Thursday, October 06, 2022

BWorld 562, Economic freedom, power reserves, and declining births

* My article in BusinessWorld last Monday, October 3.
-----------------

The Asia Liberty Forum 2022 was successfully held last week Sept. 29-30 at Shangri-La The Fort, sponsored by the Atlas Network and Foundation for Economic Freedom (FEF). Among my old friends from the US who came were Simon Lee, formerly with the Lion Rock Institute-HK, Philip Thompson of the Tholos Foundation, Joe Lehman of the Mackinac Center, Kris Mauren of the Acton Institute, Fred McMahon of the Fraser Institute in Canada, and Basanta Adhikari of Bikalpa in Nepal.

The day before, Sept. 28, there was an Economic Freedom Audit of the Philippines, presenting the results from the Economic Freedom of the World (EFW) Index which is done annually by the Fraser Institute. EFW 2022 showed the Philippines’ global rank was No. 66 out of 186 countries and territories covered. It is higher than Thailand, India, Laos, Vietnam, and China.

But the impact of the COVID-19 lockdown is not included in the report. The two years of lockdown were a triumph of Big Government and saw the retreat of economic freedom. Many free market leaders themselves did not oppose the mandatory shutdown of many businesses and shops, mandatory stay-home orders, mandatory distancing, and mandatory vaccination. Mandatory means choice and individual freedom are zero or near-zero.

ECONOMIC FREEDOM DETERIORATION INDEX

I will attempt to measure and quantify the impact of mandatory shutdowns of many businesses (lockdown) and mandatory vaccination by introducing the concept of an Economic Freedom Deterioration Index (EFDI). A more direct term would be Economic Freedom Bastardized by Lockdown Index but EFDI is the more pragmatic term.

This is a rough measurement with limited components and countries covered. For this exercise, I use only four components: percent changes in mobility from the baseline period January to Feb. 6, 2020 of Google COVID-19 Community Mobility Reports’ 1.) Transit Stations (TS), and, 2.) Retail and Recreation (RR); 3.) GDP growth percentage points increase from 2019-2020, and, 4.) Gross debt/GDP ratio percentage points increase from 2019-2021 (Table 1).

I assigned scores of 1 to 5. The higher the score, the bigger the deterioration in economic freedom. For the four components, here are their respective scores:

TS: below 10 is 1; 11-20, 2; 21-30, 3; 31-40, 4; larger than 40 is 5.

RR: below 10 is 1; 11-20, 2; 21-30, 3; 31-40, 4; larger than 40 is 5.

GDP points increase: below 3 is 1; 3.1-6, 2; 6.1-9, 3; 9.1-12, 4; larger than 12 is 5.

Debt/GDP points increase: below 4 is 1; 4.1-8, 2; 8.1-12, 3; 12.1-16, 4; larger than 16 is 5.

Then the respective weights: I assigned TS with 15%, RR also 15%, GDP points decline is 40%, and Debt/GDP points increase 30%. The score multiplied by respective weights gives the respective index, shown in Table 2. The Philippines under the previous Duterte administration has the worst EFDI among eight economies covered.

Other researchers can expand on this and introduce more components and factors, assign different scores and weights, and cover more countries. I hope to do that someday.

POWER RESERVES AND TRANSMISSION ISSUES

Consider these columns and reports in BusinessWorld:

1. “The way forward for the power industry” by Romeo Bernardo (Jan. 26, 2014): “… ensuring that the systems operator National Grid Corporation of the Philippines (NGCP) fully contracts what the system requires. The establishment of a reserve market has been long delayed.”

2. “Red Alert and EPIRA” also by Romeo Bernardo (June 13, 2021): “… the transmission line operator has not fully contracted firm power reserves. Where the system operator’s role is to procure reserves, much like procuring a genset for your home, to call on in a time of power crisis… NGCP over the past 10 years has been non-compliant with the rules… in the form of a lack of transmission lines, a lack of redundancies in our network, a lack of power reserves, and not meeting the IPO requirements under the law.”

3. “NGCP power reserve compliance inadequate, key legislator claims” by Angelica Yang (June 9, 2021). She quoted Senator Sherwin Gatchalian: “The NGCP (is) not contracting the right amount of reserves. Clearly, they are violating that policy… ERC (Energy Regulatory Commission) should now implement the policy. The foundation has been laid down by the Supreme Court that DoE (Department of Energy) produces the policy and ERC enforces the policy. In this case, since NGCP is not contracting, ERC should punish them.”

4. “DoE’s Cusi urges NGCP to meet reserve contract requirement instead of seeking Palace intervention” by Marielle Lucenio (Feb. 13, 2022): “The DoE requires the grid to have reserve power, known as ancillary services (AS) on tap committed under firm contracts. The NGCP’s position is that full compliance with the firm-contract requirement will ultimately raise power prices because of the expense involved in committing reserves. It said it instead proposes to tap a network of AS providers under firm and non-firm contracts.”

5. “ERC to NGCP: Explain failure to comply with reserve power rules” by Ashley Erika Jose (Sept. 19, 2022): “The ERC cited three sections of the DoE’s department circular which it said NGCP failed to comply. Section 4.2 requires NGCP to seek approval from the DoE on its ancillary service agreement procurement plan; Sections 7.4 and 7.5 mandate NGCP to seek the approval of the DoE on the terms of reference of the ancillary service competitive selection process (AS CSP); and Sections 7.1 and 7.11 require NGCP to complete the AS CSP within six months from the effectivity of the circular.”

As shown by the continuing yellow and red alerts in the grid until this year, it is obvious that the NGCP — the only remaining private monopoly nationwide — is abusing its power and showing continued insensitivity to the power needs of Philippine businesses and households. The new ERC leadership should go after them as the previous ERC leadership was too lazy to do its job.

DECLINING BIRTHS, CAUSES OF DEATH

The Philippine Statistics Authority (PSA) released the updates on monthly vital statistics and causes of deaths of the country last Saturday. I count only data for January to April because the data from May-June are still incomplete.

Notable trends are: 1.) continued decline in births, 2.) some stabilization in deaths in 2022, 3.) continued erosion in net increase in population, 4.) big decrease in deaths from pneumonia, 5.) likely due to labeling of pneumonia deaths as COVID-19 deaths.

Among the possible explanations for the continued decline in births would be: 1.) the reduced number of marriages in 2020-2021, 2.) fewer babies planned by couples due to economic hardships, and, 3.) possible adverse effects on fertility by COVID vaccines.

Declining births is a bad and dangerous trend. This will lead to less workers and entrepreneurs, and less producers and consumers someday. Government must study in depth its causes and quickly remedy the situation.
------------------

See also:
BWorld 560, PEB Singapore, the PPP Center, transport liberalization, and IPRI 2022, September 20, 2022
BWorld 561, Power demonopolization, privatization, and smuggling, September 27, 2022
BWorld 562, PEB in NYC, UPSE homecoming, and transport liberalization, October 04, 2022.

Tax Cut 36, WTA's Asian Taxpayers regional forum 2022

This is my presentation last week. Thanks to WTA President John O'Connel (TaxPayers Alliance, TPA UK) and Cristina Berechet, WTA Sec. Gen.








----------------

Macroecon 20, Strong US dollar and how to deal with it

* This is my guest article in Philippine Star last Sept. 22.
https://www.philstar.com/business/2022/09/22/2211288/strong-us-dollar-and-how-deal-it

Strong US dollar and how to deal with it
Bienvenido Oplas Jr.  September 22, 2022 | 12:00am

MANILA, Philippines — The Philippine peso has depreciated to 57.64:$1 last Sept. 20, an all-time low. The last time we have a similar level of depreciation was in October 2004, then July to August 2005 when the peso reached 56 to the dollar.

