BWorld 461, GDP contraction, CDC PH, and medicine taxes

 * My article in BusinessWorld, November 12, 2020.

The Philippine Statistics Authority (PSA) released a bad report, saying that the Philippines’ gross domestic product (GDP) contraction continued in the third quarter (Q3) at -11.5%. The second quarter (Q2) was also revised from -16.5% to -16.9%.

I checked our neighbors’ and some developed countries’ GDP performance and among those with Q3 data, the Philippines is the only country which still has a double-digit contraction. The year-to-date (Ytd) contraction is nearly -10% while our neighbors Taiwan and Vietnam never experienced a recession and have modest growth (see Table 1).

Some people do not appreciate the relevance of GDP percentage changes so here are GDP figures in billions of pesos. GDP is measured via demand or expenditure side, and the supply or industry side. On the demand side, the biggest declines this year are on household consumption and private investments. Investments this year in particular are even lower than the level in 2017. On the supply side, the industry sector suffered a big decline. And our GDP size or flow of goods and services in a year in 2020 is even lower than 2018’s level (see Table 2).

The Philippine government’s strict, indefinite, and no timetable lockdown policy is the main reason for the systematic crippling of the economy.

My alumni group, the UP School of Economics Alumni Association (UPSEAA) held a Zoom lecture given by Dr. Benigno “Iggy” Agbayani, Jr., on “Philippines COVID-19 Response, What we got right and wrong” on Nov. 4. Dr. Agbayani is a fellow UP alumnus (BS Biology, Medical Degree, and Residency at UP-PGH). He is currently the Chairman of the Department of Orthopedics, Manila Doctors Hospital. He is also a co-founder of the Concerned Doctors and Citizens of the Philippines (CDC PH) that campaigns to “Flatten the fear” and lift the lockdown.

On the rising number of cases in the country due to rising tests and false positives, Dr. Agbayani said that viral detection is difficult because viruses are everywhere, too small and have similarities with fragments of other viruses or organisms. No test method actually looks for the virus itself but only detects a signature RNA fragment or surface protein. False positives using the RT-PCR is a major cause of over reporting of cases since even a single fragment of an airborne virus multiplied by 40 cycles will be detected. An asymptomatic case, even if it would turn out to be symptomatic, does not necessarily mean that the person is contagious even with an accurate test positive RT-PCR because it does not measure viral load but merely the presence of a fragment of viral RNA. And this causes many bad policies like being quarantined up to two weeks even without symptoms or being contagious.

On herd immunity, he said that it is the end goal of ending or controlling all epidemics or pandemics. He fully agrees with Dr. Jay Bhattacharya, an economist and public health Epidemiologist at the Stanford School of Medicine, who said that herd immunity is just like gravity. How to get there as safely as possible is the subject of debate ranging from vaccination, infection of the less vulnerable, or by strengthening the immunity response through antiviral prophylaxis, or strengthening innate immunity. Herd immunity can be held off by endless lockdowns, mandatory distancing, etc.

He said that CDC PH offers a three pronged approach to end the lockdowns safely and effectively without the need to isolate the elderly and vulnerable for an indefinite period of time, nor wait for a safe vaccine that may be a year away or may never come. The approach is a combination of the Great Barrington Declaration (GBD) focused protection and a safe approach to herd immunity, the use of proven efficacious and safe antiviral drugs like Hydroxychloroquine, Ivermectin and, in the future, Leronlimab, and strengthening our innate immunity through sunlight or Vitamin D, foods rich in Vitamin C and zinc, exercise, good sleep, stress management, and other lifestyle modification.

Meanwhile, a global coalition of independent think tanks and institutes released a short study and position paper, “Overcoming obstacles to medicine access: Joint policy recommendations to the 2020 World Health Assembly,” released also on Nov. 4.

The study identified two important policy measures. One, reduce unnecessary medicine costs by reducing medicine taxes, abolishing medicine tariffs, and eradicating other trade barriers. Two, accelerate access to medicines by simplifying the drug approval process, modernizing government medicine reimbursement decision-making, promoting genuine free trade in medicines, and supporting the innovation system. The paper can be downloaded at https://geneva-network.com/research/overcoming-obstacles-to-medicines-access/. 

