Sunday, June 30, 2013

Weekend Fun 45: Life is Like a Bikini, It is Brief

I posted this joke in my fb wall last Friday...

Life is like a bikini, it is brief.
Statistics are like bikini. What they reveal is interesting but what they conceal is vital. 

Lots of likes and funny remarks from many friends, except for one feminist who insisted that the underwear should refer always to both men and women. Maybe a case of gender militance or whatever.

Many friends liking it, I simply added other jokes that I can remember. Below, nice and cool watermelon art.

Bahasa Malaysia is the official language of Malaysia.
Bahasa Pilipinas is what happens after heavy rains. -- from Raffy Aquino

Q: Why do Economists provide estimates of inflation to the nearest tenth of a percent?
A: To prove they have a good sense of humor.

Q:Why do economic forecasters exist?
A: To make weather forecasters look good.

A seminar on time travel will be held two weeks ago.

Loudness of thunder after lightning tells you how close you came to get hit. If you don't hear it, you got hit, so never mind.

Democracy is like a fish market - it is smelly but everyone likes to go there to haggle. – from Donaldson Tan

Newton's 1st law of motion: An object at rest (or in motion) will remain at rest (in motion) unless an external force is applied on it.
Revision of the 1st law: An object at rest will always be in the wrong place. An object in motion will always be headed in the wrong direction.

Newton's 2nd law of motion: The acceleration of a body is directly proportional to and in the same direction as the force applied to it, and inversely proportional to its mass.
Revision of the 2nd law: The acceleration of a wrong thing goes hand in hand with the weight of the person pushing it.

Newton's 3rd law of motion: For every action, there is an equal opposite reaction.
Revision to the 3rd law: For every action, there is an equal and opposite criticism.

(1) An earthworm has 5 hearts. An octopus has 3. A human has only 1. Kaya pag nagmahal ka ng higit sa isa, i-Wikipedia mo na kung anong hayop ka!

(2) Prof: Prove to me that this table does not exist.
Student: What table sir? (Prof and whole class: Nganga!)
Prof: OK, Uno. – both from Dennis Arroyo

Q: Paano malaman kung ang earthworm ay lalaki or babae?
A: Pag kinain ng lalaking kalapati/pigeon ang earthworm, babae yon.

Q: Paano malaman kung lalaki or babae ang pigeon?
A: Sa sound. Kung lalaki, "Paturoook! Paturoook!" Kung babae, "Turoook mooo!"

Q: Ano sa tagalog ang women?
A: Kaming mga lalaki, we men.

If a male judge makes sex, it's called Honorable Discharge.
If a Congressman makes sex, it's called Congressional Insertion.

Chinese feng shui:
If MIRROR at stairs, swerte at grasya akyat.
If MIRROR at door, swerte at grasya pasok.
If MIRROR at ceiling, ikaw swerte, sa loob ka ng MOTEL.

Man: Ikaw na naman? Tatlong beses mo na akong na-holdup ngayong taon, ah!
Holdaper: Ganu'n talaga brod. Inaalagaan ang good customer!

Bisaya: Hulaan mo alaga kong hayop nagsimula sa liter I.
Alog: Isda? Bisaya: Dili man!
Alog: Ibon? Bisaya: Lapit na.
Alog: Ano nga, siret na! Bisaya: IGOL.

Son to dying father: Itay, ano po ang gusto nyo, magpalibing o magpa-cremate?
Ama: Ikaw na ang bahala, anak. I-surprise mo na lang ako.

Large signboard says: "ALCOHOL KILLS SLOWLY."
Nakita ng lasenggo... "So what?! Sino ba nagmamadali? "?

 Hindi lahat ng party ay masaya--3RD PARTY
Hindi lahat ng 13 ay malas--13TH MONTH PAY
Hindi lahat ng negative nakakalungkot- PREGNANCY TEST
Hindi lahat ng positive ikina-sasaya- -HIV POSITIVE.

Panibagong sagot sa tanong na: "'musta lovelife?"
"Eto self supporting." 

Q: Why do women rub their eyes when they get up in the morning?
A: They don't have balls to scratch.

Q: Define ignorance and apathy.
A: I don't know and I don't care.

See also:
Weekend Fun 41: Nancy Binay, Grace Poe, Other Politicians, May 25, 2013 
Weekend Fun 42: Danny Purple, UP Diliman Character in the 70s, June 08, 2013 
Weekend Fun 43: Tales from Narra Dorm, UP Diliman, June 22, 2013 

Weekend Fun 44: Cow Economics, June 22, 2013

Saturday, June 29, 2013

Drug Price Control 35: DOH Procurement Price and Lobbying for Another Price Coercion

Government price control is price dictatorship. It is wrong, messy and ugly.
Explore new data below, 2,500+ words, nine pages long including seven tables and one graph, get your favorite drinks and enjoy the ride.

Price comparison across countries of certain goods and services is useful both for public and private decision making, provided that people are using the appropriate and verifiable conversion factors. Otherwise, the comparison can only lead to confusion, not education, and can lead to wrong public policy formulation.

After my reply to the email of James Auste, head of the Cancer Warriors Foundation (CWF), to all members of the DOH Advisory Council on the Implementation of RA 9502 (Cheaper Medicines Law of 2008), see Drug Price Control 32: Policeman of Pharma CompaniesDr. Melissa Guerrero of NCPAM-DOH iinformed me that prices of anti-cancer drugs in the Philippines remain expensive and out of reach of many Filipinos and offered to show the data. I was happy for her offer, and after several emails, she sent me the data. Posting these with her permission, as they plan to post this also in the DOH website, for transparency purposes. Thanks a lot for the data, Doc Melissa.