The difference in today’s depreciation with those 17 to18 years ago is that current depreciation is rather fast, and so many other currencies around the world have similar experience of fast depreciation, see this table showing year-on-year (yoy) percent change and all-time high (ATH) exchange rates.

Asian currencies exchange rate to US$, as of Sept. 20, 2022

Source: Trading Economics; years high are author assessments

The first question is why is this happening? What is driving the fast appreciation of the dollar?

The quick answer is the series of interest rate hikes by the US Federal Reserve or its central bank, from 0.5 percent until about February this year to 2.5 percent last August, and projected to further rise to 3.25 percent soon.

Central banks and monetary authorities raise interest rates to combat high inflation, encourage people and businesses to save more rather than spend and this will hopefully cool down prices.

US inflation rate was only 1.4 percent in January 2021 but rose big time after 12 months of the Biden administration to 7.5 percent in January 2022. It further increased to 9.1 percent last June, a 41-year high, and cooled down to 8.3 percent in August, still a 40-year high.

In addition, the US government is borrowing and spending like a drunken sailor so it offers high interest rates to attract trillions of dollars of money. The US 10-year bonds was only 1.10 percent in January 2021 when Trump left the White House. After 12 months of the Biden administration, it increased to 1.81 percent in January 2022, and increased further to 3.56 percent as of Sept. 20.

So with high interest rates in the US, many dollar investments in the Philippines and other countries are pulled out and dollars fly back to the US to take advantage of higher returns. And that is how many countries’ currencies depreciated fast.

The next questions are: (1) Up to what level do we expect the Philippine peso to further depreciate, say by end-October at 59, or 60? (2) If yes, should we be too alarmed, and we should make more noise to pressure the Bangko Sentral to further raise its interest rates (already increased from 2.0 percent around February to 3.75 percent last August)  to 4.25 percent or higher?

I am not a finance or monetary economics guy but from the numbers that I see, my answer to the two questions are: Yes to #1, and No to #2. Consider the following:

One, US public debt has reached $30.9 trillion in August 2022, an all time high (ATH). It was about $28.4 trillion in August 2021. And US external debt is $23.9 trillion in the first quarter (Q1) 2022, also ATH.

US government expenditure as a percentage of GDP has reached 45.3 percent in 2020 (ATH), slightly declined to 41.4 percent in 2021. With high expenditures while revenues were falling, the US budget deficit as  a percentage of GDP has reached -14.9 percent in 2020 and -16.7 percent in 2021, ATH.

Two, a substantial amount of the heavy borrowings by the Biden administration are for unproductive spending like sending more money, arms and bombs to support Ukraine and Israel, Syria and other countries where the US continues its “endless wars” policy. Also to expand subsidies and freebies to domestic welfare dependents to win more votes for the Democrats in the coming November mid-term elections.

So high US borrowings, high Treasury bond rates, and high Fed rates, will continue to pressure currencies abroad like the Philippine peso to further depreciate. And a 60:$1 may not be far behind.

But this should not cause more alarm here because (1) we should prioritize growth and higher interest rates here will temper growth, and (2) dollar strengthening is temporary, something like built on soft sand due to heavy US government borrowings and debt financing, and not based on strong business environment there.

Very soon, some economic chaos will ensue there and those dollars will scamper out and go back to emerging markets where inflation rates are more tolerable and energy prices are more realistic and not stratospheric like what many EU countries experience now.

Will US and foreign funds come back to the Philippines stocks and equities market? From the above consideration, I believe the answer is Yes, and as soon as fourth quarter of 2022, latest by fourth quarter of 2023.

Are the projected GDP growth by the Philippine economic team of seven percent in 2022 then 6.5 to 8 percent by 2023 to 2028 achievable? My quick answer is Yes.

One, first half 2022 growth already at 7.8 percent, plus strong increase in electricity demand in July to September as proxy for GDP growth points to a seven to eight percent growth in 2022.

Two, Europe is moving towards deindustrialization, degrowth and blackout economics, so many businesses there will scamper out and go to Asia including the Philippines. These are big FDIs that will create more high-paying jobs here.

Three, the Philippines has good demographics. Big population size and consumer base, generally young age, English speaking and IT-literate.

Four, good economic liberalization laws – retail trade, FDIs, public service liberalization, CREATE laws – recently passed.

Bienvenido Oplas Jr. is an economist and a columnist in BusinessWorld. His email address is minimalgovernment@gmail.com. 
------------------ 

See also:
Macroecon 17, Germany's near half-century inflation rate, May 31, 2022
Macroecon 18, More gobal price instability, June 12, 2022 
Macroecon 19, UK and Canada inflation rates, Biden admin's 'expensive gas is beneficial', July 20, 2022

Tuesday, October 04, 2022

BWorld 562, PEB in NYC, UPSE homecoming, and transport liberalization

* My column in BusinessWorld last September 26.
--------------

Last Thursday, Sept. 22, another Philippine Economic Briefing (PEB) was held in New York, USA. This was a sequel to the successful PEB held in Jakarta and Singapore on Sept. 6 and 7 where some $14.4 billion worth of investment pledges to the Philippines were made.

President Ferdinand Marcos, Jr., his entire economic team and infrastructure team, plus representatives of local conglomerates were there and gave the audience — business leaders in various industries, from manufacturing to finance and banking, real estate, etc. in the US — details on why they should come to the Philippines and invest here.

Finance Secretary Benjamin Diokno gave a presentation on behalf of the economic team, and Trade Secretary Alfredo Pascual gave a presentation on behalf of the infrastructure team. Jaime Zobel de Ayala of Ayala Corp. and Sabin Aboitiz of Aboitiz Equity spoke at both panels.

Since the audience was composed of US-based business leaders, Secretary Diokno highlighted the fact that the US is the Philippines’ 3rd largest trade partner (merchandise exports and imports), 3rd largest source of foreign direct investments (FDIs), and main source of remittances by Overseas Filipino Workers (OFWs), professionals, and businessmen. He showed the numbers for 2016-2021. I came up with some numbers for some countries, then updated the data until 2022 (see the table). Data comes from the Bangko Sentral ng Pilipinas (BSP) and the Philippine Statistics Authority (PSA).

One implication of the numbers — given the continued strengthening of the US dollar and sustained depreciation of the peso and many other global currencies — I think is that we need to further diversify our international reserves and international payment system and use less dollars and expand more use of China’s yuan, Japan’s yen, Korea’s won, and the Hong Kong and Singapore dollars.

I am not sure how practical this is, but maybe Philippine hotels, restaurant chains, and other companies can accept those Asian currencies from our Asian visitors and business transactions, then use those currencies when we buy goods and services from them. This way, many of our trade, investment, and remittance payments can be shielded from the continued strong US dollar and continued peso depreciation.

UPSE HOMECOMING 2022

The UP School of Economics (UPSE) annually holds an alumni homecoming, led by the UPSE Alumni Association (UPSEAA). After two years of COVID-19 lockdown, Homecoming 2022 — dubbed as BTS (Balik Tayo sa SE) — was held last Saturday, Sept. 24, at the school auditorium. It was sponsored by the Silver Jubilarians, batch 1997, and Golden Jubilarians 1972.

The first part of the day featured the launching of the coffee table book, More Than: The UP School of Economics, edited by eight alumni led by Professor Oggie Arcenas. Former Dean Emmanuel de Dios gave a warm description of the book and the people featured there, former Professor Winnie Monsod gave a very inspirational talk that walked the audience from the 1960s to the present, and the various alumni who joined the government and corporate world. Her talk can be summarized as: “UPSE DNA is Honor and Excellence.” Both De Dios and Monsod were my teachers in the 1980s.

