Wednesday, May 31, 2017

Example of low-life mind Du30 supporters of Martial Law

The other day, a lawyer-friend reposted a PH diplomat's post about the PDu30 government, portion of which says, "Philippine democracy remains alive and vibrant."

So I posted at my friend's wall this GMA news report. See again Du30 words,
"Until the police and the armed forces say the Philippines is safe, this martial law will continue. I will not listen to others. The Supreme Court, congress, they are not here,"

I asked my friend and some commenters in his fb wall why there seems to be no issue here, No legal or constitutional issue? I added, "wow. One-man-rule na nga."
Then this Maia Villapane came with very low-life minded response.

The language is very typical of Du30 and many of his supporters' mouth. They brag their low level minds in social media by reiterating their foul language.

But as I always say -- If people self-destruct, we should not interrupt. Let the fanaticism and low-life consciousness display in public.

IPR and Innovation 36, Plain packaging from tobacco and soon to soft drinks, alcohol, ice cream products

I am reposting this good interview of my friend, PRA Exec. Director, Lorenzo Montanari, published in The Financial last May 29, 2017. State nannyism is wrong, there will be too much state intervention to "protect people from 'harming' themselves", the state semi-own people's body and mind.

“We are really worried about the new regulations,” Montanari commented. “Plain packaging - removing all signs of the brand from the packaging of cigarettes - is a direct attack on the trademark system. The first plain packaging was implemented in Australia in 2012. We were against it and criticized it of course. As a reaction to that we have already published an International Coalition letter against plain packaging. We collected more than 40 think tank signatures from around the world; New Economic School is also amongst them. We claim that if one wants to reduce smokers’ numbers then that’s fine, but it can be done in another way, for example educational campaigns can help. The countries that have approved the law on plain packaging, for example France and Ireland, are also considering moving on to another sector, like wine, soft drinks, junk food, etc. I want to say that it is not about the tobacco itself, we care about the trademark. This is our mission because it’s intellectual property.”
Q. At present, in terms of Georgia, does it only affect the tobacco sector?
A. It has started with tobacco. It is very easy to attack this sector. In Thailand and Indonesia for example they have already started to talk about plain packaging in the wine sector too. The point is to think about the Georgian wine producer. At the moment Georgian wine is famous throughout the world. Local producers have invested so much money in building brand identity. Imagine what would happen if they weren’t able to show their label. I have heard that the Ministry of Economy, the Ministry of Finance, and even the Prime Minister of Georgia are against it. If parliament decides to implement the new law, what will happen hereafter to Georgia wine? This is the point we are strongly criticizing.
Since we analyzed the 128 country index, Georgia held 90th place. In terms of the legal political environment Georgia is not performing too badly. By registration of property Georgia is the best country in the world. The problem in Georgia is the protection of intellectual property rights. In this case we discovered the score is 2.4 - the lowest in our ranking. A policy like plain packaging will not help to improve the protection of intellectual property. I had the pleasure to speak to the Chairman of Sakpatenti. He is against this new regulation about plain packaging. We want to collaborate with them also.
Q. Can you tell us more about the experience of foreign countries which have already implemented the law?
A. The Australia National Drug strategy household survival has shown that in 2014 the daily smoking use rate was 2.5 and 1 year after the implementation was 3.4. Plus, according to the dates, afterwards a 20% increase of contraband cigarettes can be seen. Since there is no trademark it’s very easy to fake, they don’t need to reproduce the logo of the brand or label.
Even if plain packaging will reduce the number of smokers, we are still against it, because of the policy being against the principle of the trademark. I have seen interesting research by IPM. According to it, 81% of Georgians don’t have information about plain packaging. 54% of Georgians think that it will simplify the reproduction of fake cigarettes.
The Georgian Government is doing everything to make Georgia the best performing in terms of economic freedom. We are worried that parliament is moving in the opposite direction. Even in the EU, the European directive of tobacco has been approved, for example Germany is completely against plain packaging.
Q. You mentioned the EU. Georgia has signed an EU Associate Agreement which requires some changes to tobacco regulations. They also have some recommendations for approaching European standards. Do you think that this might be the reason for these regulations?
A. Germany, the leading country in the European Union, is not implementing it. This demonstrates perfectly, that even if the EU gives a recommendation, the country can still disagree. Italy and Greece are against the implementation also. If you want to cut down on the number then it’s better to hold educational campaigns. We believe that an attack on the trademark system is bad for the economy.
Q. Due to the law the tobacco industry will not have the right to conduct any philanthropy hereafter. They won’t even have the right to conduct any ads or marketing action. What do you say to that?
A. My mission isn’t to judge a law, it’s up to the Government to decide. In general, since I believe in a free market economy, if you have legal activity you can advertise. If you are legally working why should someone forbid advertising? This type of banning is against freedom of speech and expression. Removing one’s brand is the same. You can’t describe your product anymore.
Q. How can the new regulation affect the tobacco business in general and the economy as well?
A. I think that in the future if any company thinks that plain packaging will touch them they won’t invest in Georgia anymore. I honestly don’t know what tobacco companies are going to do in the future. I understand that they aren’t happy. I don’t know what will happen afterwards. What I do know is the law is violating trademarks. If we take into consideration foreign countries’ examples, in France ex-president Nicola Sarkozy criticized the plain packaging law for wine. It’s impossible to survive without brand identity.
Q. What do you think, if the Parliament of Georgia passes this new regulation, will it force some tobacco companies to leave the Georgian market?
A. I honestly don’t know. It could cause this too. For sure it is not going to be a positive signal to other companies who want to invest. Afterwards these companies might ask for help from the World Trade organization. They might find themselves in a very bad situation, because they have put millions into advertising and creating brand awareness which they now might lose.
Written By Tamta Kldiashvili

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Saturday, May 27, 2017

BWorld 132, Global commodity prices, trade and growth

* This is my article in BusinessWorld yesterday.

