Energy 134, WTI crude touched below $1/barrel

All-time low oil prices today.
From the all-time high of $165/barrel in June 2008...

https://www.macrotrends.net/1369/crude-oil-price-history-chart

Today it touched near zero, 3 cents per barrel.

https://tradingeconomics.com/commodity/crude-oil

Producers cannot find enough storage for their excess production. Some producers in Canada are pricing negative, meaning they will even pay people to get and store their oil.

May WTI Contract Crashes To $1; Alaska, Bakken, & Edmonton All Pricing Negative

by Tyler Durden

Mon, 04/20/2020 - 12:56

https://www.zerohedge.com/markets/historic-oil-crash-sends-canadian-oil-prices-negative

The anti fossil fuel planet saviours shd be jumping with joy now, people are using very little oil, and gas and coal, their advocacy is accomplished by the China virus.

On the supply-demand oil, global demand in 2019 was 99 million barrels per day (mbpd). Projection for 2020 before the pandemic is 100-101 mbpd. With current global lockdowns and scare, demand is estimated at only around 70 mbpd. That's why the planned production cut of 20 mbpd failed to lift prices up.

These very low oil and gas prices can push oil export dependent countries like Saudi, Russia, Iran, Iraq, etc to the brink of domestic riots. Their dictatorial govts give lots of freebies to their citizens in exchange for their political obedience. Now these govts are suffering from very low oil revenues, cannot sustain the many freebies.

They should cut production by at least 25 mbpd. Big problem, who will cut by how much as they are scared of further losing their market shares abroad

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See also:

Energy 131, Labor productivity by power sources, November 19, 2019 

Energy 132, US crude oil production now 13 mbpd, January 24, 2020 

Energy 133, Oil prices decline with Covid scare, March 2, 2020

BWorld 429, Treatment innovation vs. politics of envy

* My article in BusinessWorld, April 16, 2020.

In an address to the nation last Monday, April 13, about government policies to fight the China virus, a.k.a. SARS-COV2 which causes COVID-19, President Rodrigo R. Duterte said that a new treatment, an “antibody” has been developed by a giant pharmaceutical company. Problem is that “we are on the last ladder. Ang mauna niyan ‘yung mga mayayaman” (the first to benefit are the rich).

We take this statement by the President to make the following arguments.

One, there are many new treatments and new vaccines being developed by many companies. So not just one or two but more than 300 from at least two dozen pharmaceutical and biotechnology companies and laboratories. Vaccines are used on healthy people to train their immune system to recognize pathogens like the one that causes COVID-19 and neutralize these diseases before they can harm the body (see Table 1).

Of the 300+ active clinical trials, the majority are antiviral or target the virus directly, the rest focus on related effects of COVID-19 like pneumonia, inflammation, monoclonal antibodies, cell therapies, etc.

Two, some existing drugs can be repurposed to fight the virus and be manufactured cheaply. Prices as low as $1 to $29 per course of treatment and still deliver some profits to the innovator companies. They still need further clinical trials to specifically address COVID-19 but they have been used in some countries already (see Table 2).

Of the 300+ active clinical trials, more than 200 are testing medicines previously approved for another indication like the above drugs, antiviral combinations, and novel compounds.

Three, public health policies, not country wealth, will determine who will get new medicines and vaccines. There is more competition among many medicines both existing and under development from many innovator companies, so physicians and patients will have more choices. Despite this, some governments are preparing anti-innovation, anti-IPR policies like compulsory licensing and drug price control that are meant to punish innovator companies (see Table 3).

Four, new drug price control policies should be reversed by the President to attract innovators. When any of those new medicines and vaccines under development become successful and are available in the market, let the innovators bring their products to the Philippines. Initial high prices to cover high costs and high risks of developing these products can be mitigated by bulk purchase, lowering the price. EO 104 aims to impose price controls at the maximum wholesale price (MWP) then maximum retail price (MRP) levels and one of the four criteria is if medicines are most prescribed by physicians. Like compulsory licensing, this is based on envy, penalizing successful, revolutionary, disease-killer medicines and vaccines. The anti-rich, anti-innovator philosophy is wrong.

A rich family normally has drivers, helpers, other household and office workers. When that rich family is infected, chances are they might also infect their workers, who might infect the neighbors, vendors, family members and other people they interact with. When that rich family is protected by new medicines and vaccines, the threat of infection to other people is controlled. They might even shoulder the price of vaccination of their household staff. So the rich benefitting from new treatment will also benefit the poor.

The politics of envy is wrong and based on emotional and populist sentiments. Policies like compulsory licensing and drug price control should be avoided and abandoned. Attracting more innovation and competition is the way to help combat this virus scourge.

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See also:

BWorld 426, Electricity pricing under hysteria conditions, April 12, 2020 

BWorld 427, March lockdowns are not price infectious, why? April 16, 2020 

BWorld 428, Alcohol, tobacco and vapes, virus infection and WHO disinformation, April 17, 2020

Covid 6, Hysteria and disruptions in food production

Among the distortionary if not idiotic moves by the government in fighting the China virus aka Covid-19 are those many checkpoints and roadblocks that restrict if not prevent movement of people and goods, including agri products, their inputs.