More Than contains many photos of students, faculty, and alumni. Among the prominent alumni of UPSE who served in government are:

A. Former officials: President Gloria Macapagal Arroyo (PhD 1985), Vice-President Leni Robredo (BS 1986), Supreme Court Chief Justice Lourdes Sereno (MA 1992), Ombudsman Conchita Morales (AB 1964), Executive Secretary Oscar Orbos (AB 1971), Trade and Industry Secretary Ramon Lopez (AB 1981), Tourism Secretary Bernadette Puyat (BS 1990), Bangko Sentral ng Pilipinas (BSP) Governor Nestor Espenilla (BS 1981), BSP Deputy Governor Diwa Guinigundo (AB 1976), Finance Under Secretary Romy Bernardo (BS 1974), Pag-IBIG Fund CEO Zorayda Alonzo (AB 1966), Napocor President Gladys Sta. Rita (AB 1984), and Comelec Commissioner Rowena Guanzon (AB 1979).

B. Former National Economic and Development Authority (NEDA) Secretaries: Gerardo Sicat (AB, MA 1958), Solita Monsod (AB 1959), Cayetano Paderanga and Ernesto Pernia (former faculty members), Dante Canlas (MA 1974), Emmanuel Esguerra (AB, MA 1981), Karl Chua (MA, PhD 2005), former  Undersecretaries Ruperto Alonzo (MA 1969) and Rolly Tungpalan (AB 1978), and many more.

C. Legislators in the 18th Congress, July 2019-June 2022: Senators Pia Cayetano (AB 1985) and Nancy Binay (BS Econ first two years), and Representatives Isagani Amatong (AB 1964), Peter Calderon (BS 1981), Jose “Kit” Belmonte (AB 1998), Roman Romulo (BS 1990), Stella Quimbo (BS, MA, PhD 2000), Bernadette Herrera-Dy (BS 1997), and Cyrille Zaldivar (BS 1999).

D. Current officials, Marcos Jr. administration: Finance Secretary Benjamin Diokno (MA 1974), he was also a former Budget and Management Secretary and former BSP Governor; NEDA Secretary Arsenio Balisacan (former faculty and dean), DBM Secretary Amenah Pangandaman (MDE 1999), and BSP Governor Felipe Medalla (MA 1976), he was also a former NEDA Secretary.

After the book launch, the homecoming program started. Key personalities of Batch 1997 include Edu Niala as batch convenor and Program MC, Ms. Herrera-Dy who elaborately and warmly introduced the keynote speaker, and Justice Undersecretary Nicky Ty who gave the closing remarks.

Keynote Speaker was Ms. Quimbo who is now in her second term as Representative of Marikina’s 2nd Congressional District and Vice-Chairperson of the powerful House Committee on Appropriations. She gave a partly written, partly extemporaneous, mind-tickling and humorous speech that elicited wide smiles and laughter from the audience. She particularly mentioned the UPSEAA Viber group and its dynamic exchanges, and later mentioned me and my occasional wild ideas — thanks Congresswoman Stella.

Jeffrey Ng — UPSEAA President and a big donor to many of the association’s fund-raising activities, and president of Cathay Land, Cathay Metal, and Astoria Resorts and Hotels — gave a report of the association’s major activities, scholarship grants, community service work, financial condition, and much more.

Batch 1997 performed a group song number while Batch 1972 gave a fast-paced dance number with mini-fireworks and brought the house down in admiration and appreciation. There was lots of food, lots of raffle prizes courtesy of many corporate sponsors, and a live band and professional events organizer. Really fantastic and successful homecoming event. Thank you, batches 1997 and 1972, and thank you UPSEAA.

TRANSPORTATION LIBERALIZATION AND MOTORCYCLE TAXIS

During the PEB in New York, one video showed Transportation Secretary Jaime Bautista saying that his department will launch “programs that will provide our passengers with accessible, affordable, convenient and safe public transportation.”

In the panel of the infrastructure team, Secretary Bautista discussed the six big railway projects — mostly under Public-Private Partnerships (PPP) — that are being facilitated by his department. These are good projects, they will transport hundreds of thousands of passengers daily. But most passengers do not live near train stations, they live many kilometers away from the stations and they cannot drive by car or motorbike to the stations because there are no parking spaces in those stations. They must take public transport and the cheapest would be the motorcycle taxis (MCT).

Currently there is a virtual MCT duopoly by Angkas and Joyride. A third and small player, Move It, has partnered with Grab and allies of the duopoly have launched their opposition to the partnership. These groups claim to be pro-commuter, but commuters and passengers are more interested in having more choices, more options, more competition. By limiting the competition to the virtual duopoly, commuters are penalized with less choices. There should be three, four, or five major competing players in the market and not just two.

WTA REGIONAL FORUM, ATLAS LIBERTY FORUM

This coming Wednesday, Sept. 28, the World Taxpayers Association (WTA) will hold the Asia Regional Taxpayers Forum online. It was supposed to be a face-to-face meeting and forum but was changed to a virtual meeting.

Among the speakers at the event will be John O’Connel, Chair and President of WTA. John is a young dynamic leader who used to head the Tax Payers Alliance (TPA) in the UK. Former Presidents of WTA were Bjorn Tarras-Wahlberg of the Swedish Taxpayers Alliance, and Troy Lanigan of the Canadian Taxpayers Federation.

The other speakers in the Asia regional forum will be: Liu Fengjiang of the Chinese Taxpayers Association Alliance, Raymond Ho of Hong Kong Momentum 107, Gobinda Sharma of the Nepal Taxpayers Welfare Society, Raza Ullah of the Alternate Solutions Institute (Pakistan), and this writer.

Then on Sept. 29-30, the Asia Liberty Forum will be held at Shangri-La The Fort, sponsored by the Atlas Network (US) and the Foundation for Economic Freedom (FEF). Among the speakers there are several friends from FEF like Romy Bernardo and Dindo Manhit, Basanta Adhikari of Bikalpa in Nepal, Anthea Haryoko of CIPS in Indonesia, Simon Lee of Unsubject Me and formerly with Lion Rock Institute, Hong Kong, Ali Salman of PRIME Institute in Pakistan, and Adinda Muchtar of The Indonesian Institute.

I miss old friends like Wan Saiful Wan Jan of IDEAS-Malaysia, Barun Mitra of the Liberty Institute-India, Parth Shah of CSC-India, Andrew Work and Peter Wong of LRI-HK, Xingyuan Feng of CASS-China.
---------------

See also:
BWorld 559, Build-build-build, extended welfare, vaccine discrimination, and liberty forum, September 08, 2022
BWorld 560, PEB Singapore, the PPP Center, transport liberalization, and IPRI 2022, September 20, 2022
BWorld 561, Power demonopolization, privatization, and smuggling, September 27, 2022.

Monday, October 03, 2022

Deindustrialization 5, Germany, August-Sept. 2022 reports

Deindustrialization and degrowth economics continuin in Germany. Read on.
------------

August reports

1. Germany Has Three Months to Save Itself From a Winter Gas Crisis
Now cities are cutting back on lighting and hot water in a bid to avert disaster.
Dezem, William Wilkes, and Arne Delfs  August 1, 2022

2. Germany’s Growing Energy Supply Uncertainty: Electric Heater Sales Up 1000%…In The Summertime!
By P Gosselin on 14. August 2022

3. German Households Will Foot The Bill For New Gas Tax
By Charles Kennedy - Aug 15, 2022

4. Germany U-turns on nuclear in scramble to avert winter crisis
Recession now ‘unavoidable’ as country races to replace Russian gas
Rachel Millard and Tim Wallace.  16 August 2022

5. German Electricity Prices Spiraling Out Of Control…Tripling Since 2000… Blackouts, Unrest Loom
By P Gosselin 19. August 2022


6. Energy Prices Trigger Deindustrialization In Germany
Irina Slav - Aug 19, 2022,

7. Germany Risks a Factory Exodus as Energy Prices Bite Hard
Aug 19, 2022

Power and gas prices in Germany more than doubled in just two months, with year-ahead electricity -- a benchmark for the continent -- soaring to 570 euros ($573) per megawatt hour. Two years ago, it was 40 euros.