One of the beauties of free trade and global economic integration is that countries can benefit from low commodity prices as improvement in technology and processes in other countries result in bigger output for the same land area and other inputs. The downside of course is that when commodity prices go up, economies that are more dependent on imported products would tend to wobble.

The period from 2008 to 2014 was characterized by generally high food and commodity prices.

For instance, price of corn was only $98/ton in 2005 but it shot up to $223 in 2008. I think it was the momentum of the biofuels law in the US in 2005, spurring huge demand in the US, Brazil, other countries. The price mellowed in 2009-2010 during the global financial turmoil that started in the US, but shot up again to nearly $300 in 2011-2012.

The global spike in rice prices (aka as “rice crisis of 2008”) from $288/MT in 2005 to $700 in 2008 was caused by several factors, among which are (a) price hikes in major energy sources oil, natural gas, and coal in 2008, and (b) rice export restrictions by India, Vietnam, Brazil, other countries.

Maize (corn) -- US No.2 Yellow, FOB Gulf of Mexico, US price
Rice -- 5% broken milled white rice, Thailand nominal price quote
Swine (pork) -- 51%-52% lean Hogs, US price
Poultry (chicken) -- Whole bird spot price, Georgia docks
Sugar -- Free Market, Coffee Sugar and Cocoa Exchange (CSCE) contract no. 11 nearest future position
Coffee -- Other Mild Arabicas, International Coffee Org. New York cash price, ex-dock New York

Crude Oil (petroleum) -- West Texas Intermediate 40 API, Midland Texas
Natural Gas -- Indonesian Liquefied Natural Gas in Japan, $/million metric British thermal units of liquid
Coal -- Australian thermal coal, 1200 btu/pound, less than 1% sulfur, 14% ash, FOB Newcastle/Port Kembla

Among the reasons why world oil prices rose to record levels in 2008 was the high energy demand in the two biggest countries in the world in population, China and India. Prior to 2008, from 2003-2007, China’s GDP growth was always double-digit, averaging 11.7% per year. India’s growth during that period was also high, averaging 8.8% per year.

Implications for the Philippines

Among the things that the Philippines should optimize given these price fluctuations in world commodity prices are the following:

1. Rice trade liberalization should have been started in 2010 when the Aquino administration took power. After short price spikes in 2011-2012, rice prices went downhill. The Duterte administration should proceed with full rice liberalization this year because of high medium term outlook for rice output and exports by our neighbors, Thailand and Vietnam especially.

2. Sugar liberalization should be pursued too as world sugar prices have declined from their peak prices in 2010-2012 average of around 22 US cents per pound.

3. Trade of corn and swine, even poultry should also be liberalized. Prices of rice, corn, swine, poultry and other food products are among the major contributors of the overall consumer price index (CPI) which are used to compute the inflation rate.

4. Energy-intensive industries like manufacturing, hotels, construction, and transportation (on air, land, water) can expand their production and fleet to take advantage of lower prices of oil, natural gas, and coal.

5. Two hindrances here: (a) the planned hike in excise tax for oil products by P6/liter across the board, and (b) continued onslaught by feed-in-tariff (FiT) and soon, renewable portfolio standards (RPS) that will result in expensive electricity. The purpose of trade and energy revolution is to make global energy prices become cheaper. The purpose of government in this case to make cheaper energy more expensive. These two measures should be abandoned and reversed someday.

6. Among the ASEAN-6 big economies (Indonesia, Malaysia, Thailand, Singapore, Vietnam and Philippines), the Philippines registered the highest average GDP growth per year from 2010-2015: Thailand 3.7%, Indonesia and Malaysia 5.7%, Singapore and Vietnam 6.0%, and Philippines 6.2%. There was something good that the previous Aquino administration was doing that the new Duterte administration should somehow continue.

Bienvenido S. Oplas, Jr. is the head of Minimal Government Thinkers and a Fellow of SEANET. Both institutes are members of Economic Freedom Network (EFN) Asia.

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PDu30 Martial Law in Mindanao

This week, President Duterte who was in Russia when there was a big fight between the Armed Forces of the PH (AFP) and the Maute group of local terrorists, declared Martial Law for the entire Mindanao. I think PDu30 acted with paranoia here as he is too focused on anti-drugs de tokhang war vs ordinary civilians, or China-Russia-love ya affair. When faced with real war, his first instinct is to declare Martial Law.

The PH National Police (PNP) too has become too focused on drugs de tokhang that their intelligence gathering on the real organized, armed criminals has suffered. Below, I am reposting opinions from some friends, posted in their fb walls on dates indicated.