Very often, too much government — like strict and prolonged lockdowns, high and multiple taxes and tariffs on medicines — is unhealthy for the economy and patients.
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See also:
BWorld 458, Property rights and lockdown lefts, October 28, 2020 
BWorld 459, Trump energy policies and the US elections, November 03, 2020 
BWorld 460, Trade, stock markets and indefinite lockdown, November 08, 2020.

Interview at DZRH about wind-solar as baseload plants

 Last Nov. 20, I was on brief, live radio interview, DZRH hosted by Cong. Angelo Palmones. Topic was  "Solar, wind as baseload power?" I said No, far out, only 2.3% of total PH power generation as of 2019.

https://www.youtube.com/watch?v=wjTU_fgKnbA&feature=youtu.be

Cong. Palmones also saw my article the day before, https://www.bworldonline.com/coal-moratorium-climate-and-flooding/

A friend asked me about Swedish young anti-fossil fuel activist Greta Thunberg. I said that I doubt if Greta and her parents use bicycles, manual scooters, or their feet going to work, meetings, school, do groceries, domestic travel, etc. Like the UN and Al Gore, they double talk. Preach something and do the opposite.

Meanwhile, I saw these in one of DOH Reports. Multi-billion pesos public funding (foreign aid plus national government) to further promote RE especially wind-solar.

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See also:
Interview at Turbo Time by Mike Potenciano and Raymond Tribdino, August 16, 2020 
Agenda One News, Part 6, August 31, 2020 
Interview at PSVR, hosted by Cathy Cruz, September 28, 2020.

BWorld 460, Trade, stock markets and indefinite lockdown

 * My column in BusinessWorld, Nov. 5, 2020.

The Philippines is now into eight months of indefinite, no timetable lockdown since mid-March. The adverse impact on the economy and people’s livelihood is also indefinite. Estimates of the country’s GDP contraction this year range from -6% to -9.5%. At this rate, with this very low economic base in 2020, we need to grow by at least 10% in 2021 just to be at the economic level of 2019.

For this piece, I will briefly discuss the impact of the virus scare plus global lockdowns on two sectors, merchandise or goods trade and stock market capitalization.

The Philippines GDP size in 2019 was $377 billion and ranked 34th worldwide. In merchandise trade, the Philippines in 2019 ranked 43rd with $70-billion exports and ranked 34th with $113-billion imports.

With the COVID-19 scare and lockdowns in many countries, workers, investors and goods, from raw materials to finished products, have limited mobility. Among the countries listed in Table 1, data from the World Trade Organization (WTO) show that the Philippines has the second deepest contraction in exports next to India, the first half 2020 is only 40% of total exports in 2019. In imports, the Philippines has the deepest contraction, the first half 2020 only one-third of 2019 imports (see Table 1).

When it comes to the stock market, data from the World Federation of Exchanges (WFE) show that the Philippine Stock Exchange (PSE) capitalization of $275 billion in end-2019 shrank to only $192 billion by March 2020 and slowly inched up to $220 billion by September 2020, still a huge -20% contraction from the 2019 level and among the deepest dive in the world. Which means the already small capital base of the PSE became even smaller (see Table 2).

Strict lockdown policies — ECQ, MECQ, GCQ — which prohibit many public transportation options, among others, continue to wreak havoc on the economy affecting both rich and poor. Only government officials and personnel are not affected because their salaries and allowances, which have been appropriated in the 2020 budget, are already secured and funded.

The Concerned Doctors and Citizens of the Philippines (CDC PH) wrote to President Rodrigo Duterte on Oct. 7 appealing for lifting the lockdown nationwide. In that letter, the physicians and other signatories argued,

“…we do not need to sacrifice our nation’s economy to save the lives of the 800+ high-risk Filipinos each month who are actually threatened by COVID. To do this we propose the adoption of a scientific, data-driven and objective response: (1) isolation and early treatment of the sick, (2) protection of the vulnerable, i.e. the elderly and those with medical comorbidities, (3) quarantine only of affected localities based on metrics such as death rates, ICU capacity.”