Tables 1 to 4. DOH Purchase Price Index (PPI), Selected Medicines, 2009-2013, in Pesos

Of the 10 drugs shown above, there is a notable increase in the PPI from 2009-2010 for all except #s 2, 3 and 10. No price change from 2010 to 2012 for all except #7 (increase) and #10 (decrease). Then a declin in prices from 2012 to 2013 for all except #8. The change in prices were mainly due to the change in the name of supplier or trader.

Here are the other 11 drugs.

Price movement from 2009-2010, increase except #s 13, 14,16,  18, 20, 21, which retained their prices or declined (#16). From 2010-2012, prices have generally remained the same except #s 11 and 12 which declined. And from 2012-2013, price declines except # 16 (same price) and 18 (increased).

Before I show the price comparison of the above medicines among the Philippines, Thailand and India, I warned readers in my previous article that there is No Single National Price for most if not all commodities like medicines in a particular country. There are many sellers catering to particular customers and buyers and thus, have different prices for the same product made by the same manufacturer.

Consider these two graphs below for a particular medicine. Equilibrium points (where supply meets or intersects demand) A and B are prices in the pharmacies of the high end hospitals in Metro Manila like Makati Med and St. Lukes; C and D are prices for cheaper hospitals; E and F are prices for the big drugstores like Mercury and Rose or Watsons, G and H are for The Generics, Generika, and points I, J, K and so on are prices of the smaller drugstores.

Thus, one can make a table of price differences not only between the Philippines and Country B or Country C, but also among different drug outlets and retailers within the Philippines. There is NO national price for a particular commodity in one country. Only the price of the biggest retailer or second or third biggest retailer, as proxy or estimate of the prevailing price in a country at a given point in time.

So for inter-country price comparison to become meaningful and verifiable, I suggested that  one 
must show, or at least consider and mention the following:

(a) same or comparable retail outlet, say only from Watsons;
(b) same reference period, say June 15, 2013;
(c) exchange rate used for converting different currencies into a common currency on a particular day, say as of June 15, 2013;
(d) taxes and fees, national and local, applied on medicines;
(e) subsidies or mandatory discount, if any, applied on medicines;
(f) other factors.

When those verifiable factors are not shown or even considered, then the price comparison becomes less effective as the readers would only blame the country with the higher price, especially the drug manufacturers and/or drugstores.

It is possible that drug manufacturers and pharmacies in country A would have higher profit margin than those in countries B and C, even if they have lower retail prices than their counterparts in B and C.

How? When the government in country A (a) does not impose taxes on medicines, (b) has lower corporate income tax and other business taxes than in countries B and C, (c) directly subsidizes a particular medicine so that it can be sold at a lower price, (d) other factors.

With that caution, here now are the price comparison for the Philippines, Thailand and India, for the 21 medicines purchased by the DOH. The current market price for the Philippines referred here is the price of Mercury Drugstore (it corners about 60 percent of the total retail pharma market in the Philippines) and an undisclosed "big private hospital". 

Friday, June 28, 2013

Energy Econ 10: Climate Alarmism and FIT for Renewables

* This is my article today in

One tool used by the campaigners of “man-made” or anthropogenic global warming (AGW) and its cousin anthropogenic climate change (ACC), is to produce various climate models that show only one thing – an ever-rising global temperature for the planet until 2100 and beyond. Thus, to prevent or limit that from happening, global energy consumption from fossil fuels that contribute to rising carbon dioxide (CO2) level in the atmosphere should be drastically regulated, if not controlled.

How truthful and valid are those UN IPCC climate models’ guesses and projections, that have become basis of many environmental and energy policies in many countries?

Well, the short answer is that they are largely invalid and highly exaggerated, when compared to actual data of the planet’s temperature. For instance, the models projected an average of about 1.0 C warmer than usual for 2013. But as of end-May 2013, we were only 0.07 C warmer than usual, and it is a  declining trend.

Figure 1. Temperature projections vs. actual, 1979-2013

After many governments have poured lots of taxpayers' and energy consumers' money to wind and solar power around the world for many years and decades, these renewables have contributed only 0.5 percent and 0.06 percent respectively, to global energy consumption.

Figure 2. World energy consumption by source, 2010

Source: Total world energy consumption by source 2010, from REN21 Renewables 2012 Global Status Report.
Reposted in WUWT, A LOL ! press release on renewable energy from wishful thinkers at the University of Delaware, December 10, 2012

Why is this so?  Table below provides an explicit answer – the cheapest energy sources are natural gas, followed by geothermal, hydro, conventional coal, nuclear, and biomass. The renewables like offshore wind and solar PV and solar thermal remain as immature technologies that are very costly, and yet are imposed to the people via additional charges to electricity consumers.

Figure 3. Estimated levelized cost of new generation resources, US, plants entering service in 2018
(2011 $/megawatthour)

In the Philippines, the Renewable Energy (RE) Act of 2008 (RA 9513) has imposed electricity cost-raising provisions like the feed in tariff (FIT) and renewable portfolio standards (RPS).  FIT is additional charge to energy consumers and given to RE power suppliers, a form of indirect tax. RPS is a system requiring electricity distributors to source a certain minimum of their energy supply to come from eligible RE resources.

Below is the rate of more expensive electricity for Filipino energy consumers. Although rate approved by the ERC is lower than those proposed by the National Renewable Energy Board (NREB), another bureaucracy created under RA 9513, these rates will still slam energy consumers in the country.

Figure 4. FIT for renewables, Philippines, Pesos per kilowatt hour

NREB Proposed
ERC Approved
Hydro, run of river

Source: Energy Regulatory Commission (ERC), rates approved July 27, 2012

Climate change is true. Climate changes from warming to cooling to warming to cooling, in endless, natural cycles. Global warming was true, it did happen during the Roman period, Medieval Warm Period (MWP), last century's warming, see again Figure 3 above. Global cooling is also true, it did happen like during the Little Ice Age (LIA) during the Maundeer Minimum and Dalton Minimum, and is happening now.