(1)  Jose Antonio Custodio, May 23:

The group that is attacking Marawi City is the Maute group with some is not the ISIS.... They are taking advantage of the fact that the military and police are distracted by the lack of a coherent policy on internal security. It is as simple as that.

(2) Jojo Garcia, May 23:

Martial law means the suspension of civilian government and the installation of military rule. The functioning of regular civilian courts and sanggunians are explicitly the only exception among civilian offices that should continue under the military government. Martial law also means that Mindanao is now under a military governor or governors, usually the heads of the AFP commands in the island. They will govern the civilian population through AFP general orders to be carried out by soldiers, not by the civilian LGUs whose operation and authority are now effectively suspended if martial law is truly to take effect. Anything less than this will merely amount to a hodgepodge system that would result in a nominal declaration mainly intended for propaganda purposes of showing presidential muscle.

If this is real and not nominal martial law, this is the largest geographical area put under martial law since the superficial lifting of Marcos's martial law in 1981. I hope this is only a nominal presidential show of force and not a real implementation of martial law, since I am not sure if the AFP is capable of running a military government in such a large area without the concommittant human rights violations committed en masse.

In short, sana pang-PR at yabang lang yan, because the last time the AFP implemented martial law as declared by a tyrant, there was no turning back.

(3) Dan Adan, May 25:

Understanding Section 18 of Art. VII of the 1987 Constitution Bit by Bit

The President:

1. Is the Commander-in-Chief of all armed forces of the Philippines.
2. As Commander-in-Chief, may call out such armed forces to prevent or suppress lawless violence whenever it becomes necessary.
3. As Commander-in-Chief, may call out such armed forces to prevent or suppress invasion whenever it becomes necessary.
4. As Commander-in-Chief, may call out such armed forces to prevent or suppress rebellion whenever it becomes necessary.
5. May suspend the privilege of the writ of habeas corpus for a period not exceeding sixty days in case of invasion or rebellion, when the public safety requires it.
6. May place the Philippines or any part thereof under martial law for a period not exceeding sixty days in case of invasion or rebellion, when the public safety requires it.
7. Shall submit a report in person or in writing to the Congress within forty-eight hours from the proclamation of martial law.
8. Shall submit a report in person or in writing to the Congress within forty-eight hours from the suspension of the privilege of the writ of habeas corpus.

9. The Congress, voting jointly, by a vote of at least a majority of all its Members in regular or special session, may revoke the President's proclamation of martial law.
10. The Congress, voting jointly, by a vote of at least a majority of all its Members in regular or special session, may revoke the suspension of the privilege of the writ of habeas corpus.
11. The President cannot set aside the congressional revocation of the declaration of martial law.
12. The President cannot set aside the congressional revocation of the suspension of the privilege of the writ of habeas corpus.
13. The President may ask Congress to extend the proclamation of martial law if the invasion or rebellion shall persist and public safety requires it.
14. The President may ask Congress to extend the suspension of the privilege of the writ of habeas corpus if the invasion or rebellion shall persist and public safety requires it.
15. The Congress, voting jointly, by a vote of at least a majority of all its members in a regular or special session, may extend the proclamation of martial law for a period to be determined by the Congress, if the invasion or rebellion shall persist and public safety requires it.
16. The Congress, voting jointly, by a vote of at least a majority of all its members in a regular or special session, may extend the suspension of the privilege of the writ of habeas corpus for a period to be determined by the Congress, if the invasion or rebellion shall persist and public safety requires it.
17. The Congress, if not in session, shall, within twenty-four hours following such proclamation or suspension, convene in accordance with its rules without need of a call.
18. Any citizen may file a case before the Supreme Court questioning the sufficiency of the factual basis of the proclamation of martial law or the extension thereof.
19. Any citizen may file a case before the Supreme Court questioning the sufficiency of the factual basis of the suspension of the privilege of the writ of habeas corpus or the extension thereof.
20. The Supreme Court may review the sufficiency of the factual basis of the proclamation of martial law or the extension thereof.
21. The Supreme Court may review the sufficiency of the factual basis of the suspension of the privilege of the writ of habeas corpus or the extension thereof.
22. The Supreme Court must promulgate its decision on the factual basis sufficiency within thirty days from its filing.

A state of martial law does not:

23. Ssuspend the operation of the Constitution.
24. Supplant the functioning of the civil courts.
25. Supplant the functioning of legislative assemblies.
26. Authorize the conferment of jurisdiction on military courts and agencies over civilians where civil courts are able to function.
27. Automatically suspend the privilege of the writ of habeas corpus.

28. The suspension of the privilege of the writ of habeas corpus shall apply only to persons judicially charged for rebellion or offenses inherent in, or directly connected with, invasion.
29. During the suspension of the privilege of the writ of habeas corpus, any person thus arrested or detained shall be judicially charged within three days, otherwise he shall be released.

(4) Bernard Ong, May 25:


After Mindanao Martial Law, the trial balloon for nation-wide Martial Law is now flying high.

1. Mindanao of course - home of the Durterte este Maute Group
2. Visayas because it is just walking distance from Mindanao
3. Luzon because it is just walking distance from Visayas
4. Anybody named Luzviminda is covered

1. Taiwan which is just walking distance from Luzon
2. Kalayaan Islands (a.k.a Spratly) because it will anger China
3. Panatag because that has been bartered to China for (scrap) trains
4. Davao because it has already been under authoritarian rule for 30 years
5. Anybody who can walk on water is exempted

For assurance that Martial Law will not be abused by unaccountable men in power, read up on Marcos history. Better yet, go dig some bones at Maa Quarry.

