Wednesday, October 30, 2019

BWorld 376, Coal use and GDP growth correlation

* My article in BusinessWorld on October 10, 2019.


Among the tricks used by the anti-fossil fuel, anti-coal groups is to never recognize growth and economic modernization of countries that have relied on cheap, stable and reliable energy source. So for this paper, I scoured through actual numbers of coal consumption in million tons oil equivalent (mtoe) from 1965-2018, and GDP growth 1965-2018. Data source for the former is the BP Statistical Review of World Energy, June 2019, and for the later, the WB, World Development Indicators database, August 2019.

First I computed the annual growth rate of coal mtoe from 1966 to 2018, then got the averages per 10 years. (See Table 1.)


The WB’s GDP growth rates are already in percentages so I just computed the averages per 10 years. (See Table 2.)


What do the numbers show?

One, there is clear correlation between growth in coal consumption and growth in GDP, for all countries above in most years indicated. See the US, Australia, and Japan — deceleration in coal use from 2006 to 2018 translated to low growth of below 3% for the US and Australia, and a maximum of 1.1% growth for Japan. For Germany, their energy transition away from coal resulted in ever-rising energy prices and slow growth, below 2% from 1996-2018.

Two, for developing or emerging economies: Turkey’s average coal use of about 5% a year also translated to around 5% GDP growth. For China, about 6% average growth in coal use translated to around 9% average GDP growth from the 1960s to 2005. Decline in coal use by China also showed decline in GDP growth over the past three years.

Three, among the world’s biggest economies in terms of GDP size are also the world’s biggest consumers of coal energy — the US, China, India, and Japan.

This is not to say that coal use is the single most important factor for fast or slow growth of countries, no. There are a dozen other factors of course, but having cheap, stable and reliable electricity is one of the most important prerequisites to have high and sustained growth. No big manufacturing, banking, tourism projects will stay in a country which has frequent blackouts, or there is zero blackout but electricity prices are high due to frequent use of diesel gensets.

The climate alarmism movement is dishonest and deceptive. If there is less rain, less floods, less snow, they say it is proof of “man-made” warming/climate change/CC. If there are more rains, more floods, more snow, they say it is also proof of “man-made” warming/CC. And so we send more money (taxes, subsidies) to the UN, government and their new crony firms. Whatever weather and climate.

Climate change is true but it is cyclical and natural, largely nature-made and not man-made. To say that we need more government, more UN, and mandatory renewable energy to fight less rain and more rain, less floods and more floods, is a cheap but painful insult to our brains and pockets.
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See also:

Energy 130, US crude oil and natgas production

Tuesday, October 29, 2019

BWorld 375, Property rights and agrarian lefts

* My article in BusinessWorld on October 08, 2019.


“CARP has instead effected a massive de-formalization of agriculture! Time to allow agriculture to march out of the informal into the formal sector. It is time, in other words, to stop redistributing poverty!”

— Dr. Raul Fabella, “CARP: Time to Let Go,” 
UPSE Discussion Paper 2014-02, February 2014

Unlike agrarian reform in Japan, South Korea, and Taiwan that lasted only for several years before forced land redistribution was halted, the Philippines’ agrarian reform is endless, with no timetable — a forever program.

Former President Marcos declared his own agrarian reform in 1972 and when he was ousted, former President Cory Aquino implemented another version, the Comprehensive Agrarian Reform Program (CARP, RA 6657, June 1988). CARP should have ended by 1998 but it was extended under RA 9700 (August 2009). So from 1972 to 2019, there have bee 47 years of agrarian reform and there is no plan to end it.

Endless agrarian reform is wrong because it creates endless business uncertainty in two sectors, agribusiness and mass housing programs.

First, an agribusiness person develops an idle or ugly piece of land into a productive, revenue-earning fruit orchard. Rural jobs are created, food production is expanded, and that is also where the Department of Agrarian Reform (DAR) can come, knock on the person’s door to inform him/her that the land will soon be forcibly distributed to the workers. And this contributes to why many rural areas remain planted to traditional low-value crops.

Second, real estate developers endure many years of waiting for the DAR to approve land conversion from agricultural to mass housing projects.

