Thursday, May 28, 2020

My favorite political shirts

Among my favorite, most memorable shirts, below. (1) pilipinasforum@yahoogroups.com, "where immortals argue", we formed in 1999, verrry active political and economic discourses. It helped me focus my advocacy towards Minimal Government, a small political movement we formed in 2004. I was granted an Atlas International Fellowship that year, I attended the Mackinac Leadership conf in Michigan, the Atlas liberty conf 2004 in Chicago, among others.

Then the 2009 Atlas commemoration of the 20th anniversary, fall of the Berlin Wall (Nov. 1989) held in Washington DC. It was also my last Atlas-sponsored conf abroad.


Thanks again to Jo Kwong, former Atlas VP for Institute Relations, for her support and belief in me, she sought funding for my travels in Atlas liberty forum 2008 in Atlanta, Liberty Forum in March 2009 in LA, then Nov. 2009 in DC, Tearing down the wall conf. Jo resigned in end02009 I think, and Atlas has stopped sponsoring me after that, 11 years now.

But it was ok with me. I am happy that other friends see my contribution to free market movement until now, 16 years since 2004 -- ATR, PRA, IPN, FNF, Heartland, Geneva Network, etc. FNF and PRA especially. Thank you, friends.

Last July 2019, I went back to Washington DC to attend the Heartland 13th ICCC. After the conference I visited some friends, including Jo Kwong. I was very happy to see her again since 2009. She picked me up from a Metro station and brought me to her house in old Alexandria, VA. I also have beer with her hubby.



See also Jo Kwong rocks (Feb 09, 2010).

Sunday, May 24, 2020

Agri Econ 31, Rising world rice prices, falling corn, poultry prices

This pandemic period showed big jump in world rice prices since last March. Peak price over the last five years was $18 per hundredweight (cwt) reached last  April 29, 2020. A cwt = 100 pounds in the US, = 112 pounds in UK.

https://tradingeconomics.com/commodities

The main reason is the rice production disruptions in Vietnam and India, agri workers on quarantine or lockdown, and expected rise in demand for Thailand rice.
See this report for instance, https://www.cnbc.com/2020/04/08/rice-prices-surge-to-7-year-high-as-coronavirus-sparks-stockpiling.html

Corn prices on the other hand are falling, now around $317/bushel.


The main reason perhaps is the drop in demand for biofuel, ethanol, along with drop in prices and demand for petroleum products. Another reason is that  world demand for poultry products are falling, prices now only $3.9/kilogram. Corn is the main ingredient for chicken feeds.


Milk (and cheese) also falling. People are getting poorer, they consume less milk, now only $12/cwt. Milk is highly perishable, cannot be stored for long.


The more reason that this lockdown dictatorship worldwide should end. Mobility of agri workers and entrepreneurs, traders, processors and shipping should no longer be hampered.
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Saturday, May 23, 2020

BWorld 436, Growth lockdown and low carbon economy

* My column in BusinessWorld, May 21, 2020.


The hard lockdown countries experienced deep economic contraction in their GDP in first quarter (Q1) of 2020: France -5.4%, Italy -4.8%, Spain -4.1%, Belgium -2.8%, Germany -2.3%, and UK -1.6%. In Asia, the hard lockdowners and their contractions are: Hong Kong -8.9%, China -6.8%, Singapore -2.2%, Thailand -1.8%, and the Philippines -0.2%.

Japan is not a hard lockdown country but it still experienced a contraction of -2% because it was already contracting in the previous quarter with -0.7%. Japan is now technically in an economic recession.

The most adversely affected countries in Asia are China and the Philippines. From high growth of 6%+ in Q4 2019, they just went negative the next quarter.

The Department of Finance (DoF) showed sensitivity to the plight of many losing businesses. It has tweaked the CITIRA (Corporate Income Tax and Incentives Reform Act) bill, changed it to CREATE (Corporate Recovery and Tax Incentives for Enterprises Act) bill with the following tax adjustments, among others: corporate income tax (CIT) cut from 30% to 25% by July this year; applicability of net operating loss carry over (NOLCO) extended from the current three years to five years; the 5% gross income earned (GIE) transition has been prolonged from two to seven years to four to nine years.

These are perhaps the deepest tax cuts the Philippines ever experienced. Bravo, DoF.

Now some sectors want to push very parochial interests and want to penalize Philippine businesses with more expensive energy which will be passed on to consumers.

HB 2184 or the “Low carbon economy bill,” authored by Deputy Speaker and Antique Representative Loren Legarda, plans to penalize fossil fuel energy and establish the emission Cap-and-Trade System in the industry and commercial sectors to reduce greenhouse gas emissions. The bill was discussed in a public hearing by the House Committee on Climate Change on Feb. 26.

A quick survey of GDP size and coal consumption would show that this bill is very parochial and anti-business. The Philippines’s coal use in 2018 was only 16.3 million tons oil equivalent (mtoe), among the lowest in Asia. The world’s four biggest economies are also among the world’s biggest consumers of coal energy (see the table).


