Thursday, August 30, 2012

Fat-Free Econ 22: Three Years of Drug Price Control Policy

* This is my article yesterday in TV5's news portal,

The drug price control policy turned three years old in mid-August. The Maximum Retail Price or MRP was imposed through Executive Order No. 821 and Advisory Council Resolution 2009-001 - both issued in July 2009 and took effect August 16, 2009.

The imposition was driven by a political emergency and not a health emergency, as the Presidential and local elections were just nine months away back then.

Prevailing drug prices data at that time contradicted the necessity of imposing price regulation. Competition among various brands from different drug manufacturers and drugstores was healthy at that time, such that consumers had various options for their needs.

Three examples of drugs are given below. Data came from Tomas Marcelo “Beau” Agana, who is president of the Philippine Chamber of Pharmaceutical Industry. Beau prepared a PowerPoint for the public hearing of the Congressional Oversight Committee on Republic Act No. 9502 last May at the Senate. But due to limited time, Beau was unable to present it. The event became a “public speaking” -instead of a public hearing - by Rep. Ferjenel Biron and Sen. Manny Villar, as both were pushing their respective bills creating a new bureaucratic layer, the Drug Price Regulation Board.

First is amlodipine, an anti-hypertension drug. While the leading brand, Norvasc by Pfizer, was selling for around P38 for the 5 milligram tablet, similar drugs were selling for P25, P15, P11 and P10. Consumers had choices, but the politics of envy centered on Norvasc. So their solution was more politics, more government coercion.

Source: Agana, May 2012. Primary data for the second chart - prices of different brands - is from the Drugstore Survey, March 2012.

Beau showed that for the average retail price for various brands of amlodipine, Philippine prices were cheaper than those in Indonesia, but more expensive than those in Malaysia, Singapore, Taiwan and Thailand.

Now consider this: some countries - such as Malaysia - do not slap taxes on medicines. Philippine taxes on medicines include an import tax of 3-5 percent and value-added tax of 12 percent - all of which result in a 15 percent price spike. If other taxes and fees are included - local taxes and fees and Food and Drug Authority fees - the government share could rise up to 20 percent of the retail price.

Then there are indirect taxes on medicines, namely the corporate income tax and the mandatory social security contributions by drug manufacturers, wholesalers and importers, and drugstores. Those taxes and fees, direct and indirect, are passed on to consumers.

Thus, the price difference of amlodipine between the Philippines and Malaysia could pretty much approximate the difference in tax treatment they both applied (or not applied) on medicines and on corporations: 12 percent VAT in the Philippines vs. zero in Malaysia; and 32 percent CIT in the Philippines vs. 20 percent for the first RM 500,000 and 28 percent on the balance.

Second case is co-amoxiclav, an anti-infection drug. Before the MRP policy three years ago, the leading brand, Augmentin by GSK was selling for nearly P83 for the 625 milligram bottle. But consumers had other options that were selling for only P59, P47, or P35.

Comparing again with some Asian countries, drug prices here for co-amoxiclav were similar with those in Indonesia and Thailand. The price difference with Malaysia because of a different tax treatment appears to explain why they are cheaper in Malaysia.

Comparing with prices in Singapore, VAT in the city-state stands at only 5 percent and CIT at 17 percent, or almost half that in the Philippines.

The third case is simvastatin, a drug against high cholesterol and certain cardiovascular diseases. See the different prices for different brands.

And here are other drugs and their respective price ranges. Again, basic data is from the Drugstore Survey, March 2012.

The bottomline for all these data is clear: there is competition, there are various options for the consumers, and therefore government intervention in drug price setting was unnecessary and unjustified. Only then Senator Mar Roxas (who pushed for the policy in the Senate) and then President Gloria Arroyo knew why the MRP was imposed.

When the MRP was being cooked and debated, Roxas was desperate to raise his low approval rating for the May 2010 Presidential elections, while Arroyo signed the EO to steal the show from him. Then Health Secretary Francisco Duque was also looking at the possibility of running for the Senate, but did not push through with the plan because of the Arroyo administration's poor showing in surveys.

In short, the MRP imposition in August 2009 was a political gimmick for political ends by politicians looking at the elections just nine months away. While their political horizon was short term, the social and economic damage was long term. EO 821 has no sunset provision.

A year after the MRP was imposed, the key sponsors of the policy had dropped the drug sector like a hot potato: Arroyo won a congressional seat, Roxas was appointed transport and communications secretary, and Duque was appointed head of the Civil Service Commission.

Two weeks ago, I attended the emergency meeting of the DOH Advisory Council for RA 9502, the Cheaper Medicines Law, and the important question requiring an answer was: What should the DOH do, to deal with repeated if not rising cases of water-borne diseases like leptospirosis due to flooding? Should the government impose another round of MRP on drugs used to treat those diseases?

Luckily the lesson of the past three years of MRP is clear in the minds of the Advisory Council members. Competition among different brands and drugstores provides the poor some access to cheap drugs, whereas price control has upset the market for the same.

Below is data presented during the said meeting. The drug against leptospirosis, doxycycline, has various brands with a wide price range. The prices are in pesos per 100 milligram capsule.

So consumers have the option of buying at P169, P74, P49, P5 or P2. Furthermore, many drugs against diseases that arise during calamities are given away not only at low prices, but sometimes for free through donations from various civil society and charitable organizations like the Red Cross, Rotary, Mason, Lions, JCI, etc. The DOH also has its own stock of medicines for distribution to the poor.

Competition, not more government coercion. Deregulation, not more government regulation and taxation. The public and the politicians would be better off if they will heed this simple lesson from the three years of drug price control.

See also:
Drug Price Control 25: Top 10 Articles on Google Search, April 03, 2012
Drug Price Control 26: Conflict of Interest in Drug Price Regulation Legislation, May 13, 2012
Drug Price Control 27: Letter to Sen. Pia Cayetano, May 15, 2012
Drug Price Control 28: On Cong. Biron and Sen. Villar Bills, July 14, 2012
Drug Price Control 29: MRP Attempt Over Anti-Leptospirosis Drug, August 16, 2012 

Fat-Free Econ 8: Drug Price Regulation is Wrong, May 04, 2012
Fat-Free Econ 9: Drug Pricing Bureaucracy is Not Cool, May 11, 2012
Fat-Free Econ 18: Healthcare Corruption and Physician Entanglement, July 30, 2012

Self-Reliance 1: Hope During Hard Times

For some reason/s, this blog is attracting writers abroad requesting if they can guest post here. I am sorry, I apologize, to those people who earlier wrote me about this which I was lazy enough to even reply to them. Very often my mind wanders on many things and I forget to respond to some emails, especially from people I have not met before.

Two weeks ago, I received another email from Ms. Dana Le Roy of, asking if they can submit a guest contribution. Wanting to reduce my previously laziness to respond to such requests, I replied Yes.

Below is an article about self reliance. This is consistent with one of the major advocacies of Minimal Government Thinkers and this blog -- more personal and parental/civil society responsibility, less government responsibility. And we can build a more just, more dynamic, less coercion society. Enjoy reading.