I spoke with Jeffrey Ng, a fellow alumni of the UP School of Economics (UPSE) and President of our UPSE Alumni Association. He is also the Chairman of the Subdivision and Housing Developers Association (SHDA). Jeff said that they have to “get approval from National Irrigation Administration, Philippine Coconut Authority, Sugar Regulatory Administration, then the Department of Agriculture itself. Only then can we apply for actual conversion with DAR. After which comes LGUs, DENR (Department of Environment and Natural Resources) and HLURB (Housing and Land Use Regulatory Board). All these delays cost money and interest, which unnecessarily raises the cost of socialized and mass housing projects.”

President Rodrigo Duterte has ordered that this entire land conversion process should not take more than 30 days. Jeff said that it can be done if all these government agencies and departments will put up a one-stop shop under the new Department of Human Settlements and Urban Development.

Some 6.5 million Filipino families do not own a house yet, so the supply of buildable land for affordable mass housing should increase. And DAR and endless agrarian reform is part of the problem. This is agrarian and property leftism.

Related to this is the low score and global ranking of the Philippines in property rights protection like land. Small- and medium-size landowners are unsure if they can continue ownership and control of their land in the next 10 or 20 years.

In the International Property Rights Index (IPRI), an annual study by the Property Rights Alliance (PRA, Washington DC), the Philippines ranks low. The index is composed of three components: Legal and Political Environment (LPE), Physical Property Rights (PPR) and Intellectual Property Rights (IPR). LPE has four sub-components, IPR has three, and PPR also has three — Protection of physical property, Registering property, and Ease of access to loans.

In overall IPRI, the Philippines ranked 77th out of 118 economies in the 2010 Report, improved to 70th out of 125 economies in the 2018 report. In PPR, the Philippines has significantly improved over these years, ranked 80th in the 2010 Report and 63rd in the 2018 Report (See Table).
  


IPRI 2019 will be launched on Oct. 16 at Fairmont Hotel. How will the Philippines rank then, both in IPRI overall and PPR?

Report author, Dr. Sary Levy-Carciente, an economist from the Universidad Central de Venezuela, and a Fulbright Visiting Scholar at Boston University, Center of Polymer Studies, will come to discuss the report. PRA Executive Director Lorenzo Montanari will accompany her. The local partners of this event are the Foundation for Economic Freedom (FEF) and Minimal Government Thinkers.

The words of Dr. Fabella, a National Scientist, my former teacher, and our former Dean of UPSE, should be heeded by legislators and the administration, to finally end the endless forced redistribution of private lands.
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See also:

Photos, IPRI 2019 launching in KL, Oct. 19

Some of the photos when the International Property Rights Index (IPRI) 2019 was launched in Kuala Lumpur, Malaysia last October 19. It was during panel 2 of the Institute for Democracy and Economic Affairs (IDEAS) Liberalism Conference held at  at Renaissance KL Hotel.


Dr. Sary Levy-Carciente presented the results of IPRI 2019 while I spoke about Banning brands.



The next day, October 20, was our rest day, especially for me. Then October 21 morning we have media interview at the new office of IDEAS, then lunch with IDEAS CEO Ali Salman, then we headed to the airport for our flight to Singapore.

Thanks again IDEAS, especially Ali and Amir.

Sunday, October 27, 2019

BWorld 374, DoH budget and drug price control

* My column in BusinessWorld on October 03, 2019.


The Philippines’ public health sector is not a “deprived” sector in terms of annual budget to fulfill various agencies’ functions and mandates. There are three reasons why.

One, the annual budget of the Department of Health (DoH) keeps rising and constitutes around 7% of total budgets by all departments, the Legislative, and Judiciary. The data in the table comes from the Department of Budget and Management (DBM), Budget of Expenditures and Sources of Financing (BESF), submitted to Congress usually days after the President’s SONA.



Two, there are many other national agencies that also provide public health services and subsidies, like the hospitals of state universities including the University of the Philippines’ Philippine General Hospital, hospitals by other agencies like Armed Forces of the Philippines Hospital, Philippine National Police Hospital, plus health subsidies by Philippine Amusement and Gaming Corp., Philippine Charity Sweepstakes Office, and other national agencies.

Three, local government units (LGUs) have their own provincial hospitals, or district hospitals, even city hospitals. Plus the various barangay health centers, city and provincial centers.

If all the public spending by national government and LGUs are combined, the Philippines would probably have at least 5% of GDP minimum health spending.

