Tuesday, March 19, 2024

BWorld 689, Nuclear energy to sustain Philippines’ high economic growth

Nuclear energy to sustain Philippines’ high economic growth
March 12, 2024 | 12:02 am

My Cup Of Liberty
By Bienvenido S. Oplas, Jr.
https://www.bworldonline.com/opinion/2024/03/12/580957/nuclear-energy-to-sustain-philippines-high-economic-growth/

TORONTO — The Philippines’ Nuclear Trade Mission to Canada ended the three-day Toronto leg last Friday, March 8. It was a very educational tour filled with meetings for me and other Philippine participants, headed by Energy Undersecretary Sharon Garin and Science Undersecretary Leah Buendia.

On those three days, we saw the McMaster University Nuclear Reactor, we went inside the research reactor that provides neutrons for medical isotopes, imaging service, and power generation (five megawatts), and many other services. The reactor is in the middle of the sprawling university and students, staff, and visitors casually walk outside it without fear or alarm.

We also visited a big CANDU (Canada Deuterium-Uranium) mock-up reactor — not a real nuclear plant but containing all the basic components and various chambers — owned by Ontario Power Generation (OPG). OPG owns and operates the Darlington nuclear generating station, four CANDU reactors that can produce up to 31 terawatt-hours (TWH). This is almost one third of the Philippines’ total power generation of 114 TWH nationwide in 2022.

The top corporate leaders of Bruce Power, the biggest operating nuclear power company in North America, met us in their office in downtown Toronto. Their eight CANDU reactors can produce up to 48 TWH of electricity yearly, or 42% of total Philippine power generation in 2022.

If our Bataan Nuclear Power Plant (BNPP) had been allowed to operate and not killed by politics and health alarmism in 1986, it could have generated about 4.6 TWH/year (assuming 85% capacity factor) for the past 38 years. This is much larger than the output of wind + solar of 2.9 TWH combined in 2022.

As a developing country, we need to overcome our perennial low power generation and low reserves margin relative to demand, which leads to high electricity prices. I checked again the power generation of several countries and compared it with their economic performance over a seven-year period, 2016-2022. I grouped the countries into three: Group A are the G7 industrial countries, Group B are the major East Asian economies, and Group C are the major South Asian countries.

The G7 is characterized by low, if not contracting, power generation and low GDP growth of between 0.2% (Japan) to 2.1% (US). The East Asian and South Asian countries are characterized by high growth in power generation and high GDP growth, except for Thailand (see the table).

The Philippines’ average yearly growth of 4.9% in power generation was equivalent to a 4 TWH/year increase, and our GDP was growing at an average of 4.3% yearly average. In 2023, we grew at 5.6%, and the increase in power generation could be at least 5 TWH. And since the government targets growth of 6-7% yearly from 2024-2028, I strongly believe that we should produce 6-7 TWH/year of power, otherwise the growth target will not be attained due to blackouts, with supply unable to meet high demand.

Meaning if we produce only 5-6 TWH/year of power, our economy will grow only at the 5-6% range. We actually need to grow 8% yearly through the next decade if we want to, a.) drastically reduce poverty, and, b.) reduce the public debt/GDP ratio from the current 62% to 50% or less. The denominator, GDP size, must grow at a high level and be sustained for a decade or more, for us to attain those two big social and economic goals.

I am flying back to Manila in several hours. Yesterday I asked Energy Undersecretary Sharon Garin about the major lessons from this nuclear trade mission. She said that, “The Canadian Embassy has graciously given us an opportunity to comprehensively understand the core competencies of Canada in nuclear power development. Canadians have completed nuclear power plants in time or ahead of schedule, these are competencies we hope to develop in the Philippines. The Philippine Nuclear Energy Program Inter-Agency Committee will likely pursue more targeted and responsive joint activities with Canada in the near future. It is one of the few countries [with whom] we already have an existing bilateral agreement on nuclear energy.”

I also talked to two fellow participants who are local energy players and have expressed explicit interest in developing nuclear power in the country soon.

Meralco’s First Vice-President and Head of Networks, Froilan “Froi” Savet, said that “the Philippines can establish a robust regulatory framework similar to that of the Canadian Nuclear Safety Commission (CNSC) to ensure safe and secure operation of its to-be nuclear facilities. [A] possible Memorandum of Understanding (MoU) with premier academic institutions like Ontario Tech and McMaster University where we could send qualified students on scholarships to study nuclear engineering.”

