Sunday, May 19, 2019

Live interviews at ONE News, election day

Late post of pictures... During the May 13, 2019 mid-term elections, I was one of the invited guests of ONE News. My first live interview was past 2pm, with Atty. Tony Abad as our host and Dindo Manhit of Stratbase-ADRi as co-panelist. Dindo talked more about politics, I spoke more about economics. About 1 1/2 hours interview.


A little break then I was interviewed again for another segment, this time with three hosts -- Daniela Luz Laurel, Jester de los Santos and Tony Abad. I was the only guest and I discussed more econ issues. I spoke about economic issues before the elections, and possible economic agenda of the next Congress this coming July.


Another break, then I was called again for another segment, after the elections are over and partial results for the Senatorial candidates were coming in. Hosts were Daniela Luz, Roby Alampay, and RJ Ledesma (to my right).


Among the things I said, majority of the top 12 were popular not on economic issues but on promises of endless freebies and welfarism. Past 7pm other guests came and substituted me. After dinner, I told the staff that I needed to go home, have to pack my things for a trip to Kuala Lumpur the next morning.

Thank you ONE News, Danie, Roby, Tony, RJ, Jester.

BWorld 328, Innovation, competitiveness and development in Asia

* This is my article in BusinessWorld last Friday, May 17, 2019. I forgot to mention the Institute for Democracy and Economic Affairs (IDEAS, Malaysia) as co-sponsor of the seminar when I submitted my paper to my editor. IDEAS helped a lot in organizing that event.


Kuala Lumpur — I just attended the “Asian think tanks dialogue on Innovation, Competitiveness and Development” in Kuala Lumpur sponsored by the Geneva Network (UK). The event, last Wednesday, was attended by mostly free market-oriented and independent think tank leaders with participants from China, India, Indonesia, Malaysia, Myanmar, Philippines (me), Singapore, S. Korea, Thailand and Vietnam.

The first presentation was “The Policy Ingredients for Innovation: Lessons From Abroad” by Nigel Cory, associate director for trade policy of the Information Technology and Innovation Foundation (ITIF, US). Nigel emphasized that intellectual property rights (IPRs) are essential for innovation because they (1) Create incentives for innovation and help repeat it in a virtuous cycle, (2) Induce knowledge spillovers that help others to innovate, (3) Attract investment and ensure companies can focus on innovating, (4) Promote the international diffusion of technology, innovation, and knowhow, and (5) Boost domestic levels of exports, R&D, and FDI.

The second paper was “The Role of IPR for Asian Development” by Philip Stevens, founder and director of Geneva Network. Philip showed a ranking of Asian economies, from the most to least innovative, in the Global Innovation Index (GII) 2018 Report. I added the GII 2012 Report here to show changes in global ranking and scores of selected economies (see table).



Third paper was “IPR and Access to New Technologies” by Amir Ullah Khan, professor at Maulana Azad National University in India. Amir showed some glaring health data in India: 1 government doctor caters to 11,082 people, 1 government hospital bed to 1,908 people, and 80% of the population do not have significant health coverage.

Then he showed the negative impact of heavy government interventions like drug price control and patent-busting compulsory licensing: “With non-availability of cancer drugs, price controls have had a depleting effect on the efforts towards development of new antibiotics. Of the 18 largest pharma companies, 15 have stalled work in antibiotics due to economic, regulatory and scientific obstacles.”

Fourth and last paper was on “Emerging Policy Threats to Innovation” by Azrul Mohd Khalib, founder of the Galen Center for Health and Social Policy in Malaysia. Azrul discussed the IPR on health polices in four ASEAN countries. In Indonesia for instance, amendments to the Patent Law would require that the manufacture of patented products and use of patented processes should take place in the country. In Malaysia, there is concern on IP protection and enforcement because the government has either issued or threaten to issue compulsory licensing.

The Philippines has shown improvement in global ranking and score but it still belongs to the bottom half in ranking as shown in the above table. Now there is growing appreciation about the importance of innovation and IPR protection.

A BusinessWorld report, “IP protection applications rise 15% in 2018” (March 5, 2019) said, “IPOPHL said filings for patents, utility models, industrial designs, trademarks, and copyright deposits in 2018 totaled 44,461, up 15% from a year earlier. Applications filed online totaled 10,346 last year, up 35%. This covers all IP types, except copyright deposits.”

While many Asian countries appreciate the value of innovation, there seems to be less appreciation on the value of IPR protection. As pointed out by Philip, among the weaknesses in Asian innovation are counterfeiting (3.3% of global trade in 2016, higher in Asia), online piracy, more difficult to secure and defend patents (compulsory licensing, restrictive patentability criteria like in Thailand, average of 16 years to gain a pharma patent).

There should be more understanding and appreciation by governments to promote and protect IPRs. Most physical property values now are predicated by non-physical property values, like shoes with “big check” logo and trademark are more expensive than lesser-branded logo.
------------------

See also:  

Saturday, May 18, 2019

Issues and number of positions, candidates in May 2019 elections

I got these infographics from ONE News page.

First the main concerns of Philippine voters as of last December, from Pulse Asia survey. High inflation, affected salaries, and reducing poverty and joblessness are the top issues for the voters.


During a live interview with ONE News last election day, May 13, host Tony Abad asked me my opinion about the party-list system in Congress. I said their main purpose is to expand government, expand taxes to sustain an expanding number of elected politicians and bureaucracies. The district representatives are supposed to handle the concerns of farmers, fisherfolks, workers, women, disabled people, etc. in their geographical jurisdictions, why create another positions for Congressmen/women to represent these 'marginalized sectors'?