Now the DoH has revived the drug price control policy, officially called Maximum Retail Price (MRP), under the Cheaper Medicines Law of 2008 (RA 9502).

In 2009, the DoH and Department of Trade and Industry (DTI) jointly imposed the MRP, but because of heavy politicking that year before the 2010 Presidential elections, they avoided using the term “MRP” (which could mean “Mar Roxas for President”) and used “MDRP” (maximum drug retail price) instead. Then they invented another term, GMAP (Government mediated access price) to refer to “voluntary” price reduction. The subliminal meaning of GMAP of course was Gloria Macapagal Arroyo Price. There was no “health emergency” that year, only political emergencies for both the administration and opposition.

The DoH Secretary that time was Francisco Duque. And he is the DoH Secretary again now, and he is using the same political maneuvering to impose drug price dictatorship again.

Luckily, the DTI Secretary now does not believe in government price dictatorship and in arm-twisting innovator pharma companies to bring down their prices or face huge penalties.

The DoH target now is 120 drugs that address leading diseases and “catastrophic” conditions in the Philippines like hypertension, diabetes, cardiovascular disease (CVD), chronic lung diseases, neonatal diseases, and major cancers.

From the DoH press release, “Medicines were chosen on the basis of burden of disease in terms of magnitude and the severity of the conditions, high price arbitrage when compared with selected reference countries, and the presence of limited competition.”

These are illegal criteria, not found in the law.

Under Section 7, Chapter 6 of the IRR, among the many factors to consider in recommending MRP are the following:

“…Cost to the manufacturer, importer, trader, distributor, wholesaler or retailer such as but not limited to: The exchange rate of the peso to the foreign currency with which the drug or any of its component, ingredient or raw material was paid for; Any change in the amortization cost of machinery brought about by any change in the exchange rate of the peso to the foreign currency with which the machinery was bought through credit facilities; Any change in the cost of transporting or distributing the medicines to the area of destination; Marketing Costs (per drug and total global costs); Research Costs (local and global/per drug); Promotion Costs; Advertising Costs; Incentives and Discounts; Taxes and other fees, impost, duties, and other charges imposed by competent authority…”

These were not considered when price control was imposed in 2009, and again not considered when price control will be imposed in 2019. The DoH, as main implementer of RA 9502, becomes the chief violator of the provisions of the law — not good.

If we want cheaper medicines, there are many factors that government itself can do. Like reducing or abolishing import duties on medicines, taxes and VAT on medicines. Have more competition among pharma companies, innovators and generics, more competition among drug stores and pharmacies, among hospitals. Not to mention, reduce government corruption in the procurement of medicines.

The main function of government in this case is to ensure the good quality of medicines, to go after manufacturers and sellers of fake, counterfeit, and substandard medicines. Cheap but substandard medicines can kill when the disease is not controlled and mutates to something more serious.
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See also:

Photos, IPRI 2019 launching in Manila, Oct. 16

Late post, here are some photos, courtesy of the Foundation for Economic Freedom (FEF) fb photos last October 16, 2019. The event was sponsored by the Property Rights Alliance (PRA), co-sponsored locally by FEF and MGT.

Our keynote speaker that day was DTI Secretary Ramon M. Lopez. He came early and after speaking, he has to leave for another speaking engagement in Quezon City. So we held the photo ops after he spoke.

From left: Dmitri Roleda, Tony Abad (program MC), Romy Bernardo, Kristine Alcantara, Bobby de Ocampo, Lorenzo Montanari, Sary Levy-Carciente, Sec. Ramon Lopez, Calixto Chikiamco, Josephine Santiago, Vaughnn Montes, me.


Opening remarks was given by FEF President Calixto "Toti" Chikiamco, then the keynote address by DTI Sec. Ramon Lopez.



IPRI and PRA were discussed by Lorenzo, Executive Director of PRA, then the results of IPRI 2019 by report author, Dr. Sary Levy-Carciente. Followed by Q&A.




Former DOF UnderSecretary (2x) Romy Bernardo during the open forum.


The audience.



Closing remarks was given by former DOF Secretary Roberto "Bobby" de Ocampo, he is now the FEF Chairman.