Thursday, May 18, 2017

BWorld 131, Why the FiT-All is a burden to consumers

* This is my article in BusinessWorld yesterday.

Last May 15, Transmission Corp. of the Philippines (Transco) presented at the Energy Regulatory Commission (ERC) its petition of Feed-in-Tariff Allowance (FiT-All) for 2017 of 26 centavos/kWh. Very fast adjustments from 4.06 centavos/kWh in 2015, rose to 12.40 centavos in 2016, and soon 26 centavos starting mid-2017, all “to save the planet.”

The ERC still has to conduct public hearings in Visayas and Mindanao until early June and likely to make an order by late June, to be reflected in our monthly electricity bills starting July 2017.

The feed-in-tariff (FiT) provision in the Renewable Energy (RE) Act of 2008 (RA 9513) is very anomalous on the following grounds: (1) guaranteed price locked in for 20 years despite technology improving very fast these days, (2) the FiT rates are rising (see table below) yearly due to inflation and forex adjustments, (3) FiT rates of P8+ to P10+ per kWh for wind-solar are way high compared to current Wholesale Electricity Spot Market (WESM) average prices of P2-P3/kWh, (4) current capacity installations for wind and solar are higher than what was allotted, and (5) even consumers in Mindanao who are not part of WESM, not connected to the Luzon-Visayas grids, are paying for this.

The total forecast cost revenue of FiT-eligible plants would be (in P Billion): 10.22 in 2012-2015, 18.54 in 2016, 24.44 in 2017, and 26.14 2018. The bulk of this will go to wind and solar plants.

(a) Wind: 6.32 in 2012-2015, 8.00 in 2016, 9.20 in 2017, 9.20 in 2018.
(b) Solar: 1.50 in 2012-2015, 5.88 in 2016, 7.03 in 2017, 7.00 in 2018
(c) Biomass: 1.86 (2012-2015), 3.95 (2016), 6.69 (2017), 6.79 (2018)
Hydro is small, only 1.52 in 2017 and 3.15 in 2018.
(Source: ERC, Case No. 2016-192 RC, Docketed April 27, 2017, Table 4)

Below are the beneficiaries of expensive electricity via FiT scheme by virtue of their hugeness and higher FiT rates.

Many renewable firms were not able to snatch the limited FiT eligibility but they can still make money from expensive electricity via the renewable portfolio standards (RPS) provision of the RE law. The RPS coerces and forces distribution utilities (DUs) like electric cooperatives and Meralco to purchase a minimum percentage of their electricity supply from these expensive renewables, the price differential with cheaper conventional sources they will pass to the consumers. If DUs will not do this, they will be penalized and the cost of penalty they will still pass on to the consumers.

The government should step back from price intervention and price control, grid prioritization of intermittent and unstable energy sources via legislation. Consumer interest of cheaper and stable electricity should be higher than corporate interest of guaranteed pricing for 20 years, lots of fiscal incentives and other privileges that are marks of cronyism. RA 9513 is anti-consumers, anti-industrialization and hence, it should be abolished soon.

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Over-Generalization, Over-Bedanization in the Duterte Cabinet

The term "Over-Generalization" is from my former Political Science teacher in UP Diliman in the 80s, Dr. Seguondo "Doy" Romero. He posted this in his fb wall few days ago:

"My reading is that Duterte is afraid of the military and is appointing the generals to civilian top positions as a feeble attempt to guard against a possible unauthorized military exercise by colonels. The Duterte traitorous embrace of China to the point of frittering away our West Philippine Sea territories, the shift away from the U.S. and international law and organizations, and inexplicable accommodation of the CPP-NPA-NDF and rogues like Misuari, have not endeared Duterte to the military, although God knows he has courted them so assiduously. He has failed to get them on-board the campaign against drugs. What can Duterte offer to the military to make them follow him into another authoritarian regime, but ignominy and the hatred of the Filipino people? Where is the threat of rebellion and invasion, unless he himself fans the Kadamay occupation into a real mass uprising? It is the military in the image of Trillanes and Alejano that Duterte is deathly afraid of. "Over-generalization" gives him a false sense of security...

As far as I can tell, Sec. Lorenzana and Gen Ano have so far acquitted themselves very well as constitutionalist-oriented officers, curbing excesses of immature military officers and civilian officials who blur the boundaries of professionalism. I would not automatically put them as beholden to Duterte incapable of protecting the national interest."

From sir Doy's other friends, they added:

(a) Rob Ocampo: Col Alex Balutan of PCSO, Maj. Jason Aquino of NFA.

(b) Ellen Tordesillas (also my fb friend): A number of retired military officers have already been given ambassadorial posts. One is Red Kapunan to Myanmmar.

A friend complained about sir Doy's term, "Duterte traitorous embrace of China". I asked him what he would describe it, as "Duterte heroic embrace of China"? Pweh.

On another note, the PNP has been a civilian agency for many years and decades now, how come that until now almost all of its Director Generals are from the PH Military Academy (PMA), a military agency? The PMA guys are OA, or with high sense of state entitlement mentality and insecurity, that all high positions in government involving guns and bombs should be allotted only to PMA graduates?