“We propose the early treatment of COVID-19 with a variety of drugs and supplements such as Faviparivir, Budesonide, the very promising Ivermectin and the Zelenko Protocol, which combines zinc and Azithromycin with the highly politicized yet long proven effective hydroxychloroquine. Despite all the controversy surrounding HCQ, there remains very strong medical support for its efficacy in reducing mortality, hospitalization and the severity of the disease…”

The rising number of prohibitions and mandates make our lives and freedom more restricted. There is the mandatory closure of public transportation, closure of schools, churches and cinemas, and soon there will be mandatory vaccination — as if government and vaccine pushers are Gods who cannot make mistakes in the quality and safety of those vaccines. Mandatory vaccination is wrong and should not be imposed on all people.
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See also:
BWorld 457, No to free electricity from Meralco, genco, October 27, 2020 
BWorld 458, Property rights and lockdown lefts, October 28, 2020 
BWorld 459, Trump energy policies and the US elections, November 03, 2020.

IPR and Innovation 48, More medicine access via lower taxes and bureaucracies

Last Wednesday Nov. 4, a global coalition of independent think tanks and institutes released a position paper calling on governments to take steps to accelerate access to Covid-19 medicines. 

Six think tanks from the ASEAN signed this paper, two from Indonesia (Center for Indonesian Policy Studies/CIPS and Paramadina Public Policy Inst.), two from Malaysia (Institute for Democracy and Economic Affairs/IDEAS, Galen Center) and one each from Singapore (Adam Smith Center) and Philippines (Minimal Government Thinkers).

The study was initiated by the Geneva Network which is our friend for many years now. The study identified two important policy measures.

1. Reduce unnecessary medicine costs by: 

* Reducing taxes
* Abolishing tariffs
* Eradicating other trade barriers. 

2. Accelerate access to medicines by:

* Simplifying the drug approval process
* Modernising government medicine reimbursement decision-making
* Promoting genuine free trade in medicines
* Supporting the innovation system,

The paper can be downloaded at https://geneva-network.com/research/overcoming-obstacles-to-medicines-access/. 
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See also:
IPR and Innovation 45, PH IPR courts, BOI-IPO, GII 2019, August 6, 2019 
IPR and Innovation 46, IP rules and Covid-19, April 17, 2020 
IPR and Innovation 47, Our Joint Declaration on WHA, May 18, May 21, 2020.

BWorld 459, Trump energy policies and the US elections

 * My article in BusinessWorld, October 29, 2020.

Next week will be the US Presidential elections and people ask if President Donald Trump has encouraged more economic activities and dynamism than his predecessor, the Obama-Biden administration with eight years in power.

There are many metrics to help answer this but for this piece, I will limit the metrics to the overall GDP performance and key energy policies of the Trump administration. The chosen years are 2008, the end of the Bush Jr. administration as baseline; 2012, the end of Obama-Biden term 1; 2016, end of Obama-Biden term 2; and 2019, year three of Trump.

For “country” I chose the two largest economies of North America, Europe, and Asia. Then I added the three largest ASEAN countries in population — Indonesia, the Philippines, and Vietnam — which have a combined population of about 477 million, big, similar to the population of the US plus Russia.

For coal energy consumption, one Exajoule is equivalent to 23.88 million tons oil equivalent (mtoe), or 277.8 terawatt-hours (TWH). Data is from the IMF World Economic Outlook (WEO) database October 2020, and BP Statistical Review of World Energy (SRWE) database June 2020.

In GDP expansion, it appears that Trump has elicited more business dynamism than his predecessor and US economic expansion was much faster than the other five biggest economies of three continents except China. In coal use, the anti-coal policies succeeded in all developed countries in the list but not in China. Indonesia and Vietnam also jacked up their coal use much faster than the Philippines (see Table 1).