I presented my case study, "Banning brand: Consumer and economic impact of plain packaging." Reactors were IPOPHL Director-General Josephine Santiago, FEF Fellow and trade lawyer Kristine Alcantara, and PCCI's IP Committee Dep. Director Dmitri Roleda.



Thank you PRA, FEF and audience for a successful launching of IPRI 2019.
See also: Photos before the launching of IPRI 2019, Manila, October 20, 2019

Monday, October 21, 2019

BWorld 373, CITIRA, IPR and investments

* My article in BusinessWorld on October 01, 2019.


Among the contentious bills in Congress now is the proposed Corporate Income Tax and Incentives Rationalization Act (CITIRA), formerly the TRABAHO bill. The Department of Trade and Industry (DTI) has a good proposal for this.

During the launching of the report, “The Importance of IPR for Progress: Reform Agenda for ASEAN Countries” on Sept. 24 at the Holiday Inn Makati, DTI Secretary Ramon M. Lopez gave the Keynote Speech and he suggested that the Income Tax Holiday (ITH) under CITIRA for innovation firms should be four years as base for products that are expanding and moving up the value chain; five years for activities like Agribusiness and investments outside Metro Manila; seven years for intermediate parts and components; and 10 years for superior to high-tech products that are not yet present in the Philippines.

These are good proposals and are related to the DTI flagship program for innovation, the “Inclusive Innovation-led Industrial Strategy” (i3S) that seeks to attract more businesses and investments to the country and see Filipinos’ innovations contribute to high value-added activities in regional and global value chains. The i3S also highlights the importance of intellectual property rights (IPR) in creating an innovation and entrepreneurship ecosystem.

Secretary Lopez also showed numbers on IPR applications in the Philippines in 2018. I expanded the numbers he gave by getting data from 2014 to 2019 first half (H1) and the data indeed saw big expansion in IPR applications: a 17% rise in 2017, 13% in 2018 and 11% in 2019 H1 (see Table 1).
  

In his presentation, Geneva Network (UK) Executive Director Philip Stevens explained that the report is a collaboration among five independent think tanks from five ASEAN countries plus the Geneva Network. The report will help raise awareness of the importance of IPRs for economic progress and proposed principles and recommendations for a high standard IP system in the region.

Philip cited the World Intellectual Property Organization (WIPO) report where one-third of the value of manufactured goods sold globally ($5.9 trillion) comes from intangible capital. Small businesses’ greatest opportunity then is to integrate into global value chains, offering specialized services or manufacturing capabilities.

On trademark in particular, Philip said that trademark-intensive industries are worth about 20% of the Philippines’ GDP. Trademark protection is essential for investment by foreign companies and the Philippines’ economic progress, but counterfeits are widespread: reported were P8.2 billion of counterfeit goods seized in 2017, up from P6.5 billion in 2016, and these include fake medicines, machine spare parts, IT goods, luxury items.

I checked trademark application (direct and via the Madrid system) data at the WIPO website — the Philippines’ numbers were low compared to its neighbors but the pace of expansion was impressive, only 18,600+ in 2011 to 31,000+ in 2017 (see Table 2).


Reactors to the presentation by Philip were Josephine R. Santiago, Director General of the Intellectual Property Office of the Philippines (IPOPHL), Jesus B. Varela, Director for Intellectual Property of the Philippine Chamber of Commerce and Industry (PCCI), and Kristine F. Alcantara, a Fellow of the Foundation for Economic Freedom (FEF).

Ms. Santiago narrated how IPOPHL encourages more use of IPR by Philippine businesses (see Table 1 again), clamping down on fakes and counterfeits. Mr. Varela urged collaborative effort to fight illicit trade, counterfeit products and services that steal from legitimate businesses, by enhancing transparency of the supply chain, and how GS1 barcoding helps here. Ms. Alcantara spoke about the Philippines’ compliance with international IPR commitments.

Forum emcee, George Katigbak, also of FEF, eloquently summarized many points and elicited questions from the audience, topics and concerns that included compulsory licensing of patented innovator medicines, drug price control, and patent linkage, among others.

This coming Oct. 16, another IPR-related international forum will be held in Manila. It is the global launching by the Property Rights Alliance (PRA, Washington DC) of the International Property Rights Index (IPRI) 2019 Report, to be held at Fairmont Hotel Makati. Co-sponsoring with PRA in this big event will be FEF and Minimal Government Thinkers.