Sir Doy replied that "Military service is also a well-structured and systematic training designed to transform a soldier into a manager and eventually into a statesman..." 

I don't exactly buy this argument. Management of certain sectors require some deep technical skills then add management skills. Rather, retired soldiers have the "scare effect" on the bureaucracy down the line, making them tow the orders of the retired generals without much noise. Even legislators are somehow affected by the "scare effect" of these gun-wielding officers who used to command thousands of gun-and-bomb-wielding soldiers in the past.

Now, aside from "over-generalization", there is also "Over-Bedanization" of the Du30 government.

This is from San Beda's College of Law alone, there could be many other appointments from other colleges or departments of San Beda. I have no further comment about this trend in the Du30 government.

Sunday, May 14, 2017

Mining 51, Gina Lopez, Roy Cimatu and rule of law

When Gina Lopez was finally rejected as DENR Secretary by the Commission on Appointments (CA), lots of conspiracy hypothesis were flying. And one thing I notice about these comments and opinions is that it seems all of the people who spread such opinions did not watch the 2 1/2 hours CA hearing of Gina last May 02, 2017.

I watched it in full and here are my impressions:

1. Simple questions answerable by Yes or No, Gina cannot answer. Her mind and mouth is full of emotions, little or nothing on specifics, numbers and law.

2. Three questions by Sen. Alan Cayetano: (a) how much of total PH land area is actively mined, (b) beach resorts, how much of total coastal land of the PH have beach resorts, (c) what are the standards and criteria for her recent orders on mine closure — she could not answer.

3. Questions on land multiple titles involving DENR corruption resulting in perennial land grabbing problem raised by 3 Congressmen, what she’s doing about it in her 10 months in office, she was clueless, no specific answer, only generalized ones like “we are cleaning up the department” or “we are computerizing things.” She can suspend or close down many mining firms that follow certain regulations but she cannot suspend or kick out any corrupt officials in her department the past 10 months.

4. Question on very dirty rivers like Marilao river, Pasig river, she answered “structural problems” daw, despite heading the Pasig river clean up commission. She has no specific plans to clean up these rivers.

5. Questions on unabated logging, she has no clear answer.

6. Questions on legal basis, what existing laws, as basis for her recent AOs (Administrative Orders) on P2M/hectare of “disturbed” agri land as deposit — no answer. She argued “my prerogative” as Secretary.  Congw. Josephine Sato who insisted on this issue is very specific in her points — “we are a nation of laws, not of men”. Our actions and policies should be based on existing laws, not on whims of men/women leaders. Bright legislator.

DENR work is more than mining. She’s very hard-working, very passionate, only in anti-mining campaigns. But she’s lazy on other mandates of the DENR. Gina's big problem is her big ego.

I liked Congw. Sato’s rejection of Gina’s “my prerogative as Secretary” answer to her question. Department Secretaries cannot legislate on their own, otherwise Secretaries of DA, DOTC, DPWH, DSWD, DAR, etc. can just issue dozens of AOs or Department circulars (DCS) creating new prohibitions and regulations, new fines and penalties, new subsidies and entitlements — all bypassing Congress as legislative body.

PDu30 made a mistake in appointing her as DENR Secretary even without fully scrutinizing her work ethics, her technical skills. Du30 corrected this mistake by not defending her at the CA.

People who oppose mining and argue “zero mining” are as confused as the people who say “zero fossil fuel”. These people should be riding bicycles or skateboards or just walking/running, or riding horses, cows, ponies. They should not ride cars, jeeps, buses, airplanes, ships because all these use fossil fuels 100%.

People who say “zero mining” don’t want to live in caves. Even barong-barong use mining products like nails, hammer, saw, bolo, etc. Hypocrisy always finds some scapegoats like the “oligarchs”, as if the Lopezes are not oligarchs.

Last Monday, May 08, former AFP Chief Roy Cimatu was appointed as new DENR Secretary by President Duterte. A retired soldier, then labor diplomat in the Middle East, and now a DENR chief.

Perhaps near-zero official experience in managing an environment agency except in some tree planting activities of the AFP, his appointment is a guessing game for many sectors under DENR supervision — mining, forestry, solid waste, air pollution, coastal resources, rivers/lakes/sea water quality, land titling, etc.

Since all Cabinet posts are political appointees of the President, then it is assumed that the major policies of the appointed Secretary are also the policies of the President.

I am not a fan of “good governance” in a BIG government because it is a contradiction in terms. Big government almost always lead to bad governance because government would over-extend its power of coercion. Like creating a dozen new regulations on top of hundreds of regulations, laws and prohibitions that are already in place. That is what former DENR Secretary Gina Lopez did, creating new department regulations (administrative orders (AOs), department circulars (DCs), etc.) that pile up new requirements on top of existing ones, resulting in the closure and/or suspension of many mining firms.

The big question now is whether the new DENR Secretary will focus on the rule of law, enforce existing laws and regulations before creating new department orders or seek new laws in Congress. Like the laws regulating small-scale mines and quarrying equally implemented as the laws regulating large-scale metallic, non-metallic mines and quarrying.