According to the Department of Energy (DoE) Power Statistics 2019, the country’s total installed power capacity was 25.5 gigawatts (GW). Of this: coal was 10.4 GW (40.8%), oil-based 4.3 (16.9%), natural gas 3.4 (13.5%), hydro 3.8 (14.9%), geothermal 1.9 (7.4%), and solar+wind+biomass 1.7 (6.7%).

The actual electricity generation is not really reflective of this. Out of 106.0 terawatt hours (TWH), total generation from coal was 57.9 TWH (54.6%), natural gas 22.4 (21.1%), geothermal 10.7 (10.1%), hydro 8.0 (7.5%), oil-based 3.7 (3.5%), and solar+wind+biomass 3.3 (3.1%).

So the power source demonized by the low-carbon, cap-and-trade advocates, coal power, constituted only 41% of total capacity but actually produced 55% of total electricity consumption in the country. In contrast, the favored and pampered variable renewables solar+wind+biomass constituted 7% of power capacity but produced only 3% of total electricity consumption.

So this low carbon bill would want even more expensive electricity, a more unstable power supply, and more potential blackouts because it will restrict the already small fossil fuel capacity in the country. The lobbyists want more subsidies and mandates, direct and indirect, to variable renewables that by nature are intermittent and weather dependent. Adding batteries to solve intermittency problems would add extra costs to power. And even so, there are days and weeks that are cloudy and non-windy so there is little or no solar and wind power produced to store in batteries.

Congress, the DoE and the public should ignore parochial and self-serving interests to further penalize the Philippine economy, instead of jump starting it after the downturn caused by the COVID-19 pandemic. Expensive energy to “save the planet” — from whom and from what? From Al Gore and the UN, from less rain and more rain, less floods and more floods, less storms and more storms?

Let the people, let the market, decide the kind of energy that will give them the least cost.
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Friday, May 22, 2020

Energy 135, Oil, gas and coal prices

Highest oil price was recorded on June 02, 2008 at $142/barrel (WTI), then April 01, 2011 at $115/barrel. Then last month we saw a seemingly unthinkable price, -$26/barrel, with intra-day low of around -$40 last April 21, 2020.

https://tradingeconomics.com/commodity/crude-oil

The reason was the absence of enough storage. Traders with supply contracts few weeks ahead could not find any storage for the oil pumped out as all tankers, storage houses were full because of the big slump in global oil demand. Blame the Covid hysteria and lockdown dictatorship in many countries.

Natural gas peak price over the last 25 years was $14/MMBtu (million British thermal unit) reached on September 01, 2005, then $13.6 on June 02, 2008. And last month we saw steep decline to $1.55, April 03, 2020.

https://tradingeconomics.com/commodity/natural-gas

For coal, its highest price in the last 10 years was $133/MT reached on January 03, 2011. Its lowest price in recent years was $51.5 last April 27, 2020.

https://tradingeconomics.com/commodity/crude-oil

All three charts above as of around 10:30pm today, Manila time.

With low gas prices, is it true that it's now more cost-effective than coal in power generation?

From this chart, the answer is No.



https://www.statista.com/statistics/189180/natural-gas-vis-a-vis-coal-prices/

Economies and corporations, power producers and consumers, should be left alone in the market in determining what's the best energy mix for them. Climate alarmism and anti-fossil fuel drama should not be factors in achiving energy security and economic recovery after the prolonged lockdowns due to the Wuhan virus scare.
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Thursday, May 21, 2020

IPR and Innovation 47, Our Joint Declaration on WHA, May 18

Minimal Government Thinkers is one of 31 independent, non-govt think tanks around the world that signed this declaration, officially launched last Monday, May 18 as officials of the WHO member-states gathered in Geneva for the World Health Assembly.



The seven main advocacies are:

1. Abolish tariffs on medical supplies and medicines
2. Reject export bans on medical supplies
3. Reduce customs red tape
4. Enable the free flow of relevant health data across borders
5. Maintain transparency in collecting and sharing epidemiological data
6. Increase cooperation with other countries to speed up drug approval
7. Support innovation, including intellectual property rights.

Concluding statements:

The IP system is working well in the pandemic. More than 140 experimental coronavirus treatments and vaccines are under development worldwide, including 11 in clinical trials. Lifesciences companies everywhere are searching their patent and molecular reference libraries for promising compounds – all of which owe their existence to the patent system.

There is no evidence that IP rights will pose a barrier to access, as most companies working in this area have stated any new products will be available on a non-profit basis. This is welcome, although it is important as many organisations as possible are incentivised to commit their resources to COVID-19 treatments and vaccines.

Now is not the time to undermine IP rights. They underpin the global medicine innovation ecosystem. Governments should therefore commit to cooperating with the private sector in the quest for COVID-19 treatments and vaccines.
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My zoom webinars today

On average I join about four webinars a week, two of which from our UPSEAA group. But today, I have three webinars and two are in conflict or have similar time slots, 3-5pm. I registered first with the FNF and GPCCI event.


Withour checking my calendar, I also registered in this webinar, about trade and health policies.


I will just open later both webinars and shift from one to the other depending on the topic and speakers. 

Then our UPSEAA webinar -- exclusive only to members and UPSE alumni. Non-members are removed by the moderators and Viber group administrator.


Mahar and I share the same non-hysteric, end-the-lockdown attitude in this Wuhan virus pandemic.

Monday, May 18, 2020

BWorld 435, Drug pricing in Asia and WHO assembly

* My article in BusinessWorld, May 14, 2020.


As the COVID-19 global pandemic lingers, the search for new medicines and vaccines continues as existing treatments and medicines cannot cope with virus mutation. Public policies on the pricing of innovative, newly invented medicines and vaccines are among the important considerations, whether these new treatments will become available in certain countries or not.

I checked the drug pricing policies of our neighbors in the ASEAN and developed Asia. A friend showed me a copy of the latest quarterly report of IQVIA (formerly IMS Health) as it is a by-subscription paper only. Only the Philippines instituted a new drug price control policy, Malaysia plans to have one but no details are available at the moment. The rest use mechanisms that are more market-oriented and not coercive (see Table 1).



February’s EO 104, which imposed a max wholesale price and a max retail price for certain drugs, is on top of drug price control under EO 821 (July 2009, Gloria Arroyo administration) which remains in effect until today.

IQVIA also produced a country report on “Access to Innovation.” The main objective of the study is to understand the Philippines’ access to innovative medicines. I am thankful to another friend who shared with me that by subscription-only report.

The result is not good – so many new medicines, more disease-killing treatments are available in the developed world but are either not available in the Philippines, or made available only after more than two years (see Table 2).


The old EO 821 price control, threats of patent-confiscation via compulsory licensing, and endless attempts to have another round of drug price control, are among the factors why this thing happens.

There is a possibility — a danger — that when new treatments and vaccines are available against COVID-19 by early 2021, they may not be made available in the Philippines because of existing policies like price controls that penalize innovators.

President Rodrigo Duterte, Health Secretary Francisco Duque III, Senator Bong Go and other the other senators that pushed for price controls should be aware of the dangers of their policy. There are many mechanisms that government can take to have cheaper medicines like more competition among more innovators, negotiated pricing, bulk purchase, RSAs and PVAs, as shown in Table 1e.

On May 18, the member states of the World Health Organization (WHO) will gather in Geneva for the World Health Assembly and they will discuss new policies to fight the COVID-19 pandemic, among others.

That same day, a global coalition of 31 independent, non-government think tanks will release a new report, “A Joint Declaration on the Importance of Collaboration, Open Trade, and Innovation in Tackling COVID-19” (May 2020). Of these 31 think tanks, five are from the ASEAN: CIPS and Paramadina Institute (Indonesia), the Galen Center and KSO Institute (Malaysia), the Adam Smith Center (Singapore), and Minimal Government Thinkers (Philippines).

Our paper suggests seven simple measures that governments can make to save more lives now:

1. Abolish tariffs on medical supplies and medicines;

2. Reject export bans on medical supplies;

3. Reduce Customs red tape;

4. Enable the free flow of relevant health data across borders;

5. Maintain transparency in collecting and sharing epidemiological data;

6. Increase cooperation with other countries to speed up drug approval; and,

7. Support innovation, including intellectual property rights.

We hope that member-governments of WHO will consider these points. Private investments and research have a natural inclination to find new solutions to old and emerging problems, they just need to be unshackled from various restrictions, regulations, and high taxation by governments.
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Covid 11, Dire Straits and lockdowns

I was listening to some Mark Knopfler (Dire Straits) songs and checking their lyrics, three of his songs somehow portrayed the lockdown hysteria that the world has seen.


(1) Telegraph Road (1982)

I used to like to go to work but they shut it down
I got a right to go to work but there's no work here to be found
Yes and they say we're gonna have to pay what's owed
We're gonna have to reap from some seed that's been sowed...

From the anger that lives on the streets with these names
'Cos I've run every red light on memory lane
I've seen desperation explode into flames
And I don't want to see it again...

(2) Industrial Disease

On ITV and BBC they talk about the curse.
Philosophy is useless, theology is worse.
History boils over there's an economics freeze.
Sociologists invent words that mean "industrial disease".

(3) Your latest trick,

And we're standing outside of this wonderland
Looking so bereaved and so bereft
Like a Bowery bum when he finally understands
The bottle's empty and there's nothing left.

Great songs, as always. Thanks Mark.
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See also:
Covid 8, Deaths in lockdown vs No lockdown countries, May 04, 2020 
Covid 9, GDP growth of lockdown vs No/Lite lockdown (preliminary), May 05, 2020 

Covid 10, Big global pandemics, fatality rate, May 06, 2020.