Finding Hope During the Tough Times

From losing your job to facing people with seriously different political views than yourself, you've likely gone through some tough times in recent years. Sometimes, we expect other people to offer us aid and assistance. However, in the end, all we really have is ourselves and our own power to make the situation better. How can accepting this frequent truth help to improve your own life? Turning to self-reliance is often the answer.

Mind Over Matter

It's a common phrase and pretty much a cliche at this point, but maybe some truth lies in these words. Look at what the problem really is. Are you letting yourself get down every day because you're on a seemingly endless job hunt? Are those negative feelings holding you back? Try to channel those feelings into something positive. Instead of spending an hour a day wondering about why you don't have a job, use that time to send out even more resumes. Furthermore, focus on the fact that economies have historically turned around after downfalls. It's not likely that the economy will remain this way forever.

Look Back

Have you found your way through difficult times before? You've probably had the strength to recover from some major pitfalls in the past. Reflect on them, and remind yourself that you survived before and that you will again. Additionally, think about the strategies that you employed last time to put an end to the mess you were in. Consider whether these will work now, and use the past as a learning experience. When someone is challenging your political beliefs, it's importance to turn to self-reliance. Examine your self, and consider why you have those political beliefs in the first place. You'll remain how they started and why they are so important to you, and the side of the campaign won't matter anymore.

Find Your Faith

If you feel alone, turn to whatever higher power in which you believe. Even if you don't consider yourself religious, you can still be spiritual. Have some quiet time every day to pray and reflect. You might consider joining a church, temple, mosque or other house of worship. Sometimes, simply being with other people who are also praying for good to come can be an extremely comforting experience especially when problems such as war or loss of jobs are impacting an entire community. Even when you don't receive exactly what you pray for, having time periods of reflection allow you to understand some of the reasons why. You may eventually see why certain negative situations have occurred in your life. You're relying on yourself to pray, but you're also opening the door for a higher power.

"I Can" Moments

When you're feeling down about a particular situation, you might feel as though you cannot possibly ever do anything again. You might feel completely depressed about your talents and abilities because you cannot find a job in this economy. Instead of fretting so much, put them to good use. For example, let's say you're an art teacher who cannot find a job. Don't let your talent go to waste. Offer a free art session for budding artists in the community, or take an advanced art class offered in your neighborhood. Simply feeling as though you have power can really invigorate you and remind you that you have a lot of worth. Get out there and do something with your life.

People fall into tough times for all different sorts of reasons. There are going to be days where you do feel completely negative. However, it's important to not allow those feelings and emotions to completely take over your being. Remember, you might not have power over what happens out there, but you do have control over your mind.

Karmen Hall writes about self help, personal finance & more at

See also:
CSOs and State 11: Rights and Responsibilities, Liberal Civil Society, July 11, 2010
Welfarism 14: Hard Work vs. Dependence, the Pacquiao Experience, January 30, 2012
Welfarism 16: Bailing Out Lazy and Irresponsible People, February 27, 2012
Welfarism 17: Personal Irresponsibility and Government, March 15, 2012
Rotary Notes 4: Citizen Self Reliance, Public Image, July 16, 2012\

Election Watch 3: Defining Celebrities, Politicians and the State

Last week, August 22, I was one of five panel speakers who talked on the subject, "Celebrities Turned Politicians" organized by the UP Economics Towards Consciousness (UP ETC) at the UPSE. I was the only non-academic speaker there. The four  other speakers were Dr. Maria Fe Mendoza of UP National College of Public Administration and Governance (NCPAG), Dr. Jean Franco of UP College of Social Sciences and Philosophy (CSSP), Prof. Jane Vinculado of UP College of Mass Communications (CMC), and Mr. Noel del Castillo of Miriam College. The forum moderator was Kapuntong Edge of UP's radio station, DZUP 1602.

My co-speakers were very articulate in their respective fields. Unless I felt that there was something that I could add, or unless I was explicitly asked a question by the moderator, I did not speak much. I learned more listening to the four other speakers than speaking.

Well, I was invited precisely to provide a different perspective -- that of less government philosophy in topics like this. So when I was asked by Kapuntong Edge what I think about the theme, I said that we are discussing two concepts here: celebrities and politicians. I agree with Prof. Vinculado's definition that celebrities refer not only to showbiz actors, actresses, singers and dancers. They also include boxers like Manny Pacquiao, famous basketball stars and other athletes, radio and tv broadcasters, news anchors, tv public affairs program phosts, others who became instant celebrities for whatever reason/s.

The second definition is about politicians, people who aspire to be the administrators and legislators of the state and seeking the voters' mandate to get such powers and privileges. The state is force and coercion. It has the power to create various regulations, taxation, restrictions and prohibitions, to manage our lives, work and communities.

So many people, not only celebrities, but also lawyers and other professionals, clowns and idiots, aspire to become the administrators and legislators of the state, to have such power to enact new regulations or implement existing regulations and taxation.

Other topics that were discussed or mentioned were: (1) Public service as public trust, (2) the role of political parties, (3) the party-list system, (4) possible restrictions to those aspiring to become politicians, (5) voter education, many others.

On public service, I said that it is wrong to limit public service only to those who are in government because real public service is actually being done by those in the private sector. If one has to bring a family member to a hospital late at night very quickly and he/she has no car, taxi or jeepney or tricycle drivers can do that very important public service job and yet these people do not receive or rely on tax money to do such task. Notice also that even ordinary vendors of clothes, shoes, cell phone accessories and so on, do not take lunch break and close their shop. They serve their customers anytime so long as their shop is open. Whereas many government offices and personnel, national and local, take prolonged lunch break even if they are supposed to provide crucial service delivery to the public.

I mentioned the case of my friend who was accidentally bitten in the leg by one of their two dogs who fought, this was about three or four years ago. I brought him to Makati City Hall as treatment of animal bites were transferred there from the city-owned Ospital ng Makati. We arrived at city hall around 11:45 am, the doctor and his staff already left for a lunch break and we were asked to come back by 1pm. For such crucial service as treating patients who may have deadly virus in the body if the dog (or cat, rat, etc.) has rabies, they take an extended lunch break whereas those ordinary vendors who provide not-so-essential services do not take lunch breaks.

Our group photo above after the forum. From left: Three officers of ETC to my left, Mel Lorenzo Acad beside me; then Jean Franco, Jane Vinculado, Noel del Castillo, Maria Fe Mendoza, Kapuntong Edge. UP ETC gave us a modest but nice recognition plaque plus a bottle of mild wine.

My concluding notes there before the program ended:

1. Reiterating that the state is force and coercion, and so many people, celebrities or not, idiots and clowns, want to become politicians and become the administrators and legislators of the state. There is nothing special, nothing particularly wrong that many celebrities are becoming politicians.

2. What we need is to shrink government, to reduce the number of political positions, appointed or elected, reduce the taxation, regulations and prohibitions by the government, national or local, that government should focus on its important function in promulgating the rule of law, to protect the citizens' private property rights and their right to life free from aggression and harassment by bullies.