For Senators, 62/12 = 5.1 candidates per Senatorial slot; District Representatives, 633/244 = 2.6 candidates; Governors, 273/81 = 3.4 candidates; Mayors, 3986/1,634 = 2.4 candidates; City and Municipal Councilors, 33,064/13,544 = 2.4 candidates.


The local candidates are more realistic than national and Senatorial candidates. I think this is because many people -- including those who did not run for Senatorial posts -- have national central planning mindsets. They think their 'bright' ideas and biases should be legislated and implemented nationwide, irrespective of cultural and economic differences among municipalities, cities and provinces.

If I were younger and rich enough, I will run for a local position, like a municipal/city Councilor, later as Mayor, have a strong local party that will simplify and cut local taxes and regulations, have few government employees and more private businesses and investors creating more local jobs. Encourage also PPP in some big local projects like a local seaport.

But then again I am not rich so I limit myself with advocacies for less government taxation, regulations and bureaucratism.

BWorld 327, Senatorial elections and economic legislation

* This is my article in BusinessWorld last May 15, 2019.


Kuala Lumpur — During the May 2018 Malaysian elections between former PM Najib and returning PM Mahathir, the latter was an underdog, he promised that if he wins, he would abolish the gross sales tax (GST) of 6%. He won, he did what he promised, and GST went down from 6% in May to zero in June. Result was drastic, across the board price declines and inflation rate went down from 1.8% in May to only 0.8% in June 2018. The average inflation January-May 2018 of 1.7% became 0.6% in June-October 2018.

This is the kind of real inflation-busting policy reforms we wish to see in the Philippines. Last year, 2018, we had the highest inflation rate at 5.2% in East Asia. Second and third highest were Vietnam (3.5% )and Indonesia (3.2%). Malaysia had only 1.0%. Year-to-date 2019, the Philippines still has the highest in East Asia with 3.6% while Malaysia has -0.3%.

Now the 2019 senatorial elections has produced unofficial results and the top 12 so far are Cynthia Villar, Grace Poe, Bong Go, Pia Cayetano, Bato dela Rosa, Sonny Angara, Lito Lapid, Imee Marcos, Francis Tolentino, Koko Pimentel, Nancy Binay, and JV Ejercito.

Just outside the Top 12, as of this writing, is opposition reelectionist Senator Bam Aquino, who is opposed to oil tax hikes under the TRAIN law of 2017, the main cause of inflation spikes in the country. And he may lose.

This means that an important policy alternative to reducing inflation — reverting the VAT from 12% (the highest in East Asia) to 10%, even 8%, in exchange for drastic reduction in exempted sectors — may not be entertained.

The top two senators, Cynthia Villar and Grace Poe, would remain to be good in economic legislation. Senator Villar headed the enactment of the Rice Tariffication Law (RA 11203) while Senator Poe will help enact an amendment to the Public Service Act (PSA), an 87-year-old legal dinosaur that restricts competition from foreign players in five sectors including telecoms and transportation (land, sea, air). We need this kind of economic liberalization that will help reduce inflation and expand mobility of goods and people/services across the country, across the globe.
  
Philippine Congress 2016 to 2019 has produced plenty of local laws. In particular, from March to April 12, 2019, Congress passed 38 new laws, only 7 of which are of national application (18%) while 31 are local or franchise laws. Some 14 laws are not shown or missing in both the Senate and House of Representatives list.


From the perspective of tax-conscious and regulations-wary citizens, three of the seven may be good laws — 11234, 11239, and 11261. The other four are either neutral or would mean more bureaucracies, like 11235.

We hope to see a new set of senators and representatives who are aware of the defects of high taxes, economic nationalism and restrictions. In the process, they will pass legislation that can substantially reduce inflation and interest rates, and propel more economic growth and job creation.
--------------

See also:  

May 2019 elections, dynasties strengthened and defeated


I agree about 90% of this assessment by Prof. Ronald U Mendoza, Dean of the Ateneo School of Government. Reposting, then my own commentary below.
---------------------

Fat Dynasties and Dynasty Slayers in 2019: QUICK UPDATE
May 16 at 7:51 AM · Quezon City

The recently concluded 2019 mid-term elections demonstrate the staying power of dynastic incumbents, which likely affords them more control over the domestic economy to help fuel their continued expansion and staying power. It is a vicious cycle that traps many of our provinces in poverty and underdevelopment. Nevertheless, among our key cities and some provinces, the concentration of political power can be countered by key institutions of our democracy—notably the media, academe and civil society writ large—in these places there appears a glimmer of hope and a hunger for alternatives. The attached update outlines some of the gains and losses from our recently concluded elections.

Competition against dynasties

• Vico Sotto defeats Bobby Eusebio, of the Eusebio fat dynasty of Pasig City. Roman Romulo beats Ricky Eusebio for Congressional seat.

• Kid Pena defeats former VP Binay for Congressman of Makati City.

• In the provinces, Tings of Tuguegarao (Tings lose Tugegarao City Mayor and Congressional positions but keep Governorship.) and Ecleos of Dinagat Islands expected to suffer defeats. (Kaka Bag-ao expected to defeat Benglen Ecleo.) Osmenas expected to lose Cebu City Mayor position and Senate bid. However, Gwen Garcia expected to make a comeback as Governor.