Aboitiz Power Corp.’s Head of Energy Transition Projects, Felino “Lino” Bernardo, seconded Mr. Savet’s observation, saying that: “In the near to medium term, the Philippine government should first enact enabling policies that would, among others, signal support to those in the power generation sector and enable a seamless but rational allocation of resources. Likewise, multi-sectoral collaboration amongst local stakeholders and extending to foreign ones — who will leverage their experience and expertise — should close the existing skills gap, the development of robust supply chains, and converging of public-private efforts towards harnessing the potential of nuclear technology. There is a need for human capital development via friendly bilateral relations that support knowledge and skills transfers of peaceful use of nuclear energy.”

All good points there. And great guidance and assistance from the Canadian embassy in Manila with the series of meetings and site visits. In particular, David Hartman, the Ambassador of Canada to the Philippines, and Guy Boileau, Senior Trade Commissioner, and Jesus Sanchez, Trade Commissioner. Mssrs. Boileau and Sanchez brought us on a post-event tour of Niagara Falls — a fantastic place. Aboitiz Power’s Mr. Bernardo estimated that the falls’ huge volume of water can possibly generate at least 1,000 MW of power and it is still winter. Expect more power to be produced during summertime when water volume is higher.

Now that new coal plants in “greenfield” investment are prohibited, with the continuing low and pathetic output from wind-solar-biomass, and with new gas plants which are still insufficient to fulfill high power demand, the government and the public must learn to appreciate the value of nuclear energy. Nuclear power will help avoid blackouts in the future, and provide clean and stable 24/7 electricity for the country’s rising demand and fast economic growth.
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See also:
BWorld 686, On electric cooperative cases at the ERC, renewables, and food inflation
BWorld 687, High budget deficit and wage subsidy
BWorld 688, On the nuclear mission in Canada, the AP-MGen-SMC partnership, and electric cooperatives

Pol Ideology 87, No more purely capitalist or socialist countries, more of modern fascism

I like this definition by econlib:

"Fscism is socialism with a capitalist veneer.... Where socialism sought totalitarian control of a society’s economic processes through direct state operation of the means of production, fascism sought that control indirectly, through domination of nominally private owners."
(https://www.econlib.org/library/Enc/Fascism.html)

In modern application, it's not Big Government with weak private enterprises (socialism) or Big business with weak role of the state (capitalism). Rather it is Big Government + Big Business (including big media, big tech) marriage. 

(this photo, John Stossel, https://www.youtube.com/watch?app=desktop&v=WrTuxc4W8gs)



Regulatory capture -- a situation where government regulators are in bed with, or in the payroll of certain business conglomerates. The regulators issue regulations and restrictions that are unfavorable to existing competitors, or dissuade potential competitors from coming in, so that Big business or conglomerate can have more control of the economy or certain sectors of the economy.

I think almost all countries in the world now are mixed economies. No more purely capitalist ones (Adam Smith, John Locke definition of limited government) like the US or UK before. No more purely socialist/communist governments like China, Cuba and Vietnam before.

More of post-WW2, modern fascism tendency and trend.

Meanwhile, in 1987 I went to Europe, my first time to set foot in that continent. I went to Amsterdam to have elaborate study of Marx, Lenin and Trotsky for 3 months when I was still a Marxist. But I've abandoned Marx since the mid 90s and embraced Adam Smith and David Ricardo. A 180 degrees shift, but slow, about 4-5 years transition. See my presentation in 2009 about my transition,
https://funwithgovernment.blogspot.com/2021/12/pol-ideology-82-reflections-of-former.html

While I was still in Amsterdam in 1987 I joined my Trotskyist friends in a big rally in Brussels NATO HQ, an anti-cold war rally (NATO vs Warsaw Pact). I wondered years after, why Marxists who campaign for working class revolution vs capitalism would be against NATO war plans, I didn't understand then.

In measurement of economic growth, I would delineate countries not whether they are largely capitalist or largely socialist. But rather how ecological socialist they are, it's clearer. Europe is where ecological socialism and central planning is strongest (decarbonization, net zero, ESG, etc), next strongest would be N. America and Japan, essentially the G7.