3. On so-called "intelligent voters" who are not enamored by the glitz of celebrities nor by the guns, goons and gold (3Gs). I don't think it quickly qualifies as "intelligent vote." I know of people who have masters degree, have PhD, but all they say is that government should provide this, government should subsidize that, government should regulate there, government should tax over there. To suggest that government is the be-all solution to many social issues and problems in society is not promoting intelligence. Rather, it is promoting dependency, mendicancy, even stupidity in thinking.

Above, the officers and members of UP ETC. Thanks guys for a good public forum. I am proud of my former organization when I was still an undergrad student at UPSE in the 80s.

All photos above from the ETC's facebook album.

See also:
Election Watch 1: Anti Epal Photos, June 29, 2012
Election Watch 2: On Celebrities as Politicians, August 19, 2012

Wednesday, August 29, 2012

Health Spending 5: Raising DOH Budget for Childhood Cancer

A fellow member of our Coalition for Health Advocacy and Transparency (CHAT), James Auste, the head of the Cancer Warriors Foundation (CWF) has lobbied other CHAT members and CWF supporters, to lobby and write the Senators to demand:

1. Increase DOH budget for Acute Lymphocotic Leukemia (ALL) patient assistance program from P30 million to P100 million, to cover some 3,500 kids with cancer will be given proper care and treatment.

2. Increase DOH budget for non-communicable diseases (NCDs) from P70 million to P280 million for four
diseases: cardiovascular, lung cancer, diabetes,...

I replied that I support more government funding for (a) pediatric diseases, including NCDs for children like childhood cancer, (b) infectious or communicable diseases like leptospirosis, dengue and malaria, (c) people with physical and mental problems, both children and adults.

But I do not support more government funding for NCDs for adults. Why should the rest of society pay for diseases of people who over-eat, over-smoke, over-drink, over-sit? Lifestyle is a choice, not inherited.

Legislators, Congressmen/women and Senators, receive all types of higher budget request from:

(a) Departments and other Agencies themselves which suffer budgetary cut at the Department of Budget and Management (DBM).

(b) NGOs, media, other civil society groups lobbying for additional budget for their respective sectors (ie, health NGOs asking for higher DOH budget, education NGOs asking for higher DepEd and SUCs budget, etc.).

(c) Rent-seekers and contractors lobbying for bigger budget of agencies that will get their services (ie, suppliers of jet fighters and battle ships seeking higher DND budget, road contractors seeking higher DPWH budget, etc.),

(d) Foreign aid or multilateral bodies like the WB and ADB pushing for new loans that will require local counterpart funding.

(e) Other sectors and interest groups.

One will hear all types of justifications and even alibi from these sectors, interest groups and lobbyists. They know that they are indirectly competing with each other as taxpayers' money is not a bottomless pit, so some tend to shout or lobby louder than the others.

But legislators are also under pressure where to get the additional funding other than the usual, never say die "more borrowings, more borrowings, more borrowings". The annual budget deficit (expenditures larger than revenues) is around P300 billion a year, and that is also the similar amount of new borrowings each year. Our public debt has become so huge that we pay about P350 billion a year on average on interest payment alone. Utang lang ng utang, let the future administrations and taxpayers worry about those debts later.

So legislators would tend to ask, "kindly help us identify where to get the additional money and we will give your request." Good. And here are possible sources of additional money for one's favored sector or department.

1. Higher rates for existing taxes and fees, like the proposed increase in excise tax for tobacco and alcohol products, higher excise tax for mining revenues, etc. Or a proposal to hike VAT from 12 to 15 percent. Or DFA hike in passport fee, NBI hike in NBI clearance fee, DOTC hike in motor vehicle registration tax, etc.

2. New taxes and fees, say an excise tax on junk food and bottled water (now more expensive than oil).

Please note that those taxes and fees refer only to national government agencies. The local government units (LGUs) can also increase their respective taxes and fees, like the community residence tax, real property tax, business permit tax, etc. They can also create new taxes like the proposed dog ownership tax in Pasay or Paranaque, or increase penalties like penalty for dog shit on the streets, penalties for men who walk topless on the streets, etc.

3. Privatization, like privatizing PAGCOR, some military facilities or camps, some state universities, etc.

4. Shrink the budget of other agencies and rechannel the savings to one's favorite sector or department.

If one will go for option #1 like the proposed sin tax hike, malabo na, not practical. So many sectors are already salivating at the huge money that will come from it -- the universal healthcare (UHC) of PhilHealth and DOH, the condoms and pills of the RH bill, the pork barrel of legislators themselves, etc.

If option #2, it is a highly sensitive issue and next year being an election year, politicians would rather borrow like crazy than create new taxes that can spell defeat for them at the precincts.

If option #3, I myself will go for it. Prioritize PAGCOR privatization, I think up to P200 billion can be realized from it. There is a bill by Sen. Ralph Rector on this, but I think it's not moving fast enough.

If option #4, I will also support it myself. My favorite is to drastically cut the budget of the Department of National Defense (DND)-AFP. I am actually in favor of abolishing the AFP itself as I believe we have no threat of external aggression in the sense that foreign armies will invade Metro Manila and the rest of the country. The bigger threat here is internal -- those thieves and carnappers, killers and murderers, kidnappers and rapists, extortionists and terrorists, corrupt officials and plunderers, many other criminals. The noise over the WPS/SCS is hyped mainly by the rent seekers and suppliers of jet fighters and battle ships, some legislators and the DND guys themselves. I read that one battle ship from Italy will cost about P6 billion each, and the DND plans to buy two ships soon. Not included there are bombs, missiles, ammunitions, training of personnel, oil consumption, replacement of parts, that will cost several billions more.

The Philippine Military Academy (PMA) should be privatized. Our subsidy for those guys is P500,000 per student per year, or P2 million per student over four years. The same with the National Defense College of the Philippines (NDCP), which has a subsidy of about P1 million per student, and those masteral "students" are not exactly poor.  They are mid-level or senior level government officials, congressmen, governors, mayors, etc.

So if people have to write to those Senators and Congressmen, their request will have a better chance of being granted if they can pinpoint where to get new money or savings.

My suggestion, go for option #4. Target the DND, or the state universities and colleges (SUCs), or DPWH.

Then over the next few years, target option #3.

See also:
Health Spending 1: Wastes in US health spending, June 23, 2011
Health Spendng 2: DOH, Public Health Budget, June 18, 2012
Health Spending 3: Obamacare and Huge Tax Hikes, June 30, 2012
Health Spending 4: Global Aid on Health, 1990-2011, August 28, 2012

Tuesday, August 28, 2012

Health Spending 4: Global Aid on Health, 1990-2011

The main sources of development assistance for health (DAH) is slowly shifting from official foreign aid (bilateral and multilateral) to international NGOs and public-private partnerships. This is a good development.

I saw a nice interactive treemap from the Institute for Health Metrics and Evaluation (IHME) just recently posted, on the global channel of DAH from 1990 to 2011,

Of the 22 years covered in that interactive data, I chose four years: 1990, 1997, 2004, 2011 (seven years gap) for the images. Below are data for 1990 and 1997.