• Estrada/Ejercito dynasty suffers losses in Manila (Erap expected to lose to Isko for Mayor), San Juan (Janela Estrada expected to lose to Zamora for Mayor) and the Philippine Senate (both Jinggoy Estrada and Jayvee Ejercito fall short of the “magic 12” at the time of writing this article).

Further concentration of power among very fat dynasties

• Meanwhile, the Cayetanos are expected to become a fatter dynasty in Taguig City, and the Dutertes are also expected to become slightly fatter in Davao City.

• Fat dynasties also remain entrenched in the following provinces, with expected victories by already large political clans. This outline focuses on the top positions only for now given what’s available. Here are the likely victors:

¬ Lanao del Sur -- ADIONG CLAN: Governor, Vice Governor, Congressman;
¬ Lanao del Norte -- DIMAPORO CLAN: Governor, 2 Congressmen;
¬ Masbate -- KHO CLAN: Governor, Vice Governor, 2 Congressmen;
¬ Maguindanao -- MANGUDADATU CLAN: Governor, 2 Provincial Board Members, Congressman (Note: Governorship is contested by two Mangudadatus;
¬ Sulu -- TAN CLAN: Governor, Vice Governor, Congressman;
¬ Western Samar -- TAN CLAN: Governor, Vice Governor, Congressman (Note: Edgar Sarmiento of LP is leading the other district where another Tan is potential Congressman);
¬ Isabela -- ALBANO CLAN: Governor, Provincial Board Member, Congressman / DY CLAN: Vice Governor, Provincial Board Member, Congressman;
¬ Cavite -- REMULLA CLAN: Governor, Provincial Board Member, Congressman / REVILLA CLAN: Vice Governor, Congressman;
¬ La Union -- ORTEGA CLAN: Governor, Vice Governor, Provincial Board Member, Congressman;
¬ Ilocos Sur -- SINGSON CLAN: Governor, Vice Governor, Provincial Board Member, Congressman – Note:

Possible additional Congressman in Ronald Singson who is trailing DV Sevillano by around 3000 votes at the time of writing this article….

*This draws on various preliminary reports on the 2019 mid term elections, as well as from this paper: Mendoza, Ronald U. and Banaag, Miann and Yusingco, Michael Henry, Term Limits and Political Dynasties: Unpacking the Links (March 20, 2019). ASOG Working Paper 19-005 . Available at: SSRN: https://ssrn.com/abstract=3356437.
---------------

Meanwhile in Pangasinan (biggest voting population in Northern Luzon), the Espino family rules big time. Initial leader is Amado Espino Jr., a former Police General under FVR term, he became provincial Governor for 3 terms. Then the sons and wife follow. In this May 2019 elections:

Governor: ESPINO, AMADO III (son, 2nd term now)

Congressman, 2nd district: ESPINO, JUMEL (son, former Mayor of Bugallon), defeats Raul Sison, who was their pol ally for many years as provincial Board Member.

Congressman, 5th district: ESPINO, AMADO JR. (father, former Governor) defeated by Guico, Ramon III?

Bautista, Mayor: ESPINO, AMADEO (son?)
Vice Mayor: ESPINO, JOSEPH (son or grandson?)

Bugalon, Mayor: ESPINO, PRISCILLA (wife).

In Makati, as a voter there, I celebrate the defeat of former VP Jojo Binay for Congressman in District 1, and victory of his former Vice Mayor Kid Pena. The family has become greedy with political power.

For Mayor candidates were daughter and incumbent Mayor Abby, challenged by former Mayor and son Junjun Binay (Abby won).

(photo from abs-cbn)

For Congressman 2nd District is Luis Campos (Abby's husband, 2nd term as Cong.).
For Cong. 1st District Jojo Binay (defeated).

Another daughter Sen. Nancy Binay might win her 2nd term.

In 2013, the undisputed #1 political brand in the PH was the Binay family.
VP Jojo Binay, Senator Nancy Binay (daughter), Makati Mayor Junjun Binay (son), Congresswoman 2nd District Abby Binay (daughter).

Exec (VP), legislative (Senate and HOR) and LGU (city Mayor) -- Binay has presence.

This 2019, an emerging #1 political brand is the Villar family led by former Senator Manny Villar (PH's richest man in 2019, Forbes list of $ billionaires).

#1 Senator, Cynthia Aguilar-Villar (wife)
Las Pinas Congresswoman, Camille Villar (daughter)

(2nd to 4th: Manny, Cynthia, Camille; photo from Manila Times)

Las Pinas Mayor, Imelda Aguilar (sis in law?)
Las Pinas Vice Mayor, April Aguilar (sis or daughter in law?)

DPWH Sec., Mark Villar (son).

Executive (Sec.), Legislative (Senate and HOR), LGU (city Mayor, vice Mayor) – Villar-Aguilar has presence.

Tuesday, May 14, 2019

BWorld 326, Low growth, high taxes as election issue

* This is my column in BusinessWorld yesterday, May 13, 2019.


In election years, the Philippines’ GDP growth rate is always above 6.5% – except in 2001 (terrorist attack in the US, Gloria Arroyo anemic growth) and 2019. Philippines’ growth trajectory is on a downhill: 6.9% in 2016, 6.7% in 2017, 6.2% in 2018, and only 5.6% in the first quarter of 2019. Growth deceleration since Dutertenomics was invented is further confirmed.

