Friday, May 31, 2019

BWorld 331, How governments expand

* This is my article in BusinessWorld last May 24, 2019.

SYDNEY — This will be one of the topics at the 7th Australian Libertarian Society (ALS) Friedman Liberty Conference + World Taxpayers Association (WTA) Conference from May 23-26 in this city. The event is mainly sponsored by the Australia Taxpayers Alliance and co-sponsored by other free market institutes like the Property Rights Alliance (PRA, USA).

On Days 3 and 4, May 25-26, there will be four simultaneous panel discussions to accommodate many topics and speakers from many countries. I will be one of the four speakers in the panel on “Growth of Government” on Day 3 and I want to explore sub-topics like (1) Are all governments expanding endlessly? (2) If Yes, how fast and if No, since when? And (3) Are government debts rising endlessly?

To help me answer these and related questions, I checked some data from the IMF’s World Economic Outlook (WEO) database. The numbers show that for question #1, the answer is No. Of the 19 countries selected, those with (a) rising government spending as share of GDP are France, UK, Australia, US. In Asia, the socialist economies of China and Vietnam, India, and S. Korea. Those with (b) declining percentages are Germany, Canada, New Zealand; in Asia are Japan, Thailand, Taiwan and Singapore. The rest have fluctuating percentages, like the Philippines.

With this mixed result, I checked another set of numbers, government debt as share of GDP. The numbers here refer only to actual debt and do not include contingent debt and liabilities. With a few exceptions — like Germany, New Zealand, Hong Kong, Indonesia, Philippines and Thailand — all other governments have rising public debts. Meaning their governments keep expanding somehow.

The outstanding numbers here are those of Hong Kong with near-zero debt, and Indonesia which drastically cut their debt by one third in the last decade. The Philippines’ big decline in debt/GDP ratio was registered in the previous administration. By 2017 and 2018, the decline has stopped as the Duterte administration was borrowing big time to finance lots of freebies and expanded welfare programs like free tuition in all state universities, free irrigation, free PhilHealth for many sectors and expanded conditional cash transfer (CCT).

Governments expand by creating various types of alarmism and the public is convinced that more government, more taxes are the answer. Like ‘oil crisis’, ‘food crisis’, ‘climate crisis’, ‘inequality crisis’ — so more government interventions like oil subsidy, food subsidy, expanding climate bureaucracies and junkets, or oil tax hikes to fund new welfarism with no timetable (TRAIN law in the Philippines).

It is a slippery slope, one welfarism leads to another; one tax hike leads to another; one new bureaucracy created leads to another.

Most if not all of those ‘crisis’ and alarmism are false and government-invented. More facts-based research and assertion of more individual liberty, more personal and civil society responsibility, will help counter this trend. 

See also:  

ALS-ATA-WTA Sydney Conference, some photos

Some pictures here during the ALS-ATA-WTA Conference in Sydney last week, May 23-26, at UTS.
General membership meeting of the World Taxpayers Association (WTA), day 1.

International coalition meeting, headed by the Americans for Tax Reforms (ATR), Grover Norquist.

Welcome reception cocktails, at Dockside Darling Harbour. From left: me, Michiel, Grover, Dan Mitchiel, and the bar guy.

Gala dinner, day 2. Among the huuuge international free market gala dinner I have attended.

Tim Andrews of Australian Taxpayers Alliance (ATA) delivering a fiery, inspiring and fantastic speech on more freedom, more liberty, less government, less coercion, less taxes.

With Tim Wilson, then Lorenzo Montanari of ATR, Barbara Kolm of Hayek Institute in Austria.

More photos later...

Friday, May 24, 2019

BWorld 330, Energy and elections: The Philippines and Australia

* My column in BusinessWorld last Wednesday, May 22, 2019.

Sydney – The Philippines held its mid-terms elections last May 13, and “man-made” climate change, “more renewables” were marginal if not non-issues altogether for many of the national and local candidates. The energy issue was whether there would be any blackout because of the series of yellow and red alerts (insufficient power supply and reserves) many weeks before Election Day.

On May 18, Australia also held its federal elections, and for the Labor Party, among their big issues were climate alarmism, reducing carbon emission by 45% by 2030, and closing the Adani mine, with various surveys showing they would win. The Liberal Party campaigned for energy realism, and cheaper and stable electricity for a stronger economy. They won and PM Scott Morrison is reelected.

PM Morrison once brandished a lump of coal in parliament, saying, “This is coal – don’t be afraid!” True. There is nothing scary about coal but there is something to thank for it – because among the world’s biggest and industrialized economies are heavy coal users. The Philippines, having more coal plants recently and demonized by many anti-coal activists and climate alarmists, is actually a “midget” or small-time coal player in the world, even in Asia (see table). 