(this photo I got from the web)
Government culture is often one size fits all. Once a lockdown is declared, many national to Brgy personnel take it as an order, or an opportunity for extortion. In Pangasinan town that I regularly visit, some corn planting djd not push through in many brgys because the tractors, fertilizers will come from another Brgy or town and they are restricted by the checkpoints. In the farm, eggplant planting for about half hectare was discontinued because the seedlings, high yielding variety, would come from about 4 towns away.

From Comelec Commissioner, also former Cadiz City, Negros Occ. Mayor Bing Guanzon: 

Here in Negros the milling season should have started but the sugarcanes are left drying in the haciendas because the trucks can't go through the checkpoints. We have the most number of sugar mills in the country and thousands of workers have no income. They depend on the landowner for day to day needs , even if some of them benefit from the cash assistance.

Hysteria de drama pa more.

A good article by Mahar here:

Allow people the freedom to earn a living

By: Mahar Mangahas - @inquirerdotnetPhilippine Daily Inquirer / 05:05 AM April 18, 2020

https://opinion.inquirer.net/129000/allow-people-the-freedom-to-earn-a-living

The responsibility for surviving the COVID-19 pandemic ultimately lies with the Filipino people, not the Philippine government….

COVID-19 testing does not cure the carriers, but only identifies them so as to prevent them from infecting others. Persons who are asymptomatic, and untested, do not deserve to be universally quarantined.

Unnecessary restrictions on personal movement. As long as persons wear face masks and keep adequate distance from each other, it does not make sense to inhibit them from moving across barangays, cities, or provinces within Luzon. The mere act of moving across a boundary does not imply the act of crowding. Checkpoints do not make sense; in fact, they promote crowding by creating queues where there were none….
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See also:
Covid Reflections 3, Economic hysteria getting worse, March 26, 2020 
Covid Reflections 4, Global deaths from previous pandemics, April 04, 2020 
Covid 5, Co-mortality of Covid + existing diseases, Philippines, April 11, 2020.

FNF webinar on freedom and the pandemic

This morning I joined the FNF’s "Freedom in the Time of a Pandemic" webinar via zoom. The topics and their speakers:

Democracy under threat - Ms. Marites Vitug, Rappler editor-at-large

Impacts on the economy - JC Punongbayan, Rappler columnist

Disinformation and freedom of expression - Matthew Reysio-Cruz,

Philippine Daily Inquirer Journalist

Philippine public health system - Dr. Joey Hernandez,

Philippine Society of Public Health Physicians

Understanding human rights - Marc Siapno, Commission on Human Rights

Suppression of freedom of movement - Ira Cruz, AltMobility

Frankly, I find some speakers more rhetorical than substantial. Maybe because I always look for numbers and hard data when I make any opinion. Here I will just post my comments and questions during the webinar.

1. Why not tax cut for people and SMEs, instead of more govt spending, more borrowings, which will require more taxes? Like waive VAT, car/motorcycle registrations for one year, count the total revenue loss as fiscal stimulus, billions of pesos.

JC Punongbayan replied:

Even if taxes are reduced, collections will be minimal because the economy is in shutdown, and people won’t go out and spend because of COVID-19 interventions. Payroll tax cuts also are regressive; many low-income workers already don’t pay taxes due to the TRAIN law, and payroll tax cuts won’t benefit those in the informal sector.

Me: No. All SMEs have a car, a van, even a tricycle or motorcycle. Just waive these registration fees, even the mandatory smoke emission fees racket.

Companies will recover mid or late this year, let them keep more money in their pockets via tax cut. But govt distrusts people. Govt does not believe that people can do good for themselves and their employees, only govt is trustworthy so govt will collect all taxes, centrally plan who will get how much. More central planning being aided by this hysteria.

Tax cut need not refer to personal income tax. It can refer to VAT, MVUC, excise tax, etc. Give people and companies breathing space, allow them to keep more money in their pockets for just one year, not surrendered to the govt bec govt is super bright, super sincere they won't waste or steal the money or spend on their friends and cronies.

2. Hi Wolfgang, the hysteria is leading towards one direction -- more govt, bigger govt. See how the President refers to Martial Law. See how the DOF, Congress talk about P1.2 trillion of extra spending on top of P4.1 trillion approved budget in 2020. See how they want to expand more borrowings from the multilaterals, and see how they already warn of more taxes, more regulatory fees, more fines and penalties starting next year. We prepare for more dictatorships, pol and economic, in the coming years.

(This question has been answered live)

3. Guys, have you seen the weekly data on "excess mortality", actual official registered deaths in EU and US? In EU, until week 15 2020, meaning until 4th week March, excess mortality in flu season 2016-17 are much larger than flu season 2019-20.

https://www.euromomo.eu/

The same for US, flu season 2017-18 has more excess mortality than flu season 2019-20 until week 13 2020, latest data.

https://gis.cdc.gov/grasp/fluview/mortality.html

What happens now why the hysteria is big is that people who died because they have cancer + Covid, acute hypertension + Covid, old age with many diseases + Covid, etc., are now counted as Covid deaths.