The terms "climate denier" and “global warming denier” are idiotic statements. Climate change is true, warming is over, it is now global cooling. But some people do not want to recognize cooling, only warming. They do not want to recognize "nature made" CC, only "man-made" CC.

So if CC is natural and will happen anyway with or without humans, with or without SUVs or bicycles, what is the point of the various “fight CC” bureaucracies, programs and global meetings created by many governments and the UN?

What governments should do is to recognize the cooling phase of the planet and thus, prepare for more heavy rains, more debilitating floods and soil erosion. Once they recognize this, then the most immediate action is to undertake large-scale dredging of sewerage system, creeks, rivers and lakes. This will take huge amount of public money, but it is a more useful public spending than creating more climate bureaucracies and sending many climate officials to many and frequent global climate junkets.

See also:
Energy Econ 6: Intolerance in Anti-Coal Hysteria, Cadiz Coal Project, September 17, 2012.
Energy Econ 7: Renewables, FIT, RPS and Climate, September 24, 2012 
Energy Econ 8: More Intolerance by the Anti-Coal Camp, September 27, 2012 

Energy Econ 9: Blowin in the Wind Folly, April 17, 2013

Thursday, June 27, 2013

UHC 15: On DOH Plan to Recentralize Healthcare

The quest for government-initiated and centralized universal health care (UHC) can be dizzying for all sectors -- patients/public, private healthcare professionals and providers, government health agencies, the legislature and everyone else. This is because when government centralizes or almost  monopolize healthcare, competition, price differentiation, market segmentation and service innovation is often sacrificed or killed.

A famous physician, expert and consultant on UHC and NCDs, also a friend, Dr. Tony Leachon, posted this story from GMA News the other day, in his fb wall,

In a speech during the Department of Health's (DOH) 115th anniversary celebration, Aquino said his administration is determined to attain its goal of universal healthcare for all Filipinos by 2016….
"Last year mayroon tayong Sin Tax, mayroon tayong Responsible Parenthood, ngayon naman ho ay pakikiugnayan ng mas hindi masalimuot ang ating pakay," he added. Aquino, in his speech, said his government was able to enroll some 20 million more Filipinos to the national health insurance program during his first three years in office.
He also boasted of his administration's efforts to expand benefit packages for Filipinos suffering from heart diseases, aside from those with "catastrophic diseases" such as breast cancer, prostate cancer and acute leukemia.
The president likewise pledged to build more new health facilities in far-flung regions of the country, and the rehabilitate old hospitals.
"Hindi tayo titigil hangga’t may mga kababayan pa rin tayong ni hindi nakakakita ng espesyalista sa tanang-buhay nila. Kaya naman sa huling dalawang taon ng ating administrasyon—binawasan ho ako ng isang taon, siguro ‘yong writer ko po ay gusto na ring lumipat ng trabaho—target nating i-upgrade at gawing mas moderno ang 7,325 na mga ospital, klinika, at pagamutan," he said. DOH Secretary Enrique Ona, meanwhile, said his department will propose a law that will facilitate the efficient delivery of health services to distant towns in the country. 
"Kami ay nahirapan nang husto na ipaabot sa ating local health units 'yung tulong ng DOH kasi devolved ang ating health system down to the towns. Sabi namin, pag-aralan on how we can improve the devolution of healthcare," he said in an interview after the event. 
He likewise said he wants a legislation that will "improve the governance" of public hospitals under the DOH.

Among the comments raised by Doc Tony's friends were the following:

(a) Do not neglect the human resource aspect of modernizing health facilities, otherwise we willl have ghosts running our hospitals.
(b) Maldistribution and unemployment of healthcare professionals are serious issues.
(c) There is an over-supply of nurses and there is maldistribution of doctors, maybe even an under-supply of physicians.
(d) Start an Advanced Practice Nursing/ Nurse Practitioner program. Can be piloted with a very good nursing program. It will provide job security and provide additional primary care providers especially in underserved areas.
(e) "Hindi tayo titigil hangga’t may mga kababayan pa rin tayong ni hindi nakakakita ng espesyalista sa tanang-buhay nila." -- Why do the people need to see a specialist? Specialist in what? Why can't they be seen by primary care physicians or nurses? If nurses are trained to render primary care... agree ako jan.

I commented that the move now by the DOH is towards more nationalization and recentralization of public healthcare. But centralized programs often result in centralized expectations and centralized disappointment. Then I asked Doc Tony since he has worked in both private and public hospitals and other healthcare facilities, what are the efficient incentive systems that encourage HC professionals to provide really caring service to patients, so they get well and become economically productive.

Doc Tony replied that HC professionals should be compensated well to stay with a well planned career plan.

That is precisely my point. Very often in government hospitals and HC facilities, the doctors are paid flat rate, whether they see 20 or 200 patients a day, the pay is the same. So the tendency is to provide quickie prescription, little or no patient counselling, then call the next patients after 3 or 5 minutes. When government centralizes, nationalizes and monopolizes healthcare, service differentiation, market segmentation and service innovation is often sacrificed or killed. Government service is meant to uniformize, harmonize and monotonize the public, and sub-optimal health outcome is the result.

In the food sector, there is zero government carinderia or restaurant, zero government supermarket or talipapa, zero or little government farms, and yet people are eating. There are various products for various people with various budget and needs. Service innovation, price differentiation and market segmentation allows the various food producers/sellers to meet with certain food consumers.

In contrast in the health sector, (1) there are tens of thousands of government rural and barangay health centers, (2) tens of thousands of government-sponsored botika, (3)hundreds of government hospitals (DOH, LGUs, PGH, AFPMC, etc.), (4) there are free medicines and entitlement programs for the poor, (5) drug price control policy, (6) mandatory price discounts to senior citizens and persons with disabilities (PWDs), (7) government health insurance monopoly, and health problems are not declining but rising. Expectations rise, disappointment and discontent rise. Centralization and monopolization is wrong.