After the official launch of IPRI 2019, to be led by author Dr. Sary Levy-Carciente, and PRA Executive Director Lorenzo Montanari, I will discuss my paper, “Banning brand: economic and consumer impact of plain packaging.” IPOPHL Director General Josephine Santiago, Kristine Alcantara and an officer of International Trademark Association regional office in Singapore will react to my paper. More discussions on IPR, trademark and corporate brand in this column in the next few weeks.
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See also:

Exports, FDI, Manufacturing, ICOR under Dutertenomics

A really good, wowie but short article -- only two paragraphs -- from my former teacher in UPSE, Dr. Emmanuel "Noel" de Dios here, "Four figures in search of commentary" published in BusinessWorld last October 14, 2019. His last sentence, "below are some figures that seem to express definite trends or turning points. But the meaning is left to the reader who might have a different interpretation. The titles, of course, are completely gratuitous."





The charts show that X/GDP, FDI/GDP, Manufacturing/GDP, are all declining especially under Dutertenomics. There is one rise, the incremental capital-output ratio (ICOR), and this is bad news actually. ICOR shows inefficiency of investments so the lower the ICOR, better.

I think the TRAIN2 bill, its name in 2017, renamed as TRABAHO bill in 2018, and now renamed as CITIRA bill in 2019, is part of the problem why FDI/GDP ratio under Dutertenomics reversed from continued upwards to big downwards under the present government. That bill has introduced another round of uncertainties to many multinationals especially located in PEZAs and other ecozones of other government agencies.

Sunday, October 20, 2019

BWorld 372, Energy leftism will plunge the Philippines into darkness

* My column in BusinessWorld last September 26, 2019.


The continuing anti-coal paranoia of many leftist political groups and greenie environmentalists is largely based on emotion and alarmism, far away from reason and energy realism. And based on watermelon activism — green on the outside, red on the inside.

I constructed this table below to show why I said this. The data on coal consumption in million tons oil equivalent (mtoe) is from the BP Statistical Review of World Energy (June 2019), the data on population is from the IMF World Economic Outlook database (April 2019). Simply dividing coal consumption over population we can derive the kilos of oil equivalent (koe) per capita. (See Table 1).


Does the Philippines’ coal consumption of only 153 koe per person in 2018 appear to be “too scary, too Frankensteinin,” that the country should limit — if not stop building — new coal plants and phase out old coal plants? If it is too scary, then how would the watermelon activists call the coal consumption per capita of Australia, South Korea, Taiwan, and China which are nine times to 11 times larger than the Philippines’ — horribly Frankensteinly scary?

Aside from the mythical claim that the Philippines already has big coal power capacity, another dishonest claim by the paranoid anti-coal groups is that coal power will only produce more expensive prices as “stranded costs” that the consumers have to pay for decades. Far out.

The biggest private distribution utility in the country, Meralco, has successfully conducted a Competitive Selection Process (CSP) bidding and got contracts for 1,200 MW of baseload (power plants running 24/7) power with the following all-in prices, VAT inclusive: South Premiere Power for 670 MW, P4.93/kWh; San Miguel Energy for 330 MW, same P4.93/kWh, and PHINMA Energy 200 MW, P4.88/kWh.

Two things are notable about these future fixed generation prices: One, they are cheaper than recent generation charges by the company which were P5+ per kwh. (See Table 2) 


And two, coal prices would go up further in 2020 and beyond because of the higher excise tax on coal under the TRAIN law, from P10/ton to P50/ton in 2018, P100/ton in 2019, and P150/ton in 2020. And yet future prices of coal power for electricity will go down to below P5/kWh.

Another group of energy leftists rallied to oppose the 1,200-MW Atimonan One power plant because it is a coal plant. Going back to Table 1 as previously mentioned, we have very little coal power consumption despite having zero nuke power, little natgas power from the ageing Malampaya gas field, and ageing hydro, geothermal, and coal plants. If the lefties succeed in opposing new coal plants, we are courting a scenario of frequent blackouts in the coming years.

The anti-coal groups and activists can only mouth slogans and emotional statements, not facts-based research. They should not brag in their lousy and emotional campaigns, they should be ashamed instead because they are dragging the country towards darkness and frequent blackouts, of less power reserves but more political noise.
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See also:

Photos before the launching of IPRI 2019, Manila

The International Property Rights Index (IPRI) 2019 was globally launched in Manila last October 16 in Manila. Some photos before the event.