More hysteria, more government, bigger government.

Nonetheless, thank you FNF-PH, Wolfgang, for this webinar. 

BWorld 428, Alcohol, tobacco and vapes, virus infection and WHO disinformation

* My column in BusinessWorld last Tuesday, April 14, 2020.

In the ongoing Enhanced Community Quarantine (ECQ) in the Philippines, there are many prohibitions and closures — office or shop work, many businesses, and public transportation have been shut, strolling around and long travel are prohibited, etc. Also among the weird bans is a liquor ban in many cities in Metro Manila and provinces, and cigarette and e-cigarette bans in some small municipalities like General Luna in Quezon province.

The main reason given is that these three products are seen to weaken our body’s immune system against the China virus infection, so these should be restricted or prohibited for the ECQ duration.

And the World Health Organization (WHO) issued a paper, “WHO, Q&A on smoking and COVID-19” (posted March 24) saying that “smokers are likely to be more vulnerable to COVID-19 as the act of smoking means that fingers (and possibly contaminated cigarettes) are in contact with lips which increases the possibility of transmission of virus from hand to mouth.” (https://www.who.int/news-room/q-a-detail/q-a-on-smoking-and-covid-19)

Is the WHO correct here? I want to see numbers to verify if the WHO is correct or spreading disinformation. I searched many materials online and I found two case studies, in China and the US. The China case study, “Smoking, vaping and hospitalization for COVID-19,” (10 pages) was published (April 4) by three academics, Konstantinos Farsalinos, Anastasia Barbouni, and Raymond Niaura. The first two are from the University of West Attica, Athens, Greece and Dr. Niaura is from New York University, USA. The authors made a review of publications on PubMed using the terms “[SARS-CoV-2 OR COVID-19 OR 2019-nCoV] AND [Clinical OR Mortality OR Outcome].” Out of 432 studies in total, the authors identified 13 studies that included data about smoking status of hospitalized COVID-19 patients.

I repost their table below but I did not include three studies which have small sample sizes of below 140 patients. The median interquartile (IQR) or mean standard deviation (SD) age of patients are given. There is an interesting revelation – in China, with high smoking prevalence of 26.6%, only about 7% of the hospitalized COVID-19 patients are current smokers (see Table 1).

The authors concluded, “The generalized advice to quit smoking as a measure to improve health risk remains valid, but no recommendation can currently be made concerning the effects of smoking on the risk of hospitalization for COVID-19. No studies recording e-cigarette use status among hospitalized COVID-19 patients were identified. Thus, no recommendation can be made for e-cigarette users.”

Next the US case. I found a report from the US Centers for Disease Control and Prevention, “Preliminary Estimates of the Prevalence of Selected Underlying Health Conditions Among Patients with coronavirus disease 2019 — United States, February 12–March 28, 2020” (posted April 30). An attached table shows the total cases with case report forms, 74,439, of which (a.) with missing or unknown status for all conditions, 67,277, and (b.) with completed information, 7,162.

And the table shows another interesting revelation — only 3.6% of the US’ COVID-19 cases as of March 28 are former or current smokers. Meaning 96.4% are non-smokers, past or present, and they still got the infection (see Table 2).

In the two cases, the big lesson is that the WHO is spreading disinformation when it announced that “Smokers are likely to be more vulnerable to COVID-19…”

And If we follow the WHO’s logic that hand to mouth actions like smoking or vaping increase the risk of transmission, then finger-lickin-good foods like potato chips, KFC chicken should also be avoided or banned?

The WHO and many national governments’ Health Departments or Ministries seem to have PhD and post-doctorate degrees in regulating, banning certain products to deal with non-infectious diseases, but they seem to have only an AB or high school degrees in dealing with really killer infectious diseases like dengue and many strains of corona viruses. They should learn to reverse their priorities.

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See also:

BWorld 425, Virus, bacteria, and pneumococcal diseases, April 11, 2020 

BWorld 426, Electricity pricing under hysteria conditions, April 12, 2020 

BWorld 427, March lockdowns are not price infectious, why? April 16, 2020

IPR and Innovation 46, IP rules and Covid-19

I am reposting a good article by my friend Philip and his buddy Mark.
-------------

Messing with IP rules may affect COVID-19 response

April 8, 2020 | 5:20 pm

By Prof. Mark Schultz and Philip Stevens

https://www.bworldonline.com/messing-with-ip-rules-may-affect-covid-19-response/

With around a third of the world’s population in lockdown, humanity desperately needs new treatments to turn the tide against COVID-19. Our hopes depend on sensible coordination between the government and private sector.

Government and the private sector have essential roles to play. With irreplaceable expertise in practical research, clinical trials, manufacturing and distribution, the private sector knows how to take treatments from lab to bedside.

Public sector leadership, meanwhile, can direct resources where they are most needed, clearing obstacles and coordinating efforts.

Globally, researchers are racing to develop technologies to keep people out of intensive care and allow health systems to cope. Their tireless efforts fuel hopes of a treatment to ease the worst symptoms within weeks, and a vaccine within 18 months.

The private sector is rising to this Herculean research and development effort. At least 20 companies are conducting clinical trials of potential treatments, with a further six racing to be the first to find a vaccine.