Two recent reports in BusinessWorld show that the problem of power inadequacy continues and I quote portion of the reports:

1. ERC reviewing norms for allowable levels of power plant outages (May 13):

“’Those that exceeded the outage allowance under the contract should not be charged on consumers, but on the generating company that failed to deliver.’ At present, the obligation to provide replacement power depends on the provisions of the PSA between a distribution utility and a generation company.”

2. DoE may limit power contracts to 70% of plant capacity (May 16):

“’We have to encourage the plants to be well-maintained…. a 70% cap of their contracting with distribution utilities so that they can have more power available for replacement power, for power available for ancillary services and more power available in the spot market,’ said Energy Undersecretary Felix William B. Fuentebella”

Both reports 1 and 2 would tend to restrict leeway for existing gencos and power plants when the bigger issue is how to have more power capacity, more gigawatts of new, stable electricity to be added into the system, something like 1.5 GW a year or more. When there is more power available, some DUs may contract just half of their needs and get the other half from the wholesale electricity spot market (WESM), even without new DOE or ERC regulation.

Meanwhile, I am here in Sydney to attend two big events, the ALS Friedman Liberty Conference by the Australia Taxpayers Alliance, and the biennial World Taxpayers Association (WTA) conference, May 23 to 26, 2019. Energy security and more power competition is among the topics to be discussed in some panels.

See also:  

Wednesday, May 22, 2019

The 7th ALS Friedman Liberty and WTA Conferences

Tomorrow, the 7th Australian Libertarian Society (ALS) Friedman Liberty Conference + World Taxpayers Association (WTA) Conference will start. Mainly sponsored by the Australia Taxpayers Alliance, headed by Tim Andrews. Very dynamic guy and team. Here's the program, from

Friday 24th of May

Keynote - "Selling the Centre-Right" with Ron Nehring
Keynote Panel - "Increasing Competition Between Governments" with Dan Mitchell, Benjamin Gussen & Tamara Winter

11:20     Breakout Session   

How to make a difference (activism)

Andrew Meleta
Lyall Swim
Gerard Benedet
Alex Cordell
Environment & Outdoors

Marc Hendrickx
Tim Quilty
Bridgette Poulton
Christopher Field
13:30     Breakout Session
Tools for Tax Reform

Tax Foundation's Daniel Bunn,
Followed by Case Studies From Around The World
IPA Podcast: "Looking Forward: What does freedom look like in 2050"

John Roskam
Chris Berg
Scott Hardgraves
Renee Gorman

14:40     Labour markets, unions & work

Kurt Wallace, Andrew Bragg,
Kyle Kutasi, Roger Douglas

Keynote with Steve Baxter
Keynote with Matt Barrie
Closing Remarks with Tim Andrews & John Humphreys
V.I.P. Drinks with Alex Hawke - L'Aqua, Cockle Bay Wharf (1300 117 118) | sponsored by the Tax Foundation
19:00     GALA DINNER - Dockside Function Centre, Cockle Bay Wharf (Wheat Rd)  | sponsored by Tax & Super Australia

Saturday 25th of May

9:00        WELCOME
9:10        Joint Keynote: "Love, Liberty & Happiness" with Matt & Terry Kibbe
10:00     Keynote Panel: "Leaving the Left" with Bindi Cole Chocka, Miriam Isa & Vanessa de Largie
11:00     MORNING TEA
11:20     Breakout Session

Terry Kibbe
Al Canata
Ron Nehring
Growth of Government

Nonoy Oplas
David Limbrick
Dan Wild
Tamara Winter
Western Civilisation

Daisy Cousens
John Roskam
Satya Marar
Peter Phelps
Tax Success Around the World

Gia Jandieri
Chris Butler
Barbara Kolm
Jordan Williams

13:30     Breakout Session
Plain Packaging &
Tobacco Harm Reduction

Lorenzo Montanari
Colin Mendelsohn
Sinclair Davidson
Guy Bentley
Future of the
LIberal Party

Tim Wilson
Amanda Stoker
Chris Berg
More than

Prash Puspanathan
Avens O'Brien
Ash Blackwell
Gabe Buckle

Rob Carling
Mark Frost
Scott Farlow
Duncan Spender

14:40     Breakout Session
Storytelling / Videos

Miriam Isa
Troy Lanigan
Ben Whimpey
Matt Kibbe

Marko Horg
John O'Connell
Ross Marchand
Monica Wilkie
Free Speech

Amanda Stoker
Chris Berg
Daniel Meyerowitz-Katz
Scott Hennig
Money & Macro

Richard Holden
Tony Makin
Sinclair Davidson

Keynote with John Fund
Keynote with Grover Norquist
Group Photo and Closing Remarks with Tim Andrews & John Humphreys
18:00     Sydney Harbour Cruise - "Bella Vista" departing from Casino Wharf | sponsored by Kennards Self Storage

Sunday 26th of May

Keynote with Roger Douglas
Keynote with Sam Crosby
Keynote Panel: "Anti-Fragile" with Tanveer Ahmed, Joanna Crook-Barr & Anthony Dillon

