Sunday, July 28, 2019

BWorld 353, SONA 2019: what was said and not said

* My column in BusinessWorld last July 25, 2019.

SEOUL-INCHEON AIRPORT — An impressive new terminal greeted me here and it will definitely make many Filipinos wish that we have a similar airport soon. This is huge, spacious, and modern, with Wi-Fi that is fast and free. I am here waiting for my connecting flight to the US.

President Rodrigo Duterte’s State of the Nation Address (SONA) last Monday did not mention the new airports that are being proposed and developed around Metro Manila. That SONA was notable because of many things that he said and did not say. Foremost of what he said are the following:

• That corruption in government is pervasive, is everywhere. He is grossly disappointed with corruption and asked, “When will corruption end?” Special mention was made of PhilHealth (Philippine Health Insurance Corporation), the Customs bureau, the Bureau of Internal Revenue, Social Security System, Land Transportation Office, PAG-IBIG, Land Registration Authority.

• That he wants to create three new departments: Departments of Disaster Resilience, Water Resources, and Overseas Filipinos.

• That he wants more Malasakit Centers, higher salaries for teachers and nurses, a new National Academy of Sports for High School students. Which means he wants to expand welfare spending on top of existing agencies.

• That local governments should hasten the issuance of business permits to a maximum of three days, reclaim public roads, and enforce the Bangsamoro Organic Law (BOL).

• That the West Philippine Sea (WPS) is ours but we should not provoke China, otherwise there will be a confrontation and our Marines will die. Meanwhile, most or many Cabinet members are ex-military men.

• He pointed out that the Build, Build, Build programs are gaining ground, and the entry of the third telco player that will provide fast and reliable telecom service.

The creation of three new departments — how much would this cost taxpayers?

They could cost somewhere near the budget of the agencies in the Table on this page. Huge departments with budgets of at least P100 billion a year like the departments of Education, Social Welfare and Development, Health, Public Works and Highways, Interior and Local Government, and National Defence are not included here. 

Where to get the money for these new departments, agencies, and subsidies?

One is from new tax reform measures like the TRABAHO (Tax Reform for Attracting Better and Higher-quality Opportunities) bill. Second, from remittances by government-owned and controlled corporations (GOCCs). The President noted that GOCCs, infamous for high salaries, are shaping up and, as of July 2019, have remitted over P61 billion.

The TRABAHO bill is among the “dampeners” of more investments, local and foreign. The proposed removal of certain incentives like the 5% gross income earned (GIE) as substitute for corporate income tax (CIT) and local taxes, to be replaced by lowering the CIT from 30% to 20% after 10 years, or reducing to 25% immediately, is not favorable to many investors and job creators.

There are things that should not be said or issued and indeed were not said by the President — good. Like new drug price controls, or further demonizing tax coal and fossil fuels “to save the planet,” or creating five or more new Departments and not just three, etc.

There was a good tweet by Senator Panfilo Lacson hours after the speech:

“SONA 2019: I like most the part when the president said, ‘I have come face to face with the enemy. The enemy is us. We are our own tormentors… for every transaction, commission; for every action, extortion.’ Then the camera panned out on the audience right in front of him.”

Overall, SONA 2019 has issued more alarm bells to businesses and taxpayers. Corruption remains high, as admitted by the President, and yet they will further expand the size and burden of government, taxpayers will pay for the extra financial baggage, waste, and evaporated money. The saving grace is that businesses can expect easier business permits from LGUs, and things could have been worse if some ugly and unsaid things were instead announced.

See also:

Friday, July 26, 2019

Heartland's ICCC-13 photos

Washington DC -- The Heartland Institute's 13th International Conference on Climate Change (ICCC-13) was very successful yesterday. Huge audience, high caliber speakers and moderators, schedules generally followed, good venue, ballroom of Trump International Hotel.

Below, photo I took past 8am, when the first keynote and breakfast speaker, Dr. Jay Lehr was speaking.

Dr. Lehr was given the Dauntless Purveyor of Climate Truth Awardee by Heartland. He is a hydrologist but became famous with dozens of Congressional testimonies on climate and environment, author of 1,000+ magazine and journal articles, 36 books, etc.

Audience was larger in late morning and by lunch where Lord Christopher Monckton was the keynote speaker, the ballroom was packed.