Many governments are working to quickly clear the approval path for desperately needed treatments. Brazil is removing regulatory bottlenecks by relying on approvals for medicines in other major markets. We hope other countries will follow.

Crucially, public health authorities are collecting data, sharing vital information, and directing treatments where they are most needed.

Public-private coordination will give us a fighting chance.

But campaigning by health NGOs such as Médecins Sans Frontières and the UN-funded South Centre is pressuring governments into drastic action. They are calling for new legislation to pre-emptively confiscate the intellectual property (IP) of any coronavirus treatment yet to be invented, in the hope that treatment will be free for all.

This short-sightedness has struck already. Canada, Chile, Ecuador, and Israel have already moved to suspend IP rights such as patents for new COVID-19 treatments with others set to follow. The Philippines may follow.

Crisis demands extraordinary efforts, but these populist proposals risk undermining the global system for developing and delivering urgent treatments.

For instance, drug makers must spend millions to ramp up manufacture for any new treatment. Yet this is fraught with commercial risk. Kenneth Kaitin, director of the Tufts Center for the study of drug development, says: “You don’t want to invest a lot in manufacturing before you know you are going to have a drug on the market. [Yet] you want to make sure you can manufacture as much as needed, perhaps hundreds of thousands of doses at the end of the day.”

IP rights enable firms to mobilise the money for these massive manufacturing and supply chain investments and manage that risk.

IP is also vital to turning a promising idea into a real treatment. Dr. Derrick Rossi is the founder of Moderna, a young biotech company that brought the first potential COVID-19 vaccine to clinical trials in record time. We asked him recently if the government could replace the private sector in bringing treatments to patients. His response: “not a chance.”

Funding basic research is key, but just the start. “Academics are good at academia and fundamental science. They are not good at developing drugs for patients,” says Dr. Rossi. Nor do governments have the expertise, facilities, or resources to take a new treatment to market, and they usually cannot tolerate the risk of losing massive amounts of money on treatments that often don’t work out.

The existence of IP rights has enabled a rapid response to COVID-19 by the private sector. Companies are looking afresh at old drugs in their patent portfolios that never made it. Others are investigating repurposing existing medicines for other diseases. Short term, they offer the best hope of an effective COVID-19 treatment.

IP rights have not stood in the way so far. The UK will shortly make available millions of new antibody tests at minimal cost. Investigations continue into the usefulness of chloroquine, a malaria drug whose patent has long expired. A promising HIV drug has been licensed for global generic production by its US owner. And many of the other existing drugs that are being repurposed for COVID-19 are off-patent.

The private sector is mobilizing not for their share prices, but because it’s the right thing to do. But removing IP rights will only inject uncertainty into an already difficult picture.

 Technology will play the key role in allowing us to get back to our normal lives. But globally, we need governments to lead and not get distracted by counterproductive ideas.

Prof. Mark Schultz is the Goodyear Tire & Rubber Company Chair in Intellectual Property Law, University of Akron School of Law. Philip Stevens is Executive Director of the Geneva Network.

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See also:

IPR and Innovation 43, Recent news on India, China and HK on IP, May 14, 2019 

IPR and Innovation 44, Plain packaging on sweets, soda -- impact on investment and health, June 04, 2019 

IPR and Innovation 45, PH IPR courts, BOI-IPO, GII 2019, August 6, 2019

BWorld 427, March lockdowns are not price infectious, why?

* My article in BusinessWorld, April 8, 2020.

When I saw the huge drop in electricity demand for March 2020 compared to March 2019, -5.5%, a result of business shutdowns and enhanced community quarantine (ECQ) in the second half of the month, I was expecting that March inflation would be something like 1.5%. I was wrong.

I checked other major economies with March 2020 inflation data, and it shows that deflationary pressure is building up fast in Europe, in places like Italy, Spain and France, but not so much in Asia (see the Table).

The reason for my rather bleak expectation for the Philippines’ March inflation is that I was expecting that less economic activities and business shutdowns means less income for the people and so their demand for various goods and services will decline, leading to decreased prices.

Of the 11 commodity groups that constitute the inflation basket, only Transport registered a price contraction in March, -1.8%, and it is understandable. But with closure of all malls and movie houses, all restaurants and bars (except food take out and delivery), I was expecting that at least these three commodity groups — Recreation and culture, Alcoholic beverages and tobacco, Restaurants and Misc. — would experience price contractions too. Did not happen. Prices of alcohol and tobacco products are now determined more by high and rising taxes, not consumer demand.

What spiked inflation instead was in Food and Non-alcoholic beverages, from 2.1% in February, it went up to 2.6% in March. The likely reason for this are those blockades and lockdowns starting March 15 when Metro Manila quarantine was implemented, worsened by the so-called “enhanced community quarantine” (ECQ) for Luzon by March 17. These adversely affected food supply — chickens, hogs, beef, vegetables, fruits, rice, etc. — with delayed or even spoiled products.

Government cash and food distribution started around March 27 when P65 billion of the P275 billion in new spending under the Emergency/Bayanihan law have been released to local government units and have given spending power to some poor households.