“Energy inflation is way more dramatic here than elsewhere,” said Ralf Stoffels, chief executive officer of BIW Isolierstoffe GmbH, a maker of silicone parts for the auto, aerospace and appliance industries. “I fear a gradual de-industrialization of the German economy.”

8. “Electricity Crisis”: German Wholesale Prices “Virtually Exploding”…2,347% Rise Over Single Year!
By P Gosselin 21. August 2022

9. Germany to Prioritize Coal Trains Over Passenger Services
ByVanessa Dezem. August 22, 2022

10. ‘Political Suicide’: Germany Will Shutter Nuclear Plants Despite Looming Winter Shortages
JACK MCEVOY August 22, 2022

11. German Power Prices Smash Record as Energy Panic Engulfs Europe
ByVanessa Dezem and Anna Shiryaevskaya  August 22, 2022


12. German gas levy may be adjusted soon after implementation
August 23, 2022

13. Germany and France have driven eurozone into recession, economists warn
August 23, 2022

14. German government approves energy-saving measures to rein in gas usage
August 24, 2022

15. ‘Don’t sacrifice Germany for Ukraine’ – German trade association asks Chancellor Scholz to end sanctions against Russia to save economy
Signatories of the open letter say Ukraine is one of the most corrupt countries in the world
DENES ALBERT August 22, 2022

16. German Experts Warn Of Grid Instability…”Conventional Power Plants Needed For A Long Time To Come”
By P Gosselin on 27. August 2022

17. Tough choices for Germany as coal power stations return to keep people warm this winter
Germany is turning back to the world's dirtiest fuel to overcome its dependence on Russian gas, but the environment isn't its only concern.
Siobhan Robbins 30 August 2022
https://news.sky.com/story/tough-choices-for-germany-as-coal-power-stations-return-to-keep-people-warm-this-winter-12685534

18. German factories shut down as energy costs spiral out of control
James Warrington 31 August 2022
https://www.telegraph.co.uk/business/2022/08/31/eurozone-inflation-hits-new-record-energy-costs-spiral-control/

19. German factories shut down as energy costs spiral out of control
James Warrington. 31 August 2022
https://www.telegraph.co.uk/business/2022/08/31/eurozone-inflation-hits-new-record-energy-costs-spiral-control/

September reports

1. High energy prices: ArcelorMittal shuts down two plants in Germany
9/02/2022 | ArcelorMittal Germany
https://germany.arcelormittal.com/icc/arcelor/broker.jsp?uMen=7a770135-5051-5e71-9945-be470aa06ac3&uCon=b611ba70-782e-2810-a61e-481f0ad3a7b3&uTem=aaaaaaaa-aaaa-aaaa-aaaa-000000000042

2. "Exorbitant Rise In Energy Prices" Forces Europe's Top Steelmaker To Close Plants
TYLER DURDEN  SATURDAY, SEP 03, 2022
https://www.zerohedge.com/commodities/exorbitant-rise-energy-prices-forces-europes-top-steelmaker-close-plants

3. German blackout fears force JP Morgan to plan London move
American bank will shift work to the City if power outages affect EU's biggest economy
Simon Foy and Rachel Millard. 5 September 2022
https://www.telegraph.co.uk/business/2022/09/05/jp-morgan-prepares-move-workers-germany-london-amid-threat-blackouts/

4. Energy supply in Germany: bad luck for consumers
September 5, 2022
https://blackout-news.de/aktuelles/energieversorgung-in-deutschland-pech-fuer-die-verbraucher/

5. 21 Million German Households, Industry Suffer Body Blow As Green Energy Scheme Disintegrates
By P Gosselin on 6. September 2022
https://notrickszone.com/2022/09/06/21-million-german-households-industry-suffer-body-blow-as-green-energy-scheme-disintegrates/

6. Germany’s energy suicide: an autopsy
Pepe Escobar September 08, 2022
https://thesaker.is/germanys-energy-suicide-an-autopsy/

There is a so-called EU Electricity Market Reform in progress. According to it, producers of electricity – from solar or wind – automatically receive “the same price for their ‘renewable’ electricity they sell to the power companies for the grid as the highest cost, i.e. natural gas.” No wonder the cost of electricity in Germany for 2022 increased by 860% – and rising.

7. ‘Without energy, no economy can run’ – German companies warn of disaster as electricity and gas tap are ‘turned off’
“Every day we receive emergency calls from companies that are about to stop production,” said the president of the Central Association of German Crafts
JOHN CODY September 08, 2022
https://rmx.news/article/without-energy-no-economy-can-run-german-companies-warning-they-have-no-electricity-contract-could-signal-disaster/

8. Wave Of German Insolvencies Picks Up Speed…”Tenfold Increase In Gas, Electricity Prices”
By P Gosselin on 11. September 2022
https://notrickszone.com/2022/09/11/wave-of-german-insolvencies-picks-up-speed-tenfold-increase-in-gas-electricity-prices/

9. How Millions Of ‘Cheap’ Electric Heaters Could Crush Germany’s Power Grid
By ZeroHedge - Sep 13, 2022
https://oilprice.com/Energy/Energy-General/How-Millions-Of-Cheap-Electric-Heaters-Could-Crush-Germanys-Power-Grid.html

10. High energy prices: Stadtwerke are getting into financial difficulties
September 16, 2022
https://blackout-news.de/aktuelles/hohe-energiepreise-stadtwerke-geraten-in-zahlungsschwierigkeiten/

11. Power Grid Expert: “99.9% Chance” Germany Will See Blackout… “Civil War” Unless People Prepare
By P Gosselin on 17. September 2022
https://notrickszone.com/2022/09/17/power-grid-expert-99-9-chance-germany-will-see-blackout-civil-war-unless-people-prepare/

12. Germany Seizes Rosneft Refineries, But Doesn’t Solve Its Oil Problem
By Alex Kimani - Sep 19, 2022
https://oilprice.com/Energy/Crude-Oil/Germany-Seizes-Rosneft-Refineries-But-Doesnt-Solve-Its-Oil-Problem.html

13. German industry suffers worst energy shock since 1949
Tim Wallace. 20 September 2022
https://www.telegraph.co.uk/business/2022/09/20/german-industry-suffers-worst-shock-since-1949-putins-energy/

14. Germany’s “Tenfold Increase In Gas And Electricity Prices” Is Driving Out Industry
By P Gosselin on 23. September 2022
https://notrickszone.com/2022/09/23/germanys-tenfold-increase-in-gas-and-electricity-prices-is-driving-out-industry/

15. German Industry Collapse: Companies Leaving In Droves…”Can No Longer Bear Cost Explosion”!
By P Gosselin on 25. September 2022
https://notrickszone.com/2022/09/25/german-industry-collapse-companies-leaving-in-droves-can-no-longer-bear-cost-explosion/

16. German Manufacturers Struggle As Energy Crisis Persists
The country is already facing toilet paper shortages as manufacturers struggle to keep their doors open, and things are likely to get worse before they get better.
By Ag Metal Miner - Sep 28, 2022
https://oilprice.com/Energy/Energy-General/German-Manufacturers-Struggle-As-Energy-Crisis-Persists.html

17. Germany to Cap Energy Prices as Industry Is Pushed to the Brink
Rising costs are bringing the country’s energy-hungry manufacturers and small businesses close to breaking point
Tom Fairless. Sept. 29, 2022 
https://www.wsj.com/articles/energy-crisis-pushes-german-industry-to-the-brink-11664443801

18. Germany Unveils €200 Billion Package To Cap Soaring Energy Costs
By Alex Kimani - Sep 29, 2022
https://oilprice.com/Energy/Energy-General/Germany-Unveils-200-Billion-Package-To-Cap-Soaring-Energy-Costs.html

19. Germany agrees 200 bln euro package to shield against surging energy prices
Holger Hansen and Kirsti Knolle  September 30, 2022
https://www.reuters.com/business/energy/german-govt-agrees-relief-package-response-soaring-energy-prices-sources-2022-09-29/

20. Colder, Wetter Than Normal September Pushes German Gas Consumption +14.5%, Winter Gas Outage Looms!
By P Gosselin on 30. September 2022
https://notrickszone.com/2022/09/30/colder-wetter-than-normal-september-pushes-german-gas-consumption-14-5-winter-gas-outage-looms/
----------------

See also:
Deindustrialization 2, Germany, June-July 2022 reports, September 4, 2022
Deindustrialization 3, United Kingdom, August 2022 reports, September 6, 2022
Deindustrialization 4, Other Europe, September 11, 2022.