Three of Jay's slides.

I came late at the first panel discussion, I missed the main presentation by Dr. Roy Spencer, a famous climatologist at UAH. Here's his concluding slide.

Next speaker was Dr. Nir Shaviv of Physics Department, Hebrew University of Jerusalem.

Solar cycle (11 years), solar max, solar minimum.

Morning break, from left: Nir, Wolfgang Muller, and Benoit Rittaud. Wolfgang is a friend since 2005, he was working at FNF then, now he is the Sec. Gen. of the European Institute for Climate And Energy (EIKE). Benoit is the President of Association des Climato-Realistes in France. 

With Anthony Watts, founder and owner of the world's #1 climate blog with hundreds of thousands of pageviews daily, Anthony was one of the speakers in the afternoon session.

With Dr. Richard Lindzen and Dr. Benny Peiser. Dr. Lindzen is Prof. Emeritus of meteorology at MIT, a famous atmospheric physicist. He was awarded last night, Frederick Seitz Memorial Award, given by the Science and Environment Policy Project (SEPP) headed by Ken Happala. Benny is the Director of the Global Warming Policy Forum (GWPF) in London. The International Astronomical Union (IAU) has named a 10-km wide asteroid, Minor Planet (7107) was named after him.

Not a single climate alarmist would be able to withstand the hard data and concepts discussed at the  annual ICCCs. The role of the Sun and GCRs, role of clouds and water vapor (which is 95% of all GHGs vs CO2's 0.04%), role of oceans (PDO, AMO), etc. All that the climate alarmists concern themselves is CO2 -- the gas that we humans and our animals exhale, the gas that plants and trees use to produce their own food -- because they want to regulate, tax, centrally-plan the emission of CO2 and conventional energy, salivate at $100 B a year of climate money starting next year, salivate at endless global junkets.

More photos later.

BWorld 352, SONA and ICCC-13

* This is my column in BusinessWorld on July 23, 2019.

Climate change is natural, nature-made and not man-made. It is cyclical — the warming-cooling-warming-cooling over the past 4.6 billion years of the Earth — and there is no such thing as “unprecedented” global warming.

Climate alarmism relies on endless hype by politicians, multilateral institutions, NGOs, and media. Luckily, President Rodrigo Roa Duterte is among the very few country leaders who does not join the hype. I checked his past three State of the Nation Addresses (SONA), the number of words, including ad libs and jokes, and compared mentions of “climate change” (CC) or “global warming” (GW) (See Table 1). 

This should be among the few instances where I say, “Thank you, President Duterte” for not adding to and fanning the climate alarmism.

Which leads me to a related topic, the 13th International Conference on Climate Change (ICCC-13) this coming Thursday, July 25, in Washington, DC, USA. The annual ICCC is sponsored by the free market think tank Heartland Institute.

I attended ICCC-2 in New York City in 2009 and ICCC-4 in Chicago in 2010. It was those very technical lectures from known scientists in the fields of geology, meteorology, climatology, physics, astronomy, chemistry, biology, that further convinced me that CC is natural and cyclical. That natural factors like the Sun, galactic cosmic rays (GCRs), clouds, water vapor, the oceans (PDO and AMO), etc., are the bigger drivers of planet Earth’s climate, and not a quantitatively insignificant gas, carbon dioxide (CO2), that comprises only 400 parts per million (i.e., 0.04%) of total greenhouse gas molecules in the atmosphere.

The ICCC-13 will feature some big names in climate science. Among them: Dr. Richard Lindzen, professor emeritus of meteorology at the Massachusetts Institute of Technology; Dr. Patrick Michaels, past president of the American Association of State Climatologists; Dr. Tim Ball, former climatology professor at the University of Winnipeg, Manitoba, Canada; Dr. Jay Lehr, a hydrologist and Senior Policy Analyst at the International Climate Science Coalition; Dr. Roy Spencer, Principal Research Scientist at the University of Alabama in Huntsville (UAH) and former Senior Scientist for Climate Studies at NASA’s Marshall Space Flight Center; Dr. David Legates, professor of climatology at the University of Delaware; Anthony Watts, a meteorologist who operates the world’s most viewed website on climate,; and Lord Christopher Moncton, a British mathematician and former Special Advisor to Prime Minister Margaret Thatcher from 1982 to 1986.