So three factors — high taxes on alcohol, tobacco, sugar products; blockades and delays in transportation of raw food products; and government cash handouts — were the main reasons why a decrease in economic activities did not result in significant decrease in prices.

I am expecting that inflation will decline significantly in the next two to three months, then go up in the succeeding months as the impact of Central Bank money printing will kick in.

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See also:

BWorld 424, Medicine innovation and politics vs innovators, April 04, 2020 

BWorld 425, Virus, bacteria, and pneumococcal diseases, April 11, 2020 

BWorld 426, Electricity pricing under hysteria conditions, April 12, 2020

Earth Hour 10, Higher electricity consumption in EH 2020

Late post, from the IEMOP/WESM data on electricity consumption in the Luzon and Visayas grids, Philippines, EH 2020 on March 28 Saturday, 8:30-9:30pm -- there were even higher electricity demand or consumption at 8 and 9pm, than 7pm or 10pm.

Meaning people were just leaving their lights on that night nd ignored the idiotic campaign to glorify darkness for one hour. If it's not idiotic and a bright thing to do, then campaigners and believers should turn off their lights one hour (or more) every night, 365 nights a year. They won't do that of course, precisely because they think it is idiotic to glorify darkness.

Meanwhile, based on Paris Agreement 2015, the global ecological central planning and socialist movement were waiting for climate money of $100 billion/year starting 2020. Not happening so they could be shifting their effort now.

Meanwhile, I like these two articles:

1. Good stuff:
Why Severe Social Distancing Might Actually Result In More Coronavirus Deaths

APRIL 3, 2020

The author is an academic physician and researcher at an Ivy League institution in New York City.

https://thefederalist.com/2020/04/03/why-severe-social-distancing-might-actually-result-in-more-coronavirus-deaths/

The only way we are going to beat COVID-19 is by developing something called “herd immunity.” Herd immunity basically means that once a certain percentage of the population develops immunity to a virus, the rest of the population will also be protected. That percentage varies, but is often around 60-70 percent. This is why we don’t need to vaccinate 100 percent of people to eradicate or severely limit the spread of infectious diseases (e.g., polio, smallpox, and measles).

2. Lousy stuff:

California announces $125 million fund for undocumented immigrants impacted by coronavirus

PUBLISHED WED, APR 15 20204:16 PM EDTUPDATED WED, APR 15 20204:28 PM EDT

https://www.cnbc.com/2020/04/15/california-to-give-cash-payments-to-immigrants-hurt-by-coronavirus.html

California has an estimated 2 million immigrants living in the country illegally.

Immigrants are not eligible for the $2.2 trillion stimulus package approved by Congress last month, which gives cash payments to most Americans plus boosts unemployment benefits by $600 per week.

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See also:
Earth Hour 7, Lesson in basic electrical engineering, March 21, 2016 
Earth Hour 8, Celebrate darkness vs modernization, March 23, 2017 
Earth Hour 9, Hate-love of fossil fuels, March 24, 2018

BWorld 426, Electricity pricing under hysteria conditions

* My column in BusinessWorld, April 6, 2020.

The enhanced community quarantine (ECQ) which the government hoisted over the entire Luzon has resulted in large-scale business and economic losses. The overall impact on the 1st quarter GDP will be known in about two months from now, but the decline in electricity demand is known daily.

I got weekly data for March 2020 from the Independent Electricity Market Operator Philippines (IEMOP), and also the data for March 2019, and I computed the difference between the two periods. There was a big decline in power demand starting March 15, the day the Metro Manila quarantine was implemented, followed by ECQ for the entire Luzon on March 17. Big declines in average demand of 5.5% and peak demand of 8%. The customer effective spot settlement price (ESSP) at the Wholesale Electricity Spot Market (WESM) was down by 60% to only P2.08/kWh (see Table 1).

  

This means big savings for residential customers and the few commercial and industrial customers that are allowed to continue operation. It also means big losses for both generation companies (gencos) and distribution utilities (DUs) like Meralco in terms of decline in revenues. I assumed a 5% decline in megawatt hours (MWH) for March 2020. My estimated losses for gencos in the Meralco franchise area alone is about P934 billion and for Meralco itself, about P33 billion (see Table 2).

Now the Laban Konsyumer Inc. (LKI), headed by my new friend Vic Dimagiba, sent me its letter to the Philippine Independent Power Producers Association, Inc. (PIPPA) dated March 26. LKI is asking the private independent gencos to accept a Force Majeure provision of their Power Supply Agreements (PSAs) with DUs and electric cooperatives because electricity consumers in Luzon should be spared from paying fixed charges for generation capacity that was not consumed, that GenCos will have windfall profits for “ghost” deliveries.

My understanding of this letter is that LKI wants the contract price under PSAs, say P4/kWh, to be forced to go down to the WESM level of P2.08/kWh for March 2020. Otherwise they will demonize and lambast the gencos as greedy.

This is an irrational demand by LKI on the following grounds.

One, a PSA contract price is an important incentive for companies to stay, even expand in the power generation business. Otherwise they might consider going into hotels, restaurants, hospitals, and other businesses and leave the country’s power supply situation further in peril.