In 2017, all East Asian economies grew faster than their 2016 levels – except the Philippines. And in 2018 when Philippine growth further decelerated, three neighbors managed to grow faster than their 2017 levels – Vietnam, Indonesia, and Thailand. Election years in the Philippines were selected in table 1. 



What explains consistent growth deceleration under Dutertenomics?

To help answer this question, recall this equation in basic macroeconomics:

GDP = household consumption (C) + government consumption (G) + private investment (I) + Exports less Imports (X-M).

So the two main reasons for our growth deceleration are the following.

One, growth of C (biggest component at 57% of gross national income [GNI] in 2017-2018) has been declining, from 7.2% in 2016 down to 5.9% in 2017 and 5.6% in 2018. The series of murders in the Duterte drugs war since the 2nd half of 2016 to 2017 contributed to this, many people were scared to go out especially at night. Then the TRAIN law implemented in 2018 resulted in huge spike in inflation, people were spending less.

Two, growth of I (24%-26% of GNI in 2017-2018) is decelerating, 25% in 2016 and higher in previous years, down to only 9% in 2017, 14% in 2018, 7% in Q1 2019 (see table 2).



A “Joint statement on Q1 2019 GDP growth Economic Team (NEDA-DOF-DBM)” was issued last Friday.

“The budget impasse in Congress during the first three months of the year set off a spending cutback, which, in turn, stifled economic activity… This resulted in underspending of about P1 billion pesos per day, equivalent to P80-90 billion in disbursements for the first quarter of 2019. Were it not for this, the economy could have received a tremendous boost from much higher state spending… economy should have grown by at least one percentage point higher, at 6.6 to 7.2 percent in the first quarter, if the 2019 fiscal program had been approved on time.”

Dangerous philosophy, wrong prognosis by this administration. Why?

One, more state spending which requires more state taxation, more public borrowings would mean more growth? Wrong. As shown in table 2 above, growth deceleration in C and I, decline in private consumption and private investments, are the main reasons why overall GDP growth has been declining from 2016 to Q1 2019.

Two, G is small, only 9% share of GNI, and even a high G growth of 13% in 2018 failed to uplift the overall growth that year. Populist if not socialistic philosophy of more state spending, more taxation, is an ideological dinosaur that persists until today.

It is good that independent and opposition candidates like Serge Osmeña are explicit in campaigning for abolishing the oil tax under the TRAIN law as an election issue.

Significant tax cut will increase consumer confidence, C will pick up and it will pull up overall growth. TRAIN law’s cut of personal income tax (PIT) was a good move but the various tax hikes were not, they erased and negated the good will in PIT cut.

The pending TRABAHO bill (previously called TRAIN 2 bill) has been causing investment uneasiness, among the reasons why growth of I has decelerated to only 5% in Q4 2018, 7% in Q1 2019.

Hoping that the victorious senatorial and congressional candidates will introduce VAT rate cut from 12% (highest in East Asia) to 10%, even 8% in exchange for drastic reduction in exempted sectors.
--------------

See also:  

IPR and Innovation 43, Recent news on India, China and HK on IP

It is somehow easy for governments to initiate disrespect of intellectual property rights (IPR), when the history and philosophy why government was created in the first place, is to protect the citizens' three basic freedom and rights -- right to life, right to liberty, and right to private property.

Three recent news in Asia point to this continuing problem. This illustration/image is from http://www.bdu.ac.in/cells/ipr/
-----------

1. India is emerging as an important producer of counterfeit goods
Apr 21, 2019, 02.11 PM (IST)  G Srinivasan

… the European Union Intellectual Property Organisation (EU-IPO)… 2016 data, an updated report jointly released in the third week of March, estimated that the volume of global trade in counterfeit and pirated products could amount to as much as a whopping $509 billion. Even as this constitutes up to 3.3 per cent of world trade, it excludes domestically produced and consumed counterfeit and pirated products or pirated digital products being distributed via the Internet.

the study traces the dramatic sale of counterfeit and pirated goods from virtually all economies in all continents, with China and Hong Kong as the biggest conduits. In addition, several Asian economies, including India are also important suppliers of counterfeit products, despite a role that is significantly lesser than China’s.

2. China is being hyped as new haven for enforcing IP rights, but let’s not get carried away
April 25, 2019 11.05pm AEST

Before foreign firms trust the IP litigation hype about China, they need to look at the big picture. A national IP system comprises more than just win rates. The length of time required to reach a ruling and the level of damages awarded are important, too. Jaguar’s experience is dramatically different to certain other foreign firms: Honda, for instance, took 12 years to win a similar case in 2016 concerning the design of its CR-V SUV. The Japanese company only received ¥16m (£1.8m), a sliver of the ¥300m it claimed it was due.

According to the US-based Global Innovation Policy Centre’s 2019 index of IP system rankings, China scores a lukewarm 21.5 out of 45 – miles behind the top-ranked US (42.7), UK (42.2) and Sweden (41.8).

3. Innovation Banned. The Case Of Hong Kong And Other Asian Countries
Apr 24, 2019, 12:25pm   Lorenzo Montanari

The ban of e-cigarettes is back in the news in Asia, this time partnered with its disastrous partner, “plain packaging.”… In 1992, Singapore banned the import, manufacture, and sale of chewing gum, reportedly because vandals were sticking it over door sensors on new Mass Rapid Transit (MRT) trains…

Hong Kong once had a common sense approach to vaping - waiting for evidence, one way or the other, on efficacy and potential negative side effects. But, even now that we know that vaping is at least 95% safer than cigarette smoking and much better than nicotine replacement gum (which is legal in Hong Kong), Hong Kong has decided to join Singapore in banning vaping.