Fracking and modern extraction of oil and gas has greatly expanded US production of these two commodities. While US production of oil was fast under Obama-Biden, it was much faster under Trump.

In natural gas production, measured in billion cubic feet (bcf) per day, the production rate under Trump was 3x under the Obama-Biden second term. The US has become the world’s largest producer of oil and gas, though not yet the largest exporter because of its high oil-gas domestic consumption (see Table 2).

Table 2 also shows that the “Trump is Russia puppet” narrative is a hoax from the beginning. Russia’s main exports, nearly 50% of total exports, are oil, gas and coal, not bombs, missiles and jet fighters.

Trump already campaigned since 2015 that if he wins, he would raise the US’ oil, gas and coal production, meaning directly competing with Russia and adversely affecting big Russian businesses including Putin allies. And world prices of these three fossil fuels have generally stabilized at low prices in the past three years, thanks to bigger US supply especially under Trump.

The “net zero” CO2 emission goals of many country leaders recently are more sound bites and rhetorical, not real. All the major oil and gas producers have ramped up their production, or at least maintained the level more than a decade ago, shown in table 2. Meaning global demand for fossil fuels remains high.

So on the question if Trump has encouraged more economic activities and dynamism in the US than his predecessor, the answer is Yes.

Meanwhile, the Independent Electricity Market Operator of the Philippines (IEMOP) has launched its Oplan e-Skwela campaign, in which company laptops which are no longer used for market operations plus employees’ gadgets donations were collected and given to students of the Philippine Science High School in Quezon City.

On the indefinite lockdown which has walloped many businesses and killed many jobs as indicated in huge decline in electricity demand, the Concerned Doctors and Citizens of the Philippines (CDC PH) continues its call that the lockdown, whether MECQ, GCQ, MGCQ, should be lifted. Allow the healthy to freely work and travel while protecting the elderly and immune-compromised, and use proven prophylaxis to frontline personnel and people with early symptoms and avoid hospitalization.
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See also:
BWorld 456, Flattening the rule of law, October 26, 2020 
BWorld 457, No to free electricity from Meralco, genco, October 27, 2020 
BWorld 458, Property rights and lockdown lefts, October 28, 2020.

Why I support Trump

Updating again today.

22. He cut both corporate and individual income tax, reversed the Obama-Biden indiv income tax hike in 2012, implemented in 2013. (This is related to reason #14 below). Chart from Trading Economics.

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October 29, 2020

Updating this paper I posted two months ago. I include these six points by retired UP Prof. (Political Science) Clarita Carlos that she posted in FB yesterday which I agree.

16. There was no other POTUS, except Trump, who espoused our claim to the contested South China Sea and the ruling of the Arbitral Tribunal *;

17.  Before then, all US administrations took a “hands off” policy re SCS and our Sabah Claim;

18.  Only Trump dared to break the isolation of North Korea, met with Kim Jong Un and even symbolically and dramatically, crossed over to the North Korean side in Panmunjom;

19.  Trump’s “cashier diplomacy” may have unnerved his NATO allies,  but he simply asked his European allies, for an equal sharing of the defense of Europe;

20.  Trump’s leadership in the QUAD, with Australia, Japan and India, will herald a new Indo Pacific security architecture here in our region;

21.  Finally, despite Trump’s idiosyncratic ways, he is  the ONLY American leader,  who is not only willing to meet with Iran’s Rouhani,  but who will withdraw all American troops,  from the Middle East.

* Not for love for the Philippines, but because it is a critical component of its strategic goal to DENY the Indo Pacific region to China!
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Wednesday, August 26, 2020

Because...

1. He opposed UN climate drama and multi billion climate racket, $100 B/year starting 2020 the rich country taxpayers and energy consumers must fork out more money to be given to international bureaucracies/multilaterals, poor countries and their mostly corrupt governments – on top of regular foreign aid/ODAs.

2. He challenged all the other G7 leaders to a mutually zero tariff, zero subsidy trade, at the G7 meeting in June 2018. They were all silent, meaning no. So Trump said if they can’t have mutually zero or low tariffs, they better have mutually high tariffs, and they all complained, media complained of “Trump protectionism.”