Two, it is selective as it targets only the power supply sector for some parochial interests. LKI did not write similar petitions to water companies, telecom and internet companies, food manufacturers, trucking and logistics companies, etc. It did not say that they should bring down their prices in this period, otherwise LKI will demonize and lambast them as greedy.

Three, customers are charged on their actual electricity consumption, not on electricity produced that was not consumed. The claim of “windfall profits for ghost deliveries” is an illusion.

Four, as shown in Table 2, the gencos, and even DUs like Meralco, have already suffered big revenue losses of nearly P1 billion for this March alone.

Five, I am not a lawyer but I think the Force Majeure provision mainly applies to “Acts of God” and not Acts of Government. The ECQ is an economic and business punishment imposed by the government in exchange for the public health goal of “flattening the curve” of the China virus infection, a.k.a. COVID-19.

The Department of Energy and the Energy Regulatory Commission, among the entities cc’d by LKI, should not entertain this irrational letter from LKI. People should learn to respect business contracts, wait for voluntary waivers or price reductions but not forced waivers and price controls.

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See also:

BWorld 423, Estimating electricity and growth slowdown Q1 2020, March 28, 2020 

BWorld 424, Medicine innovation and politics vs innovators, April 04, 2020 

BWorld 425, Virus, bacteria, and pneumococcal diseases, April 11, 2020.

Weekend Fun 69, Math with the witch, wand and broom

I got this from a friend, Noel Nieva. Really funny and a bit mind- or eyes-twisting, so you should zoom into each item. I posted it in my fb wall with this Spoiler -- that I will delete the correct answer and will pm guys who answered correctly.

If you have not encountered this before or know the answer before, go!

..........

..........

..........

..........

3 Clues:

Equation 1: the witch is holding 2 things,

Equation 3: there are actually 4 brooms.

Equation 4: there are actually 2 wands :-)

..........

..........

..........

..........

Most of my friends answered 32, wrong. 

..........

..........

..........

..........

Ok, here's the answer: 

Witch with wand and broom = 15

Witch without wand and broom = 15-7-3 = 5

Wand = 21/3 = 7

Broom = 12/4 = 3

Eqn 4: broom + witch w/o W&B x (2 wands), notice the double/shadow.

= 3 + 5 x (7x2) = 3 + (5 x 14)

= 3 + 70 = 73.

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See also:

Weekend Fun 66, Keith Richards is immortal, September 23, 2018 

Weekend Fun 67, Fish from China, June 30, 2019 

Weekend Fun 68, The virus test kit, by Duterte, March 14, 2020

BWorld 425, Virus, bacteria, and pneumococcal diseases

* My article in BusinessWorld, April 2, 2020.

Before the China virus — a.k.a. SARS-Cov-2 which causes Covid-19 — scare, pneumococcal diseases caused by a bacteria called Streptococcus pneumonia and their treatment were in the news. The bacteria can affect people of all ages, from babies to senior citizens, and pneumococcal diseases are a leading cause of death among children below five years old. When the bacteria invade the lungs, they can cause pneumonia and death. They can also invade the bloodstream and cause bacteremia, or invade the tissues and fluids surrounding the brain and spinal cord and cause meningitis.

The best way to combat the bacteria is pneumococcal conjugate vaccine (PCV). The Department of Health (DoH) first procured PCV10 in 2012 — this vaccine protects against 10 strains of the bacteria. Then the DoH shifted to tridecavalent PVC13 in 2014, which protects against 13 strains of pneumococcal bacteria, after the World Health Organization (WHO) cost-effectiveness studies showed that PCV13 is more cost-effective than PCV10. PCV13 was then included in the Philippine National Formulary.

The three bacteria strains not covered by PCV10 are serotypes 3, 6A, and 19A. Serotype 19A in particular is more serious, can lead to meningitis, invasive diseases, and severe pneumonia. Pneumonia is estimated to kill over 50,000 people in the Philippines yearly, the third most deadly disease in the country.

An issue came out in late 2019 when some individuals or groups questioned why PCV procurement — a total of P4.9 billion for 2020 — specified only a single vaccine, PCV13.

I got curious about the difference between the two vaccines, I made my own brief research and I found these four studies and report (see Table 1).

  

So from a technical and medical perspective, PCV13 is superior. From a financial and fiscal cost, PCV13 is more costly by about 10%. An estimate of the fiscal cost if universal vaccination is done nationwide was made in 2015, the only study I have encountered so far (see Table 2).

  

From this 2015 study, it comes to a difference of P2 billion over five years, or P400 million/year for vaccines of PCV13. Updated to 2020 costs this comes to about P500 million/year — but PCV13 will protect thousands or millions of children from more virulent diseases. The DoH should be guided more by thousands of children’s lives that will be saved, than the extra cost of half a billion pesos that it can save.

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See also:

BWorld 422, International tax cuts in virus time, March 27, 2020 

BWorld 423, Estimating electricity and growth slowdown Q1 2020, March 28, 2020 

BWorld 424, Medicine innovation and politics vs innovators, April 04, 2020

Covid 5, Co-mortality of Covid + existing diseases, Philippines

Last week April 4. I posted this in my fb wall:

Am still curious -- how many of PH virus deaths are due to pure infection vs already sick with something like mild pneumonia, cancer, diabetes, hypertension, etc then they got infection only lately? Like people who will die anyway for some diseases but are now counted as Covid deaths?

