Friday, June 30, 2023

BWorld 614, FDI in the Philippines and the energy mix

* BusinessWorld, FDI in the Philippines and the energy mix
June 20, 2023 | 12:02 am

My Cup Of Liberty
By Bienvenido S. Oplas, Jr.

Last week, the government economic team held the 7th Philippine Economic Briefing (PEB) in the Singapore Fullerton Hotel. The first PEB in Singapore was held on Sept. 9, 2022 and led to investment pledges of $6.5 billion.

SOURCES OF FDI

Singapore is the most appropriate place to invite more foreign direct investments (FDIs) into the Philippines because it was the country’s number one source of FDIs in 2020-2022, larger than Japan, and six times larger than the US (see Table 1).

Among the declarations made at the Singapore PEB were the following. Finance Secretary Benjamin Diokno said “this is the moment”; Budget and Management Secretary Amenah Pangandaman said “the Philippines will not only be the darling but also the Sweetheart of Asia.” Secretary Arsenio Balisacan of the National Economic and Development Authority (NEDA) said the President desires to expand opportunities and partnerships for trade and bilateral relations rapidly. Central Bank Deputy Governor Francisco Dakila, Jr. added that cash remittances, BPO revenues, FDIs, and international reserves will cushion the Philippine economy against global headwinds.

DBS Group Chief Executive Officer (CEO) Piyush Gupta said that Philippines is among the top 10 nations of interest for Singapore investors. Good.

More investment means more businesses and job creation, more modernization, less poverty, and less dependence on the state for welfare by the citizens.

Notice the big jump in 2022 FDI coming from Malaysia, Russia, Germany, Kuwait, and Switzerland, while there was a big decline in FDI coming from China, the Netherlands, and the Cayman Islands.

The Philippines and the rest of Asia should focus on trade and investments, and global and regional peace via commerce, tourism, and modernization. We should not follow Europe and the US that are fixated on endless wars.

MANY ENERGY ISSUES

There have been many energy-related issues that cropped up recently. I have arranged them into sub-topics, with all stories published in BusinessWorld and mostly written by Ashley Erika Jose, my favorite objective energy reporter.

1.) Energy Regulatory Commission (ERC) and distributors: “ERC issues 33 show-cause orders against power co-ops, distributors” (May 31), “ERC orders distributors to explain higher-than-approved power charges” (June 8).

2.) Department of Energy (DoE) and renewables: “DoE calls for fair treatment of poor countries in transition to green-energy technology” (June 6), “Energy dep’t clarifies on-grid rollout procedures for renewables” (June 6), “DoE registers P6.8B worth of investments in energy efficiency” (June 13), “DoE may impose up to P100M in fines for RPS violations” (June 14).

3.) Decarbonization and unstable energy: “Philippine fast-track decarbonization seen costing $133 billion until 2040” (June 8), “Napocor hoping to convert off-grid unit to 100% renewable” (June 11), “New power projects to stabilize electricity supply in 2-3 years” (June 12), “Gas-fired power still critical for PHL amid green-energy transition — Fitch Solutions” (June 13).

4.) Ninoy Aquino International Airport (NAIA) blackout and Meralco: “NAIA power outage caused by MServ personnel’s lapse” (June 12), “Meralco sees easing power rates as rainy season starts” (June 12).

Last week, the Independent Electricity Market Operator of the Philippines (IEMOP) held a briefing. Since there is endless push to have more intermittent solar and wind power in the national grid, I used the IEMOP data and computed the implied capacity factor (ICF) of all energy sources — fossil fuels, conventional renewables, and intermittent renewables — to see where we can really get energy security and stability. Here are the results.

One, for the period February-May 2023, the average capacity factor — actual generation over potential generation capacity  —  for the Philippines overall is only 46%.

Two, geothermal has the highest ICF — it produced 67% of its potential capacity, meaning the other 33% of power plants were on maintenance shutdown or unscheduled, prolonged maintenance. Coal came in second with 64%, third was natural gas with 48.5%.

Three, hydro has a low ICF of only 24.5% because February-May is within the non-rainy season. Solar on average has an ICF of only about 15%, but those months already in the dry, generally sunny season so it reached 21%. Oil-based plants are used only as occasional peaking plants and are not running regularly.

Four, coal’s share in installed capacity is only 46% of the total but it contributed 64% in actual electricity generation. In contrast, solar and wind have a 7.5% combined share in installed capacity but contributed only 3.7% of actual electricity generation (see Table 2).

So, the intermittent sources are not dependable, are not reliable for electricity users and it will be dangerous if they dominate the grid. All those “decarbonization” efforts, which are very expensive and subsidy-dependent, will only lead to degrowth and blackout economics.