Tuesday, September 27, 2022

BWorld 561, Power demonopolization, privatization, and smuggling

* My article in BusinessWorld last September 19.
----------------

Last week, on Sept. 12, the National Grid Corp. of the Philippines (NGCP) made a big announcement of red and yellow alerts in the Luzon grid. It was a bad situation for three reasons.

One, it came just five days after a successful business roadshow by the Marcos Jr. administration in Jakarta and Singapore where some $14.4 billion of pledged investments to the Philippines were announced. When those big foreign investments come, they will need a huge power supply and yet the Philippines still experiences yellow-red alerts of thin power reserves and potential blackouts until now.

Two, the main reason was not power generation deficiency but the tripping of transmission lines of the NGCP — two 500 kilovolt (kv) lines connecting Kaampat (Bolo) to San Manuel (Nagsaag) tripped on the morning of Sept. 11, but the NGCP and some sectors blamed the affected power plants. Two big coal plants, Sual (1,294 megawatts or MW) and Masinloc units 2 and 3 (679 MW) tripped because there was no transmission line or “highway” to deliver the power they generated. In addition, three plants — Masinloc 1, GMEC 2, SLTEC 2 — experienced derating or below-capacity generation of 226 MW.

There were three other plants that were already out prior to the grid tripping incident — Calaca 2, Dinginin, and Quezon Power — with a combined 1,428 MW.

And, three, it highlighted once again NGCP’s non-compliance with Department of Energy (DoE) Circulars on contracting ancillary services (AS) to help ensure grid stability when there are unforeseen generation or transmission problems.

See these reports in BusinessWorld: “DoE to investigate forced outages that raised red alert over Luzon” (Sept. 12), and “NGCP ‘in discussions’ with DoE to ensure adequate power supply” (Sept. 14).

The NGCP is the only remaining national private monopoly in the country. It is a very privileged and pampered company. From 2017-2021, its average net income was P21 billion/year from gross revenues of P48 billion/year (see this column’s piece, “Electrifying profit and penalties, the case of NGCP, DUs, and ERC,” Feb. 7, 2022). The other national monopolies are government-owned corporations like SSS, PhilHealth, and Pag-IBIG.

Transmission should be demonopolized but this will require legislation. Meantime the monopoly should be strictly monitored by the Energy Regulatory Commission (ERC), penalized for acts or inaction that lead to frequent yellow-red alerts due to transmission line defects, and/or expensive transmission charges. The previous ERC leadership failed to do this job.

Also last week, the Independent Electricity Market Operator of the Philippines (IEMOP) held a media briefing on power supply demand and pricing in the Wholesale Electricity Spot Market (WESM). There are three things I want to highlight from the IEMOP data.

One, there were many instances or periods from Aug. 25 to Sept. 10 when the secondary price cap of P6.25/kwh was imposed. Price control is said to protect the consumers but the opposite really happens. At forced low prices, someday the power supply will not be there when people need it most — blackout. Damaged appliances, darkness and heat, use of candles or gensets are more expensive than temporary price hikes if there is no price control.

Two, there was huge uptick in peak demand — the average increase in July-September 2022 over July-September 2021 was 6.6%. This shows consumer demand is high, investment optimism is high — this is good news. And since growth in power demand is a good proxy for GDP growth, my estimate of third quarter 2022 GDP growth would be about 8%, +/- 0.5%. In the second quarter of 2022, peak demand growth was 5.7% while GDP growth in Q2 was 7.4%.

And, three, intermittent, unstable and unreliable wind, solar, and biomass continue to generate very low power until today, only about 3% of total power generation in June-August 2022, 13 years after the Renewable Energy (RE) law of 2008 (RA 9513) was enacted. (see Table 1)

But we frequently hear and read about the strong lobby by intermittent RE. See these recent reports in BusinessWorld:

• “IFC mobilizes financing for PHL firms’ green projects” (Sept. 8),

• “PHL urged to decentralize power generation with more solar plants” (Sept. 11),

• “RE firms want reform of competitive selection” (Sept. 11).

In many countries in Europe, the inconvenient fact is that as more wind and solar are added to the grid, overall power generation declines, and GDP growth is low and anemic. This is because many non-intermittent and reliable fossil fuel and nuclear plants exit the market as they are not a priority in the grid and are being demonized regularly.

The opposite occurs in East Asia. In the ASEAN-5 especially, wind-solar share remains low in the total generation mix and countries grow fast (see Table 2). We should keep business as usual, have more fossil fuel plants and limit the share of intermittent sources in the grid.

And then there are these two related reports in BusinessWorld: “DoE’s Lotilla says gov’t involvement in power will not bring rates down” (Sept. 8), and “Consistent application sought for key ERC ruling” (Sept. 15). I express my support for the positions taken by Energy Secretary Raphael Lotilla, and by ACEN Corp. that any ERC ruling on the SMC power companies’ petition for a rate hike must apply to all other players that will seek similar petitions.

On the budget, taxes, and borrowings for 2023, there is one important revenue source to pay the P2+ trillion/year of net borrowings from 2020 to around 2024: privatize many government corporations and other assets. I propose three state enterprises that must be prioritized for privatization, and nearly 20 others over the long-term (see Table 3). Government-owned power plants and gambling companies should be at the top of the list. There is zero market failure being addressed by these state enterprises, they remain simply due to politics.

Finally, related to a recent piece in this column, “Motorcycle taxis, illicit tobacco, and electric cooperatives” (Aug. 8) where I noted that the estimated value of foregone tobacco taxes due to smuggling is P24-49 billion/year, House Bill (HB) 3917 was filed amending the Anti-Agricultural Smuggling Act of 2016 to classify cigarette smuggling as “economic sabotage” and imposing higher fines and penalties, and imprisonment.

This is a good bill authored by Ilocos Norte Representative Ferdinand “Sandro” Marcos and Party-list Representative Margarita “Migs” Nograles. The anti-smoking NGOs and activists should support moves to fight illicit tobacco because smuggled cigarettes are so cheap — the retail prices are lower than the tax alone of P55/pack this year — that they encourage more smoking, not less.

When tax avoidance and smuggling are controlled, there will be less need to raise taxes elsewhere.
------------------

See also:
BWorld 558, ABS-TV5 Partnership, SMC rate hike petition, and Budget 2023, September 06, 2022
BWorld 559, Build-build-build, extended welfare, vaccine discrimination, and liberty forum, September 08, 2022
BWorld 560, PEB Singapore, the PPP Center, transport liberalization, and IPRI 2022, September 20, 2022.

Conservatives and rightists fighting back in Europe

Some good things happening in Europe this month.

1. Italy, Brothers of Italy party won. "Yes to the natural family. No to the LGBT lobbies. No to the violence of Islam, yes to safer borders, no to mass immigration, yes to work for our people, and no to major international finance.”