This act alone of focusing on the rule of law will be a big improvement in the department and in the national government as a whole. A better situation of course is that many existing regulations that are “out of tune” are abolished, or consolidated with others so that instead of having 10 “out of tunes” AOs, DCs and other department orders, they are consolidated into one AO that is more “in tune” with the times.

See also: 

Saturday, May 13, 2017

BWorld 130, Mobility of goods, capital, and people in Asia

* This is my article in BusinessWorld on May 09, 2017.

One big issue that failed to land on front pages during the ASEAN Prosperity Summit last week is the creeping protectionism, not through rising tariffs but rising non-tariff barriers (NTBs).
Malaysian Prime Minister Najib Razak pointed out during the Summit that NTBs and non-tariff measures (NTMs) from 2000 to 2015 have surged by nearly four times to 5,975 from 1,634. This despite the zero tariff regime for intra-regional trade and the creation of the ASEAN Economic Community (AEC) or the regional single market.

While ASEAN was created initially for defense cooperation against regional communist revolutions in the ’60s and ’70s, it has evolved into a platform for freer movement of goods, people and services, and capital or investment. It was a good development and it should be pursued.

This coming November, the Philippines will host the ASEAN partners’ meeting composed of ASEAN + 6 (China, Japan, South Korea, India, Australia, and New Zealand) + Russia and US. Mr. Putin, Mr. Xi, and Mr. Trump and other leaders will be coming to Manila.

The US exit from the Trans Pacific Partnership Agreement (TPPA) and China-Japan leadership in the Regional Comprehensive Economic Partnership (RCEP) are important developments.

By how much have Asian economies improved based on freer mobility of goods, services, investments, and tourism? Here are some basic data (see table).

Those that have expanded by more than seven times in just 15 years are the following:

1. Vietnam: 11.2x in exports, 10.6x in imports, 9.1x in investments, and 10.6x in tourism receipts.

2. Myanmar: 7.2x in imports, 12.1x in investments, 12.9x in tourist arrivals; also high expansion in tourism receipts.

3. Cambodia: 14.2x in investments, 10.3x in tourist arrivals, and 24x in tourism receipts.

4. Laos: 9.3x in imports, 10.4x in tourist arrivals and 36x in tourism receipts.

5. China: 9x in exports, 7.5x in imports, almost 6x in investments, and 7 to 7.5x in tourist arrivals and receipts.

6. Japan: 7.4x expansion in international tourist arrivals.

7. India: 7.5x in exports, 12.3% in imports, and 7.8x in exports.

The Philippines also experienced modest growth in all the above indicators but not fast enough to create more jobs and businesses to its 104 million people. We should take hard lessons from our two small neighbors with huge economic achievements, Singapore and Hong Kong.

Singapore with only 5+ million people and just 3 1/2 hours by plane south of Manila, has 6x more exports, 11x more FDIs, attracts more than 3x foreign tourists and more than 4x in tourism receipts than the Philippines.

Hong Kong with only 7+ million people and less than 2 hours by plane north of Manila, has 8x more exports, 32x more FDIs, attracts nearly 7x foreign tourists, and nearly 8x in tourism revenues.

What small economies Singapore and Hong Kong have that the Philippines lacks are two important policies: free trade (zero tariff, minimal NTBs) and stricter rule of law (the law applies equally to both rulers and ruled, applies equally to unequal people).

So while we have improved our GDP size and material wealth via freer trade, freer movement of people and capital, we need to free up more.

We should allow more islands and provinces to have their own industrial zones to attract more investments and foreign trade. To have their own international airports and seaports to attract more investments and more tourism.

More modern infrastructure, simpler rules, and freer trade will help the Philippines attain what our developed neighbors have already achieved. Drastic reduction in NTBs and the removal of rice quantitative restriction (QR) and protectionism for instance. And less politics, taxes and bureaucracies, more respect for the law by politicians and bureaucrats.

Bienvenido Oplas, Jr. heads Minimal Government Thinkers and a Fellow of SEANET. Both institutes are members of the Economic Freedom Network (EFN) Asia.

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Seasteading means more rule of law, less government

There is a good presentation by Joe Quirk of the Seasteading Institute at Dubai Freeport Zone a few months ago, Pitch: SustainableFloating Free Zones in Dubai. Below are some photos from his presentation showcasing the power of free market, competition and innovation, and relative freedom from intrusive politicians and the state.

Hong Kong, Shenzhen, and China overall.

Dubai, French Polynesia, global ecozones, and the very important role of the rule of law -- stability and certainty of application of the law to all, absence or minimum arbitrariness.

The speaker and his book, the two pioneers of the Institute, and various models of modular, detachable, floating cities and ecozones. Joe said that they can guarantee prosperity to host countries or economies that will allow these floating ecozones in relatively calmer sea near the shores. If their model is a failure, no worries, they can tow away these structures and move to other economies that are willing to host them.

I have read about the Institute since about four years ago but it was only in January 2015 when I personally heard and saw the presentation by the Executive Director of the Institute, Randy Hencken, during the 3rd Asia Liberty Forum (ALF) in Kathmandu, Nepal. The 2-days conference was sponsored by the CCS (India), Samriddhi (Nepal), Atlas (USA), and a few others.

Randy was very emphatic that the principle behind seasteading and its projects is to create future economies that are founded on the principles of free market, limited government and rule of law. Very lean government whose main function is to lay down very few laws and enforce them without favor and exemptions. Taxes and fees therefore will be few and small. Market competition and innovation will attract residents, business locators, multinational investors and tourists.