Singapore has now intensified its war on smokers, not just by banning the one credible alternative to smoking, but now also passing “plain packaging” for cigarette containers… removal of branding and trademarks from tobacco products, Singapore has also conducted a public consultation regarding sugary soft drinks.
-----------------

See also: 

Monday, May 13, 2019

BWorld 325, Power shortage as election issue

* This is my column in BusinessWorld last Friday, May 10, 2019.


Until last week May 3, another yellow alert has been issued by the National Grid Corp. of the Philippines (NGCP) because of insufficient reserves due to the following: (a) forced outage due to earthquake of GN Power Mariveles (316 MW), (b) unplanned/forced outage of SEM Calaca U2 and Team’s Pagbilao U1 (582 MW), and (c) derated/reduced capacity of five power plants (736 MW). Total 1,634 MW unavailable, that’s big.

These yellow alerts and occasional red alerts (which require rotational blackouts) have been going on since around mid-March this year — and have become an election issue for some sectors. This week we are lucky with thick clouds daily and occasional rains, meaning power demand is low. Mid-terms election on Monday, we pray that the thick clouds will stay.

Numbers below will further illustrate how weak and unreliable the Philippines’ power sector is — which explains the recurring power shortages and, in the process, higher power prices. For instance, these three socialist economies have shockingly more power capacity per person than supposedly capitalist Philippines: Vietnam has 2x, Laos has 5x, and N. Korea has 6x (see table).


Official DoE data show that the Philippines’ installed capacity was 21.42 GW in 2016, 22.73 GW in 2017, and 23.82 GW in 2018. Nonetheless I use the CIA numbers for comparison purpose.

Four recent stories in BusinessWorld would give more contexts to this situation and I quote portions of them.

1. Power panel passes amendments to EPIRA IRR (May 3):

“THE Joint Congressional Power Commission (JCPC) on Thursday approved amendments to the implementing rules and regulations (IRR) of the Electric Power Industry Reform Act Law (EPIRA) to facilitate the granting of benefits to host communities.”

2. Invitation still open for Chinese merchant power plant builders — Energy dep’t says (May 3):

“We asked both Japan and China to help us put up a merchant plant and this is part of an MoU that we successfully signed in China.”… Aside from the China-funded coal-fired power plants, the DoE has encouraged private sector investment in… liquefied natural gas (LNG).”

3. On credit ratings upgrade and power shortage risk (May 6, opinion piece by Romeo L. Bernardo):

“Chair Devanadera’s chart shows that there are 454 Power Supply Agreements Requiring Further Action, involving 150 power plants. How long does an evaluation take and how many technical people has the Energy Regulatory Commission assigned to evaluate? Answer: 90-180 days; 14 technical personnel.

The ERC can be more faithful to market based competition principles… by moving away from detailed cost based review of every PSA… a simple validation of adherence to Competitive Selection Process rules to ensure arms length competitive contracting would be a fairly quick and straightforward alternative approach.”

4. ERC’s competitive selection rules expected in 30 days (May 7):

“…final rules on competitive selection process (CSP), a scheme that chooses the lowest-cost power for consumers… require the generation companies to shoulder the cost of unscheduled plant outages…. a template for a power supply agreement (PSA) … provision on replacement power.”

Story #1 is bordering on a risky proposal by some sectors to amend the EPIRA law of 2001. I say ‘risky’ because once EPIRA is amended, the probability of that law becoming worse — more state-control of power generation and supply vs better/market competition — becomes 75-25.

Story #2 is eliciting another anti-China communist government sentiment here. The communist bully that steals Philippines territory at the WPS/SCS is being invited by the Duterte government to build more dams, airports, telecoms, power plants, other sectors that are strategic for national security.

Opinion #3 offers good and practical proposals so that ERC should move away from a micro-managing central planner and further relax regulations, so that we should have more new and big power plants today, not three to five years from now.

Story #4 is good, CSP rule is long overdue and having a template for all PSAs is important. If power supply remains tight, the cost of replacement power will be high so ERC should further deregulate pricing by gencos. Having more new reliable power sources at WESM will remedy this.

We should stay the course of more market players and competition, less government regulations and over-bureaucratism of power supply approval and pricing.
----------------

See also:  

Cool, libertarian Health Minister of Norway

The new Health Minister of Norway rocks. Being a libertarian or classical liberal, she knows the value of individual freedom and choice. Heavy smoking, drinking, skyjumping, downhill cycling,  head-buttin the ball in soccer, etc. are dangerous to one's health, people know that, but they do it anyway.

So long as people are informed of the dangers of their actions and inactions, of imbibing something, governments should not push being a huge nanny "protecting people from themselves." 

Again, gun control, price control, fare control, wage control, rent control, smoking control, drinking control, etc. -- refers only to one thing: more state command and control. 

Some news reports here.
--------------

1. This Health Minister Says People Should Smoke, Eat And Drink As Much As They Want
David Nikel, Contributor  May 11, 2019, 02:39pm

“I think people should be allowed to smoke, drink and eat as much red meat as they wish”, Listhaug told NRK. “The government can provide information, but I think people in general know what is healthy and what is not.”

Listhaug, who admits she is herself an occasional social smoker, also said she is increasingly sympathetic towards smokers. “They almost feel they have to hide away, and I think that's stupid. Although smoking is harmful, older people have to decide for themselves what they do.”