The half-hour blackout at the NAIA on June 9 was an accident. MServ, which is a wholly owned subsidiary of Meralco, was doing a comprehensive technical audit to improve NAIA Terminal 3’s electrical system following the outage that hit the terminal on May 1. It was a pro-bono effort by Meralco, at no cost to NAIA or the airport passengers. An MServ worker accidentally left grounding conductors attached to a piece of electrical equipment during a testing activity, which triggered an electrical fault that subsequently caused the power interruption of NAIA Terminal 3.

Meralco Spokesman Joe Zaldariaga quickly issued a statement explaining what happened and humbly made the public apology. I saw and read the press statement; the apology was sincere. No alibi, no blame game. They tried to help — for free — improve the airport’s electrical system, then an accident happened. Good move, Mr. Zaldariaga.

On a related note, I support the privatization of NAIA operations. Make it more professional and less political. There is no “market failure” in airport operation, even ownership. If a private airport frequently conks out, then passengers and airlines will avoid it and the private owner and operator will lose money.
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See also:
BWorld 611, Declining inflation and Germany’s energiewende, June 24, 2023 
BWorld 612, Financing growth, fiscal discipline and Maharlika fund, June 28, 2023
BWorld 613, Financing sustained growth: Tax reforms, June 29, 2023.

LGBTQ++, cancel culture and UPSEAA board double talk

Last Saturday June 24, I shared this observation with some friends and the UPSEAA Viber Community:

This afternoon I saw huge "Pride" parade, supporters of LGBTQ++ advocacies. JP Rizal st Makati. Many young folks, mostly middle class.

Oil/energy crisis, hunger/food crisis, population crisis, NCDs crisis, garbage crisis, climate crisis, virus crisis,... next is gender crisis? Ano main agenda, population control? More same sex union with no children?

Next day Sunday June 25, a member of UPSEAA replied. Here are our exchanges.

D: more same sex union with no children? ang homophobic ng comment mo @Bienvenido

Me: Hi D, pls explain why it's homophobic. Thank you.

Anyway D, it is not homophobic, it is biology.

Male+male = no child. Men cannot get pregnant. Never. Ever.

Female+female = no child. No male sperm to fertilize female ovum.

Few same sex union is fine. But when many via mass propaganda with large parades, legal and judicial measures,it is dangerous and wrong. 

People shd breed and continue human reproduction. That's nature. That's biological science. 

Narrative that people shd discontinue Hunan reproduction via so many same sex union, that's political science. And it is evil.

D: surrogacy or adoption ang sagot dyan.
parenthood is not synonyomous na biologically sa kanya galing ang bata.
heterosexual.marriage does not also mean reproduction. some also adopts or resort to surrogacy due to difficulty in having the baby.
by your end statement na " it is evil" eh homophobic na yun. paaano mo icacategorize yun.

Me: (re surrogacy) O yon Pala, we shd encourage more human reproduction, more male+female union.

Problem is that not many couples will want their babies adopted by other people who in the first place have no plan to have babies on their via same sex union

D: at sino nga nagdiscourage? madami  single by choice so ilalagay mo din sila sa category na yan dahil ayaw magreproduce?

Me: Discouraging more human reproduction is evil. It is not homophobic. It is anti nature.

D: its their choice..bakit mo impose standard mo sa kanila

Me: Deception is like coercion. Deceiving people that sex change, organ mutilation, taking puberty and testosterone blocking medications and procedures are ok. No. It is not ok. It is deception and dishonest

In the US, Canada etc, males who declare themselves as females can enter female Cr, female shower rooms, join and compete in female sports.

If a man enters a female Cr saying he's a transgender and hence justified and my daughter is inside the Cr, hehe, mKakatikim ang trans na yan sa akin na di nya magugustohan.

May male Cr naman pero papasok sa female Cr, dapat turuan ng leksyon. Turuan ng good manners.

I know that my term "evil" referring to discontinuance of human reproduction is rather strong. Should have not used that word. But I have read a number of articles of the dangers or damages of sex change and promotion of transgender even among children. See for instance these reports:

1. Anguished parents of trans kids fight back against ‘gender cult’ trying to silence them
Dana Kennedy. May 11, 2022
https://nypost.com/2022/05/11/meet-the-parents-of-trans-kids-fighting-gender-cult/ 

2. ‘I literally lost organs:’ Why detransitioned teens regret changing genders
Rikki Schlott. June 18, 2022
https://nypost.com/2022/06/18/detransitioned-teens-explain-why-they-regret-changing-genders/

3. California ex-trans teen backs Florida ban on Medicaid funds for transgender medical interventions
Chloe Cole said she may not be able to have children and is at higher risk for cancer because of transgender medical interventions
Tyler O'Neil July 10, 2022
https://www.foxnews.com/health/california-ex-trans-teen-backs-florida-ban-medicaid-funds-transgender-medical-interventions