11:50     Breakout Session
the Internet

Katie McAullife
Paul Shetler
Gideon Rozner
Ben Guerin
Living with the
Panda & the Dragon

Sue Windybank
Dan Ryan
Andrew Pickford
Feng Chongyi
Media and
Fake News

Kerry Wakefield
James Morrow
Luke Malpass
John Fund
& Climate

Andrew Reynolds
Staffan Wennberg
Jo Nova
Nick Minchin

14:00     Breakout Session
Media Training

Beverly Halberg
Seouled Out:
Preserving South Korea’s Freedom

Dan Schneider
Andrew Crilly
Life Without Politics

Avens O'Brien
Tomas Forgac
David Mullan
Les Hughes
Tax and Trade

Phillip Thompson
Keith Kendall
Michael Potter
Grover Norquist

15:10     Breakout Session
Using Social
Media Effectively

Ron Nehring
Scott Hennig
Ben Guerin
Avens O'Brien
Liberty Around
the World

Vale Sloane
Andreas Guevara
Rainer Heufers
Maryan Zablotskyy
Rise of the
Regressive Left

Jeremy Sammut
Renee Gorman
Sydney Watson
with Tax

Dan Mitchell
Ken Phillips
Pete Sepp
Christopher Lingle

Keynote with Jim Lark
Closing Remarks with Tim Andrews & John Humphreys
18:30     MOVIE: "The Pursuit"

BWorld 329, Jeju Forum and smart cities

* This is my article in BusinessWorld last Monday, May 20, 2019.

ON May 29-31, the big “Jeju Forum for Peace and Prosperity” conference will be held at the International Convention Center Jeju, South Korea. It is an annual international and geographical platform to discuss diplomatic, economic, political and cultural subjects that include the North-South Korea relations, Korea-China-Japan-US relations and many more.

A unique topic, “Smart Cities and Startups — Opportunities for Business Innovation” will be discussed in the afternoon of May 30, the panel sponsored by the Friedrich Naumann Foundation for Freedom (FNF).

FNF is a German political foundation whose main advocacies are economic freedom, human rights and rule of law. Business startups can only prosper if there is economic freedom, private enterprises are not burdened with too many taxes, regulations and restrictions, they focus their resources innovating and dealing with their customers, suppliers and competitors. Human rights would include labor rights, employer rights, and other policies that remove various discrimination based on gender, race and other factors. And rule of law protects private investments from the dangers of state nationalization, expropriation, price control and related confiscatory policies.

To introduce the topic and its importance in today’s modernization will be Christian Taaks, Head of FNF Korea Office. To introduce the speakers and moderate the panel will be Waltraut Ritter, Founder of Knowledge Dialogues in Hong Kong. The three panel speakers will be Marc Bovenschulte, Director of the Institute for Innovation and Technology in Germany; Sofia Ramirez, Business Developer of Hawa Dawa in Germany; and Whang Ji Eun, Professor at the University of Seoul in Korea. Panel Rapporteur will be Pimrapaat Dusadeeisariyakul, Program Manager of FNF Thailand.

Jeju island itself can be considered a “smart city/province” as it is a self-governing province of S. Korea. Its main economic base is tourism so they allow visa-free entry for citizens of many countries including the Philippines, unlike landing in Incheon airport where a strict Korean visa is required.

Talking of islands and the Philippines as an archipelago of more than 7,500 islands and islets, one infrastructure project in the country that fascinates me is the Cebu–Cordova Link Expressway (CCLEx), aimed at connecting the southern part of Cebu City with Cordova in Mactan island and reducing travel time to Mactan-Cebu International Airport (MCIA).

CCLEx is an 8.5 kilometers tollroad including viaduct and causeway, 27 meters wide and a cable-stayed bridge 145 meters high. Its proponent is Metro Pacific Tollways Corp. (MPTC) costing about P30 billion in a pure integrated PPP scheme. So MPTC will build and finance it, then do the operation and maintenance (O&M) when it is completed and opened to the public in 2021. Meaning no additional public debt, and taxpayers from Luzon, Eastern and Western Visayas, Mindanao will not be burdened with paying its construction cost if it was under the ‘hybrid PPP’ scheme of the administration. Only those who use that expressway will pay for its construction cost and O&M, applying the users-pay principle, not all-taxpayers-pay scheme.

I spoke with the Managing Director of Norconsult Mgt. Services Phils. Inc., Mr. Director Rodolfo T. Azanza Jr. Norconsult is the Independent Consultant of the Grantor, Cebu City and Cordova City. They are upbeat about the potentials of this new project and will greatly decongest heavy traffic in the two existing bridges between Mandaue City and Mactan island.

Smart cities and provinces would include faster mobility of people and goods across islands and traffic-gridlocked cities. Where there is faster and greater mobility, there is greater economic freedom enjoyed by the people.

See also:  

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:

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 OsmeƱa 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.

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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

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.

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