Very radical yet practical worldview. Instead of reforming existing countries towards smaller government (the success rate here I think is about close to zero), create small and new territories with some political independence from host countries, to evolve later into new countries.

I just saw in fb that today is Randy's birthday. Happy birthday man.

Friday, May 12, 2017

Energy 95, Al Gore's $15-T carbon tax racket

According to the bible of Al Gore, the UN and other groups/individuals, we should be guilty that we are riding cars, jeepneys, buses, motorcycles, airplanes, boats, other machines that use fossil fuels. We should be riding only cows, horses, bicycles, skateboards other things that do not use fossil fuel. We should be guilty that we have 24/7 electricity mainly from base load coal and natgas power plants. Thus, we should send them more money via carbon tax so that they can "save the planet." Nice but not-so-brilliant global robbery scheme.

The purpose of a carbon tax is to make cheaper energy, cheaper transpo, cheaper manufacturing, become expensive. National governments, the UN and Al Gore will get the extra money, trillions of $ of money and they will "save the planet".

Al Gore, Obama, di Caprio, Richard Branson, etc., they hate fossil-fuel-guzzling airplanes a lot.

Meanwhile, the WB, IMF, ADB, DOF, etc already made a chorus that petroleum is a "public bad" because our use of cars, buses, boats, motorcycles, airplanes are bad for the environment, so they are raising the excise tax of petrol products by P6/liter across the board. Some legislators are not satisfied with this, they want additional tax on petrol products, coal power plants, etc. to get more money to "save the planet."

People who are "non-polluters" are those who have zero demand for fossil fuels like petroleum and coal power plants. Like those who live in the caves, those who only ride horses, carabaos, bicycles or just walk/run only. For their trips to far away provinces and countries, they ride flying witches like manananggals that do not use fossil fuels.

The ecological socialists partner with "cap-carbon" capitalists for a multi-trillion dollars robbery of energy consumers. New racket indeed, but it is bound to fail. People hate more expensive energy, more government/UN taxation.

See also:
Energy 92, Asia retains big coal use, April 07, 2017 

BWorld 129, Open pit mines and the DENR Secretary

* This is my article in BusinessWorld on May 02, 2017.

Department of Environment and Natural Resources (DENR) Secretary, Ms. Gina Lopez, created a stir with the issuance of DENR AO (Administrative Order) No. 2017-10, banning all prospective “open-pit method of mining for copper, gold, silver, and complex ores.”
To be excluded in her AO are existing open-pit mining (OPM) of metals, existing quarries, and prospective quarries for non-metallic products like granite, marbles, and limestone.

The reason for the new order is that OPM by large metallic firms is destructive to the environment and that the method is already being avoided by many countries around the world.

This is not true, for three reasons.

One, almost all forms of deforestation or land conversion from forest to non-forest uses (agriculture, housing, commercial and industrial development, road construction, quarrying of non-metallic products, etc.) create damage to the natural environment and yet only large metallic mining is singled out.

Two, OPM concentrates metallic extraction in a few thousand hectares of land and spare millions of hectares of reservation from further disturbance and extraction.

Three, OPM continues to be practiced in many countries including developed ones like the US, Australia, Sweden, and Canada. Because mining firms and their stockholders earn substantial incomes, their governments get huge tax revenues, and many workers get long-term high-paying jobs.

What Ms. Lopez will likely do among others, if she is confirmed by the Congressional Commission on Appointment (CA) as DENR Secretary:

1. Enforce and implement the closure of 22 large metallic mines and continue hiding the results of their so-called “audit” as basis for such closure order. This is because the Mining and Geosciences Bureau (MGB) conducts a quarterly review of all mining firms based on technical criteria and its 4x a year assessment produce no recommendations of large-scale mine closure while the Secretary’s “audit” seems to be based on emotional criteria, hence it remains hidden.

2. Continue turning a blind eye on plenty of small-scale miners which operate more destructive open-pit mines to extract gold. About 80% of all gold purchases by the Bangko Sentral ng Pilipinas (BSP) are sourced from these small scale mines as gold output by large metallic mines is limited owing to regulations and prohibitions, if not outright closure orders.

3. Enforce and implement DENR AO 2017-10.

4. Create new AOs in the future that will ban and close existing OPM, producing another round of “audits” justifying such closure orders.

To avoid these and other uncertainties in the industry, the CA should consider rejecting her appointment. Let the President appoint a new DENR secretary.

The main purpose of government is to lay down rules and implement laws that apply to all, to institutionalize the rule of law that apply equally to unequal people and players,that exempt no one and rulers are prevented from making exemptions. Giving rulers and in this case a Cabinet secretary, the power to make exemptions is tantamount to the rule of men that despise the rule of law.

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Tuesday, May 09, 2017

Drugs War 6, How PDu30 supporters justify his kill-ambush-poison-bomb policy

I have a fb debate with a physician-friend who supports PDu30's violent style in fighting the drugs war. See again PDu30 language last May 04, 2017: “I told them that once you get involved in drugs I will kill you. I will ambush you, poison you, bomb you, whatever. Steal your wife from you..."