4. California school broadcasts sexually explicit books, some covering 'pedophiles,' kink and pornographic images
Some of the passages in the California public school library appeared to discuss 6- and 8-year-old kids engaging in sex acts
Hannah Grossman | October 24, 2022
https://www.foxnews.com/media/california-school-broadcasts-sexually-explicit-books-covering-pedophiles-kink-pornographic-images

5. Kindergarteners expected to understand gender identity, sexuality in Oregon district
 KRISTINA WATROBSKI | October 26th 2022
https://wpde.com/news/nation-world/kindergarteners-expected-to-understand-gender-identity-sexuality-in-oregon-district-beaverton-school-bsd

6. Even progressive Europe won’t go as far as America in child transgender treatments
Dr. Stanley Goldfarb and Dr. Miriam Grossman. January 30, 2023
https://nypost.com/2023/01/30/even-progressive-europe-wont-go-as-far-as-america-in-child-transgender-treatments/

7. Detransitioner Chloe Cole announces lawsuit against hospitals 'for pushing her into medical mutilation'
A prominent detransitioner sued a nationwide medical group and its doctors who she said 'decided to perform a mutilating, mimicry sex change experiment' on her
Kendall Tietz February 23, 2023
https://www.foxnews.com/media/detransitioner-chloe-cole-announces-lawsuit-hospitals-pushing-medical-mutilation

8. Woman pressured into breast removal at 13 under ‘erroneous belief’ she was transgender: lawsuit
Jacob Geanous June 17, 2023
https://nypost.com/2023/06/17/woman-sues-hospital-for-removing-her-breasts-when-she-was-13-years-old/

9. Number of 'Non-Binary' Students in New Jersey Up 4,000 Percent Since 2019
41 of 675 self-identified ‘non-binary’ students are in elementary school, state enrollment figures show
Alec Schemmel June 19, 2023
https://freebeacon.com/campus/number-of-non-binary-students-in-new-jersey-up-4000-percent-since-2019/

10. Schools Are Now Allowing Children To Identify As Cats, Horses, Dinosaurs And All Sorts Of Other Things
Michael Snyder June 20, 2023
http://themostimportantnews.com/archives/schools-are-now-allowing-children-to-identify-as-cats-horses-dinosaurs-and-all-sorts-of-other-things

11. Video: LGBTQ Activist Cannot Answer Question ‘Is There A Difference Between Men And Women?’
“I’m trying to get a yes or no. I’m not trying to get a speech.”
Steve Watson 22 June, 2023
https://summit.news/2023/06/22/video-lgbtq-activist-cannot-answer-question-is-there-a-difference-between-men-and-women/

12. Europe Does About-Face On Transgender Therapy For Children
Tyler Durden JUN 22, 2023
https://www.zerohedge.com/medical/europe-does-about-face-transgender-therapy-children


On male transgenders who enter female CR and if my daughter is inside, I doubt she (or other young girls) can protect herself/themselves if those men would oogle if not sexually attack her/them. The case of a man who transitioned to a "woman" to compete in female swimming competition in the US is an example. See for instance this report,

‘Don’t Talk To The Media’: Former UPenn Swimmer Says College Silenced Trans Swimmer’s Teammates
HAROLD HUTCHISON June 19, 2023
https://dailycaller.com/2023/06/19/dont-talk-to-the-media-former-upenn-swimmer-says-college-silenced-trans-swimmers-teammates/


That Sunday afternoon to evening me and my wife were in Philippine Arena, Bulacan to watch Bruno Mars concert. After the concert, going out of the Arena, I saw these posts.

R: Disappointing is an understatement for the way UPSEAA is tolerating @Bienvenido’s bigotry, homophobia, transphobia (among other things) in this group chat.

If you’re just choosing to spread hate and your outdated ways, go elsewhere. Nobody wants to hear it. This isn’t your column. No one’s paying for it.

You rambling and giving your opinion when no one asks for it is one thing. A lot of us younger alumni have already muted this chat because of that.

But is UPSEAA really gonna stand for this bigotry that actually translates to violence against the LGBTQ+ community? You don’t deserve a platform. Not here, not anywhere.

J: Go!!!  Full support!  Thank you for your brave words

I composed a brief reply, clicked Send, then a message popped out,

"You can't send messages in this Community because you're no longer a member."

So I was blocked, removed, cancelled. A pm from UPSEAA admin confirmed that I have been removed.

I checked UPSEAA Community Rules, among these:

1."Offensive posts and messages may be removed." 

Fine. But in my case, they did not remove my posts, they instead removed a member, me.

2. "messages that insult, threaten and degrade a fellow member are prohibited."

And R personally attacked me, "@Bienvenido’s bigotry, homophobia, transphobia (among other things)." And the Board finds it ok.

Double standard. Double talk. Rules are applied arbitrarily.