In 1990, it seemed that about 90 percent or higher, DAH were channeled via official foreign aid bodies, especially through the World Health Organization (WHO) and the governments of France and the US. Seven years after, the World Bank or IBRD and its attached agency International Development Association (IDA), plus the government of Japan, became more prominent.

By 2004, the NGOs and the Global Fund to fight AIDS, TB and Malaria (GFATM), a public-private sectors partnership, showed prominence while the WB-IDA, WHO and US government remained among the major channels and donors.

Last year, the GFATM, the Bill and Melinda Gates Foundation (BMGF), GAVI (Global Alliance for Vaccines and Immunization), another public-private sector alliance, and other NGOs have become really prominent, channelling around one third of the global DAH. I think a substantial amount of the funding for GFATM and GAVI also came from the BMGF.

The official foreign aid channels still dominate, like the WHO, WB, US and UK governments. But we should recognize that not all of such foreign aid is comprised of actual service delivery to poor patients. A substantial amount of US Agency for International Development (USAID) funding for health for instance, is to finance various studies for public health policies. I think many faculty members and researchers of my alma mater, the UP School of Economics, make big money from USAID to do various research projects on healthcare.

The same with UK foreign aid via the Department for International Development (DFID). One DFID project for instance, is the Medicines Transparency Alliance (MeTA), a big multi-sectoral alliance to advance more transparency and accountability in medicines pricing, procurement, dispensation, and other services. There are MeTA projects in seven countries including the Philippines. The health coalition that I belong where I represent MG Thinkers, CHAT, is the civil society partner of MeTA Philippines.

With the fiscal burden of ever-rising public debt by the governments of the industrialized economies like the US, UK, France and Italy, the share of the official foreign aid I think will slowly but steadily decline. Those governments will be stuck in dealing with huge domestic health concerns with their ageing population and rising spending for interest payment. International NGOs and corporate foundations will slowly take the tab.

Health spending will also slowly move from rich country governments' donation to national governments of the poorer countries, national and local, plus various NGOs, corporate healthcare providers, charity organizations, private health insurance and out of pocket (OOP) spending.

What this means is that global healthcare will slowly move from heavy "government responsibility" to more "personal and civil society responsibility." We will watch future data to see if this hypothesis will hold.

See also:
Health Spending 1: Wastes in US health spending, June 23, 2011
Health Spendng 2: DOH, Public Health Budget, June 18, 2012
Health Spending 3: Obamacare and Huge Tax Hikes, June 30, 2012

Business Bureaucracy 5: Doing Business 2012 Report

The WB-IFC's "Doing Business 2012 Report was released several months ago. and the result for the Philippines was as ugly as in previous years: Long procedures to start and continue a business, lots of taxes and mandatory contributions to pay. The Country Tables are available here,

Singapore, Hong Kong and New Zealand took the 1st, 2nd and 3rd places, respectively. To start a business: Number of procedures, number of days, minimum capital: 3, 3, 0 for Singapore and HK, 1, 1, 0 for NZ. For the Philippines? 15, 35, 5.2 percent of per capita income.

In paying taxes: number of payments per year, number of hours, percent of profit: 5, 84, 27.1 for Singapore; 3, 80, 23.0 percent for HK; and 8, 172, 34.4 percent for NZ. For the Philippiines? 47, 195, 46.5 percent.

Then S. Korea, Australia and Thailand also got high ranks, meaning their business bureaucracies are not that complicated or parasitic.

To enforce contracts: number of procedures, number of days, cost (percent of claim): 33, 230, 10.3 percent for Korea; 28, 395, and 21.8 percent for Australia; and 36, 479, 12.3 percent for Thailand. For the Philippines? 37, 842, 26.0 percent.

Also Malaysia, Japan and Taiwan. In resolving insolvency, number of years, cost (percent of estate), recovery rate (cents on the dollar):  1.5, 15, 44.6 for Malaysia;  0.6, 4 percent, 92.7 for Japan; and 1.9, 4 percent and 82.1 for Taiwan. For the Philippines? 5.7, 38 percent, 4.7!

Monday, August 27, 2012

Energy Econ 4: Oil Prices and Taxes

* This is my article last Saturday in the online magazine,

Local oil prices have significantly jumped the past few days by about P3 per liter. This reflected the upward movement of oil prices in the world market over the past few weeks. As usual, the left-leaning groups raised howl and criticized the oil companies for their “greed” and called on the government to have another round of tax hikes on oil or other products and services.

Last July 11, 2012, I attended the “Platts Forum on Oil, Coal and LNG” at Edsa Shangrila Hotel. Among the speakers there was Ms. Zenaida Monzada of the Department of Energy. Below are among the slide presentations she gave in the said forum.

Taxes that contribute to the higher retail prices of petroleum products are (a) excise tax, P4.35 per liter for gasoline, P3.67 per liter for jet fuel, P1.63 per liter for diesel, and (b) value added tax (VAT) 12 percent. This means that for the P54 per liter unleaded gasoline, about P10 of it goes to excise tax and VAT alone. Or the government is directly accountable for expensive oil by about P10 per liter. There are other indirect taxes of course, like corporate income tax, documentary stamp tax, real property tax, etc. of the oil companies, trucking and gas stations.

The lower chart shows that the Pesos per liter retail price has moved along with the world crude oil price, from 1984 onwards.

 Below, the same story is shown. From 1999 to June 2012, local gasoline and diesel prices have moved generally in steep with international crude and refined product prices. And world oil prices are dictated by the governments of the major oil exporting countries, both OPEC and non-OPEC member countries.

The conspiracy theory therefore, of oil companies dictating local oil prices to satisfy their greed is standing on a hollow ground.

Below, “prevailing prices” refer to early July 2012 prices. Prices across various oil dealers and retailers are generally similar, with minor price differential that can be attributed to other business costs like land lease or rent, and/or varying profit ratio.

The lower table shows comparative prices across major capital cities, converted into Pesos per liter. Philippine oil prices are not among the highest in the region. The most proximate explanation would be that those countries that have higher oil prices than us have higher taxes and fees, direct and indirect, that are slapped on oil products and oil producers and retailers.

The bottomline is that contrary to common public perception that the oil companies are the main instigator of oil price hikes, it is not. It is more due to the (a) governments of oil exporting countries like those in OPEN-member countries that set the price of crude oil, and (b) governments of net oil importing countries like the Philippines, for the various taxes and fees imposed both on the oil products and the companies that import, refine, transport and retail oil products.

Repeated calls to re-regulate if not nationalize the local oil industry are misguided and wrong. Instead of having more government involvement and intervention in local oil price setting, there should instead be lesser government taxes and involvement. The excise tax on oil products should in fact be abolished, instead of raising it as proposed by some sectors.

See also:
Energy Econ 1: Coal Power, July 24, 2012
Energy Econ 2: Renewable Energy and High Electricity Prices, July 30, 2012
Energy Econ 3: Market Reforms in India's Electricity Sector, July 30, 2012

Saturday, August 25, 2012

Healthcare Competition 9: Deregulate Further the Supply of Healthcare

This will be more of a discussion outline rather than a paper. I would appreciate readers' comments, especially in the two conceptual analysis that I am introducing below.