The less ecological socialist are largely the BRICS (Brazil, Russia, India, China, S. Africa), MidEast and ASEAN countries. Although Singapore is now following the G7 path. Degrowth is now creeping in Singapore.
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See also:
Pol. Ideology 84, Capitalism and prosperity, June 28, 2022
Pol. Ideology 85, Austrian Economics and marginal utility, January 06, 2023
Pol. Ideology 86, Endless crisis narratives and authoritarianism, August 27, 2023

BWorld 688, On the nuclear mission in Canada, the AP-MGen-SMC partnership, and electric cooperatives

On the nuclear mission in Canada, the AP-MGen-SMC partnership, and electric cooperatives
March 7, 2024 | 12:02 am

My Cup Of Liberty
By Bienvenido S. Oplas, Jr.
https://www.bworldonline.com/opinion/2024/03/07/579978/on-the-nuclear-mission-in-canada-the-ap-mgen-smc-partnership-and-electric-cooperatives/

TORONTO — It is my first time to set foot in Canada. Our plane from Hong Kong landed in the evening and I saw from the air how extensive the bright lights of Toronto are — amazing and fantastic! This is clear proof of a country’s level of development and industrialization — that it has a huge supply of power that is efficiently distributed at competitive prices to wide areas of the country.

I will be discussing four energy topics in this column.

PHL NUCLEAR TRADE MISSION TO CANADA

I am participating in Canadian government-organized events in Ottawa, Toronto, and Saskatoon from March 4 to 12. The Philippine delegation is headed by Energy Undersecretary Sharon Garin, Science Undersecretary Leah Buendia, Energy Regulatory Commission (ERC) Chairperson Monalisa Dimalanta, Philippine Nuclear Research Institute Deputy Director Vallerie Samson, officials from the Philippine embassy in Ottawa, the Philippine consulate in Toronto, and officials from the Canadian embassy in Manila. There are also participants from Philippine private corporations: Aboitiz Power, Meralco, and Prime Metro BMD. And a few members from Philippines media, me included. But we will participate only in the Toronto leg, from March 6-8. The formal events will start today and I will write about them next week.

I believe that the small modular reactors (SMRs) will be viable in off-grid islands and provinces that currently have up to 99% of their energy needs provided by diesel/bunker oil gensets. They have frequent blackouts; their power cost is expensive and made “affordable” only via the subsidy that is the universal charge for missionary electrification (UC-ME) that is slapped on all on-grid consumers nationwide. Many potential investors fear blackouts and expensive energy and hence, job creation on these islands is limited.

There are many small industrialized countries which have big power supplies. They have been using nuclear power for many decades and have had no nuclear accidents (I list them in Table 1). Small countries like Slovenia, Slovakia, and Bulgaria generate 2,500+ kWh per capita from nuclear energy alone. Meanwhile, in 2022, the Philippines generated a total of only 1,000+ kWh per capita of power from all energy sources.

MGEN, AP, SMGP PARTNERSHIP

Last Friday, three of the largest power companies in the country — Meralco PowerGen Corp. (MGen), Aboitiz Power Corp. (AP) and San Miguel Global Power Holdings Corp. (SMGP) — launched the Philippines’ first and most expansive integrated liquefied natural gas (LNG) facilities in Batangas. AP and MGen will invest jointly in two of SMGP’s gas plants — the existing 1,278-megawatt (MW) Ilijan power plant and the new 1,320-MW combined cycle power plant which is expected to start operations by end-2024. See this report in BusinessWorld: “MGen, AboitizPower, and SMGP sign $3.3-B deal for Batangas LNG facility” (March 4).

I like this development as it further ensures our energy security, so I congratulate the companies. I like these quotes from the heads of the three power conglomerates from the press release that was issued.

“Apart from transforming the energy landscape of the Philippines, this symbolizes a milestone alliance among major players in the energy industry towards a more sustainable future. We are thrilled to have such reliable partners as we lay the foundation for a brighter, greener future,” said MGen Chairman Manuel V. Pangilinan.

AP Chairman Sabin M. Aboitiz noted, “Both LNG and renewables are needed to achieve a balanced energy mix and well-planned energy transition. Above all, this is a big win for the Philippines and the people. Economic development is impossible without energy security.”

SMGP Chairman and President Ramon S. Ang said, “For the first time, three leading power companies are working together to secure our country’s energy needs while transitioning towards cleaner power sources. This represents a major leap forward for our energy future, ensuring not just reliability but also cost-efficient power for many Filipinos.”

In a separate press release, AP President and CEO Emannuel Rubio was quoted as having said, “We continue to diversify our generation portfolio and increase our capability in energy security in the Philippines through a minority share in the first integrated LNG facility, to keep the lights on.”

For Table 2, I looked at the financial conditions of these three players and I included FirstGen as it is a big gas company too. I notice that the four big power companies have a combined gross revenue of about P1 trillion.