Below from left: _______, Vaughn Montes, Art Corpuz, Ed Gana, Lorenzo Montanari, Executive Director of the Property Rights Alliance (PRA, Washington DC), me. Seated from left: Calixto "Toti" Chikiamco, President of the Foundation for Economic Freedom (FEF), Romeo Bernardo, Dr. Sary Levy-Carciente, author of IPRI 2019, and Gerry Choa. All of them are FEF Fellows and officers except me, Lorenzo and Sary. Dinner at Jade Garden, October 15.


Closer view.


Minutes before the official launching last October 16. Sary and Lorenzo having a chat with IPOPHL Dir. Gen. Josephine Santiago, DTI Sec. Ramon Lopez, and FEF President Toti Chikiamco.



Ok, this one is during the exploratory coalition meeting, October 17 evening. From left: me, Lorenzo, Atty. Kristine Alcantara of FEF, Andrew Masigan, a fellow BWorld columnist, Tony Abad and John Forbes, both also from FEF.


Thanks again FEF staff -- Ranna, Rhea, Mabel, others, for the big help before, during and after the launching.

Saturday, October 19, 2019

BWorld 371, Reform agenda for IPR in the ASEAN

* This is my column in BusinessWorld on September 24, 2019.


Today, Sept. 24, a new report — “The importance of IPR (Intellectual Property Rights) in progress: reform agenda for ASEAN countries” — will be launched at Holiday Inn Makati. It will be jointly sponsored by the Geneva Network (GN, UK) and Minimal Government Thinkers (MGT). The keynote speech will be given by Department of Trade and Industry (DTI) Secretary Ramon M. Lopez, and the discussion of the report will be given by Philip Stevens, Executive Director of GN and yours truly as head of MGT.

Reactors will be Josephine R. Santiago, Director General of the Intellectual Property Office of the Philippines (IPOPHL), Jesus B. Varela, Director for Intellectual Property of the Philippine Chamber of Commerce and Industry, and Kristine F. Alcantara, a Fellow of the Foundation for Economic Freedom (FEF). George Katigbak, also of FEF, will be the program MC.

The report is jointly published by GN plus five independent think tanks in the ASEAN: MGT (Philippines), the Institute for Democracy and Economic Affairs (Malaysia), Paramadina Public Policy Institute (Indonesia), the Siam Intelligence Unit (Thailand), and Vietnam Economic Policy Research Institute.

Our report noted among others, that ASEAN countries are well-placed to move up the value-chain and become more innovative, but they need to do more, to reform their IPR systems to high global standards.

According to international comparative indices on innovation, the IP framework in Malaysia, Indonesia, Vietnam, Thailand and the Philippines is still well below global standards.

Here are the global ranking and scores of selected countries on intellectual property (IP) indices from the Global IP Center’s (GIPC) IP Index (IPI) 2019 report, and the International Property Rights Index’s (IPRI) IPR component 2018 report. GIPC is a project of the US Chamber of Commerce while IPRI is a project of the Property Rights Alliance (PRA), both are based in Washington DC, USA.

  
Both domestic and foreign investors want stability and predictability in the protection of their private property and investments, both physical and intellectual. Strong IPR policies and enforcement will help them develop new goods and services, knowledge-based industries characterized by high initial investments (R&D, multiple clinical trials, etc.) but low marginal costs of production, then enter into cross-border business alliances and partnerships.

There is recognition in the Philippine government about this new reality, especially from the DTI and its attached agency IPOPHL — they exert extra efforts to remedy this deficiency and help attract more foreign direct investments and help start-up businesses.

But it seems the DTI and IPOPHL can only do so much. Other agencies in the government are less helpful, like law enforcers that seem to play along with large-scale counterfeiters of various consumer products.

In the health sector, life science patents are becoming more difficult to obtain and there are concerns that compulsory licensing (CL) of famous, patented drugs could become more widely used. CL is partly or largely driven by envy — some companies would not spend on very expensive and risky R&D (like patients under clinical trials may suffer serious side-effects) but when the new drug molecule is later proven to be safe and effective in killing or controlling certain diseases, the lobby to issue CL becomes louder. When CL becomes a norm, the likelihood that newly invented, more powerful medicines will be launched in the Philippines will grow thin, which will also undermine the availability of generic medicines of the same molecule someday.