The outspoken right-wing nationalist is widely tipped to take over the leadership of Fremskrittspartiet (Progress Party) from Siv Jensen, Norway’s current Minister of Finance, in the years to come.

The party describes itself as “a libertarian party that believes in freedom for the individual, lower taxes, prosperity and a limited government that empowers people.”

2. Smoke, drink and eat what you want, Norway's public health minister says
FRI, MAY 10, 2019 - 10:50 PM

In a statement of her own, emailed Friday, Ms Listhaug said, "The government believes that people have to take responsibility for their own life, but the government has to make sure that everyone can make healthy and informed choices."

"The number of daily smokers has declined sharply since 2000," Ms Listhaug said. "This confirms that the Norwegian tobacco policy and control strategy works."

Ms Listhaug said people who smoked felt like "pariahs" in Norway, and that she would not be the "moral police" in government. She echoed comments made by Austria's far right, defending freedom of choice in opposing anti-smoking legislation.

3. Let people smoke, drink and eat red meat - Norwegian health minister
7 May 2019

4. Go Ahead And Smoke, Drink And Eat Whatever You Want: Norway's Public Health Minister
by Tyler Durden  Sun, 05/12/2019 - 07:45

Sunday, May 12, 2019

BWorld 324, MORE price declines, less Dutertenomics

* This is my article in BusinessWorld last May 8, 2019.


As the mid-terms election approaches, we see and hear more “good economic news” coming from the administration. The goal is to dupe the voters into voting the administration senatorial and congressional candidates. Numbers below show that the administration is spewing half-truths.

1. Lower inflation. The April 2019 inflation is 3.0%, dubbed as the “lowest inflation since January 2018” and hence, good news. This is only half of the story. The other half is that even such “low inflation” is actually the highest among the more mature economies with updated numbers in East Asia, both year to date (ytd) 2019 and full year 2018. Dutertenomics should be ashamed of this (see table 1).


2. Ratings upgrade. S&P’s ratings upgrade for the Philippines to BBB+ was credited to President Duterte and the leader of the Dutertenomics team, the DOF. Again, that’s only half of the story. The other half is that while the Philippines suffered lots of mediocre if not negative outlooks under the Ramos, Estrada and Arroyo administrations, things reversed to lots of upgrades under the Aquino administration. Dutertenomics simply inherited the momentum (see table 2).


3. Sectoral deterioration. Using 2010 (last half-year of Arroyo and start half-year of Aquino administrations) as reference year, we compare numbers over the past four years.
  
a. Business confidence has been declining.

b. Ease of doing business global ranking improved, then declined.

c. Current account balance as share of GDP has been deteriorating to high deficit.

d. Public debt has been rising big time in the last two years.

e. Public debt/GDP ratio declined big time 10% from 2010 to 2016 or just six years, then the ratio has stopped declining under Dutertenomics.

f. Power prices at the Wholesale Electricity Spot Market (WESM) declining then increased last two years. TRAIN law’s oil tax hikes affected prices of oil- and coal-power plants (see table 3).


Dutertenomics’ various tax hikes – oil, LPG, coal, sugary drinks, tobacco, etc. – is the main culprit why the Philippines has the highest inflation rate in East Asia. Also a rise in electricity prices, amid souring business confidence.

Voters should remember these and penalize the Duterte/Hugpong candidates. Support independents like Serge Osmeña. The market-oriented reforms for efficiency (MORE) is to reverse the irrationality of many tax hikes to finance huge current and future over-borrowings by Dutertenomics especially for China ODA.
-----------------

See also:  

My Mama on Mother's day

Today is Mother's day, my other sister in Negros Occ. posted these old photos of our mother (she died more than 3 years ago at roughly 80 yo). Mama Consuelo is beautiful. Below left with Manang Bebeth (2nd child), below right with Neneng Marycris (3rd child). I'm the 4th in the family.


With Manang Bebeth's only child, Marvien. Mama with Guen Alas, Neneng's eldest child.


Mama, Manong Nestor (our eldest, he passed away about 14 years ago due to cancer), Papa (he died two years ago), Manang Bebeth, Marvien.


Manong, Mama, Papa, Neneng, me, and Marvien.


Thank you Ma. Thank you Pa....

Tuesday, May 07, 2019

BWorld 323, MORE smart cities… with sufficient water

* This is my article in BusinessWorld yesterday, May 06, 2019.


Metro Manila is expanding fast with 13+ million residents, plus an estimated 2+ million from surrounding provinces going to the big city for work, studies, other transactions. Big populations lead to big economic opportunities but also big problems like heavy traffic congestion and recently, insufficient potable water and power shortage.

Asia hosts among the biggest cities in the world, some of which show that having a big population does not automatically means big problems. Tokyo for instance has nearly 3x the population of Metro Manila but people there do not experience horrible daily traffic congestion or water and power shortage.

But most other big cities in Asia generally experience what people in Metro Manila experience – like Delhi and Mumbai, Dhaka and Chittagong, Karachi and Lahore, Jakarta and Bekasi.


Discussions of developing “smart cities” to distinguish developing an entire country have surfaced in recent years. The purpose is to narrow down policy reforms in smaller geographical areas so that program implementation will be faster and more customized.