When converted to US dollars, that’s only $17.9 billion gross — “small” compared to most energy companies in the ASEAN-6 and developed East Asia.

THE VISAYAS’ TIGHT POWER SUPPLY

From the monthly operations report by the Independent Electricity Market Operator of the Philippines (IEMOP) one sees that the average power margin (supply minus demand) is about 2,500 MW in the Luzon grid, about 1,200 MW in the Visayas grid, and only around 300 MW in the Mindanao grid. Thin reserves and small margins mean the grid is courting yellow-red alerts or near-actual rotating blackouts, that prices are high, and consumers are forced to cut their electricity use — not good.

Of the roughly 1,850 MW average demand in the Visayas grid, about half of it goes to Cebu alone, and the other half is shared by the sub-grids in Negros, Panay, and Samar-Leyte. Expansion of a coal plant in Cebu is being planned, but instead of welcoming it, some blackout-friendly environmental activists are lobbying that it should be discontinued because… climate. When there are frequent blackouts, the poor use more candles while the rich use more diesel-powered gensets. More candles often lead to fires, the destruction of property and injury or death. Today, not decades from now.

The national and local governments, local businesses and consumers should prioritize 24/7 electricity and job creation, not scare people about what will happen to the climate 50 or 100 years from now.

COSTLY ELECTRIC COOPERATIVES

In my recent column “On electric cooperative cases at the ERC, renewables, and food inflation” (Feb. 29), I forgot to emphasize that many electric cooperatives (ECs) in the country are indeed abusing their consumers with expensive rates that have no regulatory approval, and that some of these ECs have already been penalized by the ERC but are still awaiting the implementation of fines and penalties. The ERC people might be over-worked since there are 120+ ECs to monitor monthly nationwide.

This is another reason why there should be mergers and consolidation of ECs nationwide. I wrote here before that in my province Negros Occidental, there are five ECs, plus another three in Negros Oriental, or eight ECs in just one island. Meaning that the ERC has to monitor and evaluate eight ECs every month in Negros Island. I believe there should be only one corporate distribution utility (DU) in Negros Island, another single DU in Panay Island, and so on. This would result in economies of scale for the DU, less work for the regulators, and lower electricity cost for consumers.
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See also:
BWorld 685, The economic impact of 2 years of war in Ukraine, and the Philippines fiscal situation
BWorld 686, On electric cooperative cases at the ERC, renewables, and food inflation
BWorld 687, High budget deficit and wage subsidy

On charter change, make the Constitution short

About charter change, I think we should have a short constitution, maximum 25 pages from the current 91 pages. Mostly general principles, no details, like minimum age for those running for Senator, Congress; foreign equity limit, etc. All details should be done by legislation, by Congress.

The purpose of the Constitution especially the Bill of Rights is to protect the people from government. Executive and Legislative branches especially. Thus, the Bill of Rights explicitly state what areas that Congress can NOT legislate, Executive can NOT issue executive orders, adminstrative orders, etc.

The longer the constitution, the more details in the constitution, the more divisive it is for the people.

There are a number of details in the charter. Examples:

Article VI, The Legislative Department

SECTION 3. No person shall be a Senator unless... at least thirty-five years of age... 

SECTION 6. No person shall be a Member of the House of Representatives unless... at least twenty-five years of age...

SECTION 7. The Members of the House of Representatives shall be elected for a term of three years...

Age limit, terms of office, etc. are details that should not be in the Constitution. The 60-40 limit in domestic-foreign equity in investment in certain sectors of the economy should not be there. If these details are not in the constitution, there would have been less divisiveness in society. 

Most if not all legislation tend to subjugate the people or groups of people. Like a tax hike for sector A but not in sector B, subsidies for sector C but not for sector D, and so on.

A new constitution should instead focus on the Bill of Rights, expand it, protect people from government. For instance,

Article III, Bill of Rights.
Section 1. 

This section should be expanded.

Right to life includes freedom from state-enforced mandatory vaccination and inoculation (otherwise a person cannot go to school, office, mall, ride public transpo, etc).

Right to liberty includes freedom of movement, no prolonged lockdown and horrible mobility restrictions. During the lockdown dictatorship of 2020, even going to the next municipality requires a travel pass. This was relaxed a bit in 2021 but mobility restrictions persisted until about end of the year. Restrictions were relaxed because the national and local elections May 2022 was approaching and politicians, their staff and supporters were moving a lot.