I respect my friend's medical views and his healthcare policy views, he is a brilliant physician and surgeon. But his political views related to the drugs war are lousy, so I am blogging our debate.

I argued foremost that with such explicit message above, PDu30 is exhorting certain government armed personnel and the trigger-happy civilians to conduct any or all of these:

a. state-sponsored murders (PNP, other state officers doing it),
b. state-inspired murders (vigilantes, gangs, etc. doing the murders as inspired by Du30), or 
c. state-tolerated murders (PNP knows the murderers and gangs but little or zero investigation as the murders produce the same result as ordered by PDu30. 

Below are some of his comments which I think are commonly uttered by many supporters and followers of PDu30. Then my reply/comments, slightly revised from the original fb exchange.

1. "were you this vocal during the past admins". No, except the Maguindanao massacre. Under the past administrations -- Cory Aquino, FV Ramos, Erap Estrada, Gloria Arroyo and BSA3/Pnoy -- there were no murders by the thousands on drugs war. Most murders in the past administrations were pol. murders, ordinary crimes, etc. Here we are talking about drug-related murders with explicit exhortation by a President to kill-murder-ambush-poison people suspected to be involved in drugs.

2. "are those purported extra-judicial killings (EJKs) indeed EJKs". PNP data showed that from July 01, 2016 to January 24, 2017 anti-drugs campaign, they killed 2,500+ and so this falls under (a) state-sponsored murders. The 5k+ other murders by vigilantes/gangs but some of them are actually policemen, like the incident in Mindoro in October 2016. Two hooded men killed a woman at night, local police were able to catch the murderers within minutes, and they were active duty policemen from another municipality. 

Since there is legal, judicial killing by the state in the form of death penalty via lethal injection, then those drugs-related murders can be considered as EJKs. 

3. "shy away from drugs, surrender or be killed." Singapore, Malaysia, etc. have the same warning and law for people to "shy away from drugs" but their main tool is legal, due process, not kill-ambush-poison-bomb order from a President who has very little or zero respect for due process.
In SG or MY and other countries, the due process itself that can be worse than death penalty for drug offenses. Being put in courts, reported in media, put in prison, brought to the courts again for another hearing, public reporting, execution if proven guilty -- the humiliation can be worse than death. And that scares potential drug offenders.

4. “i cannot condone killing, my business is saving lives, paano ko singilin yung patay?”
and yet why there is no explicit, categorical condemnation of Du30's explicit, categorical pronouncement of kill-ambush-poison-bomb people in drugs? 

5. “whatever compassion you have for these drug users and pushers, you render to the sick who couldn't afford healthcare.” I have no compassion for real pushers and users, but give them due process, to defend themselves if they are indeed guilty or innocent and simply falsely accused. As mentioned above, SG, MY, ID, etc. also have death penalties for drug offenders, similar to PH laws. The difference is that there is due process there; here, little or no due process, short cut kill-ambush-poison-bomb order as pronounced by the President himself.

6. “we're better off sana with Mar?” This as political paranoia. The thread is about Du30's drug war, not Mar, not Marcos, not any other personality or sector. 

7. "mukhang sobrang sacred sa yo ng due process" because (i) many murdered people accused of being drug users/pushers may be innocent, simply falsely accused. Pero tapos na, dedo na sila. And because (ii) that is what SG, MY, ID, etc are doing to control drug crimes without killing thousands. SG with death penalty but due process to drug offenders has low drugs incidence compared to PH with kill-murder-bomb them policy of Du30.

8. "policy criticism is the same as criticizing the person." Wrong. I like PDu30 infra policy on build-build-build, I like his questioning the UN climate drama, etc. My criticism is mainly on his kill-murder-ambush-bomb people in drugs war. Have allowance for those falsely accused as drug users/pushers and not just murder them. Dead people cannot defend themselves.

9. "your choice is the right one for us." Wrong, it's not me 'ordering' the PDu30 government to "go through due process". Far out. It's the existing laws, the criminal code, the various Republic Acts, that are ordering this and other administrations that they should respect these laws.

10. "di naman pwedeng wala tayong presidente." Another pol. paranoia. I did not make any statement, explicit or implicit, that we should have no President, or that Du30 should be replaced without constitutional process or be bombed to eradication, nada. 

Du30 should stay as elected President until 2022 unless the impeachment case against him in Congress prospers. We focus on Du30's kill-ambush-bomb mentality and policy and it should stop. Go the due-process route. Police to get plenty of evidence against suspected drug pushers and users. If evidence is strong, make arrest, bring to jail, go to the courts, wait for court decision. If innocent, set them free. If guilty, death penalty via lethal injection.

From this Guardian article, "Asked in an interview with al-Jazeera about minors caught up in the violence, Duterte said those cases would be investigated but added that police can kill hundreds of civilians without criminal liability."

This hypothetical case becomes policy pronouncement. "police can kill hundreds of civilians without criminal liability." wow. Implying no need for police training to avoid killing civilians in dealing with criminals. Just kill the criminals, kill the civilians too, no criminal liability, magaleeeng na logic.

For now, nothing can stop PDu30 from his wild and insane remarks on drugs war. Sometime last year he said something like "annihilate 3M drug users... I'll be like Hitler". And last week, he said kill-poison-bomb. Tomorrow he might say "kill-burn-grill-eat their liver". And PDu30 supporters will clap and applaud him.

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