On this subject, the Friedrich Naumann Foundation for Freedom (FNF) is participating and hosting a panel discussion on “Smart Cities and Startups — Opportunities for Business Innovation” at the huge, 3-day “Jeju Forum for Peace and Prosperity” conference this coming May 29-31, 2019, at the International Convention Center Jeju, South Korea.

The FNF panel will be on Day 2 (May 30) and its speakers will explore challenges and opportunities that startup companies are facing and discuss strategies to create enabling ecosystems where they can thrive. Policy reforms would cover national and local regulatory framework, role of city governments and policies or regulations to support business innovation of startups, and drawing a line between freedom to innovate and freedom to privacy in the use of open data.

Meanwhile a big group of local business organizations (MAP, MBC, PCCI, PhilExport, etc.) and foreign chambers of commerce (US, Canada, EU, Japan, Aus-NZ, Korea) have issued “Statement on Proposed Reforms for the Philippine Water Sector” last April 22, 2019.

They pointed out two things among others and I agree with them: (a) “The megacity’s overdependence on the sole Angat Dam for Metro Manila’s water supply requirements has proven to be folly”, and (b) 20 years water privatization has been successful. They proposed the following measures:

1. Fast-track the construction and development of new water sources for Metro Manila.

2. Introduce water conservation and promote water efficiency.

3. Develop a Water Security Masterplan for Metro Manila and the entire country based on sound science and strengthen the National Water Resources Board.

4. Rehabilitating the country’s wetlands, water bodies, and supporting ecosystems.

Good proposals. I want to emphasize that our big problem yearly is not lack of water but too much rain water, too much flood especially during the months of July to September. But we do not have enough dams and lakes to store the huge volume of water, they just go straight to the sea.

The private sector should be allowed and encouraged to own private dams and man-made lakes, like mined-out big open pit mines. They can use the raw water for their community and corporate needs, and sell water to private water utilities and hydro-electric power plants. This should be among the market-oriented reforms for efficiency (MORE) that can help “smart cities” and business start ups so that these smaller units can prosper further.
----------------

See also:  

China Watch 33, US' 25% tariff on $200 B of CN exports

The China communist government is reeling again, not just from Trump challenge at the WPS/SCS but this time at his announcement yesterday of 25% tariff on $200 B of China exports starting this Friday. The CN economic bubble will burst big time?


Related news reports:

1. Trade Deal Dead: Trump Says 10% China Tariff Rising To 25% On Friday, Another $325BN In Goods To Be Taxed
by Tyler Durden Sun, 05/05/2019 - 19:39

2. Markets slide after Trump threatens to dramatically increase China tariffs
Martin Farrer and Richard Partington    Mon 6 May 2019 18.04 BST

3. US accuses China of backtracking on trade deal
7 May 2019

I was expecting that many Trump-haters would jump on this. NOT because they have suddenly become free traders and zero tariff advocates, but because they want to further pacify the CN Communist- protectionists. And they wish that beloved Obama-Hillary team will do that continued pacification. Seems they were silent on this.

Only Trump can do this. His balls are a lot sturdier than the balls of Obama, Biden, Sanders, etc combined. He challenged Russia, Saudi and OPEC who want high world oil prices by cutting their combined output, Trump deregulated US energy policies to help jack up US oil and gas production. He challenged global ecological socialism by the UN and big environmentalists by pulling out of Paris Agreement. He challenged NATO countries that they should send their billions of $ yearly for their own protection in Europe. Now he's directly confronting China communist protectionists.

Yesterday, end-of-day stocks in AsPac, Shanghai -5.6%, Shenzhen -6.8%.


Then the censorship and media blackout by the Beijing government.

China's Bull Market Suddenly in Peril
May 6, 2019, 11:41 AM GMT+8 Updated on May 6, 2019, 3:45 PM GMT+8

"Posts and stories about Trump’s twin pronouncements were deleted from Weibo, according to Weiboscope, a project backed by the University of Hong Kong that tallies deleted posts and censored words on the Twitter-like service. And several users reported that attempts to post screenshots of the American leader’s tweets to Tencent’s WeChat were blocked."

Trump challenged the EU countries to a zero tariff deal including agriculture, EU said no, showing how protectionist they can be. Trump challenged CN for mutually low if not zero tariff, CN said no naturally, so this trade challenge.

Ultimately we should go to a world of zero tariff, very little non-tariff barriers.
----------------

See also:

Saturday, May 04, 2019

BWorld 322, MORE transparency in China deals

* This is my column in BusinessWorld yesterday, May 03, 2019.


Three China-related business stories in BusinessWorld last week caught my attention, short quotes from them are shown:

1. PHL, Chinese firms sign $12-B in business deals (April 27):

“THE Philippine business delegation and Chinese companies on Friday signed 19 deals worth $12.165 billion… This included one contract agreement, three cooperation agreements, two purchase framework agreements, and 13 Memoranda of Agreement (MoA) or Understanding (MoU).”

2. ALI plans to develop country’s first Sino-PHL industrial park (April 29):

“AYALA LAND, Inc. (ALI) is riding on the influx of Chinese firms coming to the Philippines as it plans to acquire up to 200 hectares of land in Central Luzon.”

3. Udenna-China Telecom deal may prompt more Chinese firms to enter Philippines (April 29):

“THE $5.4-billion deal signed last week by Udenna Corp. and subsidiary Chelsea Logistics Holdings Corp. with China Telecommunications Corp. for a telecommunications joint venture may prompt more Chinese firms to pour investments in the Philippines.”