A. Consumers of Healthcare

Practically everyone, young and old, men and women, rich and poor.

B. Suppliers of Healthcare

1. National government:

   a. Department of Health (DOH) attached hospitals, NCPAM and other agencies; Botika ng Barangay (BnB)
   b: Philippine Health Insurance Corporation (PHIC or PhilHealth)
   c. UP-Philippine General Hospital (PGH) and other state universities offering health courses
   d. Department of National Defense's (DND) AFP Hospital and Veterans Hospital
   e. Department of the Interior and Local Government's (DILG) PNP Hospital
   f. Other Departments and government corporations providing occasional medical and dental missions.
     PCSO and PAGCOR provide limited hospitalization cover, give away ambulances, etc.

2. Local government units (LGUs)

  a. City hospitals (Ospital ng Maynila, Ospital ng Makati, Ospital ng Muntinlupa,...)
  b. Municipal hospitals
  c. Provincial hospitals
  d. Barangay health centers and rural health units (RHUs) under the city or municipal governments

3. Private companies and foundations

   a. Hospitals under a foundation (St. Lukes, Manila Doctors Hospital, Makati Medical Center, etc.)
   b. Other private hospitals, affiliated with the Private Hospitals Association of the Phils. Inc. (PHAPI)
   c. Health Maintenance Organizations (HMOs)
   d. Pharmaceutical companies, members of PHAP or PCPI
   e. Drugstores and pharmacies (Mercury, Watsons, The Generics, members of DSAP)
   f.  Big companies and offices, schools and universities, usually have their own small medical offices/services

4. Civil society organizations

   a. Various NGOs and charity organizations that directly provide health services (Botika Binhi, Alt-Health, PPF, etc.)
   b. Rotary Clubs, Lions Clubs, Mason, JCI, etc. that regularly sponsor medical and dental missions, vaccination projects
   c. Other NGOs, charity organizations, that indirectly provide health services, or do various healthcare policy advocacies

C. Concept 1: Current Financing of Healthcare

First, HC is divided into outpatient and in-patient or hospital confinement services. Financing for outpatient services are usually done via out of pocket (OOP) for those who have no private health insurance, the HMOs for those who have private health cards, LGU hospitals or LGU guarantees if patients are brought to a private hospital ER.

For hospital confinement, that is the main job of PhilHealth. But since its coverage is limited (eg, only P500 per day for hospital bed), the balance is to be shouldered by those mentioned above as financing the outpatient services. Other government agencies like DSWD, PCSO, also give limited cash cover for the balance.

Question: Is this an appropriate representation of the existing health financing system and schemes?

D. Concept 2: Supply and Demand of Healthcare

Some left-leaning groups and health NGOs are definitely calling for health socialism, that the national government, in coordination with LGUs, should provide free or highly subsidized HC services to the public, from outpatient to inpatient services because "health is a right, not a privilege." This is represented by the graph on the left.

Other groups, well a minority actually, like us in Minimal Government Thinkers and other free market-oriented groups and individuals, want to keep government role in HC to be focused on dealing with infectious or communicable diseases, pediatric diseases, children and adults with physical and mental limitations. The rest should be given free choices and options where to get their health insurance.

I believe in universal healthcare (UHC), that everyone should have some form of health insurance. But I do not believe that only the government, national and local as enumerated above, should provide that universal coverage.

Would greatly appreciate readers' comments at this stage.  Meanwhile, here's short but good paper from The Independent Institute,
Competition Based on Quality of Healthcare: Why Does Quality Rise in Free Markets and Decline with Government?

See also:
Healthcare Competition 4: Solving Info Assymetry, September 08, 2010
Healthcare Competition 5: Thailand, September 24, 2010
Healthcare Competition 6: United States, May 05, 2011
Healthcare Competition 7: Moral Hazards in Healthcare Subsidies, May 24, 2011
Healthcare Competition 8: Centralization vs. Deregulation of Healthcare, December 31, 2011

PhilHealth Watch 11: Is PHIC an Insurance Company?, June 12, 2012
Socialized Healthcare 6: Student Debates, Charity Beds and UHC, August 22, 2012

Rule of Law 16: On the New SC Chief Justice Ma. Lourdes Sereno

From so many lawyers in the Philippines, among them whom I highly respect is Atty. Theodore "Ted" Te. Not only that he was a friend way back in our undergrad days in UP Diliman in the mid-80s, I like the way he speaks frankly on many issues.

After the announcement of the new Supreme Court (SC) Chief Justice, UP Law Professor Ma. Lourdes Sereno, Ted posted these in his facebook wall. I like his opinions, so I am reposting them here.

"For such a time as this": It is a landmark appointment in two ways--Chief Justice Sereno is the first female to sit as such and, unless sooner removed or resigned, she will also serve for the equivalent of the terms of three Presidents. It is also a nod to the past, specifically to the "deep selection" that the first President Aquino favored, with the Chief Justice bypassing all of her colleagues who were nominated for the same Office.

Chief Justice Sereno was my professor and colleague at the faculty of the University of the Philippines. A deeply prayerful person wont to quote scripture together with legal provisions, her biggest challenge right now is to transform--(a) herself from the Court's dissenter to the Court's leader and consensus builder by showing that she can do more than write courageous and stinging dissents, and (b) her image as the current President's favored one (being the first to be appointed as Associate and the first to be appointed as Chief Justice under his watch) by displaying, if necessary and where appropriate, an unexpected ingratitude to the appointing power. In doing so, she will thereby transform the Court that she now leads.

As I did when I learned of her appointment as Associate Justice (which was the last time I texted her), I offer her now my congratulations for the appointment and my prayers for courage, wisdom,strength and protection in the years ahead. Perhaps the call for her, as Chief Justice, is to not remain silent and hold her peace lest relief and deliverance rise from another place but to appreciate that she has been gifted with high office "for such a time as this." (Esther 4:14)

Population Control 13: Excess People are Liabilities kuno

I saw this facebook wall posting by a health economist and staunch pro-RH ideologue, Oscar Picazo:
WE ARE ALL IN THIS TOGETHER - I have seen a few FB posts argue that sex and reproduction are PERSONAL matters. Well, the act itself is, but the fruits of that act are very SOCIAL matters:
(a) Unwanted children become a burden not only to the couples who produce them but to society as a whole. I will be paying more in taxes just to educate your excess children in public schools.
(b) The congestion effects of excess fertility are serious, as seen in urban traffic, environmental degradation, sprawling informal settlements, etc. These negative things affect me, not only the couples who over-produced. 
(c) The crime and other social pathologies engendered by rampaging population and poverty are real, and affect everybody.
So stop burdening me with your excess fertility. I would rather that the government increase my taxes now so I can help purchase contraceptives for poor people, rather than pay much, much higher taxes in the future for the needs of a burgeoning population. Simple, straight logic.