I ask that because I read the Italy Health Minister saying only about 12% of Covid deaths are due to virus infection. The rest, 88% are already sick with something and when they die, they are counted as Covid deaths. One reason why Italy deaths are highest in the world.

While many of my friends agreed with me for asking that question, a few friends turned to insults. Like this:

Josef: Where are you going with this Noy? That since the deaths are not that high lets all just go back to our normal lives and risk infecting each other, because those who will be compromised by the virus will die anyway of pre-existing conditions? That this is being blown out of proportions as to stop the world economy, when we should just treat this like any other disease? Am I correct?

... And probably the reason why doctors and medical country reports on the covid virus statistics do not have an answer to your question is because their doctors are not heartless enough to say "oh, this covid positive has diabetes, and will die of it anyway down the line, maybe 10 or 15 years from now, so lets just put his cause of death as diabetes, not covid". Only you are heartless enough to ask that question. This is so sick, I thought that even you would not think of this.

We have a long debate after that. Suffice to say that this numbers-mediocre lawyer friend just produced kilometric emotional sentences and produce zero numbers when I was exactly looking for numbers. Pathetic mind.

The main reason why I asked that question, my "agenda" for posting this -- what are the mathematical, science basis for these so many prohibitions and bawal? Prohibited/bawal to work, do business, run or take public transpo including tricycles and jeepneys, going out in a group, alcohol, etc. Many of these bawal are plain dictatorship.

Then a friend who appreciates numbers and data gave me this link,
https://public.tableau.com/profile/jason.haw?fbclid=IwAR1eWlu8-Pn4TSBaMZ_nYUBSW5ZZ_dej-D4-GYNSx8jy5fS135vI7HtTV-Q#!/vizhome/COVID-19CasesandDeathsinthePhilippines/Dashboard?publish=yes

Now if co-mortality factors are included, out of 247 total Covid deaths:

(a) Covid with diabetes, 76 deaths

(b) Covid with hypertension, 103 deaths

(c) Covid with diabetes + hypertension, 52 deaths.

So taking (b) for instance, of the 247 deaths, only 134 died due to Covid infection without hypertension. But some of these 134 may have diabetes, cancer, influenza, pneumonia, previous stroke, etc.

The possibility of exaggerated cases and deaths from China virus is still high. Then governments create many draconian measures based on faulty data.
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See also:
Covid reflections, Part 2, March 11, 2020 
Covid Reflections 3, Economic hysteria getting worse, March 26, 2020 
Covid Reflections 4, Global deaths from previous pandemics, April 04, 2020.

WTA meetings 2017 and 2019

Minimal Government Thinkers which I represent is an observer or sort of honorary member of the World Taxpayers Association (WTA, http://worldtaxpayers.org/).

December 2017 meeting in Bangkok, Thailand.
From left: Fengiang Liu of Beijing Taxpayers Association, his buddy, Mr. Kim Sun Taek of Korea Taxpayers Association (KTA), Bjorn Tarras-Wahlberg and his wife. Bjorn is the founder of WTA and former President of Swedish Taxpayers Association, and co-founder of the Asia Pacific Taxpayers Union (APTU) to my right. To my left is Raymond Ho, President of Momentum 107, Hong Kong.

May 2019 meeting in Sydney. Co-sponsored by the Australia Taxpayers Alliance (ATA) and Australia Libertarian Society (ALS).

A by-invite-only roundtable sponsored by the Americans for Tax Reforms (ATR), afternoon after the WTA meeting in the morning.

BWorld 424, Medicine innovation and politics vs innovators

* My column in BusinessWorld, March 31, 2020.

This column will briefly tackle two discoveries related to the Wuhan/China virus, a.k.a. SARS-CoV-2 which causes coronavirus disease 2019, better known as COVID-19. Take note that global deaths from regular flu, pandemics not included, is between 300,000 to 646,000 per year.

First, excess deaths over average deaths in Europe in flu season 2019-2020 (about 2,000+) were lower than flu season 2018-2019 (about 5,000), or flu season 2017-2018 (about 10,000) or 2016-2017 (about 12,000). It is a surprising revelation from official European government data itself. I learned this from a post by Dr. Roy Spencer (see Figure 1). Excess mortality by age brackets, five charts, are found here, https://www.euromomo.eu/index.html.  

  

Second, the level of new medicines, new vaccines and new diagnostics to detect whether patients are genuinely infected with the virus or not, are developing at a fast rate. As of mid-March 2020, more than 20 vaccines and antiviral medicines are being developed against this virus, undergoing nearly 80 clinical trials in various phases in various countries, data from the International Federation of Pharmaceutical Manufacturers Association (IFPMA) (see Figure 2). 