In another thread, there are good experiences in private-provided healthcare like the case of Dr. Meo Santos-Cao. She said, 
when I had my practice here in Laguna (up to 2006). I did not even register as provider with PhilHealth. I always made sure that this fact was clear to my patients. They paid me directly, usually before discharge from the hospital, but sometimes upon post-hospitalization check-up in my clinic if they had difficulty raising money. And since I didn't have to wait for 3-6 months for PhilHealth to pay me, I always charged much lower than other MDs here.  
I practiced general med. I did minor surgeries, checked on pregnant women and assisted normal deliveries. While it's customary for those services to be provided by specialists (surgeons and OB-Gyne), I had no qualms doing those because I was capable, had training and licensed to practice. In so doing, I gave patients an alternative to expensive services of specialists. In 2005, OBs charged 15k for a normal vaginal delivery, part was paid for by PhilHealth and the bulk out-of-pocket. Whereas, I charged only 6k for the same service, all out of patient's pocket. Malaki pa rin ang natipid ng pasyente. The important point here is that patients must know that they have options and that they cannot be held hostage by the prevailing system. Bottom line pa rin, as Marco pointed out, patient and provider must agree on the service and its cost.

I like the stories that Doc Meo shared, it's about private contract between a service provider (her as a physician) and service consumer (the patients) with no tertiary or external intervention (the state like PhilHealth, especially). The result is fine. If the patients are not happy, no need to rally or demonstrate in the streets to demand that the state should regulate Dr. Meo Cao or whoever. They simply refuse to come back, tell their friends that Dr. Cao is a lousy doctor. But this did not happen, they keep coming back, meaning they are happy with the services provided by Dr. Meo Cao.

Another physician friend also shared that "...with unjust compensation, doctors would opt not to operate lalo na kung difficult cases, the new Philhealth scheme doesnt take into account case difficulty. Di ka na properly compensated, mas malaki pa risk sa license mo, pagod ka pa. I dont think this is in the best interest of the patient. It takes forever for Philhealth to pay the MD and hospital, and only an instant to disqualify patients na may minor delinquencies sa continuity ng payment."

On another note, I changed the subject of this thread from "Socailized Healthcare" to simply UHC. See also:

Tuesday, June 25, 2013

Mining 24: Casino-Hontiveros Mining Socialism is Off Tangent

Today is part 2 of the oral debate at the Supreme Court between the anti-corporate mining groups led by former Party-list Congressman Teddy Casino and Congresswoman Risa Hontiveros, and the Chamber of Mines of the Philippines (COMP). The former simply wants the government to confiscate as much money and revenues from the big mining corporations as possible because of their exploitation of the country’s mineral and forest resources, while being silent about similar exploitation by  the so-called “small scale mining” groups and individuals.

While data on various payment in taxes, fees, royalties and penalties made by large mining companies are available (See Mining Taxation and Government), there is zero data available for taxes and other payment by the small scale metallic (gold especially) mining. See also this comparison of mining taxation policies of Chile vs. the Philippines.

The petitioners want the SC  to declare Secs. 80 and 81 of RA 7942 as unconstitutional and then what, the SC will make its own tax rates in mining and insert them as the new Secs. 80 and 81 of this law? Can the SC legislate taxes and tax rates? This is not possible unconstitutional itself because such function is assigned by the Constitution exclusively to Congress, the House and Senate crafting a synchronized bill, and must be signed by the President.

I am wondering why these ex-legislators simply cannot wait for the new 16th Congress to convene just four weeks from now and introduce an amendment to RA 7942, say government should get 90 to 95 percent of the net revenues of big mining companies and go for explicit mining socialism. Teddy Casino and Risa Hontiveros are socialists anyway, I do not think they will deny their affinity with near- or full-socialism and have social and economic equality in society, demonize and over-tax the rich, over-subsidize the poor including the lazy and irresponsible.

Below are some news reports on this subject.

Philippine Star, June 21, 2013

COMP argued that since the La Bugal ruling – the longest in Supreme Court history which took six years for the high tribunal to deliberate on – there has been no material change in the circumstances of the Philippine mining industry.

“There is no compelling reason for the high tribunal to abandon its previous ruling,” COMP said in its motion.

Sec. 80 stipulates that the government share in mineral production sharing agreement (mpsa) is limited to excise taxes.

Sec. 81,on the other hand, limits the government’s share in Financial and Technical Assistance Agreement  (FTAA) to taxes, fees and royalties.

COMP said about P173 billion ($4 billion) in mining investments have been poured into the country since 2004 following the high court’s ruling, making the industry a significant contributor to national development, added COMP….

Sun Star, June 24, 2013

Debates started last April as the SC wanted to know whether the mineral production sharing agreement (MPSA) is unconstitutional for allowing an inequitable sharing of wealth (Section 80) and the government surrenders control and beneficial use of mineral resources under the financial and technical assistance agreement (FTAA) under Section 81.

The Chamber of Mines of the Philippines (COMP)… also said an equitable revenue sharing in mining is a question for the legislative and executive branches of government to decide....

GMA News, June 24, 2013

In a press conference in Manila, Erwin Quinones of the SOS-Yamang Bayan, one group opposed to the law, said that they wanted an "Alternative Minerals Management Bill", in which mining activities are "regulated and needs-based."

Quinones said the alternative mining law should also pave the way for the creation of a "minerals management council" that would ensure the Philippine Government's interests are protected.

"In its present form the so-called revenue regimes of the Mining Act reveals that with its many fiscal incentives and tax holidays, it is a one-way assurance for mining companies get their profits while the Government and the Filipino people bear the brunt of the social and environmental risks," the groups said.

Philippine Daily Inquirer, June 25, 2013

… In its 38-page comment in intervention, the Chamber of Mines asked for the dismissal of the petitions for certiorari and prohibition filed by Hontiveros and her copetitioners, citing three reasons.