To promote innovation in biologic medicines, agricultural chemicals and veterinary medicines, the key IP right is not patent but regulatory data protection. The most innovative countries in these sectors have legally binding rules to protect the data for several years: the US grants 12 years of protection, EU grants 10 years; Japan and Canada eight years. The Philippines currently allows very limited protection and should bring its rules in line with international best practice.

Copyright protection is particularly important, with the creative industries set to be major growth areas. Despite the prevalence of online copyright infringement, ASEAN countries tend to lack sufficient rules and capacity for online enforcement.

To protect trademarks vs. counterfeit goods, the police, customs agencies and the judiciary need more resources and technical capacity to enforce existing laws.

The Philippines has the potential to join the ranks of the world’s leading knowledge economies. A strengthening of IPR will be necessary to achieve this. In particular: Speed up the examination of patents; do not discriminate against specific technologies in the granting of patents; restrict the use of CL of patents to true emergencies; strengthen the enforcement of copyright, particularly online; enable courts and officials to act against goods that infringe trademarks including those in transit between countries; raise awareness of the importance of trade secret protection; and provide sufficient terms of regulatory data protection for medicines, veterinary medicines and agricultural biotechnology.
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See also:

Photos, launching of IPR-ASEAN report with Geneva Network

Late post, photos last September 24, 2019, when the report "The importance of IPR for growth: reform agenda for ASEAN countries" was officially launched in Manila at Holiday Inn Makati. The report is sponsored by the Geneva Network (GN, UK) plus five partner independent think tanks from the PH, MY, ID, TH and VN. Our keynote speaker was DTI Secretary Ramon M. Lopez.

Below, from left: Josephine Santiago, Atty. George Katigbak, Secretary Lopez, Philip Stevens, me and Jesus "Jess" Varela.


Atty. Santiago is the Director General of the Intellectual Property Office of the Philippines (IPOPHL), Atty. Katigbak is with the Foundation for Economic Freedom (FEF) Property Rights Team and served as program MC that afternoon. Philip is the Founder and Executive Director of GN and is my friend since 2005 when he was still with the International Policy Network (IPN, UK). Jess is the Director of the IPR Committee, Philippine Chamber of Commerce and Industry (PCCI).

Below from left: Jess Varela, Atty Kristine Alcantara, Dir. Gen. Santiago, Atty. Katigbak, me and Philip.


Atty. Alcantara is with the Trade Lawyers firm and also an FEF Fellow. She, Jess and DG Santiago served as reactors to the report presented by Philip that afternoon.

Below, a b&w version of the photo posted by Kristine. Cool.


I made the opening remarks, I showed some of my columns in BusinessWorld about IPR.


Some of the audience and speakers that afternoon.


Thank you Philip, Sec Mon, DG Santiago, Jess, Kristine, George. Thanks also FEF staff who helped me invite other participants -- Rhea Dealca, Mabel Almenteros, and Ranna Pintor. Thank you friends and participants who came that afternoon.

Thursday, October 03, 2019

BWorld 370, Universal healthcare via lower medicine taxes and tariffs

* This is my article in BusinessWorld last September 19, 2019.


Among the ironies of government health policies regardless of administration is their cry for “cheaper medicines” — and then they impose various tariff and taxes on medicines that make these products more expensive.

I checked the tariff and duties for imported pharmaceutical products at the World Trade Organization (WTO) and I was surprised to see that zero tariff in medicines is imposed by a number of our neighbors in the region while the Philippines imposes a nearly 3% tariff, aside from 12% VAT on medicines (See Table 1).


Other countries have higher medicine tariffs: Nepal has 14%, Pakistan 11%, Laos 10%.

This coming Monday, Sept. 23, there will be a UN High-Level Meeting (UN HLM) on Universal Health Coverage (UHC). Their theme is “Universal Health Coverage: Moving Together to Build a Healthier World.”

The UN and WHO send this virtue signaling to member-country governments to further raise taxes, impose more prohibitions and restrictions on “unhealthy” products to achieve a “healthier world.” So that the Philippines’ Department of Health, Department of Finance, other agencies create new legislations and regulations to implement this signaling.
  