2. Autocrat, non-elected EU bureaucrat Ursula von der Leyen tried to blackmail Italians not to support Meloni's party, and she failed. https://rmx.news/article/shock-eu-commission-president-threatens-italy-on-eve-of-election-says-brussels-has-tools-if-wrong-parties-win/

3. Sweden, Sweden Democrats party won. Anti-illegal immigrants, anti-mass migration, "deport all foreign criminals, no discussion." 

Sweden's Conservative Right Opposition Bloc Takes Lead In General Election
TYLER DURDEN, SEP 12, 2022
https://www.zerohedge.com/political/deport-foreign-criminals-no-discussion-swedish-far-right-party-surges-ahead-tomorrows.

4. Hungary, some MPs pushing back against EU lefties who are angry that a conservative party, anti leftism party won in elections early this year. 

‘Nothing to do with Reality’: Hungarian MEP Slams Leftists After EU Declares His Country is ‘No Longer a Democracy’
PETER CADDLE. 20 Sep 2022
https://www.breitbart.com/europe/2022/09/20/nothing-to-do-with-reality-hungarian-mep-slams-leftists-after-eu-declares-his-country-is-no-longer-a-democracy/

And here's a good victory speech by Georgia Meloni, Italy's newly elected "right wing" prime minister: https://twitter.com/zenarchyandtea/status/1574425503749967872

"I can't define myself as Italian, Christian, woman, mother. No.
I must be citizen x, gender x, parent 1, parent 2. I must be a number.
Because when I am only a number, when I no longer have an identity or roots, then I will be a perfect slave at the mercy of financial speculators."

Boom! haha. Viva Meloni. Viva "right wing". The lefties are angry.
Gender is male or female, period. A man might be effeminate but he's still male.

On migration, the really "rightist" position is -- zero restriction on migration, zero visa needed. But zero welfare to migrants, no free or subsidized healthcare, housing, education, none. When immigrants who speak or understand nothing about their country destination, very little skills, when they cannot find a job, they starve, they die. If they steal, they go to jail.
This "rightist" policy on migration, I fully support.

The lefties want free migration, open borders, but they want more govt welfare, more subsidies, more freebies to those migrants. Ewww.

Monday, September 26, 2022

Agri Econ 38, Fermin Adriano article on "Full blown food crisis"

An article the other week that I find alarmist. 

Food crisis
Fermin Adriano  September 16, 2022
https://www.manilatimes.net/2022/09/16/business/top-business/food-crisis/1858605

“MY bold prediction is that by the end of this year or early next year, the country will be facing a full-blown food crisis if corresponding corrective measures are not undertaken by the government.”

Very limited numbers presented by the author to conclude "full blown food crisis." Like how many metric tons (MT) of rice, corn, vegetables, sugar, etc will be the projected gap relative to demand to conclude such. If such numbers cannot be properly shown, then alarmist projections cannot be justified. Silence is golden. No harm in  making non alarmist conclusions. Which might prod some people and traders to start food hoarding. Unnecessary damage can result from unsubstantiated projections.

For now we shd ignore his  alarmist ""full blown food crisis " projections by end 2022 or Q1 2023, and there should be no unnecessary hoarding of rice, corn, sugar etc.

The real, non fictional, most recent food crisis happened in Sri Lanka. Thousands of hungry people marching on the streets demanding more food supply at low price. For one, Sri Lanka has very idiotic climate drama policy of zero chemical fertilizer, plus their forex reserves went down to 1 month, 1 week value of imports, PH has about 10 months import cover. (This photo of food queuing in Sri Lanka from Foreign Policy)

Good thing that he proposes Agri trade liberalization. Now since that's not likely to happen, he warns "full blown food crisis" just 1-2 quarters from now. Some or many scaredy folks might start hoarding food, sacks of rice, corn, animal feeds, fertilizers etc. 

A "full blown food crisis" in the PH would look something like this:

1. Our average annual rice deficit of about 0.8 million MT, by December 2022 or Q1 2023 to reach 3 million MT or so.

2. Our forex reserves by October only about 2-3 months of import cover, so we cannot pay enough the huge food imports we need by Nov-Dec.. And rice exporters won't sell to us. But as of Sept our reserves were about 10 months of import cover.

3. similar estimates on supply deficit for rice, vegetables, sugar, etc.

All these are not quantified in the Adriano article. He just quickly concluded a "full blown food crisis", which to me is just sensationism.

Even if govt does not take corrective action like Agri import liberalization, it's still far out that we'll have full blown food crisis by Dec 2022 or early 2023. If you don't import food  now, then you can still import by Nov or Dec to rest of 2023. Why? Bec of our big reserves level. Sri Lanka didn't have that leeway. Only about 1 month, one week of import cover for food, oil, medicines etc. The exporters abroad didn't sell to Sri Lanka on those months fearing they won't be paid. Hence a "full blown food crisis" there, but far out to happen in the PH.
----------

On farm productivity, consider this in tilling one hectare of ricefield:

By carabao, about 2 weeks.
By hand tractor, about 4-5 days.
By old model rotor tractor, about one day.
By modern rotor tractors, Yanmar or Kubota, 2 hours.

More machines and fossil fuel use means faster work, higher productivity. These things been evolving fast in PH farms -- lots of machines now in use. Rotor tractors not hand tractors. Harvester-thresher combiner machines, not manual harvest then threshers. Trucks transport, not carabao transport of crops. These alone immediately raise productivity and reduce crop losses. Those machines use lots of fossil fuels, good that most farmers don't believe those climate drama, anti fossil fuel drama.

-------------

See also:
Agri Econ 35, High prices of poultry, beef, hogs, palm oil, canola, oat, August 04, 2021
Agri Econ 36, High beef, wheat, coffee, ammonia and fertilizer prices, January 21, 2022
Agri Econ 37, Sri Lanka food catastrophe, July 15, 2022.

Tuesday, September 20, 2022

BWorld 560, PEB Singapore, the PPP Center, transport liberalization, and IPRI 2022

* My column in BusinessWorld last Sept. 12.
-----------------

Four important economic and business developments occurred last week that I want to comment on.

1. Philippine Economic Briefing, Singapore

Last Wednesday, Sept. 7, President Ferdinand Marcos, Jr. and his economic and infrastructure teams held the Philippine Economic Briefing (PEB) in Singapore, which was attended by many investors.

In Panel 1, the speakers were Finance Secretary Benjamin Diokno, Socio-Economic Secretary Arsenio Balisacan, Budget Secretary Amenah Pangandaman, Central Bank Governor Felipe Medalla, and SM Investment Corp. (SMIC) Vice-Chair Teresita Sy-Coson. The four officials spoke clearly about the macroeconomic and fiscal stability of the country. And it was a brilliant idea to have another speaker from Philippine business. Singapore businessmen know the Sy and SM conglomerate, and Ms. Coson spoke positively about the economic team and economic outlook of the Philippines. When the panel ended, there was loud applause in the conference room.

Panel 2 had Trade Secretary Alfredo Pascual, Public Works Secretary Manuel Bonoan, Transportation Secretary Jaime Bautista, Tourism Secretary Maria Esperanza Christina Garcia Frasco, and Information and Communications Technology Secretary Ivan John Uy. I would say it was another slam dunk — with “come and invest in the Philippines” messaging that was clearly and convincingly delivered. And since Singapore is the Regional Headquarters of many multinationals from the west, the message must have been echoed well.

A report in BusinessWorld about the Singapore event noted that, “Electric tricycle, floating solar projects top Singapore investment deals from Marcos visit” (Sept. 8).

Investment pledges after the PEB Singapore came to $6.5 billion. Of this, $5 billion would be for the manufacturing of electric tricycles and $1.2 billion for floating solar. This does not seem right. More e-tricycles mean more power demand and our power generation is low — only 108 terawatt-hours (TWH) in 2021, less than half of Vietnam’s 245 TWH. Solar or wind are not baseload power sources, their output and storage are intermittent and very unstable.

The Philippines should aim for an increase of at least 7 TWH/year in power generation from 2023-2025 versus an increase of only 3.5 TWH/year in 2016-2021, then at least 10 TWH/year more from 2026-2028, to avoid the frequent yellow-red alerts that we experienced until this year. Vietnam has increased its power generation over the last 10 years by 14-15 TWH/year. Big commercial and industrial projects will not come in if they see that they will face occasional blackouts and that they must buy and regularly run huge expensive gensets.

Big industrial countries like Germany, the UK, France and Japan have entered a deindustrialization and low growth phase as they shut down many of their fossil fuel and nuclear plants and rely more on intermittent wind-solar. In contrast, South East Asian countries keep humming with their conventional energy sources and experience fast growth (see Table 1).

2. The BOT law and new PPP Center head

Last week, the Public Private Partnership (PPP) Center announced a “Public Consultation on the Amendments to the 2022 Implementing Rules and Regulations (IRR) of the Build-Operate-Transfer (BOT) Law (RA 7718).” People can submit their comments in writing or they can also attend the face-to-face consultation tomorrow, Sept. 13.

President Ferdinand Marcos, Jr. has appointed a new PPP Center Executive Director, Cynthia Hernandez. The lady is very cerebral: she graduated from the Philippine Science High School, took the UP College Admissions Test (UPCAT) and landed in the top 50 out of about 80,000+ examinees nationwide, graduated BS Metallurgical Engineering from UP as an Oblation scholar, finished a Masters in Development Economics (MDE) from the UP School of Economics (UPSE), ongoing MSc Business Management at Berlin Professional School. She has worked in some big energy, infrastructure, and consulting companies in the country: Meralco, the Philippine National Oil Company (PNOC), the Power Sector Assets and Liabilities Management Corp. (PSALM), AES, Aboitiz Power, SGV/EY, and KPMG.

Meanwhile, Marilou “Louie” Mendoza was re-appointed as Chairperson of the Tariff Commission (TC). Louie is another cerebral official: she graduated AB Economics (cum laude) then MDE (university scholar) from UPSE, and with a Master in Development Management (with honors), and the National Government Career Executive Service Development Program.

Cynthia, Louie, Department of Budget and Management (DBM) Secretary Pangandaman, and DBM Undersecretary for Budget Policy and Strategy Joselito Basilio were classmates in MDE at the Program in Development Economics (PDE) batch 33 of UPSE. Mr. Basilio has another MS in Applied Economics from University of Michigan-Ann Arbor, then a PhD Economics from University of Illinois at Chicago, USA.

The PDE Program Director back then and a teacher for two semesters was Prof. Ruperto “Ruping” Alonzo. Prof. Ruping (RIP) molded these four bright minds plus their other batchmates.

3. Transport inflation and Grab-MOVE IT partnership

Last week, the Philippine Statistics Authority (PSA) said that August inflation was 6.3%, flat from July’s inflation rate of 6.4%. Among the commodity groups, Transport inflation was 14.6% in August, of which “Operation of personal transport equipment” was 34.7%. Inflation in the first eight months of 2022 is now 4.9% and transport inflation is 12.9% (see Table 2).

With continued high prices for gasoline and diesel, driving personal cars remains costly and people would wish to find alternative cheaper but safe transportation. Motorcycle taxis (MCT) should fall in this category — fast, cheap, no need for parking. But MCT remains a virtual duopoly by Angkas and Joyride. So, when Grab partnered with the smallest and weakest third player, MOVE IT, the duopoly was unhinged. See this report in BusinessWorld: “Grab Philippines’ acquisition of MOVE IT challenged by 4 groups” (Sept. 9).

Commuters and the public have one “vested” interest — more choices, more options. Transport companies, especially if they are a duopoly or oligopoly, have the opposite vested interest — reduce the options for commuters, get more money and power for themselves. This is exactly what the four transport groups and the duopoly are lobbying for.

Real commuter and consumer groups call for more options and competition. Fake commuter groups call for more bureaucratization and less competition. Last month this column’s piece, “Motorcycle taxis, illicit tobacco, and electric cooperatives” (Aug. 8), said “Transportation Secretary Jaime J. Bautista and LTFRB (Land Transportation Franchising and Regulatory Board) Chair Cheloy Velicaria-Garafil should consider removing two caps — remove the maximum number of MCT players from only three, and remove the maximum 15,000 drivers per player. At a maximum of 45,000 legal drivers, it is very likely that the number of unregistered “habal habal” drivers may be twice or more than that number nationwide. Since they are already existing, they should be onboarded via legal MCT companies, for better regulatory transparency and better passenger safety.”

At the PEB Singapore, Secretary Bautista discussed the planned big railway projects that will transport people and goods much faster. These should proceed. But many people do not live near train stations, they reside many kilometers away. More MCTs will transport people from their houses to train stations then to their destinations, and back.

Grab-MOVE IT as third player is a good move. A better move is to have four, five or more players. And no maximum number of riders per player. More competition, more options, and more protection for the riding public. The LTFRB should junk the lobby of the four groups and think of the needs of the riding public.

4. IPRI 2022

Finally, the International Property Rights Index (IPRI) 2022 was launched on Sept. 7 by the Property Rights Alliance (PRA, Washington DC).

The IPRI index is a composite for three sub-indices: legal and political environment, physical property, and intellectual property protection. The Philippines showed deterioration in the global ranking, from 70th in 2018 to 83rd in 2022, pulled down by low scores in legal and political sections due to poor performance in rule of law and control of corruption (see Table 3).

The Marcos Jr. administration must do more to strengthen the rule of law and control corruption in the country.
----------------

See also:
BWorld 557, 10 things to watch in energy, the budget, and taxes, September 5, 2022
BWorld 558, ABS-TV5 Partnership, SMC rate hike petition, and Budget 2023, September 06, 2022
BWorld 559, Build-build-build, extended welfare, vaccine discrimination, and liberty forum, September 08, 2022.

Sunday, September 11, 2022

Deindustrialization 4, Other Europe

See more stories of other European countries deindustrializing, from ample supply and cheap energy to blackout preparations and expensive energy. More governments and UN climate and energy alarmism and interventions for decades led to this.
----------------

1. Europe is heading into a depression
Into the darkness, again.
Tuomas Malinen Aug 20 2022
https://mtmalinen.substack.com/p/europe-is-heading-into-a-depression

2. Azoty Drops as Polish Fertilizer Output Halts on Gas Prices
* Shares of country’s leading chemical maker drop as much as 10%
* Government says fertilizer stocks sufficient for sowing season
Konrad Krasuski August 23, 2022
https://www.bloomberg.com/news/articles/2022-08-23/azoty-of-poland-halts-fertilizer-production-on-record-gas-prices#xj4y7vzkg

3. EU Energy Crisis Forces Major Fertilizer Producer To Halt Production
Irina Slav - Aug 23, 2022
https://oilprice.com/Latest-Energy-News/World-News/EU-Energy-Crisis-Forces-Major-Fertilizer-Producer-To-Halt-Production.html

4. Why the Energy Transition Will Fail
New report highlights the staggering cost of green ‘delusions.’
James Freeman Aug. 26, 2022
https://www.wsj.com/articles/why-the-energy-transition-will-fail-11661547051

Even if you’re never hit by a 7-ton blade falling from the night sky, alternative energy will fail you. Regardless of facts or feelings about the climate, there are reasons why wind and solar power are not replacing fossil fuels. Wind and solar are also no substitute for nuclear power.

5. Europe's widening fertilizer crisis threatens food supplies
Bloomberg - 26 Aug 2022
https://www.msn.com/en-za/news/other/europes-widening-fertilizer-crisis-threatens-food-supplies/ar-AA116fZO

6. The Crucial Cause Behind Energy Crisis is ‘Green Fanaticism,’ Says Czech President
Prague Morning  AUGUST 26, 2022
https://www.praguemorning.cz/the-crucial-cause-behind-energy-crisis-is-green-fanaticism-says-czech-president/

7. Two more fertilizer plants in Europe shut down due to high gas prices – no energy means no food
Ethan Huff, August 26, 2022
https://naturalnews.com/2022-08-26-fertilizer-plants-europe-close-high-gas-prices.html

8. How West’s “Green Agenda” Incentivized and Empowered Putin’s Attack on Ukraine
Jaroslaw Martyniuk. Aug. 28, 2022
https://www.kyivpost.com/article/opinion/op-ed/how-wests-green-agenda-incentivized-and-empowered-putins-attack-on-ukraine.html

9. Czechs have most expensive electricity in Europe despite exporting huge amounts of power abroad
Czechs are paying massive energy bills even as the country remains one of the largest energy exporters in the world
LUKÁŠ KOVANDA August 29, 2022
https://rmx.news/czech-republic/czechs-have-most-expensive-electricity-in-europe-despite-exporting-huge-amounts-of-power-abroad/

10. One of the world’s largest fertilizer producers, Yara (in Norway), slashes production due to skyrocketing natural gas prices
Ethan Huff August 29, 2022
https://naturalnews.com/2022-08-29-fertilizer-producer-yara-slashes-production-natural-gas.html

11. ‘I never thought I’d see this again’ – People in Poland sleeping in cars while waiting in line to buy coal for winter
A long line formed outside the Bogdanka Coal Mine to buy bargain price coal, with some people waiting up to a week to make their purchase
WPROST.PL August 29, 2022
https://rmx.news/poland/i-never-thought-id-see-this-again-people-in-poland-sleeping-in-cars-while-waiting-in-line-to-buy-coal-for-winter/

12. Europe’s Alarming New Trend: Rapid De-Industrialization
Michael Bastasch / September 01, 2022
https://www.dailysignal.com/2022/09/01/europes-industrial-might-is-collapsing-while-its-elites-deny-reality/

13. We are all living in Greta's world now
This winter's energy crisis will give us a foretaste of what a world without cheap energy looks like
ROSS CLARK  2 September 2022
https://www.telegraph.co.uk/news/2022/09/02/living-gretas-world-now/

14. Darker and Colder: Europeans Warned of ‘Unprecedented’ Power Failures This Winter
“Production of electricity cannot keep up with demand.”
Paul Joseph Watson  2 September, 2022 
https://www.infowars.com/posts/darker-and-colder-europeans-warned-of-unprecedented-power-failures-this-winter/

15. "Worst Has Yet To Come": Civil Unrest Set To Surge Worldwide As Socioeconomic Pressure Builds, Report Warns
TYLER DURDEN  SATURDAY, SEP 03, 2022
https://www.zerohedge.com/geopolitical/worst-has-yet-come-civil-unrest-set-surge-socioeconomic-pressure-builds-report-warns

16. Tens of thousands protest in Prague against Czech government, EU and NATO
September 3, 2022
https://www.reuters.com/world/europe/tens-thousands-protest-prague-against-czech-government-eu-nato-2022-09-03/

17. "Europe On The Brink:" 70,000 Czech Protesters Flood Prague Over Energy Crisis
https://www.zerohedge.com/geopolitical/europe-brink-70000-czech-protesters-flood-prague-over-energy-crisis

18. Europe Looks Set for Energy Rationing After Russian Gas Cut
* Germany has built up storage, but it may not be enough
* Europe’s ability to get through winter depends on the weather
* European Gas Prices to Stay High Without Policy Intervention: Energy Aspects
Vanessa Dezem, Rachel Morison, and Ewa Krukowska. September 4, 2022
https://www.bloomberg.com/news/articles/2022-09-04/europe-looks-set-for-energy-rationing-after-russian-cut#xj4y7vzkg

19. Why Europe’s Dependence On U.S. LNG Is Risky
Alex Kimani - Sep 05, 2022
https://oilprice.com/Energy/Natural-Gas/Why-Europes-Dependence-On-US-LNG-Is-Risky.html

20. DARK TIMES: Industry and infrastructure collapsing by the day across Europe and the USA
Mike Adams September 05, 2022
https://www.naturalnews.com/2022-09-05-industry-and-infrastructure-collapsing-across-europe-and-usa.html

21. Energy crisis: 30 public pools in France suddenly close after energy bills jump from €15 million to €100 million
The company’s energy bill is a sign of what may come for business and public services across Europe
JOHN CODY September 06, 2022
https://rmx.news/article/energy-crisis-30-public-pools-in-france-suddenly-close-after-energy-bills-jump-from-e15-million-to-e100-million/

22. “Lehman Event” Looms For Europe As Energy Companies Face $1.5T In Margin Calls
Josh Owens - Sep 06, 2022
https://oilprice.com/Energy/Energy-General/European-Energy-Companies-Face-15-Trillion-In-Margin-Calls.html

23. Europe's Nightmare Scenario Comes True: Energy Bills To Rise By €2 Trillion, Will Reach 20% Of Disposable Income
TYLER DURDEN SEP 07, 2022 
https://www.zerohedge.com/commodities/europes-nightmare-scenario-comes-true-energy-bills-rise-eu2-trillion-will-reach-20

24. Europe Is Buying All The Russian Oil It Can Before Banning It
By Irina Slav - Sep 07, 2022
https://oilprice.com/Energy/Energy-General/Europe-Is-Buying-All-The-Russian-Oil-It-Can-Before-Banning-It.html

25. Swiss citizens who overheat their homes this winter could face hefty fines and 3 years in jail
Radical new legislative proposals in the country could see citizens reporting their neighbors for overheating their homes
THOMAS BROOKE September 07, 2022
https://rmx.news/switzerland/swiss-citizens-who-overheat-their-homes-this-winter-could-face-hefty-fines-and-3-years-in-jail/

26. This Winter, Europe Plunges Into “The New Dark Ages”
by Michael September 7, 2022
http://theeconomiccollapseblog.com/this-winter-europe-plunges-into-the-new-dark-ages/

27. FORCE MAJEURE: Massive global shutdowns are now under way for METALS SMELTING operations covering iron, copper, nickel, aluminum, zinc and STEEL
Mike Adams September 07, 2022
https://www.naturalnews.com/2022-09-07-force-majeure-massive-global-shutdowns-are-now-under-way-for-metals-smelting-operations.html

28. Putin warns the West will 'keep freezing' if energy price caps are imposed – and Russia will stop all gas and oil supplies
* Putin said Western attempts to cap prices for Russian oil and gas were 'stupid'
* The Russian leader, 69, warned EU leaders that Russia would walk away from supply contract if EU imposed price caps on the country's exports of gas and oil
* If gas and energy supplies stopped, there would be devastating consequences
RACHAEL BUNYAN  7 September 2022
https://www.dailymail.co.uk/news/article-11188715/Putin-says-Russia-stop-oil-gas-supplies-price-caps-imposed.html

29. Putin Responds to Truss / EU Energy Price Cap: “Keep Freezing”
Eric Worrall September 7, 2022
https://wattsupwiththat.com/2022/09/07/putin-responds-to-truss-eu-energy-price-cap-keep-freezing/

30. Energy Transition a ‘Dangerous Delusion’: Report
By Nathan Worcester September 8, 2022
https://www.theepochtimes.com/energy-transition-a-dangerous-delusion-report_4717765.html
--------------