These were: That the arguments raised by petitioners had already been passed upon and disposed of against petitioners in the case La Bugal-B’laan Tribal Association v Ramos, which the Supreme Court made a landmark ruling; that the high court should stand by its ruling here; and that the legislative and executive branches should decide on the question of what is an equitable revenue sharing from mining.

The chamber also said the petitioners had not shown any compelling reason to abandon the La Bugal B’laan case as it described their arguments to be a “mere rehash of those already overruled” in the same case.

It also held that there was no actual case or controversy in which to relitigate the case and that petitioners did not complain that they had been injured because of these provisions.

See also:
Mining 21: Chile Policies, May 21, 2013 

Mining 22: Philippines as EITI Candidate, June 05, 2013 

Mining 23: On the Proposed 10 Percent Gross Revenue Tax, June 06, 2013

Saturday, June 22, 2013

Weekend Fun 44: Cow Economics

This revised "Cow Economics" is funny, got this from JB Baylon's facebook status, thanks JB. The photos, I got them from the web.

A Lesson in Global Economics

Traditional Economics:
You have two cows. You sell one and buy a bull.
Your herd multiplies and the economy grows. You retire on your income.

Indian Economics:
You have two cows. You worship them.

Pakistani economics:
You don't have any cows. You claim that the Indian cows belong to you.
You ask the US for financial aid, China for military aid, Britain for warplanes, Italy for machines, Germany for technology, France for submarines, Switzerland for loans, Russia for drugs and Japan for equipment. You buy the cows with all this and claim exploitation by the Western world.

American economics:
You have two cows.
You sell one and force the other to produce the milk of four cows.
You profess surprise when the cow drops dead. You put the blame on some nation with cows and allege that that nation will be a danger to mankind.
You wage a war against that cow nation to save the world, and grab the cows.

French economics:
You have two cows. You go on strike because you want three cows.

German economics:
You have two cows. You re-engineer them so that they live for 100 years, eat once a month and milk themselves.

British economics.
You have two cows. They are both mad cows.

Italian economics.
You have two cows. You don't know where they are.
You break for lunch.

Swiss economics:
You have 5,00 cows. None of them are yours.
You charge others for storing them.

Japanese economics:
You have two cows. You redesign them so that they are one-tenth the size of an ordinary cow, and produce twenty times the milk.
You then create cute cartoon cow images called Cowkimon and market them worldwide.

Russian economics:
You have two cows. You count them, and learn you have five cows.
You count them again, and learn you have 42 cows.
You count them again and learn you have 17 cows.
You give up counting and open another bottle of vodka.

Chinese economics:
You have two cows. You have 300 people milking them.
You claim full employment and high productivity.

Philippine economics:
You have two cows. One is white and one is black.
Actually the black one is not a cow -- it is a carabao.
But the person who sold it to you in Greenhills claimed it was an albino cow.

See also:
Weekend Fun 41: Nancy Binay, Grace Poe, Other Politicians, May 25, 2013 
Weekend Fun 42: Danny Purple, UP Diliman Character in the 70s, June 08, 2013 
Weekend Fun 43: Tales from Narra Dorm, UP Diliman, June 22, 2013

Climate Tricks 20: Cooling Denial

Many people these days complain of the frequent strong rains and heavy flooding this month. Not only in Metro Manila but in various provinces, or in other countries. When I try to explain that this is part of global cooling, many resist the idea or the term itself. They always argue that this is still part of "man-made" or anthropogenic global warming (AGW) or man-made climate change (CC). I call this attitude as "cooling denial" and 'nature-made CC denial".

Yesterday, known journalist and Rappler editor, Marites Danguilan Vitug, posted in her facebook wall about the global weather while she is in Germany. See the exchanges after that, removing the last names of the people who commented in her wall. I just want to show some spontaneous comments and ideas on this subject.

Marites It's incredible that the rains are lashing in India, Canada, France, Germany! A friend's cellar in Bonn was flooded, an extremely rare phenomenon.

Top of Form
Antonio  climate change and will get worse.

Camilo High River, Alberta is now experiencing excessive flooding. (One reason of flooding.... the temperature at the North Pole went high???)

Nonoy Oplas Climate changes from warming to cooling to warming to cooling, in endless, natural cycles. Global cooling is here and ALL the guesses and projections by the UN are all wrong,
Nonoy Oplas Global sea surface temperature (SST) anomaly, composite for all oceans (Pacific, Atlantic, Arctic, Indian, etc.) and seas in the planet, been mostly in the cooling territory for the past 3 years now,

Boyet  baka greenhouse effect ?

Cheryl  Minnesota's winter lasted 8 months. They say this was the worst winter. I am now in Calgary which was hit by a flood yesterday. And yet, the right insists that climate change is a hoax so there is no need to change lifestyles.

Virgilio  The world IS flat!

Lino  I don't know how some people can still deny that climate change is a reality!

Benedict  Ma'am, its true here in Paris!

Maripi  Hindi ka nag-iisa Manila.

Hedwig  Friend's garage in Geneva was flooded, too. 

Sammy  from globalized disaster and calamities, towards globalized resistance against perpetrators of climate crisis...

Nonoy Oplas CC is true. Climate changes from warming to cooling to warming to cooling. In endless, natural cycles. Global warming was true, it did happen -- Roman period, Medieval Warm Period (MWP), last century's warming. Global cooling is also true, it did happen -- little ice age (LIA) during the Maundeer Minimum and Dalton Minimum, and is happening now.
So the term "climate denier" is an idiotic and stupid statement. CC is true, warming is over, it's now cooling. But some scammers do not want to recognize cooling, only warming. They do not want to recognize "nature made" CC, only "man-made" CC.