Saturday, March 16, 2024

BWorld 687, High budget deficit and wage subsidy

High budget deficit and wage subsidy
March 5, 2024 | 12:02 am

My Cup Of Liberty
By Bienvenido S. Oplas, Jr.
https://www.bworldonline.com/opinion/2024/03/05/579338/high-budget-deficit-and-wage-subsidy/

Last week, on Feb. 29, the Development Budget Coordination Committee (DBCC) released the full year cash operations report (COR) for 2023. The good news from it is that revenues have expanded significantly despite the absence of a major tax hike, from P3.55 trillion in 2022 to P3.82 trillion in 2023, and that the actual collection was higher by P95 billion than the target or programmed P3.73 trillion.

The bad news is that the actual budget deficit of P1.51 trillion was higher than the programmed deficit by P13 billion because expenditures have expanded significantly. Last year’s actual spending of P5.34 trillion was P108 billion higher than the programmed spending of P5.23 trillion.

The average budget deficit has increased from P609 billion/year in 2018-2019 to P1.542 trillion/year in 2020-2023. Consequently, the average financing or borrowings have more than doubled, from P830 billion/year in 2018-2019 to P2.196 trillion/year in 2020-2023 (see the table).


See also these recent reports in BusinessWorld: “Gov’t debt hits record P14.79 trillion at end-January” (March 1), “NG budget deficit exceeds full-year ceiling in 2023” (March 1), and, “Gross borrowings hit P2.19 trillion” (March 4).

I think there are three major reasons why the deficit in 2023 continued to remain high.

1. On the revenue side there was a continued decline in excise tax collection, mainly from tobacco tax revenues. As the tax rate has increased from P55/pack in 2021 to P60/pack in 2022, and P63/pack in 2023, the price of legal tobacco has become more expensive compared to illegal or smuggled tobacco and thus many smokers have shifted to the latter and government revenues from this product have declined.

2. On the expenditure side, National Government subsidies for both the needy and non-needy keep expanding. Among the non-needy are non-poor households that declare themselves as poor to continue receiving subsidies and freebies with no timetable, and the military and uniformed personnel (MUP) pension. The latter was about P164 billion in 2023 and could reach P200 billion this year, when it should be zero. Government doctors and nurses, teachers and professors, engineers and agriculturists, etc. pay for their own future pension via deductions from their monthly salaries but MUPs pay zero. And the pension is tax-free, so zero contribution as active personnel, zero contribution as pensioners. An average tax of 25% on the P164-billion pension, or P41 billion, will help because it goes back to them in the succeeding years. Plus, there are the monthly contributions by active MUPs.

3. The high interest rate policy of the Bangko Sentral ng Pilipinas contributed to the high interest payment of public debt, from P429 billion in 2021 to P503 billion in 2022 and further up to P628 billion in 2023. I will add that the high interest rate policy has cooled some investments in the country and adversely affected potentially higher GDP growth.

These three factors are beyond the policy changes or interventions made by the current economic team. The “sin products” tax rate was made by Congress upon the prodding of the economic teams of the last two administrations. The costly and burdensome MUP pension scheme was crafted back in the Fidel Ramos administration (1992-1998), and the high interest rate policy is made by the monetary authority.

Given these constraints, what can the current economic team do?

Finance Secretary Ralph G. Recto must go beyond revenue mobilization and help raise overall economic productivity. For instance, on the Metro Manila Subway, which is funded by huge foreign aid, he correctly announced that “this administration will deliver top-notch infrastructure projects to modernize the Philippine mass transportation system. We are working non-stop to get all of these done as soon as possible.”

Budget Undersecretary and Principal Economist Joselito R. Basilio rightly observed that “the lower National Tax Allotment shares of local government units for 2023 weighed down on overall growth of spending. Nonetheless, other productive expenditures, particularly infrastructure and other capital outlays, helped buoy government disbursements in 2023 and contributed to propping up overall GDP growth.”

PROPOSAL FOR GOVERNMENT SUBSIDIES FOR MINIMUM WAGE EARNERS

Earlier, there was a concerted lobby for Congress to legislate another minimum wage hike and, in the process, set aside the traditional tripartite negotiations among government (through the Department of Labor and Employment or DoLE), business and labor. See these recent reports in BusinessWorld: “‘Not the right time’ to raise wages — NEDA” (Feb. 23), “Legislated wage hike won’t benefit 80% of workforce — business groups” (Feb. 29), and, “Chamber warns prices will rise if wage hike bill becomes law” (Feb. 29).