(This photo from https://www.politico.eu/article/trumps-surprise-g7-pitch-we-should-at-least-consider-no-tariffs-steel-aluminum-trade/)

3. He pushed and penalized China on their high tariffs for US exports and IPR stealing, from patents, copyrights to trademarks and corporate brands. 

4. He supported Israel more, moved the US embassy from Tel Aviv to Jerusalem.

5. He supported Taiwan further, allowed the sale of modern jetfighters to Taiwan military as China keeps its pressure to annex Taiwan, likely by force and military invasion.

6. He supported South East Asian countries (esp. PH, VN, ID, MY) on the SCS and China stealing of territories. He used the UN Permanent Court of Arbitration (PCA) ruling in July 2016 that the SCS are international waters, not China waters. Regularly sends US battle ships and aircraft carriers in the area.

7. He pushed for US energy dominance, challenged explicitly OPEC-Russia oil-gas cartel, leading to sustained low oil-gas prices globally.

8. He pushed for more MidEast peace, recently brokered UAE-Israel peace agreement. Even Saudi implicitly supported this big deal in the Mideast.

9. He wanted a full S-N. Korea peace deal, perhaps the only US president to meet face to face N. Korea  leader. Too bad he has a noisy hawk Bolton in the team, the initiative failed. But the Trump Kim Jung Un (KJU) meeting in Singapore 2019 was a big int’l event.

10. He challenged all NATO member countries to pay in full their dues and contribution to sustain the military coalition. Many members, from Germany to France, UK etc contribute little to the coalition, below 2% of GDP, for many decades.

11. He wanted to pull out US troops in Afghanistan, Iraq, Europe, etc. Deep state and even among Republican legislators find a way to stop this. Hope he will succeed in pulling out some 10,000 US troops in Germany, the latter not paying its dues to NATO among the reasons.

12. He penalized Iran further, the biggest sponsor of terrorism in the region. Even Saudi would embrace Israel than Iran. For instance, the Yemen rebels bombing Saudi are Iran-backed.

13. He put up longer and stronger border wall with Mexico, controlled illegal migration. Also being tough on illegals with criminal records and acts, want quick deportation.

14. He cut US corporate income tax (CIT) from 35% to 21%. Before Ronald Reagan, the US was socialistic with about 70% CIT. Reagan cut it to 35%. No other US President cut it until Trump came.

15. He is non-appeasing to the BLM and Antifa rioters and arsonists, looters and thieves. The police killing of Floyd and other black individuals in unreasonable manners are wrong, the guilty officers should face penalties. But parked cars, shops and malls, have nothing to do with this, they should not have been broken, smashed, looted, burned.

Many others. These are what I can think at the moment. 

So why do many people hate Trump?

Because NYT, WaPo and CNN say he’s bad. Because MSNBC, TIME, BBC, etc, say he’s bad.
Because Pelosi, Obama and Biden say he’s bad. Because Sanders, Harris, Warren, etc. say he’s bad.
Because people hate his hair, his tweets, his language, his face, his family, his businesses. 

The focus of their hatred are mostly personal. If people focus on issues -- tax cut or tax hike, support Israel or not, support Taiwan or not, support SE Asia in SCS or not, produce more oil-gas or not, expand the border wall with Mexico or not, penalize BLM and Antifa rioters and looters or not,... -- they would realize that the man has balls to take even politically-incorrect positions.

So many issues, domestic and international, that Trump took explicit "politically incorrect" positions. Many Dems and supporters are either ignorant of the issues or have ambivalent position. How could they be ambivalent on CN militarism and stealing of territories in  SCS, Japan sea, etc? Ambivalent about large scale IPR stealing and high tariffs, non-tariff barriers?
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See also: 
Spencer, Watts, Gosselin and Bastardi on Clinton vs. Trump, Elections 2016, November 05, 2016 
Jayant Bhandari on Democracy, Trump and Soleimani, January 04, 2020.