The 27 speakers will cover topics on Climate modeling vs. observed temperature data, the Sun and climate, the latest volume of the Non-governmental International Panel on Climate Change (NIPCC), Green New Deal, CO2 taxes, societal benefits of fossil fuels, etc.

The world’s four biggest economies in terms of GDP size are also the world’s biggest coal users, and many previously undeveloped/poor countries are now among the world’s major economies and they are major coal users (see Table 2).

To demonize fossil fuels while at the same time using lots of fossil fuels (for cars and buses, boats and airplanes, power and electricity) is double talk. To demonize CO2 as a bad “pollutant” gas is anti-science because the gas that we humans exhale is CO2, we do not exhale pollution. The gas that our plants and crops use to produce their own food via photosynthesis is CO2, so more CO2 means more plant food, more trees and more food production.

See also:

Monday, July 22, 2019

UPSEAA lecture 3, Tito Ortiz

The latest speaker for the UP School of Economics Alumni Association (UPSEAA) lectures was Unionbank Chairman Justo "Tito" Ortiz. He is not an alumnus of the school, he's from Ateneo but his bank has many officers who are UPSE alumni, and are active in the Association.

Tito is the first banker who dabbles on political philosophy that I have heard, I wrote it here, Tito Ortiz, the philosopher-banker (June 18, 2019).

His topic that night, June 27, was on corporate digital transformation and AI, subjects that I am not so familiar. 

Among the slides he presented that I like -- i2i. Individual to individual, island to island, institution to institution. Helping micro- and small entrepreneurs even in remote islands via full private sector initiative is possible, is happening, little or no government assistance involved. Though at a limited level, for now.

I think the term here should not be "kill" but perhaps "weaken." Movies, taxi, hotels, retailers, etc. are still there, they did not die, but they have been weakened by new IT-based competitors.

Open banking or Application Programming Interface (API) banking. Tito said that their bank gets 266,000 calls per day on average. If humans would take such huge volume of calls, the bank must hire so many personnel, which will raise their cost, which they must pass to their clients, higher interest rate to borrowers, lower interest to depositors. AI helps bring down costs significantly.

Another slide that I really like, Tito showed this quote from Elinor Ostrom, an American Nobel Prize in Economics awardee in 2009.

Awarding of the Certificate of Appreciation by UPSEAA President Jeffrey (to the right of Tito), with Vice President Rey Regalado and other board members.

Thank you again UPSEAA officers, Unionbank.

See also: 
UPSEAA lecture 1, Robina Gokongwei-Pe, July 20, 2019
UPSEAA lecture 2, DTI Sec. Mon Lopez, July 21, 2019.

BWorld 351, SONA economic numbers

* My guest commentary in BusinessWorld Economy section last Friday, July 19.

SELECTED macro-economic data of the Philippines compared to our more economically-stable neighbors in the region.

* The Philippines is the only economy with consistently declining GDP growth rate. Others have up-down or down-up trends.

* The Philippines has the highest inflation rate in the region, 2018 and 2019 Year to date (Ytd., January to May/June).

* The Philippines and Indonesia have high, decline then increase interest rates. Vietnam has the highest but with slight decline trend.

* The Philippines and Indonesia have the worst current account/GDP ratio. Difference is that Indonesia has been in negative territory for several years now, Philippines only in 2018.

The Duterte administration’s ma-croeconomic performance in the last three years is not sterling, not outstanding, and wasted the economic momentum from the previous administration. But at least we are still growing at a high rate above 5%.

See also:

Sunday, July 21, 2019

UPSEAA lecture 2, DTI Sec. Mon Lopez

Last June 5, I attended the UP School of Economics Alumni Association (UPSEAA) lecture by DTI Secretary Ramon Lopez, or simply "Sec Mon" to many of us. It was held at the Unionbank's The Ark, Insular Life Bldg. in Ayala Avenue. Ms. Pearlie Lontoc of Unionbank and also a Board Member of UPSEAA welcomed the audience with an opening message.

Intro of Sec Mon was given by his former undergrad classmate, Maret Follosco. Meanwhile I was surprised of this "Ark" -- no tellers and tables, only chairs and sofa, this is a bank? Wow.