I replied that the "unwanted or excess children" that he despises are the family drivers, yayas, helpers, gardeners, carpenters of many rich and middle class people who like him, despise such excess population. These "unwanted children" are also the taxi drivers, bus drivers, construction workers, security guards, office janitors and messengers, salon beauticians, nurses and caregivers, that people hire because they are useful.

If Oscar and other population control advocates do not believe this, they should ask their office messengers and security guards, if they come from one or two children households. Most likely they come from four or more children households, they come from parents with excess or "unwanted children."

People are assets, not liabilities. The liabilities that people dislike -- thieves and plunderers, killers and murderers, rapists and kidnappers, other criminals both from poor and rich families, both in private and government sectors -- that is the role of government to catch and control. Promulgate the rule of law and stop coddling corrupt people and law violators in government itself.

Many rich countries now with ageing population are benefitting from our "surplus population". They prefer to get Filipino caregivers, nurses and other health professionals, rather than have more robots or their own government bureaucrats taking care many of their sick and old people.

If they do not want to pay additional taxes for public education of those "unwanted children", then they can demand that government subsidy for education should be until elementary and/or secondary levels only, privatize all state universities and colleges. Or limit subsidy to science high schools only.

Government has been around for many decades giving education and books for the poor, healthcare and medicines for the poor, housing and relocation for the poor, agrarian reform and tractors for the poor, roads and bridges for the poor, and recently cash transfer for the poor, and poverty persists, so they blame the poor? They do not blame state nannyism and government failures? Who said and enacted laws that there should be government responsibility almost everywhere and have little personal and parental responsibility in society, aren't they government politicians and officials themselves?

"Congestion effects" are caused more by government policies, not the poor. Who disapproves or fails to act on unsolicited private sector proposals to build more trains in Metro Manila? Who creates tricycle route monopoly and jeepney route monopoly and give tricycle and jeepney franchises?  It is government, both national and local.

Friday, August 24, 2012

On IPR abolition 16: Debate with Teddy Boy Locsin

Patent, copyright, trademark, other forms of intellectual property rights (IPR) remain a thorny issue among many people who either (a) want social or state ownership of many things, physical or intellectual, or (b) consider that all ideas are similar so that both mediocre/idiotic and bright ideas should not enjoy any form of property rights protection.

Yesterday, I debated Teddy Boy Locsin on twitter. He is a former Congressman, former Presidential Spokesperson (Pres. Cory's time), media personality. He is also a fellow columnist in but he's definitely more famous than a newbie like me, that's why he has more than 23,000 twitter followers.

The subject is about a new rice variety developed by some rice scientists and the gene has been transferred to the International Rice Research Institute (IRRI) in Los Banos, Philippines.

It is not clear from the news report if it was IRRI scientists themselves, or other scientists from other countries or private biotech companies, that developed that new rice seed variety. See the full news report below. These tweets were posted from around 7:20am to 8:28am yesterday.

InterAksyon ‏@interaksyon
Gene breakthrough could boost rice yields by 20 percent

Teddy Locsin Jr. ‏@teddyboylocsin
@interaksyon Is it patented?

Nonoy Oplas ‏@Noysky
@teddyboylocsin @interaksyon Most revolutionary seed varieties (rice, corn, tomato,..) patented. Inventors spend years & big money for R&D

Teddy Locsin Jr. ‏@teddyboylocsin
@Noysky @interaksyon That's their claim.

Nonoy Oplas ‏@Noysky
@teddyboylocsin @interaksyon If its not costly to develop revolutionary seed varieties, politicians etc shd cheaply do R&D, give seeds free

InterAksyon ‏@interaksyon
@teddyboylocsin @Noysky Good question. Let's ask IRRI. Research seems attributed to them. Does @RiceResearch patent?

Teddy Locsin Jr. ‏@teddyboylocsin
@Noysky @interaksyon Not when seed companies sue right and left, even on seed varieties native to the place that they patented.

Teddy Locsin Jr. ‏@teddyboylocsin
@interaksyon @Noysky @RiceResearch If IRRI has patent, then it is out our pockets and in our pockets again, so okay. IRRI is ours right?

Nonoy Oplas ‏@Noysky
@teddyboylocsin @interaksyon Local seed drought resistant but low yield. Biotech makes drought resistant + high yield, value added, patented

Nonoy Oplas ‏@Noysky
@teddyboylocsin @interaksyon @RiceResearch June 2011 abt 112,000+ diff rice varieties in IRRI seedbank, mostly patnted?

Teddy Locsin Jr. ‏@teddyboylocsin
@Noysky @interaksyon @RiceResearch I hope IRRI is ours or does it do research and Monsanto steals it?

Nonoy Oplas ‏@Noysky
@teddyboylocsin @interaksyon @RiceResearch I think biotech like Monsanto, PhilRice do own R&D, patent them, IRRI get sampls for its genebank

Teddy Locsin Jr. ‏@teddyboylocsin
@Noysky @interaksyon @RiceResearch o crap

Nonoy Oplas ‏@Noysky
@teddyboylocsin @interaksyon @RiceResearch Most bleeding hearts hate patent, IPR. They want freebies for other people's toil & hard research

Teddy Locsin Jr. ‏@teddyboylocsin
@Noysky @interaksyon @RiceResearch I hardly qualify as a bleeding heart as I am usually heartless.

Teddy Locsin Jr. ‏@teddyboylocsin
@Noysky @interaksyon @RiceResearch Um, where's the hard research by Monsanto when the work is done by Pinoys in IRRI?

Nonoy Oplas ‏@Noysky
@teddyboylocsin @interaksyon @RiceResearch Great. Some heartless people hate patent & IPR, want freebies from other people's toil & hard R&D

Teddy Locsin Jr. ‏@teddyboylocsin
@Noysky @interaksyon @RiceResearch And the heartless are the best kind in a fight for proper compensation for intellectual property use.

Nonoy Oplas ‏@Noysky
@teddyboylocsin @interaksyon @RiceResearch Right, IPR like patents shd be properly respected & compensated. Disrespect IPR encourge copycat

Nonoy Oplas ‏@Noysky
@teddyboylocsin @interaksyon @RiceResearch Interaksyon article posted has zero mention of Monsanto. Not all rice R&D are done by IRRI

Today, IRRI replied to the tweets and here are the exchanges, posted around 8:15 to 9:30am today:

IRRI ‏@RiceResearch
@noysky @teddyboylocsin @interaksyon Thanks for the great conversation! FYI IRRI does not hold any patents - we share all our new...

Teddy Locsin Jr. ‏@teddyboylocsin
@RiceResearch @Noysky @interaksyon Poor you. You do the work, the whites get the money. There is a reason why we are brown.

IRRI ‏@RiceResearch
@noysky @teddyboylocsin @interaksyon For more about who funds our research see

IRRI ‏@RiceResearch
@noysky @teddyboylocsin @interaksyon We work all across the world to share our research to benefit as many farmers as we can :-)

IRRI ‏@RiceResearch
@noysky @teddyboylocsin @interaksyon Here's how we share the rice varieties and info from International Rice Genebank

Nonoy Oplas ‏@Noysky
@teddyboylocsin @RiceResearch @interaksyon Rice gene patents owned by PhilRice, UPLB, Syngenta, Bayer... They all share these to IRRI, good.