No details were given in story #1, the Ayala conglomerate is also cashing in on growing China investments in story #2, and Udenna seems to be the main entry point for more China investors.

Is the Philippines slowly being swamped by China capital, China imports, China tourism and visitors?

I checked relevant data to help me answer this question. On merchandise exports, China is the fourth market of the Philippines in 2018 while its dominance as #1 source of imports is further cemented in 2017-2018 (see table 1).


In foreign direct investments (FDIs), investors from China catapulted to #4 in 2018 with nearly $200 million, from below $30 million in 2016-2017. Investors from Singapore, Hong Kong and Japan remain the top sources of long-term capital in the Philippines (see table 2).


And in tourism, Chinese tourists are inching fast with nearly 1.3 million visitors in 2018, hoping to dislodge S. Korean visitors in a few years while visitors from the US including Filipino-American balikbayans have also breached the 1 million level (see table 3).


China is known for large-scale secrecy in business and political numbers, there is a tendency to understate or overstate certain figures. The imports from China figures, while already big, should be much bigger as it is common knowledge that large-scale smuggling occurs until now and most of the goods easily land in Divisoria, Quiapo, Baclaran, and other big mass-market areas.

The huge number of undocumented and un-permitted Chinese workers in the Philippines is another issue, especially in the Philippines overseas gaming operations (POGO).

The market-oriented reforms for efficiency (MORE) needed is to have more transparency in the actual number of workers, tourists, businesses, investments, imports from China. The DOF, DOLE, SEC, etc. are known to be strict with Filipino businesses but they seem to be grappling for regulations and taxation of these Chinese enterprises. President Duterte’s favoritism with China and Xi Jinping need not be followed by the line agencies. More on China later.
---------------

See also:  

Friday, May 03, 2019

Energy 124, US, Russia, Saudi oil production

US oil production keeps rising, now at 12.3 million barrels per day (mbpd); good job, Trump. Putin and Russia are angry since their main business is exporting oil and gas they hate more competition. From this angle alone, the Trump-as-Putin-puppet is an idiotic moronic proposition at the onset.


Russia oil production is 11.05 mbpd max, Saudi Arabia oil production is 11.1 mbpd max, now down to only 9.8 mbpd because of the OPEC + Russia collusion on oil output cut.

https://tradingeconomics.com/russia/crude-oil-production
https://tradingeconomics.com/saudi-arabia/crude-oil-production

Oil prices should go down, world oil production should go up, and governments should not over-tax oil production and trading.

Meanwhile among the recent stories, May 02, 2019:
https://www.cnbc.com/2019/05/02/oil-market-us-sanctions-on-iran-venezuela-crisis-in-focus.html

https://www.zerohedge.com/news/2019-05-02/trump-wins-oil-prices-plunge-opec-tweet-russia-production-surprises
---------------

See also:

BWorld 321, IPR and MORE investments

* This is my article in BusinessWorld on May 1, 2019.


A report in BusinessWorld reiterated the value of IPR protection: “PHL remains out of US IPR watch list for 6th year’ (April 27, 2019)

“FOR the sixth straight year, the Philippines was not included in the US government’s watch list of countries with weak protection of intellectual property rights (IPR)… after being included from 1994 through 2013,” the report said in part.

The government’s Intellectual Property Office (IPOPHL) also announced in its website: “Finally, Philippines No Longer in the Notorious Markets List of the USTR” (April 25, 2019) — of which I quote in part, “After being on the list for the last six (6) years, the Philippines is completely gone in the list of Notorious Markets of the Office of the United States Trade Representatives (USTR) as reported in the Out-of-Cycle Review of Notorious Markets dated December 13, 2012.”

Good news then. Last week, April 26, was World Intellectual Property Day as declared by WIPO with the theme, “Reach for Gold: IP and Sports.”

Also that day, 77 independent think tanks and institutes (including Minimal Government Thinkers) from 39 countries signed the “Open Letter to WIPO Director General Francis Gurry,” initiated by the Property Rights Alliance (PRA, USA). The letter said:

“When IPRs are protected, markets are formed that encourage innovators to compete to make the next breakthrough product consumers demand — be it training equipment, a smart sensor, or a new media platform. In this way, athletes and innovative markets are sure to always go faster, stronger, higher! Neither innovation nor sport can exist without enforceable property rights.”

More IPR protection indeed facilitates and encourages more investments. Table below is constructed from three different sources: (1) International Property Rights Index (IPRI) rank: PRA’s IPRI 2018 Report, (2) Foreign direct investment (FDI) inward stock 2017: UNCTAD, World Investment Report 2018, and (3) Population 2017: IMF, World Economic Outlook 2019. The last column is derived by this paper.

Global ranking in IPR protection and innovation in East Asia


More property rights protection, more investments. Japan is the exception here because Japan is the main source, not destination, of FDIs in many countries abroad. On May 15, the Geneva Network (UK) will hold a one-day seminar and meeting of Asian free market think tanks, institutes and academics doing work on IPR protection and trade to be held in Kuala Lumpur.

And on May 24 or 25, PRA (US) will hold a side event on IPR and investment promotion in Sydney during the 17th meeting of the World Taxpayers Association (WTA) conference and the 7th Friedman conference by the Australia Taxpayers Alliance.

From the IPRI report, the per-capita income in countries with robust property rights protection is 20 times greater than those in countries with weak protections. The market-oriented reforms for efficiency (MORE) are to further strengthen private property protection, physical or intellectual — by legislation or executive action.
----------------

See also: