Wednesday, May 11, 2022

Winners and losers in the 2022 elections, by Jop Yap

This is what my friend, Dr. Josef "Jop" Yap, former President of the Philippine Institute for Development Studies (PIDS), wrote about the PH elections last Monday. Enjoy.
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given a chance, e.g. Chel Diokno.

Perhaps that is what many politicians lack nowadays: a dose of humility. What will bring that about? Being overtaken by Viet Nam? Or suddenly waking up one day to find out that Cambodia, Lao PDR, and Myanmar have surpassed us? But I am not holding my breath waiting for change to happen. Till 2028 then."

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See also other articles by Jop here:
Welfare Economics: Philippine Institutional Issues, November 14, 2011 
Free Trade 33: ASEAN Economic Community 2016, February 16, 2014 
Winners and losers in the 2016 elections, by Dr. Jop Yap, May 10, 2016
Telcos, Pacquiao and China, by Dr. Jop Yap, July 13, 2016
Jop Yap on Trump-Putin connection, November 12, 2016.

Sunday, May 08, 2022

Weekend Fun 82, Bawal Party, BBM supporters

I like this old poster, Bawal (Prohibition) Party, and yet "everything is  permitted", haha.

Meanwhile, I posted this in my fb wall yday. Not alluding to anyone and yet it seems most pro-BBM and pro-Isko supporters feel they are being alluded to. Well, elections are always emotionally charged. My wall is public anyway, so these comments are visible in public, reposting them here.



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See also:
Weekend Fun 79, Ang Ano, by PRRD, August 29, 2021
Weekend Fun 80, Political jokes for 2022 elections, October 10, 2021
Weekend Fun 81, Sic o'clock News - Rewind, January 15, 2022.

BWorld 539, Under scarcity: Leni service, BBM welfarism, and Isko overspending

* My article in BusinessWorld last April 25.
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The first lesson of economics is scarcity: there is never enough of anything to fully satisfy all those who want it. The first lesson of politics is to disregard the first lesson of economics. 
— Thomas Sowell, American economist, historian and social theorist

This piece will quickly review some of the fiscal and economic performances of the three leading candidates for President in the coming May 9 elections — Vice-President Leni Robredo, former Senator Bongbong Marcos (BBM), and Manila Mayor Isko Moreno.

THE UPSE ALUMNI, STUDENTS STATEMENT

Ms. Robredo is a graduate of the University of the Philippines School of Economics (UPSE) batch 1986, before she took up Law. More than 400 of her fellow alumni and some 150+ students signed a Manifesto expressing support for her and her running mate Kiko Pangilinan for Vice-President. The signature drive was initiated in early March and cut off was March 31. Alumni range from as old as batch 1968 to batch 2019.

The main reason given by the nearly 600 UPSE alumni and students for their support is that the Leni-Kiko pair is “subok na sa kakayanan at integridad at may track record. Si VP Leni ay ekonomista at isang public interest lawyer…. Si Kiko ay abogado (UP Law batch 1993) at batikang Senador (tested in competence and integrity and has a track record. VP Leni is an economist and a public interest lawyer… Kiko is a lawyer (UP Law batch 1993) and a veteran senator).”

VP Leni has shown that having big agency budgets via big taxes and huge borrowings is not a guarantee of real public service and improving the ordinary Filipinos’ lives. The budget for six years (2017-2022) of the Office of the Vice-President (OVP) was only P0.6 to P0.9 billion a year, always below P1B/year. The total budget for 2022 is P5 trillion, of which the OVP budget is only P0.71 billion, or 0.0001 or 1% of 1%. Thus, for every P100 in total budget, the OVP budget is only P0.01 or 1 centavo. Compare that to the budget of the Office of the President (OP) amounting to P8.24 billion plus discretionary and intelligence funds and other offices of P65.1 billion.

And yet VP Leni was able to inspire confidence and transparency and attracted many private donations during the pandemic that enabled her office to deliver PPEs to many frontline health workers and COVID treatment kits to poor households.

In Table 1, Other Executive Offices (OEO) under the OP include, among others, the Presidential Management Staff (PMS), National Intelligence Coordinating Agency (NICA), National Security Council (NSC), and the Office of the Presidential Adviser on the Peace Process (OPAPP).

BBM’S NON-ACHIEVEMENT AND PROGRAMS

Of public achievement over the past six years, BBM practically has none. His own official website shows no private business engagement, no government position even as a consultant — 2016-2022 is blank. He just spent the past six years campaigning and revising Philippine history to say that the country had great economic performance, often referred as “the golden years,” under his father’s Presidency from 1966-1985.

So, achievement-wise — zero. Yet he promises plenty of welfarist, bordering on socialistic, programs: 1.) free health insurance for all senior citizens, rich and poor; 2.) subsidized food nationwide via permanent Kadiwa rolling stores in every barangay; 3.) free EDSA Carousel rides all year round; 4.) immunization registry and mass vaccination in every local government unit (LGU); and, 5.) energy rationing by killing all coal plants and use mainly renewables.

He and his running mate Sara Duterte also promise to continue many economic programs of the current administration. Well, the Philippines had a GDP contraction of -9.6% in 2020, the worst in Asia that year and the worst in Philippine economic history since the post-World War 2 era. Public debt also rose big time, from P8.22 trillion (actual and guaranteed) in 2019 to P10.25 trillion in 2020, P12.15 trillion in 2021, and P12.51 as of February 2022. High public debt will require high and multiple taxes.

From 2016 to 2021, the Philippines has had the lowest increase in per capita income among the ASEAN-6 — only 15%, while Vietnam has had 37%, Singapore 28%, while Malaysia, Indonesia, and Thailand have had 19-22% (Table 2).

ISKO MORENO’S OVERSPENDING

While VP Leni’s office has an annual budget of only P0.6 to P0.9 billion a year for the past six years, Isko Moreno as Manila Mayor has had expenditures of P30 billion in 2021 and P71 billion in 2022. He is the only Mayor in the National Capital Region (NCR) to undertake annual and large-scale privatization of city assets. Here are the revenues or proceeds from the sale of City government assets: P90 million in 2019, P4.936 billion in 2020, P14.761 billion in 2021, and P44.146 billion in 2022.

So, with huge one-time revenues, he splurged in huge public spending. The ending share of Manila City’s expenditures to total NCR (16 cities and one municipality) rose from 10% in 2019 to 22% in 2022. (Table 3).

Let’s go back to the quote of Dr. Thomas Sowell. VP Leni is a practitioner of doing public service while given a very small budget and resources. BBM and Isko are the politicians who disregard the lesson of scarcity and just spend huge amounts or promise to spend for huge freebies. These spend-spend-spend politicians will also be the tax-tax-tax authoritarians when they splurge on nationwide public spending. Voters will note this when they cast their votes in two weeks.
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See also:
BWorld 536, Electoral campaigns, vaccination and causes of deaths, April 13, 2022
BWorld 537, Duterte’s Philippine Economic Debriefing, April 19, 2022
BWorld 538, Energy prices and renewables-gas lobby, May 07, 2022.

Election 2022, Presentation at CBS

Last week, I gave an online lecture at some personnel and officers of China Bank Savings. Have 26 slides including cover, showing half of them here. Enjoy.






Saturday, May 07, 2022

BWorld 538, Energy prices and renewables-gas lobby

* My column in BusinessWorld last April 18.
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There are some eyebrow-raising developments in the global and domestic energy situation captured by these recent reports in BusinessWorld:

1.) “Transition to renewables seen accelerating in response to high price of imported fuel” (March 29)

2.) “Fitch Solutions bullish on PHL power industry decarbonization” (April 7)

3.) “Think tank says hidden costs erode appeal of cheap coal power” (April 10)

4.) “ACEN to refinance unit’s loan, reinvest in renewables” (April 12)

5.) “Power rates up in April as generation charge rises” (April 12)

6.) “Battery storage seen as critical for RE adoption” (April 13).

I say “eyebrow-raising” because the expected rise in fuel and electricity prices due to the Ukraine war and stiff economic sanctions against Russia are used to further demonize fossil fuels and coal power in particular and invite blackout economics to come back in the Philippines and other countries.

For instance, report Nos. 1, 2, and 6 are about decarbonization and high imported fuel (oil, coal) — but prices of lithium, cobalt, manganese, nickel, zinc, other metals to produce solar PV, batteries for e-cars and battery energy storage system (BESS) are also high. And the price of indigenous Malampaya gas will also rise.

Report No. 3 quotes Redentor Constantino,  Executive Director of the Institute for Climate and Sustainable Cities, as saying “A quick look at actual coal generation costs of major distribution utilities shows that these costs range from over P4 per kilowatt-hour to approaching P9 pesos per kWh. Not only are these costs much higher than expected but they are also volatile as they reflect ‘Pasaload’ of fuel costs to the consumer.” But Mr. Constantino is silent on the “Pasablackout” of intermittent power to the consumers when the wind does not blow and the sun is covered by thick clouds, when it rains, or it is absent at night.

Report No. 4 is about Ayala Energy’s (ACEN) 244 MW Calaca, Batangas coal plant which will be decommissioned by 2025 — 15 years ahead of end of the end of its technical life — following the Energy Transition Mechanism (ETM) of the Asian Development Bank (ADB). Ayala Energy and ADB want to further thin out already thin reserves of stable, dispatchable coal power and risk blackout economics. See this column’s piece, “ADB’s kill coal plan, government corporations, and power transmission” (Sept. 13, 2021).

And report No. 5 is expected — Meralco has to raise our electricity bill by P0.536/kwh because the cost of various components has increased: generation increased by P0.399/kwh, transmission + subsidies + system loss + taxes have increased by P0.138/kwh.

A populist and renewables lobby NGO, People for Power (P4P), led by Gerry Arances, staged a rally and issued a press release, Consumers protest Meralco greed amid new power rate hike (April 13) arguing that “coal, gas, other fossil fuels for our power supply is an electricity affordability disaster.”

Two items are wrong in the Arances “analysis”:

1.) the idea of “Meralco greed” which is disproven by the numbers in the preceding paragraph. All increases in the April electricity bill came from generation, transmission, subsidies, and taxes. There is no increase in Meralco’s distribution cost, which has been stable for nearly seven years now since July 2015.

And, 2.) “coal, fossil fuels electricity affordability disaster,” which is far out. It should be “solar-wind electricity affordability disaster” as countries that have big share of coal to total power generation like our neighbors Vietnam, Malaysia, and Indonesia have very low power prices while Europeans with a big solar-wind share to total generation like Spain, the Netherlands, Italy, the UK, and Germany have prices that are two to three times more expensive than the mentioned ASEAN countries (see Table 1). See also this column’s recent piece, “The effects of Biden and sanctions on energy and commodity prices” (March 28).

In another paper, “Profiting from outages,” Pedro Maniego cherry-picked two out of 365 days in 2021 when there was a price spike because several big coal plants extended their maintenance shutdowns, so he blames the other coal plants that continued running as profiting.

Because of this, he invites government to issue another intervention: “The regulators should investigate whether any of these dominant players who own or operate the coal plants with extended and frequent outages, benefited from the higher WESM (Wholesale Electricity Spot Market) rates.”

So, “who is profiting from the power outages” and by extension, who is profiting from thin reserves? I think the answer to both questions are the sellers of gensets, candles, and fire insurance. When there are frequent thin reserves, frequent yellow-red alerts and rotating blackouts, the rich buy gensets and the poor buy candles. More candles often lead to more fires, so there is need to buy fire insurance for one’s office and other properties.

Notice that Mr. Maniego’s paper calls for the harassment of coal plants, but not of gas plants that also experience occasional extended shutdowns and derating, or solar-wind plants that produce zero or little power when the wind does not blow and the sun is covered by thick clouds or absent at night.

And going back to the complaint of Messrs. Constantino, Arances, and Maniego that coal plants create expensive electricity — coal fuel used to be cheap, below $100/ton, but the continuing global war and underinvestment in coal mining and power plants led to tighter supply. Notice the increase in price from April 2021 to pre-invasion Feb. 23, 2022.

The gas plants in Batangas using Malampaya gas will raise their prices too because Malampaya gas prices are indexed or based on Dubai crude prices. This will start in next month’s billing as Malampaya gas prices are adjusted quarterly.

The big gas plants that are being built to use imported LNG will also charge higher prices when they start operating because LNG supply is tight, as shown in US natgas and TTF/EU gas prices.

And as mentioned above, the prices of commodities that are used to manufacture solar PV, e-car batteries, and BESS are also rising. In fact, the year-on-year (yoy) percent increase in lithium prices is six times larger than WTI and Dubai crude, four times larger than the uranium nuke price, and twice that of coal and UK gas prices (see Table 2).

The main reason why “net-zero” and decarbonize-obsessed Europe endured expensive oil-gas-coal (to avoid blackouts) even before the invasion of Ukraine is because their beloved wind-solar energy produced little power due to the less-windy, often cloudy years, 2021 and 2022.

It seems the Ukraine war will be prolonged and the sanctions against Russia and its ally trade partners will last even longer. We should expand, not shrink, our power sources. The war against coal should stop, let more coal, gas, oil, nuclear, hydro, even intermittent wind-solar plants with BESS be built. And let them compete in prices and supply stability.

I and many power consumers have “vested interests” in the energy debate: I want stable electricity, no blackouts even for a minute, no unnecessary damage to my home appliances, lights, and gadgets due to power fluctuations. I want there to be no need to buy gensets or candles. A price hike for a few days is ok as long as stable, competitive prices return for the rest of the year with no blackouts.

And please, do not ask the government for more intervention, investigation, and harassment in the competitive power generation sector. Let stiff competition be the main regulator among many private gencos. The government should instead focus its regulation and investigation on the monopoly transmission sector.
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See also:
BWorld 535, The effects of Biden and sanctions on energy and commodity prices, April 12, 2022
BWorld 536, Electoral campaigns, vaccination and causes of deaths, April 13, 2022
BWorld 537, Duterte’s Philippine Economic Debriefing, April 19, 2022.

Energy 164, More Europe energy agony

Guys, enjoy these reports.
Cheers.
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1. Government Minister Tells Germans to Cope With Soaring Energy Costs by Wearing Warmer Sweaters
“You can withstand 15 degrees in winter in a sweater. No one dies of it.”
Paul Joseph Watson  March 29, 2022 
https://summit.news/2022/03/29/government-minister-tells-germans-to-cope-with-soaring-energy-costs-by-wearing-warmer-sweaters/

2. Energy Debt Owed by U.K. Families Could Leap 50%, CEOs Say
ByRachel Morison, Will Mathis, and Todd Gillespie
April 19, 2022, 6:23 PM GMT+8
https://www.bloomberg.com/news/articles/2022-04-19/u-k-energy-bosses-warn-of-steep-increase-in-customers-debt

3. UK Energy Execs Tell MPs That "Fuel Poverty" Will Crush Households Into Debt
BY TYLER DURDEN  WEDNESDAY, APR 20, 2022 - 02:45 PM
https://www.zerohedge.com/commodities/uk-energy-execs-tell-mps-fuel-poverty-crush-households-debt

4. Italy puts 25C limit on air conditioning as Ukraine crisis forces energy rationing
‘Operation thermostat’ initiative aimed at helping country avert shortages and ministers sign gas deal with Angola
Angela Giuffrida in Rome. Thu 21 Apr 2022 02.10 BST
https://www.theguardian.com/world/2022/apr/20/operation-thermostat-italy-limits-air-conditioning-amid-energy-crisis-fears

5. “Operation Thermostat”: Energy rationing & the pivot from Ukraine to climate?
Kit Knightly  Apr 22, 2022
https://off-guardian.org/2022/04/22/operation-thermostat-energy-rationing-the-pivot-from-ukraine-to-climate/

6. Energy firms asked to keep burning coal as ministers fight to keep lights on
Coal operations set to be extended beyond planned September shut-off
By Rachel Millard   27 April 2022 • 9:44pm
https://www.telegraph.co.uk/business/2022/04/27/coal-power-set-stay-execution-ministers-scramble-keep-lights/

7. Coal has lots of staying power
Apr 27, 2022
https://www.axios.com/coal-lots-staying-power-5afe575c-77fc-45bf-988b-10afdbb3d690.html

8. China ignores climate pledges, tops list in building new coal plants
ANI   27 April, 2022 10:30 pm IST
https://theprint.in/world/china-ignores-climate-pledges-tops-list-in-building-new-coal-plants/933830/

9. Asset Managers Are Ignoring Climate “Science” and Continuing to Fund Fossil Fuels!
David Middleton April 28, 2022
https://wattsupwiththat.com/2022/04/28/asset-managers-are-ignoring-climate-science-and-continuing-to-fund-fossil-fuels/

https://www.eia.gov/todayinenergy/images/2021.10.06/main.svg

10. Bank of England warns energy bills will hit £2,800 and inflation will surge to 10%
The cost of living will hit a record high this year, the Bank of England is warning, with inflation due to hit 10% and the price of energy bills and food likely to keep rising
Graham HiscottHead of BusinessSam Barker. 12:18, 5 May 2022
https://www.mirror.co.uk/money/breaking-bank-england-warns-energy-26880633

11. 'Bad boys' are back: India doubles down on coal as heatwave worsens power crisis
By Nupur Anand and Sudarshan Varadhan May 6, 2022
https://www.reuters.com/world/india/india-looking-boost-coal-output-by-up-100-mln-tonnes-reopen-closed-mines-2022-05-06/

12. India Asks Coal Plants to Run Flat Out to Ease Power Crisis
* Government invokes rare provisions amid widespread blackouts
* Decision impacts power producers using expensive imported coal
By Rajesh Kumar Singh May 6, 2022, 3:37 PM GMT+8
https://www.bloomberg.com/news/articles/2022-05-06/india-orders-coal-plants-to-run-full-out-to-attack-power-crisis

13. Wrangle over EU carbon market revamp threatens climate targets
By Kate Abnett May 7, 2022. 3:29 AM GMT+8
https://www.reuters.com/business/energy/wrangle-over-eu-carbon-market-revamp-threatens-climate-targets-2022-05-06/
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See also:
Energy 161, No Tricks Zone on Europe energy situation, e-cars, February 24, 2022
Energy 162, Russia fossil fuels trade, random notes, March 25, 2022
Energy 163, Impact of sanctions on energy supply in Germany, rest of Europe, April 03, 2022

Tuesday, April 19, 2022

BWorld 537, Duterte’s Philippine Economic Debriefing

* My article in BusinessWorld last April 11. 
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Last week, on April 5, I attended the Philippine Economic Briefing (PEB) at the PICC, a sort of valedictory address by the Duterte administration led by Secretary of Finance Carlos G. Dominguez. The Opening Remarks were given by Executive Secretary Salvador C. Medialdea, then the main report, “The Ship of State Has Been Masterfully Steered,” delivered by Mr. Dominguez, followed by “Monetary, External, and Financial Sector Updates” by Governor of the Bangko Sentral ng Pilipinas (BSP) Benjamin E. Diokno.

It was followed by a press conference with seven officials in the panel: Mr. Dominguez, Mr. Diokno, Trade and Industry Secretary Ramon M. Lopez, Agriculture Secretary William D. Dar, Tourism Secretary Bernadette T. Romulo-Puyat, NEDA (National Economic and Development Authority) Undersecretary Rose Edillon, and Transportation Undersecretary Giovanni Z. Lopez.

Mr. Dominguez emphasized in his report that the “Duterte presidency made the turn towards more inclusive growth and prosperity…. Our 2020 GDP would have plunged deeper by 13.3% instead of 9.6%… The Tax Reform for Acceleration and Inclusion (TRAIN) Law is a crowning achievement of this administration.”

I titled this piece as economic “debriefing” because the comparative regional macroeconomic data do not seem to conform with these claims for the Philippines. And here are some numbers covering the 12 major economies of East and South Asia. Data sources are the IMF World Economic Outlook (WEO) database from October 2021 and the ADB Asian Development Outlook (ADO) from April 2022.

One, in average GDP growth from 2011-2016 to 2017-2021, the Philippines had the biggest decline of 3.1 percentage point along with India. The Philippines’ average growth of 3.1% in the last five years was high compared to those of Singapore, Malaysia, South Korea, Thailand, Hong Kong, and Japan, true. But the Philippines came from an average growth of 6.2% under the previous administration, so the percent point decline was starkly huge.

Two, the Philippines is the only economy that experienced a rising inflation rate over the same period, an increase of 0.7% percentage point, while the 11 other economies had zero or declining prices. Our average inflation rate from 2011-2017 of 3.4% was the second highest after India, while our five ASEAN neighbors had only 0.6% to 2.7%.

Three, the Philippines experienced the highest inflation rate of 5.2% among these economies in 2018 — the first year of implementation of the TRAIN law. The next highest inflation was Vietnam’s at 3.5% and lowest was Singapore’s at 0.4% that year. The oil tax hikes Part 1 — diesel from zero to P2.50/liter, gasoline from P4.35/liter to P6.50/liter, etc. — implemented that year triggered a series of commodity price increases, from food to wages and rentals. The diesel tax became P6/liter, gasoline P10/liter, etc. in 2020.

Four, inflation started to creep upwards in March this year to 4% due to the ongoing war in Ukraine and the US-led economic sanctions against Russia that has dragged perhaps the whole world economy into an inflationary spiral (see Table 1). Hence, the clamor by some sectors to suspend or reverse the oil tax hikes of the TRAIN law to help reduce prices in the Philippines.

Five, from 2019 to 2021 the Philippines had the second-highest increase of 5.2% in its budget deficit/GDP ratio after Thailand.  The Finance department, Congress, and many sectors of the country were swayed by Keynesian economic thinking — when household and private spending and investment declines, government spending should expand fast to “stimulate” overall demand — a questionable if not unrealistic philosophy in the current world.

Six, the expected “stimulated” rise in demand with high deficit spending did not happen as shown by -9.6% GDP contraction of the Philippines in 2020, the worst since post-WW2. In contrast, Vietnam and Taiwan did not significantly expand their deficit spending and they managed to have GDP growth of 2.9% and 3.4% respectively. This is a slap in the face of Keynesian economics in the last two years.

Seven, in external debt outstanding, the Philippines had the second largest increase of 27% from 2019 to 2021, next to South Korea’s 34% (see Table 2).

On the positive side, the Duterte administration should be recognized and credited for some good moves and fiscal reforms. Among these is the new Ease of Doing Business Act, principally initiated by the Department of Trade and Industry under Secretary Ramon Lopez. We need more businesses and job creators, not more bureaucracies.

The BSP under Mr. Diokno has consistently managed our external account. There was a buildup of our gross international reserves (GIR), from $79.2 billion in 2018 to $110.1 billion in 2020 and $108.8 billion in 2021. This was equivalent to about 10 months of imports cover and so we are shielded from any energy imports supply shock because of this huge GIR level. Also, there was the BSP’s Digital Payments Transformation Roadmap that strengthened the digital payment ecosystem.

I saw at the event the new President of Philippine Chamber of Commerce and Industry (PCCI), George Barcelon. Since they are the biggest business organization in the country, I asked him his assessment of the PEB. His response:

“Build, Build, Build initiatives were successful in roads, railways, airports and sea ports all over the country. On tax reforms, TRAIN, CREATE (Corporate Recovery and Tax Incentives for Enterprises Act), the Public Service Act, the Foreign Investment Act, and the Retail Trade liberalization Act, etc. will transform our nation’s ability to attract Foreign Investments and fiscal support for health and education. The private sector was disappointed in the handling of COVID-19 during the initial stages wherein strict quarantine was imposed without stakeholders’ involvement in the decision-making process. But credit goes to the cooperation and discipline of business owners and the general populace. The minor glitches are gaps that can be addressed. The new administration can leverage on the present administration’s ground work.”

If I have to grade the Duterte administration’s overall economic performance in the last six years from 1.0 to 5.0 with 1 as excellent and 5 as failure, just looking at internal figures I will give it a 2.5. But considering the comparative performance of our neighbors in the region, I will give it a 3-3.5: 2.0 in 2017-2019 and 4.5 in 2020-2021 because of its strict prolonged lockdown and mobility restrictions, and implicit mandatory vaccination policy.

Hoping that the next administration will not follow the pitfalls of this government. And to secure change in economic policies in the next six years, the Duterte-allied Bongbong Marcos — Sara Duterte tandem should not win.
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See also:
BWorld 534, A campaign of disinformation, April 04, 2022
BWorld 535, The effects of Biden and sanctions on energy and commodity prices, April 12, 2022
BWorld 536, Electoral campaigns, vaccination and causes of deaths, April 13, 2022.

Macroecon 16, US inflation classmates in March 2022

Here are the new inflation "classmates" of the US last month. Many Asians are able to reign in prices, good. Many Europeans have high month-on-month (MoM) increases of 2+ percent point, like Netherlands, Spain, Poland, Germany.


Now we often hear US President Biden and his Democrat partymates, along with their big media allies using "Putin price hikes" to imply the Russia invasion of Ukraine last February caused all the price hikes. They are lying. Dishonest deceptive politicians. US and many European inflation started rising when Biden came to power. Only 1.4% in January when Trump left the White House, became 7.5% in January 2022 or 12 months Biden in office, no Russia invasion.


Liar Biden and Democrats do not want to admit that their policies -- anti fossil fuel development and investment to "save the planet", large-scale money distribution while preventing people to be productive via continued lockdown, etc. -- caused all the price hikes and instability.
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See also:
Macroecon 13, More economic damages of strict indefinite lockdown, September 17, 2021
Macroecon 14, Macro indicators, inflation rates in selected countries, September 23, 2021
Macroecon 15, US trade, inflation, public debt, November 12, 2021.

Wednesday, April 13, 2022

BWorld 536, Electoral campaigns, vaccination and causes of deaths

* My column in BusinessWorld last April 4.
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The general elections from President down to City and Municipal Councilors on May 9 are just five weeks or 35 days away. I checked some of the electoral campaigns of the leading presidential and vice-presidential candidates, the Bongbong Marcos (BBM)-Sara Duterte tandem, and the Leni Robredo-Kiko Pangilinan pair.

ELECTORAL CAMPAIGN CROWD

The Leni-Kiko tandem has attracted these record number crowds at campaign rallies as of April 1 (source: https://web.facebook.com/TeamLeniKiko/photos):

1. Pasig (March 20), 130,000+;

2. Bacolod, Negros Occidental (March 11), 86,000+;

3. Tagbilaran, Bohol (April 1), 80,000+;

4. Catarman, Northern Samar (March 28), 73,000+;

5. Borongan, Eastern Samar (March 29), 54,000+;

6. Tarlac (March 23), Camanava (March 26), Cabanatuan, Nueva Ecija (March 22), 50,000+ each;

7. Gen. Trias, Cavite (March 4), 47,000+;

8. Malolos, Bulacan (March 5) and Isabela, Basilan (March 16), 45,000+ each;

9. Iloilo City (Feb. 25), 40,000+; and,

10. Zamboanga (March 17), 35,000+.

The BBM-Sara tandem rallies also have huge crowds but they did not put crowd estimates. But from the photos shown (source: https://web.facebook.com/BongbongMarcos/photos), they seem to have larger crowds than the Leni-Kiko rallies, and they do it almost daily. Their Mindanao swing on March 27 to April 2 — from GenSan to Zamboanga, Sultan Kudarat, Davao del Norte and Sur, Lanao, and Bukidnon — showed crowds of the tens of thousands per event, morning till evening.

The Manny Pacquiao and Isko Moreno campaigns also have some big crowds but they are not held as often and are not as thick as the Leni and BBM crowds.

NO SURGE IN COVID CASES

Since the official campaign period for national office started on Feb. 8 or eight weeks ago, the political rallies have attracted tens of thousands of people per event, shoulder to shoulder, with no distancing for many hours, no temperature checks, no vax card checks. And yet there was not a single incidence of a COVID surge whether in any big city venues or nationwide — none. But we read the usual alarmist pronouncements by government virus “experts” of more infections. See for instance the Department of Health (DoH) warning which was contradicted by data in these two reports in BusinessWorld: “Ignoring protocols could lead to rise in infections — DoH” (March 29), “PHL logs among lowest daily coronavirus cases in SE Asia” (March 30).

Theory (and narrative) must conform with data. Always. No exception. In the COVID pandemic, the theory or narrative is: more huge gatherings, no distancing for hours, no widespread vaccination, then more infections and cases. Consider also the infamous and fallacious OCTA terms “super-spreader” events that require “circuit breaker” lockdowns.

So, what happens if theory and data do not conform with each other? In real natural science, one must uphold and respect the data and junk the “theory” or narrative — it reverts back to an ordinary hypothesis. But in politics and political science, one must ignore the data and uphold the narrative. And that is why despite eight weeks straight of having huge numbers of people packed together for many hours with no distancing, many even wearing their masks below their mouths, we see no COVID surges. But government retains the soft lockdown and mobility restrictions and pushes mass vaccination. It is no longer about medical science but political science and military science.

GOOGLE TRENDS IN THE CAMPAIGN

There are no results of voter preference surveys conducted in March by SWS and Pulse Asia, the top polling firms in the country. In the absence of such data, proxy data must be used, like estimated crowds per political rally by the leading contenders, discussed above. Another proxy is Google Trends “interest over time.”

“Interest over time” numbers and scores represent search interest relative to the highest point on the chart for the given region and time. Peak popularity is 100, 50 means that the term is half as popular, and 0 means there is not enough data for this term. While political surveys use sample sizes of only 1,200 to 3,000 people, Google Trends processes billions of bits of data, millions daily.

So, I searched Leni and BBM and this is the result.

The Leni campaign is gaining more interest — from 40 in the first half of February when official campaigns started, to 46 in early March, and 67 in late March. The score reached 96 on March 20, during the huge rally in Pasig, and peaked at 100 on March 21, when photos of the huge crowd that night were more circulated and reported the next day.

The BBM campaign is losing interest — from 34 in the first half of February to only 28 in first half of March. It recovered to 40 in the second half of March but this was way below the 67 of Leni over the same period.

So, from two data sets — photos of campaign rallies and caravans, and Google Trends — BBM seems to retain his lead in the first but he is losing in the second set of data. Good. His chances of becoming President are less.

CAUSES OF DEATHS, PSA DATA

The Philippine Statistics Authority (PSA) released the Causes of Deaths data for 2020 and 2021 last week on March 29. I searched their previous reports and included data for 2018 and 2019 below. Since there was no excess mortality or deaths in 2020 over 2019, I compared 2021 with 2019. The data show the following.

One, there was a huge increase in deaths in 2021 when more COVID infections happened and mass vaccination started — 145,700 more deaths than in 2019 and 152,200 more deaths than 2020.

Two, if COVID deaths — virus identified UO7.1 and unidentified UO7.2 — are excluded, there were still 39,000 more deaths in 2021 over 2019.

Three, there were more deaths from ischemic heart diseases, diabetes, hypertension, and cerebrovascular diseases in 2021 than in 2019. This coincided with more reports of myocarditis, blood clots and related diseases days or weeks after vaccination in 2021, even until 2022.

Four, there were fewer deaths from pneumonia, cancer or neoplasms, lower respiratory diseases, and tuberculosis in 2021. The hypothesis “deaths from regular pneumonia were counted as COVID deaths” may fit in this situation.

Five, continued lockdown and business closures (KTV and music bars, some hospitality shops, etc.) led to fewer deaths from assault/fights and transport accidents, but more deaths from malnutrition and suicides or intentional self-harm (see Table).

Since the narrative “more huge gatherings, no distancing for hours, more COVID infections” is proven to be false by the huge electoral rallies, government should drop all mobility restrictions and presentation of mandatory vax card or negative PCR tests for work and travel.

Three real economic risks facing the Philippines this year: 1.) continued high public debt that will require high taxes, from P8.22 trillion (actual and guaranteed) in 2019 to P10.25 trillion in 2020, and P12.15 trillion in 2021; 2.) high inflation, from 2.6% in 2020 to 4.5% in 2021, and projected to reach 5% or more in 2022 with very high energy and commodity prices; and, 3.) low GDP growth this year, from -9.6% in 2020 and 5.7% in 2021. Our people and businesses should be freed from various mobility restrictions to produce more goods and services, reduce inflation and expand economic output.

The two leading Presidential candidates, especially VP Leni who is catching up, should have clear policies to open up the economy wide and clear, and remove all existing and planned mobility restrictions on people and businesses.
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See also:
BWorld 533, After two years of lockdown, what have we achieved? April 03, 2022
BWorld 534, A campaign of disinformation, April 04, 2022
BWorld 535, The effects of Biden and sanctions on energy and commodity prices, April 12, 2022.

Tuesday, April 12, 2022

Covid 73, More deaths, more marriages, but less babies in 2021, why?

Reposting this from https://cdcph.org/f/more-deaths-more-marriages-but-less-babies-in-2021-why.

More deaths, more marriages, but less babies in 2021, why?

Nonoy Oplas

The Philippine Statistics Authority (PSA) released today the most recent update on marriages, births and deaths per month, 2020 and 2021. Here is my reformat table:

Now compare 2021 vs 2020 monthly averages there were:

19,928/month more deaths (bad),
28,883/month more marriages (good), and
-18,257/month less births (bad).

Year 2021 has delta variants plus mass vaccination was started. More deaths, more marriages, but producing less babies. Why?

I see three possibilities: 

(1) more preggy women in 2021 who have miscarriages (after vax?),
(2) Married women who became less fertile (after vax?), and
(3) many mothers among those who died.

Those vaccines have no, zero, nada long-term studies about their possible impact on women fertility, and the vax are being pushed down to 5 yo kids.
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See also:
Covid 70, Doc Iggy Agbayani on pedia vaccination, February 23, 2022 
Covid 71, More vax adverse reactions, February 24, 2022 
Covid 72, More testimonies of vax injuries, April 03, 2022.

BWorld 535, The effects of Biden and sanctions on energy and commodity prices

* My article in BusinessWorld last March 28.
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US President Joe Biden has already been in the White House for 14 months, and Russia’s invasion of Ukraine and the US-led economic sanctions against it have just marked one month, and things are worsening. Here are 10 emerging trends, global and national.

BIDEN’S EFFECT ON FOSSIL FUEL PRICES AND SUPPLY

One: Biden and the US Democrat Party campaigned, among other issues, for a war on fossil fuels. And on Day 1 of his administration, Jan. 20, 2021, he announced a halt to oil-gas drilling in federal lands, and the killing of the Keystone XL pipeline that would bring some 800,000 barrels per day of Canada crude oil to the US. See these reports:

1. “In intimate moment, Biden vows to ‘end fossil fuel’,” AP News, Sept. 7, 2019 (“I guarantee you. We’re going to end fossil fuel.”)

2. “Keystone XL pipeline halted as Biden revokes permit,” AP News, Jan. 21, 2021

3. “Biden administration pauses federal drilling program in climate push,” Reuters, Jan. 22, 2021.

In Table 1, the reference points are last week’s trading day March 25; then the day before the invasion, Feb. 23; then the year ago or year-on-year from March 25, 2021; and Nov. 3, 2020, the US Presidential election day.

Two: World oil, coal and gas prices started rising after the Nov. 3, 2020 elections when it became apparent that Biden and his anti-fossil fuel policies would be implemented. WTI and Dubai oil jumped 68% and 64% from Nov. 3, 2020 to March 25, 2021. Coal jumped 56%, TTF gas and UK gas rose 38% and 21%, and EU carbon permits rose 65%.

Since a war on fossil fuel also means a war on internal combustion engines (ICE) that use gasoline or diesel, it signaled a rise in prices of metals largely used in electric car batteries like lithium and cobalt, which rose 118% and 58% over the same period.

Three: World prices of fossil fuels and uranium continued rising until pre-invasion day while the solar and wind index declined. The planet experienced a generally calm, less windy 2021 and the wind farms of many countries, especially Europe, produced little energy so they endured high gas-oil-coal prices to keep the lights on and avoid blackouts.

RUSSIA INVASION AND SANCTIONS EFFECT

Four: The invasion on Feb. 24 quickly pushed upwards the prices of many commodities, especially oil and gas because Russia is the number one source of these energy products for many countries in Europe. The percent changes in prices from Feb. 23 to March 25 were: 26% and 22% for WTI and Dubai crude, 37% for coal, and 34% for uranium. Nickel prices jumped 42% while wheat rose 24%, sending alarms calls of “food shortages” in many countries.

Five: The year-on-year (March 25, 2021 to March 25, 2022) percent change in prices were generally brutal for Europe gas at 425%, from €18.8/MWH to €98.7/MWH. The price of UK gas has risen 382%, US natgas 116%, coal 246%, uranium 107%. The price of lithium has risen 485% and nickel 117% (Table 1).

The main target of the US-led sanctions is Russia, to impoverish it quick, but the law of unintended consequences when things are politicized always kicks in and the rest of the world is adversely affected.

MORE FOSSIL FUELS MEAN CHEAPER ELECTRICITY

Six: Data until 2020-2021 show that when countries use more fossil fuels and nuclear for power generation, they have cheaper electricity prices. When they use more intermittent renewables like solar and wind, they have expensive electricity prices.

In Asia, Malaysia and Vietnam, renewables only have a 2-4% share to total generation and they have cheap electricity prices of only 7-8 US¢/kwh. The Philippines and Japan, with renewables having a 12-14% share, have electricity prices of 17-21US¢/kwh.

In Europe, Russia and Ukraine have the cheapest electricity prices of only 5-6US¢/kwh, their renewables’ share is only 0.3-6%, while their gas+coal+nuke power share is 79-88% of power generation. The UK and Germany have high power prices and their renewables’ share is 41% of total generation (Table 2).

Seven: Since the Philippines was already bullied by the environmental, social and governance (ESG) lobby to stop building new coal plants, it should consider turning to nuclear power, particularly small modular reactors, for islands like Palawan, Mindoro, Masbate, Bohol.

TOKYO AND METRO MANILA NEAR BLACKOUT

Eight: Tokyo nearly experienced a blackout on March 22. The temperature dropped and demand for electricity rose while some power plants were out. The Japan electricity network sent extra power to Tokyo. Japan has suffered from thin reserves for several years now as they retire many coal and nuclear plants while joining the ESG bandwagon of more intermittent power sources.

Japan introduced a feed-in tariff (FIT) program in 2012 to boost solar power. Many backup and reserve thermal power plants became more expensive to operate as intermittents were given priority in grid dispatch. And Japan’s power reserves become even thinner.

Nine: Metro Manila still experienced yellow-red alerts yearly even during the two years of COVID-19 lockdown (2020-2021), until this year. Last Saturday we experienced this: “Luzon grid placed on yellow alert after seven-plant outage” (BusinessWorld, March 27).

The Philippines implemented the FIT provision (guaranteed high price for 20 years) in 2012 and many solar-wind plants were built. Since they have priority dispatch in the grid, they also displace some reliable thermal plants. This is often praised as “merit order effect” that results in lower prices in the Wholesale Electricity Spot Market (WESM). This is fiction because the frequent displacement of dispatchable thermal plants in the grid means some or many of them will be gone soon, like what happened in Japan. And when some big plants go offline due to natural calamities or unscheduled shutdowns, reserves are thin and blackouts will be the result. The most expensive energy is one that is not there, absent, zero. Then people will use more candles and have more fires. Or use expensive gensets and diesel and create more air pollution.

THE NATIONAL MONOPOLY PROBLEM

Ten: Then there is the continuing problem that is the only remaining national monopoly in the country, the National Grid Corp. of the Philippines (NGCP). In last Saturday’s yellow alerts, five power plants, with a combined capacity of 1,193 MW, had a “forced outage due to undisclosed reason” simultaneously at 6:17 p.m. It does not look like a generation problem but a transmission problem because they went out all at the same time, on the same day.

About late January this year, the NGCP announced that it will get more firm contracts for ancillary services (AS) to augment reserves. It was good news — thank you NGCP. The bad news is that nothing seems to have happened after that, and so we are back to having yellow-red alerts in the next two to three months.

We should have less politics in energy policy. There should be no favoritism in energy technology, and no priority dispatch. Companies should bid based on the lowest price at the most stable supply for the consumers. And no more monopoly please, especially in the nationwide transmission system.
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See also:
BWorld 532, The law of unintended consequences in the US-Russia economic war, March 26, 2022
BWorld 533, After two years of lockdown, what have we achieved? April 03, 2022
BWorld 534, A campaign of disinformation, April 04, 2022.

Pol. Ideology 83, The end of liberalism and return of militarist-protectionism?

This April until July, the FNF (Friedrich Naumann Foundation for Freedom) IAF (International Academy for Leadership, Gummersbach, Germany) alumni will have a series of lectures about the impact of the Russia-Ukraine war. These are for alumni only, not open to the public. I went to IAF in Germany in October 2008, I attended the seminar on "Local Government and Civil Society", our great facilitators and lecturers were Arno Keller and Monika Bayern, great liberal minds of FNF.

Here are the lecture topics, then my short discussion about them.


If I have to answer briefly the above questions, here:

1. The end of history? No. History is about endless evolution of human societies and communities. Homo sapiens been around the planet for about 30,000 years or so, out of the planet's 4.6 billion years existence. I think modern homo sapiens will be around for the next thousands and millions of years.

2. The end of peace? No. After WW2 that ended in 1944, there were few invasions that happened, mostly done by the US (Vietnam in the 70s, Afghanistan in 2001, Iraq in 2003, regime change wars in Eastern Europe in 2010s, Libya in 2011, Syria in 2014,...), Russia invasion of Afghanistan in 1979, annexation of Crimea in 2014, etc. Beyond these, no global war happened. Generally global peace for 8 decades, until the Ukraine war last February. 

Recall also, when Gorbachev allowed the collapse of the Berlin Wall in 1989, disintegration of USSR in 1990, abolition of Warsaw Pact military alliance in 1991, they happened generally peacefully. But NATO was not abolished, instead it kept expanding towards Russia border, promising more missiles and tanks near Russia.

3. The end of liberalism? No. Humanity by nature longs for freedom, peace, unrestricted mobility aided by technology. But we saw large-scale curtailment of this freedom since 2000 lockdowns because governments and multilaterals don't believe in natural immunity, only vax-vax-vax immunity with 3rd, 4th, endless boosters and money.

4. The end of democracy? No. If people are left on their own, they and their service providers (physicians, traders, etc) will provide competitive and useful information and services, like using proven, off-patent early treatment drugs. But global narrative is a different political animal. Demonize those proven early treatment drugs, use only unproven, EUA, no long-term studies of real safety vax.

5. The end of trade globalization? No. People want cheap energy from different sources and countries. But governments, especially the US and EU, have politicized trade via econ sanctions on Russia exports. When you politicize trade, you get more politics and less trade. So now energy prices are very high because only few countries can freely supply the world of oil, gas and coal while huge supply of these energy products from Russia are being shunned and demonized.

6. The end of reality? No. Take wars and invasion. These are good and justified, no heavy attacks by global media and multilaterals if the invader is the US (Vietnam, Afghanistan, Iraq,...). But war and invasion is bad and unjustified if the invader is Russia. Pure propaganda. Real non-propaganda is this -- war and invasion is wrong. Period. Whether the invader is Russia or America. Invasion is wrong.

Take these cover stories by The Statist, aka The Economist.


For this mouthpiece of military-industrial complex, wars and invasion are good, justfied. Invade and/or bomb the Afghans, Iraqis, Libyans, Syrians, Bosnians, Kosovars, etc., all justified so long as the bombers are Americans and British. But for The Statist, Russia invasion is bad evil wrong unjustified. Double talk by big media. Lousy. Anti-liberal.
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See also:
Pol Ideology 80, Capitalism reset, liberal democracy, September 10, 2021
Pol Ideology 81, Human rights and dangers of turning socialist, October 28, 2021
Pol Ideology 82, Reflections of a former Marxist on property, December 18, 2021
Germany elections, some scenarios, September 24, 2021.

Monday, April 04, 2022

BWorld 534, A campaign of disinformation

* My column in BusinessWorld last March 21. 
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A campaign of disinformation

Among the claims made in support of the Bongbong Marcos (BBM) and Sara Duterte tandem, candidates for President and Vice-President of UniTeam, is that the Philippines under former President Ferdinand Marcos was the “golden age” of peace and prosperity, and that the Philippines under the current administration of President Rodrigo Duterte is doing well. True or false?

False. And here are the facts and numbers.

One, the average annual GDP growth in the 1970s of the Philippines was only 5.8%. In contrast, our neighbors in the ASEAN (Association of Southeast Asian Nations) had higher growth over the same period: Indonesia’s growth was 7.2%, Thailand was 7.5%, Malaysia was 8.2%, and Singapore was 9.2%.

Then from 1980-1985, the last six years of the Marcos administration, the Philippines’ average annual GDP growth was -0.1%, a contraction. In contrast, our ASEAN neighbors performed better. Even Vietnam which had emerged from a brutal civil war and US invasion in the 1970s, managed to grow at 3.8%.

Two, the fast growth during the Benigno Aquino III administration of 6.2% a year decelerated under Duterte in 2017-2019, capped by a huge contraction of -9.6% in 2020, the worst in Asia even though the same COVID-19 virus affected all countries. So, in percentage points change, the Philippines under Duterte administration has had the largest, or the worst reduction among the ASEAN-6 or the major economies of the region.

Three, the increase in the gross national income (GNI) per capita from 1970 to 1985 was lowest in the Philippines, only $300 over 15 years, while our neighbors had $420 and up.

Four, the increase in GDP per capita from 2016 to 2020 was lowest in the Philippines, again, at only $214 while that of our neighbors ranged from $316 to nearly $3,000 (see Table 1).

Five, when considering foreign direct investment (FDI) in 1980-1985, the Philippines had very low FDI net inflows of only $35 million/year while Indonesia attracted $227 M/year, Thailand got $264 M/year, and Malaysia and Singapore got more than $1 billion/year. Foreign investors and their local partners were uncertain or scared of the business environment under Marcos then.

Six, when considering FDI inward stock (inflows less outflows through the years), the Philippines got an increase of $39 billion from 2016 to 2020. While this is better than Indonesia’s -$9 billion, it was lower than the rest of the ASEAN-6 which got $52 billion and up.

Seven, looking at external debt stock, the Philippines’ foreign borrowings expanded quickly, from $2.2 billion in 1970 ($0.60 billion in 1966) to $27 billion in 1985. A lot of the big infrastructure projects during Marcos period — the CCP complex, NLEx, the good roads to Ilocos Norte, etc. — were funded not via domestic revenues but via heavy foreign borrowings.

Eight, external borrowings mellowed after Marcos was gone, increasing only $48.7 billion over 31 years (from $27 billion in 1985 to $74.7 billion in 2016). But Duterte restarted heavy borrowings in 2018-2019, and much bigger loans in 2020, with external debt reaching $98.5 billion that year (Table 2). More borrowings today mean higher taxes tomorrow.

Nine, the “golden age” of peace during the Marcos Martial Law period would likely refer to the peace of the dead. The average life expectancy of Filipinos in 1970 was 63.2 years, which marginally increased to 64.7 years in 1985, or an increase of only 1.5 years over a 15-year period. During that same period, Indonesians had an increase of 7.7 years, Thais 8.5 years, and Vietnamese 9.4 years.

This very low increase in life expectancy of Filipinos under Ferdinand Marcos may mean that either many people were poor and sickly and died young, or that many adults were murdered. Or perhaps fewer babies were born because many fathers disappeared or had been killed.

During the Pol Pot regime in Cambodia in the 1970s, life expectancy went from 41.6 years in 1970, down to 18.9 years in 1977. He murdered millions of his own people, affecting the overall life expectancy downwards. Ferdinand Marcos’s regime did not reach Pol Pot’s barbarity but his political and military path was trying to approximate it.

Under post-Marcos governments life expectancy rose quicker, hitting 66.4 years in 1990, a 1.7-year increase in five years.

And 10, considering crude death rate per 1,000 people, the Philippines under Marcos had one of the highest rates in the ASEAN with eight in 1970, declining marginally to 7.1 in 1985, or a decrease of only 0.9 deaths per 1,000 people over 15 years. In contrast, Thailand experienced a decrease of four, Vietnam of 4.6, Indonesia had a decrease of five, Cambodia 5.7. (Cambodia had a remarkable improvement after Pol Pot was toppled in 1978. Its life expectancy rose from 27.5 years in 1980 to 50.6 in 1985, and its crude death rate improved from 43.9 per 1,000 in 1980 to 14.2 per 1,000 in 1985)

Things improved only when the next administration came to power (Table 3).

Overall, the claims that the Philippines had a “golden age” of peace and prosperity during Ferdinand Marcos’ presidency, and that things have greatly improved under the Duterte administration, are false, dishonest, and deceptive.

The economy was bad, the average Filipinos were living less healthy lives compared to their many neighbors in the ASEAN. So many people died during the Martial Law years that life expectancy was generally flat and the crude death rates hardly declined.

There is a campaign to change people’s perception of the reality of the past and present by pushing myths of a “golden age.” That Bongbong Marcos and Sara Duterte refuse to participate in live debates suggests to many members of the public that it is because they cannot truthfully support the myths if confronted with them in these forums. The actuations, or the lack thereof, of the candidates in the face of untruths can be considered a foreshadowing of the future. Therefore, they and their other candidates should not win.
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See also:
BWorld 531, Energy and economic impact of Russia-Ukraine war, March 25, 2022
BWorld 532, The law of unintended consequences in the US-Russia economic war, March 26, 2022
BWorld 533, After two years of lockdown, what have we achieved? April 03, 2022.