Budget Secretary Amenah F. Pangandaman made the headlines in the Philippine Star, “DBM chief: Government can’t afford wage subsidies” (March 2). She was quoted as saying, “With its limited fiscal space the government is unlikely to find the resources to subsidize minimum wage earners… pushing through with such a subsidy would undermine consolidation efforts as well as the delivery of other social services. This is currently not in the budget approved by Congress. And it might eat up the budget for social services and other infrastructure priorities.”

That is a wise and rational position. As shown in the numbers above, the government keeps on borrowing a lot because domestic revenues are not enough, so we should avoid inventing new ways of spending. Rather, we should think of spending cuts in certain sectors, or the large-scale privatization of government assets to fund new or higher spending to unburden the taxpayers.

Meanwhile, I attended a lunch meeting organized by the President of the Federation of Filipino Chinese Chambers of Commerce and Industry, Inc. (FFCCCII), Dr. Cecilio K. Pedro, for business editors and columnists last week at the Makati Shangri-La hotel.

Dr. Pedro discussed the general activities for the upcoming 70th anniversary of FFCCCII, the local business sector’s desire for world peace and commerce, to have friends and not enemies in many countries so that more business and jobs can be created here, and that wages will increase with higher demand for labor and not with legislated minimum wage hike. I agree with the gentleman.
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See also:
BWorld 684, The nuclear trade mission to Canada
BWorld 685, The economic impact of 2 years of war in Ukraine, and the Philippines fiscal situation
BWorld 686, On electric cooperative cases at the ERC, renewables, and food inflation

Transport Econ 24, Trains, tricycles and government-created route monopolies

On the never-ending traffic in Metro Manila and other cities, many people blame car owners then blame other agencies like MMDA, DOTr. I think these analysis are partly wrong and hence, their proposals are unwise or will not address the traffic problem. Why, well consider this situation.

If you live in UP Village, or Filinvest QC and going to Makati Ayala/Buendia or BGC and if you commute this is your route: (1) tricycle from house to Philcoa or COA, (2) jeep from Philcoa to MRT station, (3) MRT Quezon Ave to MRT Ayala station, (4) jeep to Ayala or bus to BGC. Going back home, reverse the process, total eight rides. Each day. If you are in formal barong clothes or carrying a laptop or valuable papers, endure this? Especially during rainy months? Most car-owning people will say No.

So even if we have the most modern MRT trains and stations by tomorrow, most people will still drive their cars.

LGUs create tricycle route monopoly. From house to Philcoa, no jeepney or aircon van, only tricycles.

LTFRB creates jeepney, bus route monopoly. So from Philcoa, only jeepney will serve, not sure if aircon vans are allowed to pick up short-distance passengers like Philcoa-MRT.

And many activists or even some government officials pushing for "inclusive transportation", "inclusive growth", etc will be averse to remove the tricycles, remove the jeepneys, diesel or electric.

Guys, do NOT blame car owners. They know their priorities, like their own or family safety, convenience, because government has created favoritism and transpo route monopolies, which make public transpo inconvenient, even less safe.

My own proposals for these two problems:

(1) Deregulate routes by bus/van companies. LTFRB will only give franchise to transpo companies, monitor their compliance but not dictate where the vehicles can go and cannot go. 

(2) Demonopolize routes within LGUs. So current routes by tricycles can be served by non-aircon jeeps or aircon vans. 

This way, I think tricycles will die a natural death because passengers will just stop riding them. No need for legislation or City ordinances to remove tricycles.

About tricycle drivers and operators who will lose their jobs, people are rational. Tricycle drivers who see that passengers no longer patronize them because their route monopoly has been removed, they usually find other jobs. Remember the former typewriters who lost jobs when computers became more accesible to people. Or telegram companies and employees when people shifted to pagers, and when people shifted to cellphone communication via emails or FB messenger, IG, twitter, etc. All of those people whose companies and sub-sectors have vanished, they found new jobs somewhere.

The previous lavanderas whose jobs have vanished with the introduction of laundry washing and drying machines, the previous manual dishwashers in restaurants whose jobs have vanished with the introduction of dishwashing machines. Many more old jobs now replaced by machines, people move on, upgrade their skills. Previously bicycle or motorcycle mechanics later become cars and trucks mechanics, even heavy machine mechanics with much higher pay. People are rational. Hunger did not happen to typewriters, pager operators, telegram delivery guys, lavanderas, etc. They see the trend and it's slow moving, they have time to adjust. Just don't introduce wider government endless subsidies, people can become lazy.