I didn't know many of the new initiatives of DTI now, I was glad I attended the lecture. I took photos of his slides but I accidentally deleted them. Anyway I mentioned portions of his lecture in my column last June 20, "More investment liberalization needed",

Recognition given UPSEAA President Jeffrey Ng (right) and VP Rey Regalado (left).

Last 3 on the right -- Robina Pe, Maret Follosco, and former UPSEAA President Jack Teotico.

UPSEAA Board Members, from left: Gigette de Luna, Pearlie Lontoc, Kiko Josef, RJ, (Sec Mon in the middle), Jeff Ng, Sally Magat, Verge Gepuela, Rey Regalado.

Beside me is another Past UPSEAA President Ernie Albano, then his wife Yolly, Sec Mon, Rey, Noel de Luna.

Thanks Sec Mon, Jeff, Unionbank, others. Good lecture.
Btway, Unionbank has many UPSE alumni as officers, they donated the Center for Monetary Economics at UPSE, a research institute. It was done nearly a decade ago during the time of another alumni Vic Valdepenas as Unionbank President.

See also: UPSEAA lecture 1, Robina Gokongwei-Pe, July 20, 2019.

BWorld 350, Logistics, infrastructure and the consumers

* My column in BusinessWorld last Thursday, July 18, 2019.

Last Monday, upon the invitation of the Department of Trade and Industry (DTI), I attended the 2nd Logistics Services Conference and Exhibition at the Philippine International Convention Center. I was invited as media and I attended the press conference led by Department of Trade and Industry (DTI) Secretary Ramon Lopez, flanked by leaders of various private industry associations and government officials from the Philippine Economic Zone Authority, the Technical Education and Skills Development Authority (TESDA), the Export development Council the International Finance Corp. ), and the DTI.

I am unfamiliar with the major issues of this sector, hence my curiosity about the conference. I was also intrigued by the World Bank’s Logistics Performance Index (LPI) so I checked that biennial report. The index is composed of six factors — Customs, Infrastructure, International shipments, Logistics quality and competence, Tracking and tracing, and Timeliness.

I extracted from the Excel database the numbers for major Asian economies for the years 2010, 2014, and the latest report 2018. Germany is included in this list because it is the consistent No. 1. The Philippines has a bad trend — a declining score and declining global rank out of 160 countries and jurisdictions covered. In particular, its rank in Customs has fallen from 47th in 2014 to 85th in 2018. The good news is that its rank in infrastructure has somehow improved (see Table).

I know Secretary Mon Lopez — we are both members of the UP School of Economics Alumni Association and I spoke with him a few times. I know that he is solutions-oriented as the private sector and business competition had been his home for many years before joining the DTI.

Listening to him and many other speakers at the press conference, I was surprised that while it was the DTI that led this conference, many of the issues that cause headaches to players in the sector are outside the mandate and core concerns of DTI. Like lack of drivers for trucks, forklifts and heavy equipment (TESDA training), port congestion (Customs bureau, Department of Finance), truck ban and numbers coding ban (Metropolitan Manila Development Authority), long period to get vehicle franchises (Land Transportation Franchising and Regulatory Board, Department of Transportation), etc.

During the open forum, I asked if the advocacies by various stakeholders cover the wider macro-economic and intra-industry reforms like airlines and shipping lines liberalization, seaports and airports modernization, tollroads expansion nationwide. Secretary Mon said they do, that the administration’s Build, Build, Build programs address these infrastructure challenges, and investment liberalization measures are being advanced.

My impression now is that the DTI has become a sort of intermediary for many government agencies that tend to over-bureaucratize logistics players like truckers, freight forwarders, cargo handlers, airlines and shipping lines, to temper their itch to demand too many requirements and simplify these instead.

This should extend to infrastructure development. Too many permits and requirements — from local governments to various national agencies — to build or expand seaports, airports, tollways, power plants, dams and water sources, etc.

The goal of policy reforms should be the betterment of the consumers. More goods and services at lower cost and prices, reduced waste due to faster mobility of commodities from manufacturers and traders to end-users. Less government bureaucracies and more private competition, these will favour the consumers. Happy to see the DTI leading this.