But people around the world have been living healthier and longer, even before UHC was coined and before various taxes or tax hikes on alcohol, tobacco, sugary drinks and food were imposed (See Table 2).


Related to this, a new report was released this week, “Accelerating access to medicines: Policy recommendations for achieving the health-related Sustainable Development Goals.” It was produced and co-signed by 15 independent and non-government think tanks from 14 countries including the Geneva Network (UK), Minimal Government Thinkers (Philippines), and four others from Asia.

The report has noted that government itself is among the causes of expensive medicines and thus recommended three ways to reduce medicine costs: reduce taxes, abolish tariffs, and eradicate other trade barriers. In particular, it recommended that “Non-members should join the WTO Pharmaceutical Tariff Elimination Agreement (‘Zero for Zero’ initiative). If this is not possible, countries that still levy tariffs should unilaterally abolish them.” Yes, the Philippines should reduce its double talk by cutting its pharmaceutical tariffs of 2.8% to zero (See Table 1 again).

Regarding improving access to medicines, the report also noted that government itself creates regulations that in the process delay or limit access to medicines by the people. Thus, the report made four recommendations: Speed up patent examination, simplify the drug approval process, modernize government medicine reimbursement decision-making, and promote open trade in medicines.

Open trade in medicines means allowing more market competition via: (1) a stronger role for the WTO in enforcing existing laws vs. mandatory local content requirements; (2) instead of protectionism, developing country governments should make their economies more attractive to foreign investment by among others, investing in human capital and physical infrastructure; and, (3) public procurement of medicines should be transparent, ensure best interests of the taxpayers.

As this column has repeatedly argued, cheaper products like energy, rice, transportation, healthcare and medicines is possible if government steps back via less taxes and tariff, less mandates and prohibitions, have more competition among producers and sellers of these goods and services. Government should only ensure good quality commodities from competing players by heavily penalizing producers of fake, counterfeit, substandard, and unreliable products.
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Inequality 39, Capitalism and its detractors

A friend, Richard Heydarian, posted this article in his fb wall with his note, "Injustice of capitalism 🙈"

'Eye-Popping': Analysis Shows Top 1% Gained $21 Trillion in Wealth Since 1989 While Bottom Half Lost $900 Billion”
byJake Johnson, staff writer
Friday, June 14, 2019

I commented, "And you want the 'justice' of socialism? Fb capitalism is cool, even critics of capitalism super enjoy and use it."

Richard replied, "not sure about the bottom 60 percent of world population subsidising the billionaires on top... these networks are extracting 'rents' by appropriating commons..."

No. We users of FB, YouTube, Twitter, Google, etc, do not subsidize the owners of these great inventions. It's the reverse, their inventions subsidize and modernize our lifestyle. We should be thankful of them, not demonize them because they are super rich. Of course these guys are not  angels but neither are they devils as most lefties would portray them.

And to say "appropriating commons" is wrong. These products and services are not part of natural commons like air, sea and mountains. These were non existent before, they were invented by bright minds who know exactly what the people want. They become rich, they privatize what they privately invented and risks taken.

On “data mining” by these socmeds -- when I sign up for "free" social media, I know that owners of these platforms also have free access to my posts, pms, etc. I don't care. People who are bothered with this, I suggest they deactivate NOW. Keep their privacy to the max, minimize emails too. There are tradeoffs to some "freebies" like free fb, free twitter, etc. I accept the tradeoffs. Rich inventors of these socmeds meet happy subscribers worldwide. The beauty of capitalism, people transact their businesses on a voluntary scheme, no one is forced, coerced to sign up and give up something.

On the contrary, the stupidity and idiocy of socialism -- people are forced, coerced to feed the wasteful and irresponsible, via high taxes, mandatory fees and contributions. Venezuela is a good case when people or leaders lambast the profit system and replace it with heavy state coercion system. Result is equality of poverty and misery, lousy.

(Linear inequality graph, not mine, I only got it from the web, CTTO, thank you.)
Private enterprise and the profit system really results in more inequality, 100%. Because people have free will. The will to be hardworking and the will to be complacent. Some people work hard 6-7 days a week but if they also party 6-7 nights a week and have zero savings, then they are headed for poverty, 100%. The super-rich are demonized because they know how to super-save, how to reinvest instead of spending quick their initial big earnings. This is wrong. 
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