Nonoy Oplas ‏@Noysky
@RiceResearch @teddyboylocsin @interaksyon 113,000+ rice genes at IRRI genebank, thx to biotech & patent sys, more varieties are invented.

Thursday, August 23, 2012

Filipino Free Market Blogs 4

How is the free market movement going in the Philippines?

There are several qualitative and anecdotal discussions and proof that shows it is alive and kicking. By how much?

Until now I can only think of one measurement, and that is the global traffic rank of Filipino free market blogs via As of today, here are the top five and their respective global ranks:

As there are several hundred million blogs and websites worldwide, to land in the first six million would be a privilege. Here are other free market-oriented Filipino blogs but have relatively low (above 20 million) or no rank assigned by alexa.

1. Carlos Tapang,
2. Joshua Lipana,
3. Laisse Faire Filipino,
4. Minimal Government Thinkers, Inc.
5. Monkey Society, libertarian Buddhist blog,
6. New Commonwealth,

I think there are other free market-leaning blogs and websites by Filipinos, whether based here or abroad. I hope to find and read them someday.

Wednesday, August 22, 2012

Socialized Healthcare 6: Student Debates, Charity Beds and UHC

There is some positive twist in healthcare discussions in the country these days. And that is involving more non-healthcare students and professionals in various healthcare debates. Reiner Gloor of PHAP reports below that some 50 debate teams from different local universities will debate on various health issues, from no balance billing to corporatization of government hospitals and more, starting this month.

I am particularly interested how today's university student debaters would consider personal and parental/guardian responsibility in the overall healthcare discussions and public policy formulation. And how they would consider limiting government role in  dealing with infectious and communicable diseases like dengue. I just read today that for the first eight months of 2012 alone, some 74,784 people, mostly children, were hit by this mosquito-borne disease, with 448 deaths. This is 17.5 percent higher than last year's same months level.

A daughter of a friend who is a godfather to my second daughter, was admitted in a hospital the other day due to dengue. The son of another friend' also got that disease and was hospitalized for a week. These are middle class families who do not live in dirty places with many stagnant water. This disease which currently has no existing vaccine yet, is really nerve wracking for parents and other family members.

Anyway, former DOH Secretary Alberto Romualdez also discussed some of those health issues in his column. The three papers I am reposting below are:

1. Let's talk about health
2. The Secretary's Cup -- both by Reiner Gloor
3. Charity Beds and Universal Health Care -- by Alberto Romualdez


(1) Let’s talk about health

Posted on 05:53 PM, August 16, 2012
Medicine Cabinet -- Reiner Gloor

Creating a forum where ideas are challenged and differences resolved through critical thinking and rational arguments, not force, is one of the goals of competitive debates.

Towards this goal, the International Debate Education Association (IDEA) was established and has recently named five Filipino universities in its top 100 debate societies in the world. They are the Ateneo de Manila University, the University of the Philippines (UP) Diliman, UP Manila, the Far Eastern University and De La Salle University.

Debates aim to raise discussions of opposing views to help the public in making informed decisions on critical issues. And one of the important issues involves health.

While significant milestones on health have been achieved, overall health outcomes and goals can be improved. In many cases, the fundamental problem lies with the broader health system and its ability to deliver interventions to those who need them, observed the World Health Organization (WHO). The same is true for the country and thus, health system strengthening is very much in order.

Beginning this month, 50 teams from various schools will be competing in a nationwide inter-collegiate debate on the so-called building blocks of a health system. Each month, the debate topic will be based on a specific building block namely governance, regulation, service delivery, human resources, information, and financing.

The debates are part of the Secretary’s Cup initiative being led by the Department of Health (DoH) and the Universal Health Care Study Group of the UP-National Institutes of Health, along with partners including the Pharmaceutical and Healthcare Association of the Philippines. The series of health debates will be examining the state of health of Filipinos while at the same time seeking to explain the role of universal healthcare as the more comprehensive path to attaining health for all.

For August, the participants are gearing to debate on governance issues. Former health secretary Alberto Romualdez will open governance month while Department of Local and Interior Government Secretary Jesus Robredo will join in public discussions.

Monday, August 20, 2012

PAGASA Bureaucracy 3: On Giving Local Names to Storms with International Names

I have been wondering before, so I asked PAGASA via twitter, why do they have to give local names to storms with international names already? It only creates some confusion for people here who track the storms'  movement from the SCS/WPS or Pacific Ocean to the Philippines to Hong Kong or Taiwan, Vietnam, China, Korea, or Japan.

I asked PAGASA about it, zero reply. See here,
PAGASA Bureaucracy 1: On Temperature Data, July 14, 2011.

Today, I saw Dr. Mahar Lagmay's tweets and since he's a friend in UP and he seems to be working for PAGASA's NOAH project, I asked him the same question. Here is our conversation between 8:30 to 9:45am today. A friend also from UP, Leo Venezuela, joined the conversation.

Mahar Lagmay ‏@nababaha
Latest satellite image in the Project NOAH website.

Nonoy Oplas ‏@Noysky
@nababaha Can PAGASA stop giving local names to storms w/ intl name already? It adds confusion to people who track d storm across countries

Leo Venezuela™ ‏@levenezu
@Noysky - is this all in the name of misplaced nationalism?

Nonoy Oplas ‏@Noysky
@levenezu @nababaha Not abt nationalism, I think PAGASA guys put names of thr kids frnds as storms local name. Old practice, shd discontinue

Leo Venezuela™ ‏@levenezu
@Noysky @nababaha - That's such crapola if indeed true. Terrible.

Leo Venezuela™ ‏@levenezu
@Noysky @nababaha - Even worse actually if true. The local meteorologists will be the laughing stock of their foreign peers.

Mahar Lagmay ‏@nababaha
@Noysky @levenezu Nonoy and Leo, please stop.

Nonoy Oplas ‏@Noysky
@levenezu @nababaha I see no reason why PAGASA give local names except nepotism. Intl media & meteorological agencies only use intl names.

Leo Venezuela™ ‏@levenezu
@nababaha @Noysky -But what is indeed PAGASA's rationale for giving local names?

Nonoy Oplas ‏@Noysky
@nababaha @levenezu I asked PAGASA about it before several times, they give zero answer. Perhaps you can, but you want us to stop asking?

Leo Venezuela™ ‏@levenezu
@nababaha @Noysky -Mahar, that is very unfair for you to ask us to stop when what we ask are legitimate questions.

Nonoy Oplas ‏@Noysky
@levenezu @nababaha PAGASA and Mahar napipikon? Not good. We are asking a legitimate Q, give a good answer. Gobyerno gusto pat d back lang?

Leo Venezuela™ ‏@levenezu
@Noysky @nababaha -There's a new tropical storm with IGME as the local name. What process went into giving it that name?

Leo Venezuela™ ‏@levenezu
@Noysky @nababaha -That shouldn't be a national security concern naman 'di ba? Also, we are taxpayers.

