* This is my article in BusinessWorld last Friday, January 25, 2019.
To be frank about it, Dutertenomics is lousy in
macroeconomic management. Inability to sustain fast growth of 6.5% or higher,
inability to control inflation rate below 3%, and inability to control interest
rates below 5% for government bonds.
Compared to the ASEAN 6 (excluding Brunei, Cambodia,
Laos, Myanmar because they have late and incomplete economic data, smaller
economic size), the Philippines is the odd-man-out on three important
indicators: reducing inflation rate, raising GDP growth, and reducing interest
rates via reducing government borrowings and overspending.
In 2018, world oil prices were high until the first week
of October. But ASEAN 6 economies have experienced stable and low, even
declining inflation rate (Malaysia and Singapore) — except the Philippines
because of the various tax hikes under the TRAIN law, particularly oil tax hike
part 1.
Now world oil prices are rising again because of the OPEC
+ Russia deal of oil output cut by 1.2 million barrels a day from January to
June 2019. And Dutertenomics has worsened it by imposing part 2 of oil tax hike
this January, part 3 to be implemented in January 2020.
Meanwhile, the UP School of Economics (UPSE) Alumni
Association will sponsor a talk on Economic Briefing on Friday, January 25,
6:30 p.m. at Astoria Hotel in Ortigas, Mandaluyong City. Speakers will be NEDA
Secretary Ernesto Pernia and DBM Secretary Benjamin Diokno. Both are former
UPSE faculty members. It is open to the public, just pay the buffet dinner fee
on site.
The two speakers will likely be spewing pat-our-back
numbers of good economic prospects. They will likely continue to deny that
expensive energy policy via higher taxes is wrong.
And now another team member of Dutertenomics, the
Department of Trade and Industry (DTI), has imposed a new inflation-pushing
measure, the safeguard duty for imported cement, P8.40 per bag (40 kilos) of
imported cement, starting February 8, 2019.
In a BusinessWorld report, “Gov’t imposes cement
safeguard duty” (Jan. 18, 2019), it said “he (DTI Sec. Lopez) noted that
imported cement surged to more than 3 million metric tons (MT) in 2017 from
just 3,558 MT in 2013, while the share of imports by non-manufacturers or
‘pure’ traders increased to 15% from only 0.02% during the same four-year
period, he noted.”
Let’s do simple math. This means that the share of local
cement producers has increased from 3,558 MT (almost 100% share) in 2013 to
2.55 million MT (85% share of 3 million MT) in 2017. So local cement producers
are already happy with bigger sales and revenues, why should DTI penalize the
average cement consumers here with higher price?
I saw the position of the Subdivision and Housing
Developers Association, Inc. (SHDA) signed by its Chairman Jeffrey Ng and
President Raphael Felix. They argued that:
“Stable, consistent and reliable supply of cement is
necessary. The imposition of cement safeguards or any uncompetitive non-tariff
measure will create supply shortages and result in soaring cement prices,
serving only to protect large multinational corporations and, worse,
disregarding the general public who will bear the brunt of such actions.”
True. As this column tirelessly argues, consumer interest
of cheaper, more reliable products and services (electricity, oil, food,
cement,…) should be paramount over other business and bureaucratic interests of
higher prices, higher taxes.
Dutertenomics is now known for “expensive is beautiful”
policy. Cheap oil and energy is wrong so they made it expensive via higher
taxes under TRAIN law. Cheaper cement via more imports (because demand is
rising fast) is wrong so government must make it expensive via safeguard duty
or tax. Lousy.
-------------------
See also:
BWorld 285, Consumer interests and the Public Service Act, January 23, 2019
BWorld 286, Henry Sy, a hero of Philippine capitalism, January 24, 2019
BWorld 287, Public transport mess and traffic congestion, January 26, 2019
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