More about tricycles

If government will keep protecting tricycles by giving them route monopoly, we shall have tricycles in our roads for the next 100 years or more. Tricycles are among the major sources of traffic congestion because they often counterflow then cut the motorists with just 1-2 inches space, forcing other motorists to stop or slow down to give way.

Not immediate nor forcible phaseout of tricycles. Like typerwriters, pagers, telegrams, the phaseout was slow, taking several years. Current new tricycles will depreciate enough before the owners decide to set aside and sell at junk shops. Or convert as "garong", cargo only side car of motorcycles.

The rural tricycles are often worse than urban tricycles. Most provincial roads now are 4-lanes, 2 lanes each side. Inner lane shoul be overtaking/fast lane, outer lane for slow vehicles. Most tricycles in the provinces occupy the inner or fast lane, forcing cars to overtake at the outler lane, or go against the on-coming vehicles. LGUs are supposed to apprehend these tricycles bec they are the ones that granted permit but LGUs not doing their job, neither the local police. 

Tollroads are good. Exclusive transpo, not inclusive transpo. Tricycles, small motorcycles, bicycles, kariton, tractors, are prohibited. And travel is safer, faster, convenient. Mali yang mga "inclusive transpo", we often get inclusive chaos.
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Friday, March 15, 2024

BWorld 686, On electric cooperative cases at the ERC, renewables, and food inflation

On electric cooperative cases at the ERC, renewables, and food inflation
February 29, 2024 | 12:02 am

My Cup Of Liberty
By Bienvenido S. Oplas, Jr.
https://www.bworldonline.com/opinion/2024/02/29/578430/on-electric-cooperative-cases-at-the-erc-renewables-and-food-inflation/

I saw a copy of the “List of distribution utilities with violations under RA 9136 as determined by Energy Regulatory Commission (ERC) in 2023.” Some 30 electric cooperatives (ECs) and private distribution utilities (DUs) were listed there. The violations are generally about “The generation rate charges to consumers are beyond its load weighted average NPC TOU rates contrary to Section 2, Article II of the OU Rules.” The Orders to them are to “Submit Hourly Energy Purchases (in excel format) and copies of power bills,” and to “Immediately Refund all generation rate collected in excess of the load weighted average NPC TOU rate in Luzon from (period covered).”

Accompanying this piece is a list of the ECs and DUs with long-running cases. Most ECs have cases covering shorter durations, from 2020 to 2023.

I got curious about the San Fernando Electric Light and Power Co. (Sfelapco) and the huge amount of its reimbursement order: P654.4 million + P1,7 billion = P2.4 billion! Among the reports I saw about this was this one: “CA junks P1.4 billion refund order vs Pampanga power firm” (Inquirer, Jan. 27). It said that the Court of Appeals (CA) Special 17th Division declared that the ERC’s order to refund the P2.4 billion “lacked legal and factual basis and that it violated Sfelapco’s right to due process, among others.” The CA added that the DU was not given the “opportunity to ventilate matters involving the orders of refund adjudged against it.”

I checked the other ECs and DUs — they had similar violations: no approved or un-acted power supply agreements (PSAs). I am no fan of ECs and their Congress-granted geographical franchise monopolies, where captive customers have no choice but to pay whatever rates they impose. But I remember that under the previous ERC leadership, there was a huge backlog of un-acted, and hence un-approved, PSAs, so ECs/DUs and their old genco PSAs proceeded with the old arrangements and prices. And after many years, here the ERC comes penalizing ECs and DUs for unapproved PSAs that it itself did not act upon on time. So, it seems that at fault here was the ERC under the previous administration.

Last week, on Feb. 22, I attended the “Business to Business Matching Event to Support Energy Transition” (B2B SET) conducted by the Department of Energy (DoE) and the United States Agency for International Development (USAID) at the Grand Hyatt Hotel BGC. Among the speakers were DoE Secretary Raphael PM Lotilla, Ryder Rogers of USAID Philippines, DoE Undersecretaries William Fuentebella and Rowena Guevarra, ERC Chair Monalisa Dimalanta, officials from the Department of Environment and Natural Resources, Board of Investments, National Irrigation Administration, and the Asian Development Bank.

What struck me most were the huge planned capacities for solar (58.1 gigawatts or GW), onshore wind (254 GW), offshore wind (178 GW), plus ocean (170 GW). Wow! Compare that with the total installed capacity of only 28.3 GW in 2022, of which solar was only 1.5 GW and wind only 0.4 GW.

I follow and monitor monthly inflation data, both national and global. Among the things I notice are that overall inflation, even in rich countries, remains at high levels and that food inflation is much higher than overall inflation, and this coincides with rise in solar and wind capacities in many countries.

Foremost among the countries that have these trends are those in Europe. For lack of space, I have limited myself to only five European Union countries plus Australia and Japan in the data table here.

As more solar and wind capacity is added, food inflation rises, and total power generation either flat lines or declines. This is because solar and wind are priority dispatch in the grid, whether in Europe, America or Asia. So, more coal, gas, and nuclear plants are forced to retire because they cannot earn 24/7 anymore, or they are being forcibly closed earlier, and they are the real electricity producers, not wind/solar.


Let us look at GDP growth in Europe in 2023: Spain 2.5%, France 0.9%, Italy 0.8%, the UK 0.3%, and Germany -0.1%. They are technically crawling, if not contracting like Germany, Poland with -0.1%, and Ireland with -2.1%.

The Philippines should not follow the Europe path of deindustrialization and degrowth economics in pursuit of the amorphous and weird goals of “net zero” and “decarbonization.” We should prioritize our people’s desire to have more jobs, more businesses, more stable and cheaper electricity, more industrialization and prosperity. The gung-ho plan to inject more intermittent wind and solar into the electricity grid should be abandoned before it is too late.
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See also:
BWorld 683, NAIA privatization is good, legislated minimum wage is bad
BWorld 684, The nuclear trade mission to Canada
BWorld 685, The economic impact of 2 years of war in Ukraine, and the Philippines fiscal situation

Rising car theft in Toronto and the role of government

I was surprised to see these reports,

Toronto Police Gives Advice on Auto Theft: Just Let Thieves Steal Your Car
Paul Joseph Watson 14th March 2024
https://modernity.news/2024/03/14/toronto-police-gives-advice-on-auto-theft-just-let-thieves-steal-your-car/

Toronto Police have given advice to residents worried about the city’s spiraling auto theft problem – just let thieves steal your car by leaving them the keys.

Leave keys at the front door: Toronto police constable gives BIZARRE advice amid rising car theft
Toronto, Canada
Edited By: Heena SharmaUpdated: Mar 14, 2024
https://www.wionews.com/world/toronto-police-constable-gives-bizarre-advice-amid-rising-car-theft-700100

Toronto police advise locals to leave car keys near front doors to avoid confrontations with violent thieves
'Home invasions and break and enters for auto theft occurrences rose 400 percent in 2023,' police say
By Gabriel Hays Fox News March 15, 2024 
https://www.foxnews.com/media/toronto-police-advise-locals-leave-car-keys-front-doors-avoid-confrontation-violent-thieves

(this photo from https://www.thestar.com/news/gta/local-crime/)

So I asked four Filipino friends living in Toronto -- is this true? Their replies:

1. Oo, kainis Yan. (Yes, it's irritating)

2. Yup, it was announced by one of the toronto police member that to avoid being ransacked, just place car key/s near the main door para pag may magnakaw ng car sa drive way, makikita agad ang susi malapit sa main door.

3. I stopped watching news coz it's very depressing. Car theft, talamak. Ilang friends namin nanakawan ng car. May Mafia behind...they work inside the govt office.

4. This is not true, but it’s true that car theft is on the rise.

Then this is clear governmentt failure. The main purpose of government why it was invented, from a  classical liberal tradition, only 3 functions: protect the people's right to life, right to private property, right to liberty. A car is private property. If thieves can easily take other people's car, then government is not doing its mandate to protect the people's right to private property.

Trudeau and his team are busy protecting the properties of Ukraine, Palestinians?

Canada, US, etc. governments cannot control the invasion of criminals in the homes of their own citizens but are so concerned about Ukraine, Taiwan, N. Korea, etc. They cannot prioritize the protection of right to life, right to private property of their own citizens yet are so focused on right to life, property of other nationals thousands of kilometers away.

Same here. We are harassed by daily traffic, too many road intersections where  congestions occur. Govt can build more overpass, underpass, tunnels, avoid having intersections as much as possible so that vehicles can pass smoothly. But govt says it has no money to build more infra, rely on PPP. Then govt says it will have money to buy soon submarines, battleships, jetfighters, etc.

Meanwhile, I think the US, Canada, W. Europe will slowly implode socially and economically. Too many unvetted illegal immigrants and possibly with criminal or terror background from many countries are already there.