxation techniques, music, art or others.

From all the information acquired from the CDC, and the recommendations from Gelpi, the best option that people can have to diminish stress is to take a break from all the stressors that are around them, from news stories to worries, and relax.

The pandemic is not yet controlled and until a vaccine is developed, we will all have to manage our stress loads. Focus on finding positive ways to cope with tough situations and perhaps we can even thrive in these hard times.

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Meeting

/ Wednesday, August 12, 2020

Rope Splicer the

Adventures and life in the Caribbean

H

Damian R. LaPlaca

is simple, yellow-fringed business card advertised a singular trade, rope splicing. A king’s coat of arms is his logo, fitting, given that he works out of Puerto del Rey Marina in Fajardo.

His card caught my eye since I needed either a new stern anchor line or to splice the existing 150foot line that I cut during Hurricane Dorian to save my new 35-foot sailboat (new to me) from heading out to sea or crashing into a new catamaran.

I had just purchased my boat, which I named “Second Wind,” in Tortola. With Bryant, a longtime buddy and his son, we sailed it home to Fajardo, in late August, during a lull in the hurricane season.

The start of Dorian changed our plans to cruise the British Virgin Islands. At the time, Dorian was forecast to be a tropical storm heading straight for Fajardo and missing St. Thomas. We decided to find shelter at a marina in St. Thomas. Why sail into a storm?

While floating off Charlotte Amalie, I called marinas looking for a home. The first marina was evacuating its clients. The second marina did not take transients. The engine heat alarm kept on going off. My crew eyed me with concern.

Luckily, Yacht Haven Grand, a marina for mega yachts, enthusiastically welcomed us. We limped into a nearly empty marina over numerous overheating alarms. Upon arrival, Bryant’s son took an immediate flight out. Bryant left the next morning.

Preparing for Dorian

Rafael Serrano-Olmo, the rope splicer >Courtesy

The storm was intensifying: 50 knot winds were forecast for the next day.

By then Yacht Haven was full of beautiful 80- to 100-foot mega yachts with professional crews.

My 35-foot sailboat was by far the smallest vessel there. To prepare for the storm, I stowed anything that could move, I collapsed and tied the dodger and bimini, and I tied separate bow and stern lines to the dock. With my dinghy I set bow and stern anchors in the ocean. Finished, I stocked provisions from the local Pueblo supermarket and plenty of Dark and Stormy ingredients. I thought I was prepared.

The next morning the storm shifted its westerly path and headed north, right over St. Thomas. I in was for a rock ‘n’ roll day. At 1 p.m., I received a hurricane alert by text. At 2:20 p.m., I received

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/ Wednesday, August 12, 2020

The “Second Wind” >Courtesy of Miguel Villalobos

a text announcing that St. Thomas reported sustained winds of 82 miles per hour (MPH) and gusts of 111 MPH. No longer a tropical storm, Dorian became a Category 1 hurricane and passed directly overhead.

During the height of the storm, my bow line snapped off the bollard and my boat pointed directly toward a beautiful new catamaran. My stern anchor failed and I was tethered to the dry world by one remaining line. My immediate concern was not my personal safety but whether I had enough insurance to T-bone the catamaran.

Too late to call my broker.

I made a Mayday call to the marina and to my surprise Phil and Jamie, the general manager and dock manager, drove out in a golf cart to save my sorry stern. At Phil’s direction, I cut the stern anchor line to use as a makeshift bow line, we tied it around the mast, threw it to Jamie, and she muscled the boat to the dock and tied the line to the bollard. To me, Jamie and Phil are heroes.

As he left, Phil suggested a hot tea was in order.

I made a cold and strong Dark and Stormy instead.

Meeting the Rope Splicer

Which brings me to the need to hire Rafael Serrano-Olmo, the rope splicer, weeks later, at the marina in Fajardo. He arrived at my boat, deeply tanned, wearing cool sunglasses, crisp, pressed white khakis over clean boat shoes, a bright white T-shirt and a light white sweater draped around his shoulders. He looked more like a Greek shipping

>Courtesy

magnate than a tradesman doing ropework. I immediately liked him and knew I was in for an experience with a local character.

I asked him how he learned to splice ropes.

“My father taught me to fish. I fished in Puerto Rico, Nicaragua, Costa Rica, Panama. I am from Aguadilla!”

He meticulously unlaid the three strands of the inch-thick line, and using tape and his heat gun, he sealed the ends of the strands from unraveling.

Slowly and deliberately, he tucked each strand under the corresponding strand of the other line. I did not count how many revolutions he made.

Rafael wanted to teach me how to splice rope, since he thinks it’s important to pass his knowledge down. I was surprised that he wanted to teach himself out of business. But I thought I should learn this skill in case of an emergency in open water. Seated next to him, he passed me the lines. I tried but predictably failed.

“You see that boat across from yours?” Rafael asked. “I am making an eye splice for them tomorrow. Come and see me do it and you can learn.” I could not be at the marina the next day but Rafael was insistent that I come.

Rafael turned 75 on Feb. 22, my birthday too. I wanted to party with Rafael on his birthday.

When he finished the spliced line was every bit as strong as before. Rafael talked again about passing his trade down. He asked me again to come the next day to learn the eye splice. I told him that I wished I could, but I had an obligation in San Juan.

In Puerto Rico, some are concerned that the cooking methods and recipes from the current generation of the islands’ grandmothers may be lost if not passed down. But it struck me that other important knowledge may also be lost if not taught.

I was grateful for his work but disappointed to see Rafael leave. He packed up his heat gun in his tool bag and gingerly stepped off “Second Wind” and onto the dock.

“See you tomorrow Damian!”

“See you tomorrow Rafael!”