Meanwhile, global air temp of the lower troposphere, composite for Norhtern + Southern Hemisphere + Tropics,

 YR        MON     GLOBAL  NH        SH           TROPICS
2013       1              +0.504    +0.555  +0.453  +0.371
2013       2              +0.175    +0.368  -0.018   +0.168
2013       3              +0.183    +0.329  +0.038  +0.226
2013       4              +0.103    +0.120  +0.086  +0.167
2013       5              +0.074    +0.162  -0.013   +0.113

(NH, SH means Northern Hemisphere, Southern Hemisphere)

Another stupid and idiotic statement is that the past century's warming was "unprecedented", that no period in the past was warmer than the 20th century warming. Their time scale of comparison is limited to only 150 years or so. But go back to 11,000+ years, see the up-down-up-down in global temp,

...Let’s look at some specific features of the Marcott et al. curve. As shown in more than 3,000 publications, the Medieval Warm Period (MWP) is widely recognized to have been somewhat warmer than present Figure 1). In the past 10,000 years, at least six other warm periods of magnitude equal to the MWP occurred; nine other warm periods that were 0.5°C warmer than the MWP occurred; two warm periods that were 1°C warmer than the MWP occurred; and three warm periods that were 1.5°C warmer than the MWP occurred. All of these periods warmer than the MWP clearly contradict the Marcott et al. conclusions. 
 The Marcott et al. conclusions that “Current global temperatures of the past decade … are warmer than during ~75% of the Holocene temperature history” and “Global mean temperature for the decade 2000-2009 ….are warmer than 82% of the Holocene” are clearly contrary to measured, accurate, real-time data and thus fail the Feynman test, i.e., they are wrong.
Again, the terms "climate denier" and "warming denier" are stupid and idiotic statements. Scammers who benefit from oodles of climate money would want to perpetuate that urban legend.

Weekend Fun 43: Tales from Narra Dorm, UP Diliman

Narra Residence Hall in UP Diliman was the only dormitory for boys. There are three dormitories for girls -- Kamia, Sampaguita and Ilang-Ilang, the rest are co-eds. And of those dormitories, Narra is gone, since several years ago. First it was neglected, then a portion got burned, and finally it was demolished to house the UP Integrated School (UPIS) as the original UPIS campus has been bought by the Ayalas for another real estate project.

I was a resident of Narra dorm from 1983-85. Before that I stayed in Molave (my 2nd year in UP) then Yakal dorms (my 3rd year). Many memories of wild, wacky and other characters in Narra remain vivid in my mind until now, three decades ago. I should write about those memories here in the near future. For now, I am posting a great article written by a fellow Narra dormmate and friend, Fer Cao, originally posted in the Narra dorm facebook group more than a year ago. This is well written, colorful and wacky. Thanks for the permission to post your great memoir Fer.


by Fernando "Fer" Cao

The thing I fondly miss most about late 80s Narra was the air of pure, unapologetic decadence that must have been like the Roman Empire in decline.

It is something that will greet you immediately while still at the lobby: two old men sitting on ancient chairs acting like gatekeepers to the empire---one a cool, ponderous and word-thrifty Mang Tony while the other, a blustering, cantankerous and full-of-exclamations Mang Willie. They were commanded by a Napoleonic figure---the enigmatic Mr. Bernardo---who would roam his domain with his unsmiling, arrogant glances, stomach out, and one of his hands on his trouser pockets.

In my time, there was a sort of unwritten rule in Narra. If you were a novice, you had to defer to the veterans. No matter how tough you were or how intelligent your opinion might have been, you must yield to the frailest looking denizen of the place. Just like in the outside world, a novice must earn time, recognition and respect. I’ve seen rowdy newcomers given their deserved comeuppance by the mayors of each wing. Unfortunately for the novice, most veterans considered themselves mayors of each wing! So you were The Man in Molave? Go fuck yourself, pussy, this is Narra! Now go back to the end of the line!

Narra was an amalgamation of tribes not mutually exclusive of each other---the fratmen, the basketball guys, the degenerate sugarols, the regional buddies, the Pink sisters, the tropang malilibog, the freespirits, artists and bohemians, the Muslim brethren, the grim-and-determined activists, the plain weird and goofy, the sleep-deprived law and masteral students, the vet students and their horrible experiments, the trippers and their stashes, etcetera, etcetera…

All of which make up the dreaded Narra Gauntlet. Each year, candidates for the various positions of the University Student Council (USC) tour the dorms, present their platforms and campaign for votes. Narehans love to make candidates squirm, fumble with answers and blush with embarrassment with pointed questions and arguments that pierced many a veneer or pretension. In my time, the most dreaded questions usually come from the oldest among us who’ve nearly seen it all. I can’t remember all their names now but one stands out---Clifford Espinosa, presently a famous wood sculptor, he with the infamous smirk, leer and lilt that curses you without uttering a single expletive yet. And this is just coming from the guys opening their mouths! The rest of the gauntlets are as equally bloodthirsty with their sporadic howls of maniacal laughter at something even remotely funny or embarrassing. So what about those decent looking guys over there keeping to themselves? Don’t be fooled--- they’re fantasizing about you right now in a victory joe position! Thus, in all my time at Narra, I rarely saw the prettiest or the sultriest USC candidate drumming up enough courage to face the Gauntlet.

Friday, June 21, 2013

Current Account, Foreign Reserves and Philippine Economic Growth

* This is my article today in the online magazine,

Three weeks ago, I made an analysis of the breakdown of the Philippines’ 7.8 percent growth in 1Q 2013 and showed how the services and industry sectors, and the construction and financial intermediation sub-sectors in particular have contributed the most to such stunning growth rate. It also showed comparative growth rates of other Asian economies and the industrial economies of the US and Europe.

This column will now look at some international aspects and contributors of such growth, and how the Philippines stacks up with its neighbors in the region as well as the industrial and emerging markets in other continents.