Nonoy Oplas ‏@Noysky
@levenezu @nababaha When my friend in HK talked abt big typhoon coming, I had to search d web if "Helen" & "Kai tak" were d same. They were.

Mahar Lagmay ‏@nababaha
You are entitled to your opinions but please exclude my name from your conversation.

Leo Venezuela™ ‏@levenezu
@Noysky @nababaha - Mahar, we taxpayers are waiting for your answer. Ok nga dito sa Twitter, your answer will reach a large audience.

Leo Venezuela™ ‏@levenezu
@nababaha @noysky - They are legitimate questions. They involve your agency.

Nonoy Oplas ‏@Noysky
@nababaha @levenezu Only asking a valid Q that PAGASA itself does not answer. Is it nepotism or what? If you cant give an answer just say it

Leo Venezuela™ ‏@levenezu
@Noysky @nababaha - Do you want us to ask now or in #Congress when we ask our representatives to ask you themselves?

Leo Venezuela™ ‏@levenezu
@nababaha @noysky -It's the process and not the name. So why not simplify things and just adopt the int'l name for tropical storms?

Mahar Lagmay ‏@nababaha
The answer is there are a lot more important concerns now than wanting to change a name from Filipino to English.

Leo Venezuela™ ‏@levenezu
@nababaha @noysky -You don't need to come up with a name in English. All you need to do is use the int'l name. Simplifies everything.

Nonoy Oplas ‏@Noysky
@nababaha @levenezu At least Mahar answered, PAGASA never. You don't need to create any Filipino name, just use existing storms' intl names.

Nonoy Oplas ‏@Noysky
@nababaha @levenezu My hypothesis confirmed. PAGASA giving local name to storms w intl name only for nepotism purpose. But add pub confusion

Leo Venezuela™ ‏@levenezu
@Noysky @nababaha - Good luck then in PAGASA's next budget hearing.

Nonoy Oplas ‏@Noysky
@levenezu @nababaha Maybe some Congressmen kids' names were used as storms' local names by PAGASA, and the latter get their budget request?

No further tweets and conversation after that. I was just wondering why Mahar could be pikon when asked that simple question, although he answered later.

See also: PAGASA Bureaucracy 2: Deregulate Weather Forecasting, Privatize PAGASA, December 20, 2011.

Fat-Free Econ 21: Jesse Robredo and Government

* This is my article last night in TV5's news portal,

When government corruption and inefficiency is high, the public is looking for an exception. A few public officials are seen to be doing their job with little fanfare in furtherance of their personal and political interests.

The Secretary of the Department of Interior and Local Government, Jesse Robredo, is one of those few high officials in the current administration whom many people think belongs to that exceptional breed.

Unfortunately, his plane crashed yesterday afternoon off the waters of Masbate. As of this writing (2 p.m.), he and the two plane pilots remain missing, almost 24 hours since the sad incident. I am one of the millions of Filipinos who are saddened by this event.

I have heard a number of good stories about the man, although I did not really read much on him. My mountaineering buddy in the mid-1990s, Jun Velasco, who hails from Naga City, would tell us that when there was flooding in the city after a strong typhoon, among the first persons they see on the streets when they wake up was then mayor Jesse Robredo. Wearing shorts and boots, holding a shovel and among those in actual action, and not just giving orders in clean shirts and pants.

On July 26, there was a big conference titled "The Role of SMEs in Fighting Corruption" held at Mandarin Hotel in Makati and sponsored by the Hills Governance Center of the Asian Institute of Management and a few other partners. Among the high government officials who were invited and had confirmed attendance were Trade Secretary Gregory Domingo, Sen. Edgardo Angara, Internal Revenue Commissioner Kim Henares, and Robredo.

Most did not show up except for Robredo. And he arrived on time, gave his talk, answered many questions during the open forum, gave media interviews after, before leaving the conference. That act alone made me admire him. I also liked his talk.

As DILG secretary, Robredo was concerned about limiting the unnecessary bureaucracies in local government units that can lead to corruption and economic inefficiency. When he became Naga City mayor, the normal period to approve a building permit was something like a month. So he talked to the business and building permit officials of City Hall, and they said it could be brought down to something like eight working days. Then he pressed further, and they settled at a nice number: three, assuming of course that all requirements were complete.

As DILG secretary, the hotels in Makati came to him to help them talk the Makati City LGU and the Bureau of Fire Protection out of a plan requiring all rooms in a hotel to have a fire extinguisher. Idiotic, right?

A hotel, especially modern ones, normally has multiple systems to detect and hence, stamp out fire, including a smoke detector and a water sprinkler system in each room. Besides, having a fire extinguisher is an ugly sight in a hotel room. It can be an unnecessary reminder to guests and visitors that the hotel guest themselves must learn to put out a fire if there is one in their room, or the hotel is lousy that it has no system of its own to stamp out fire that can break out in any part of its building. One can quickly surmise that such a measure would invite extortion.

Anyway, Robredo talked to the BFP and Makati City LGU about this and the planned measure was not pushed.

A shop - big, medium or small - must have the above permits prominently displayed in its premises. Not all of them are from LGUs, about half perhaps is from national government agencies like the BIR, DTI, SEC, SSS, etc. The other half is from LGUs, such as barangay permit, health and sanitation permit, electrical permit, mayor's permit, etc.

Anyway, Robredo's talk was among the highlights of the conference that day. His desire to reduce unnecessary bureaucracies, to control corruption, seemed very honest to me. But then again, he had no power to stop local legislation that will impose new taxes, mandatory fees, inspections and regulations. There are more than 1,500 cities and municipalities around the country, plus more than 80 provinces, and more than 42,000 barangays. Each LGU has the fiscal autonomy and political power to introduce new regulations and prohibitions.

If Robredo were gone, then it will be a big loss for the Philippine bureaucracy. I am not aware of other politicians who have the LGU experience and credibility as this man to take his place.

Nonetheless, big government is wrong. It will be a pointless effort to find honest and non-corrupt, non-abusive officials to manage government when the systems and bureaucracies allow or invite corruption and abuse. Like when a government office and bureaucrat has the power to say yes or no to someone who only wishes to put up a simple bread shop or internet shop or restaurant.

Meanwhile, here's a testimony from a friend and fellow columnist in, Luie Montemar:

‎"Jesse Robredo once agreed to talk before a development studies batch that I handled at DLSU. The students organized the talk and were very concerned about approaching the then Citizen Robredo who, they then thought, might be like some political personalities who would demand so much from event organizers. Sec Robredo arrived in simple smart casual attire. Made a wonderful, inspiring presentation and left after answering questions from the students. He came without fanfare, didn't require anything special; he even refused to be fetched from the gate. A soul whose mission was to share. We continue to hope..."

** See also:

Fat-Free Econ 18: Healthcare Corruption and Physician Entanglement, July 30, 2012
Fat-Free Econ 19: Population Decontrol, Not RH Bill, August 06, 2012
Fat-Free Econ 20: Flooding and Global Cooling, August 13, 2012