Now the same innovator companies seeking various treatment and inhibitors to this virus are being subjected to political harassment and confiscation of their successful, more disease-killing medicines in the Philippines via Executive Order (EO) 104 signed by President Duterte on Feb. 17. It aims to impose a second round of drug price controls mainly at the maximum wholesale price (MWP), then at maximum retail price (MRP). The first round of price controls was in July 2009, through EO 821 of the Gloria Arroyo administration.

I attended the Department of Health (DoH) Advisory Council meeting on March 6 at Axiaa Hotel, Quezon City, and I questioned certain provisions of EO 104.

One, the four criteria of EO 104 where price control can be imposed are not found in the Cheaper Medicines Act of 2008 (RA 9502) or its Implementing rules and regulations (IRR), they have no legal basis as DoH just invented and legislated new criteria on its own.

Two, the so-called “studies showing PH medicine prices are much higher than Asian neighbors” say as of 2018 or 2019 are actually not available, I searched for them many times online, and not in some DoH hard literature.

Three, DoH’s criteria #4, if medicines are most prescribed by physicians, then it should be price controlled. This is based on envy, penalizing successful, more disease-killing medicines. And perhaps hoping that the manufacturers of these medicines will pull out their products, not selling at a loss, so that the less-prescribed medicines by some local manufacturers will become famous?

The DoH officials in the room responded as follows:

On #1: The DoH can cover any molecules for MRP, they can establish any criteria to have “fair” pricing.

On #2: There are several studies available.

On #3: They are not penalizing success, they just want medicines that are priced “fairly.”

Consider a hypothetical situation where a new medicine or vaccine has been discovered already to be effective and safe vs the China virus and it’s high priced (high costs to develop it, etc.). Do we expect the DoH to impose price control on it?

By the DoH insistence on “fair” pricing based on very subjective criteria, the answer is very likely, “Yes.”

And that is a danger that Philippine patients and health practitioners might face. Effective treatment vs the virus is available in Singapore, Malaysia, Thailand, but not in the Philippines because the government has a political harassment EO waiting for it when it lands in the country.

The government should rethink this EO 104, pull it out without fanfare. Encourage innovators, not scare them.

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See also:

BWorld 421, More water and investments, less virus, March 21, 2020 

BWorld 422, International tax cuts in virus time, March 27, 2020 

BWorld 423, Estimating electricity and growth slowdown Q1 2020, March 28, 2020

Decentralization 11, Government centralizing foreign and private donations

The big lesson in this China virus scare is to decentralize, not more centralization. Centralized transpo like MRT and LRT should be avoided, centralized shopping like malls being avoided. Lockdowns and regional, provincial quarantines mean each LGU and area should find ways to control the spread of the virus, another decentralization. Tmplementation of lockdown is further  decentralized as Brgy leaders make their own quarantine systems, allow or disallow people from moving.

Donations by nature are voluntary and decentralized. When government wants to centralize, we can expect further centralized corruption.

UPDATED: Duterte wants donations to gov’t in fight vs COVID-19 managed by OCD

By: Krissy Aguilar - Reporter / @KAguilarINQINQUIRER.net / 12:27 PM April 01, 2020

https://newsinfo.inquirer.net/1252185/duterte-wants-donations-to-govt-in-fight-vs-covid-19-managed-by-ocd

Through Administrative Order no. 27, Duterte established a framework wherein these donations to the government and the DOH to address COVID-19 crisis will be coordinated and transmitted to the Office of the Civil Defense (OCD) for consolidation.

This covers donations from foreign governments, private entities, non-governmental organizations, or any group or individual.

Full text of AO 27, March 31, 2020, https://www.officialgazette.gov.ph/downloads/2020/03mar/20200331-AO-27-RRD.pdf

People who donated for various fund drive for PGH, etc., would we entrust our cash to Malacanang officials? Kung sila Malacanang din lang naman, we'd rather keep our money or buy beer.

Then a post was circulated on socmed analysing that Sen. Bong Go intends to control the various donations, siphon to his “Malasakit Centers” in government hospitals and he will get the credit, use the credit grabbing for 2022 elections.

I think this is something like 80% true. The other 20% I think is to know which agencies get lots of private donations and by the law of envy, do not give these agencies extra funding from the Emergency law's new billions of pesos. Siphon to other agencies or LGUs that are known to be loyal to the administration.

The Malasakit Centers are pure credit grabbing offices for Sen. Bong Go. I realized this when I attended the DOH Advisory Council meeting last March 6, Axiaa hotel in QC. I asked the DOH presenter what's the fiscal cost, additional spending, that the centers will take considering we have the expanded universal HC law already, about P200B a year and rising.

The one who answered is a consultant of Bong Go, he said no extra funding. The Malasakit Centers will just somehow centralize all funding from Philhealth, PCSO, Pagcor, Congressmen, LGUs, etc. then assist poor patients how to access these, go out with zero balance with the hosp. Magaleeeng.

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See also:

Decentralization 6: Local Fees and LGUs' Independence from NG, September 20, 2010

Decentralization 7: From Decentralization to Privatization, January 25, 2011

Decentralization 8: PIPER Forum on Fiscal Decentralization, January 06, 2012

Decentralization 9: Ben Diokno Says Recentralize, January 19, 2012

Decentralization 10: Devolution, Federalism and Subsidiarity, January 21, 2012