Numbers below compare countries in terms of their trade balance (goods and services), current account (trade balance + factor income balance, including remittances by nationals and foreigners of a particular countr), the budget balance (governments’ revenues and expenditures) and interest rates, both short- and long-term.

The Philippines has trade deficit (more imports than exports) but has current account surplus, meaning the trade deficit was more than covered up by high factor income, especially OFW remittances.

Table 1. Trade, Current Account, Budget Balance and Interest Rates, Selected Countries, Latest Data

Source: The Economist, June 8th 2013, Trade, Exchange Rates, Budget Balances and Interest Rates

Very high debts of the governments of industrial countries, reflected in high public debt/GDP ratio, and in the above table, high budget deficit/GDP ratio, is a big drag to the economies of those countries. The tolerable level of budget deficit is generally pegged at -3.0 percent of GDP. But some countries like the US, Canada, Japan, UK, France and many other European countries have deficit ratio way above that level. This is the main generator or creator of global economic instability in the past few years. And this has repercussions on many emerging economies like the Philippines.

The saving grace despite high fiscal irresponsibility of many governments, is that aggregate savings and financial mobilization in the private sector of many countries have greatly improved. So that while many governments borrow like crazy, both short and long-term interest rates have remained low. The private sector has ample savings to lend to governments even at low interest rates. The Philippines’ private sector share this global trend and characteristic.

Below is an interesting data on international reserves of industrializing and emerging and markets from Asia, Europe, South America and Africa. The huge reserves of economies in Asia can easily dwarf the reserves of their counterparts in other continents, except for a few countries like Russia and Brazil. The Philippines’ international reserves are in the lower bracket by Asian standards, but in the medium bracket by European and South American levels.

Table 2. Foreign Reserves Including Gold, in $ Billion, 2013

* Excluding gold for China, Taiwan, Vietnam, Saudi Arabia, Israel
Primary data source: Haver Analytics
Posted in The Economist, June 6th 2013, Foreign Reserves.

High reserves do not necessarily translate into fast growth in the short term, but more of an insurance against high volatility and instability in the international financial market in the medium to long-term. Foreign reserves are counted in the capital account of an economy or country.

The four Asian tiger economies (Hong Kong, Korea, Singapore and Taiwan) can be characterized also as having current account surplus and high foreign reserves at the same time. It is the envy of many countries and economies. Plus the fact that they have balance surpluses (government revenues larger than expenditures) or low budget deficit, case of Taiwan.

These economies may suffer low growth in the short-term but in terms of hedging their economies from another round of financial and economic turmoil that the world experienced over the past four years. The US housing and fiscal instability in 2008-2010, Eurozone public debt turmoil in 2010-2012, starring especially the PIGS -- Portugal, Ireland, Greece and Spain.

The Philippines can capitalize on many favorable developments in the region despite a weak overall global economic environment. These include (a) rising investments and revenues in the business process outsourcing (BPO) sector, (b) rising remittances from more skilled OFWs, and (c) rising interest and revenues from tourism, including health tourism.

The country’s high and young population is a huge factor for these favorable developments. Young and easily trainable manpower, not only in the schools and universities but also on the job training and actual work itself.

Dynamism and efficiency in the private sector compensate for the inefficiencies, wastes and irresponsibility in the public sector, but only up to a certain point. The Philippine government should bear this in mind and learn lessons from the US and Europe and hence, watch its fiscal condition with prudence and sensitivity to the Filipino taxpayers and entrepreneurs.

FDA 5: Trade and Investment Promotions

Today, the Food and Drug Administration (FDA) will celebrate its 50th Anniversary at its office in Alabang. Congratulations, FDA Director Dr. Kenneth Hartigan-Go and staff.

Doc KHG has a new slogan, a "Transformative FDA" where they are "finding the balance between innovations and sound regulations."

I think it is a good and simple goal. Encouraging innovations while weeding out the not-so-good guys among the players via regulations and penalties for violation of certain rules.

Last Monday, June 17, FDA held a training seminar for its top officials and decision makers from different centers and offices, with resource speakers from the Board of Investments (BOI, DTI) and the Bureau of Customs (BOC, DOF). The goal of the training and discussion is to further develop FDA as an "agency that is conscious of its important role in facilitating trade of goods and services as well as in promoting investment in the country.... securing public health (and) be a more trade and investment-friendly agency in order to support growth and development of the industry, promote national competitiveness and sustain economic gains of the country."

I saw the FDA Press Release on the activity. A BOC official and speaker, Mr. Villanueva,  focused on "Ease of Doing Business, discussing the importance of time, cost, and documents as far as business registration is concerned." 

Bureaucratic regulations are realities happening almost anywhere in the planet that we have to live with. If kept to the minimum, such regulations and prohibitions will drastically help reduce unethical or abusive business practices that can disadvantage consumers as both the players/regulated and the regulator can easily remember only a few regulations, not dozens or hundreds of them.

One important precondition for the rule of law to prevail is that the laws and regulations should be as general (ie, not so detailed) in application and as few as possible in number. To promote economic freedom and more entrepreneurship, more job creation, everything should be allowed, except for a few expressly and explicitly prohibited acts like stealing, killing, abduction, explicit plan to fool the consumers, and a few others. The penalties should be very clear and should apply to all violators, no one is exempted and no one can grant an exemption. That is the essence of the rule of law.

In the case of the FDA, its main function is to allow and encourage the entry of more players, manufacturers, distributors and retailers, who will give the public more useful food, drinks and medicines at competitive prices, and weed out players that produce and sell products that can be harmful to the people. This way, public health will be further promoted.

It is important for the FDA to have a strong legal team that can prosecute at a short period of time those caught violating its rules and regulations. Or at least, it should have strong tie up with the Department of Justice, the police and the courts, so that legal cases against violators or plain suspects can be pushed with little or no delay.