See also:

On Vaping

These are some of the slides by Dr. Colin Mendelsohn during the 7th ALSFC and 17th WTA Conference in Sydney last May 24-26, 2019, panel on Plain Packaging & Tobacco Harm Reduction. Dr. Mendelsohn is a tobacco treatment specialist and Conjoint Associate Professor, School of Public Health and Community Medicine at the University of NSW, Australia.

Then I just saw this article by a friend, Nick Sallnow-Smith, former Chairman of the Lion Rock Institute, Hong Kong. Then a recent paper by Peter Wallace. Reposting portions here.

Live and Let Live
Nick Sallnow-Smith  31/10/2018

… Let’s take a current example in Hong Kong; the CE’s proposal to outlaw “vaping”. The reaction from commentators in the media, both here and abroad, typically centres on the technical details. Is vaping “safer” than smoking? Does the damage from tobacco come from the tar, not the nicotine? Might it lead to youngsters moving on to cigarettes later? Shouldn’t we have years of testing to establish whether it is “harmful”. (No doubt there will be many arguments about what “harmful” means in this context.)  And so on.

What none of this does is apply the social test of my title. Why not live and let live? If someone wants to vape, what basis is there in a truly free society for stopping them? Many will argue that “we” (who is that group?) should protect the “vapers” from themselves. But it is none of the business of anyone to “protect” other citizens from their own decisions. I possess my own body (otherwise I am a slave), why therefore should I not be free to inhale anything into my body that I choose?  It is the height of arrogance for anyone to claim that their own judgment about whether vaping is a “good thing” or not, is a superior judgment to that of the person they are, in effect, judging. Yet few people discuss the matter in “live and let live” terms, rather they are keen to explain why they are in favour or against the ban, without even considering whether it is anyone’s business except the”vaper”.

In fact the vaping debate is even worse than that. The proposal has naturally triggered some eager souls to claim that smoking tobacco should also be banned, because obviously tobacco smoke is more harmful than vaping. In other words, the vaping proposal did not so much trigger a debate about whether government bans too much, rather people look for more activities to make illegal! This is often the consequence of a highly regulated society. Few resist the existing level of regulations; most people simply argue for more. Assuming the position of the “anointed”, they propose that any set of activities that they happen to dislike in others should be banned (for the benefit of others of course). The list of activities ripe for regulation is endless.

One great benefit of a “live and let live” approach (which Hong Kong used to enjoy), apart from the personal freedom that it would allow, is that it would neutralise ( “vapourise”?) much of the political dissension in our city. So many political issues arise from one “anointed” group attempting to impose their policy ideas on the rest of us. Whether this involves the public school curriculum, regulating cyber currencies, imposing a minimum wage, forcing property owners to sell what they do not wish to do so; to select just a few of recent debate,  the inevitable consequence of denying free market choices in any of these areas is political infighting over which “policy” is to be imposed, when in fact no policy is needed.

I suggest that all of us, when hearing of yet another “public policy” proposal, apply the following test; why not “live and let live”?

Smoking kills, vaping doesn’t
By: Peter Wallace  / 05:08 AM July 11, 2019

I know, my two best friends died an agonizing death over it. For you kids, it is not cool to start smoking, it’s stupid.

For those who smoke: Stop. But if you can’t, and it is an addiction that is very hard to forego there’s a much less harmful alternative: Vaping. And that’s what e-cigarettes are all about, convincing smokers who can’t stop to shift. They are not, and shouldn’t be allowed to be designed to attract new smokers, the young. This, to me, is the most important point. E-cigarettes are a much safer alternative for those who must smoke. And government should encourage smokers to shift to vaping. Not make it just as different to do.

E-cigarettes are far less harmful than cigarettes. They heat the tobacco, not burn it and it’s the burning that causes all the damage. Tests of cigarettes versus e-cigarettes show a 90-95% reduction in exposure to toxins. Tests have been conducted by the World Health Organization (WHO), the USFDA, Health Canada, Public Health England and other countries. They all show the same thing vaping reduces harmful chemicals by 90% to 95%. But tests are still on-going so more certainty can be expected. So I can’t quite understand why the same severe restrictions as to where you can smoke are being applied to vaping. An e-cigarette only emits steam with negligible other things. Vaping affects only the smokers, and that in a minor way, so why restrict it.

The Cigarette smoke from burning creates some 6000 chemicals a number of which cause the illnesses and death smokers suffer. Without the smoke those chemicals won’t be created...