This act alone will encourage the entry of more players both from abroad and from local entrepreneurs, to enter the food and drugs business, as they see the equal application of the law to unequal people and players, and the opportunist and shrewd among them will be culled and removed.

So good luck, Doc Ken and your staff at the FDA.

See also:
FDA Watch 1: BFAD Strengthening Bill, May 06, 2009
FDA Watch 2: Inspection of cGMP Compliance, January 31, 2011 
FDA Watch 3: Retirement of Dr. Suzette Lazo from FDA, May 16, 2012 

FDA Watch 4: Dr. KH Go Lecture on Regulation and UHC, May 06, 2013

Wednesday, June 19, 2013

Mining 24: The Regalian Doctrine

A friend, law student and Objectivist, free market blogger Froi of the wrote a good legal and economic opinion on mining. In his article last June 08, 2013, Regalian Doctrine Versus RP’s Mining Industry andEconomic Progress, he traced the history of this philosophy and its negative impact on regulate-tax-regulate thinking in mining. It's a long paper, reposting only portions of it. Below, among the products of mining that many anti-mining activists fail or refuse to recognize.

The primitive, colonial Regalian Doctrine

But… such a statist notion is founded on a single primitive, royalist concept, which has all the trappings of European collectivism or statism. This concept is called the Regalian Doctrine first introduced to our political system by the Spaniards through the Royal Decree of 13 February 1894 or the Maura Law. According to this doctrine, all lands of the public domain belong to the State.

This system is enshrined in the 1987 Constitution under Article 12, Section 2, which states:

“All lands of the public domain, waters, minerals, coal, petroleum, and other mineral oils, all forces of potential energy, fisheries, forests or timber, wildlife, flora and fauna, and other natural resources are owned by the State.”

The above-mentioned Constitutional provision is the main reason why the country’s mining industry is one of the most regulated industries in the world. In fact, almost all mining countries of the world, except the United States, follow this Regalian Doctrine….

The case of La Bugal-B’laan

The paramount- or evil- influence of the Regalian Doctrine was clearly demonstrated in La Bugal-B’laan v. DENRIn this landmark case, the Court asserted the authority of the Regalian Doctrine enshrined in Article XII Section 2 of the 1987 Constitution and declared that RA 7942 or the Philippine Mining Act of 1995 is unconstitutional for allowing fully foreign owned corporations to exploit Philippine natural resources. Unlike the 1935 and 1973 Constitutions that authorized the State grant licenses, concessions, or leases for the exploration, exploitation, development or utilization of natural resources, the 1987 Constitution merely permits foreign owned corporations to provide technical or financial assistance to the State for large scale exploration, development and utilization of minerals, petroleum and other mineral oils.

The Supreme Court held: “In any case, the constitutional provision allowing the President to enter into FTAAs with foreign-owned corporations is an exception to the rule that participation in the nation’s natural resources is reserved exclusively to Filipinos. Accordingly, such provision must be construed strictly against their enjoyment by non-Filipinos.”

In this age of globalization and technological innovation, we arbitrarily, capriciously limit foreign participation in our ailing economy and industries when most governments the world over allow Filipinos to invest and buy lands in their respective countries. Without a doubt, Philippine protectionism is in violation of the principle of reciprocity in international law. It is our mediocre, anti-reality, anti-economics protectionism anchored on the statist principles of egalitarianism, Regalian dogma, and social justice that have been driving our economy into the ground….

How freedom led to mining boom in the U.S.

In the early years of the United States, which is the birthplace of free market capitalism, some of its ceded states were acquired from Mexico and France— both of which had long-established mining laws, which carried the influence of the Regalian Doctrine. The sway of this colonial doctrine, which was paramount in these countries, had been said to be at odds with the United States’ Anglo-Saxon common-law system. The American common-law system gives a landowner a right to the minerals beneath the surface of his land property.

According to Jesse Hoover, who wrote a compelling book titled ‘The Economics of Mining’:

“The Regalian Doctrine did not prevail, and therefore a patent from the federal government has ordinarily carried with it the right both to hold the surface of the property and to mine all minerals beneath the surface. Title vests in the patentee absolutely, and under most conditions the land becomes private property.”

Mining claims and statist regulations of the mining industry were virtually non-existent in the early free market years of the United States. Such mining claims and regulations first existed in Europe and in Latin America, wherein the Regalian Doctrine, or the notion that mineral wealth pertains to the Crown, prevailed.

In 1807 the U.S. Congress started leasing mining lands, however, the results were disappointing that it decided to abandon the system in 1847.

Hoover said that miners began to search for a mining sanctuary that guaranteed them freedom from government restriction and intervention….

Objective law, not regulations

… how the Philippine government and the anti-mining, anti-mind, anti-reality mob treat people in the mining industry, particularly foreign investors who are willing to share their technical know-how, technologies, and wealth with Filipinos. These technical people are being publicly criticized by Filipino throwbacks who just can’t understand the crucial, indispensable role of mining in human life.

Yet what these clueless anti-mining leftists do not understand is that their lives and survival on earth largely depend upon the people in the mining industry. Yes, the future lies in the ability and willingness of some people to mine earth’s hidden resource and then transform the same into an actual wealth.

America’s early mining industry did not succeed through government help or government regulations. It succeeded by searching— and then valuing— freedom, which was unfortunately eroded during America’s progressive era. It’s no surprise that America became the most economically prosperous nation on earth. All credit must go to America’s Founding Fathers who understood and valued the concepts of limited government, individual rights, and economic freedom.

The real enemy is this Regalian principle, which is one of the root causes of injustice, poverty, and statism in the Philippines.

See also:
Mining 20: Miscellaneous Comments on Mining, May 18, 2013
Mining 21: Chile Policies, May 21, 2013 

Mining 22: Philippines as EITI Candidate, June 05, 2013 

Mining 23: On the Proposed 10 Percent Gross Revenue Tax, June 03, 2013