Now the board is implicitly saying these:

1. Do not say or argue that:

Male+male = no child. Men cannot get pregnant.
Female+female = no child. No male sperm to fertilize female ovum. 

One can be accused of homophobia for saying that. And the board will be on the side of the accuser, remove you from the community. Just stay silent, do not question the LGBTQ narratives.

2. Do not say or argue that:

Sex change, organ mutilation, taking puberty and testosterone blocking medications and procedures are  not ok.
Male trans cannot enter female CR, cannot join female sports, etc.
You can be accused of transphobia for saying that. And the board will be on the side of the accuser and remove you from the community. Just stay silent.

The purpose of having a community is to practice tolerance, to raise tolerance level of people to contrary, opposing views. So long as no one is urging physical harm (burn, die,...), opposing ideas should be welcome. Now the game has changed. Remove opposing ideas by removing members or people who will espouse the opposing ideas.

Checking through recent news reports, enjoy these:

1. Video: Biden Trans ‘Health’ Official Claims Gender Surgery On Kids Is “Literally Suicide-prevention Care”
Also declares that ‘Pride’ now lasts the entire Summer
Steve Watson 27 June, 2023
https://summit.news/2023/06/27/video-biden-trans-health-official-claims-gender-surgery-on-kids-is-literally-suicide-prevention-care/

2. Trump Vows to Sign a Bill Barring ‘Child Sexual Mutilation in All 50 States’
Jack Phillips June 26, 2023
https://www.theepochtimes.com/trump-vows-to-sign-a-bill-barring-child-sexual-mutilation-in-all-50-states_5357673.html

3. Video: Biden Department of Education ‘Pride’ Seminar Advocates Puberty Blockers For Kids
Features children talking about teachers hiding their ‘transitions’ from parents and reporting students who ‘misgender’ them
Steve Watson 28 June, 2023
https://summit.news/2023/06/28/video-biden-department-of-education-pride-seminar-advocates-puberty-blockers-for-kids/

4. Watch: New York Pride March Chants "We're Coming For Your Children"
Tyler Durden JUN 28, 2023
https://www.zerohedge.com/political/watch-new-york-pride-march-chants-were-coming-your-children

5. 250 Hollywood Celebrities Sign Letter Demanding Big Tech Censor Anyone Who Opposes Trans Surgeries On Kids
They call for action “akin to election and COVID-19 mitigations and rules”
Steve Watson 28 June, 2023
https://summit.news/2023/06/28/28685/

6. Pride Month is bad public policy
Being Right
By Jemy Gatdula June 30, 2023
https://www.bworldonline.com/opinion/2023/06/30/531417/pride-month-is-bad-public-policy/
--------

I like UPSEAA then. I mentioned it several times in my column in BusinessWorld, like

1. UPSE Homecoming 2022 (Sept. 26, 2022), https://www.bworldonline.com/opinion/2022/09/26/476692/peb-in-nyc-upse-homecoming-and-transport-liberalization/

2. UPSEAA lecture by Secs. Pernia and Diokno (Jan. 28, 2019), https://www.bworldonline.com/editors-picks/2019/01/28/211311/growth-by-elections-and-fdis-by-psa-liberalization/

3. UPSEAA lecture by Sec. Mon Lopez (June 19, 2019), https://www.bworldonline.com/editors-picks/2019/06/19/237531/more-investment-liberalization-needed/

4. UPSEAA lecture by Robina Gokongwei (Nov. 11, 2019), https://www.bworldonline.com/editors-picks/2019/11/11/263647/john-gokongwei-and-q3-gdp/

5. UPSEAA support for UP PGH, UP Medical Foundation (April 27, 2020), https://www.bworldonline.com/editors-picks/2020/04/27/291534/some-heroes-against-the-virus-hysteria/

6. UPSEAA lecture by Dr. Iggy Agbayani (Nov. 11, 2020), https://www.bworldonline.com/editors-picks/2020/11/11/328243/gdp-contraction-cdc-ph-and-medicine-taxes/

7. UPSEAA lecture by Andrew Masigan (March 1, 2021), https://www.bworldonline.com/opinion/2021/03/01/347594/global-economic-impact-of-lockdowns/.

I also blogged some lectures there, like:

....
UPSEAA Lecture 6, Ferdie Constantino and SMC infra, August 28, 2020 
UPSEAA Lecture 7, Dr. Butch Arroyo, October 17, 2020 
UPSEAA lecture 8Dr. Iggy Agbayani, November 04, 2020
UPSEAA Lecture 9, Andrew Masigan on PH and VN, Feb. 24, 2021.

This LGBTQ++ thing, UPSEAA removed me via double standard application of its own rules. So be it. Babuu.

Finally, I am not against gays, etc. I have many friends, relatives who are gays. They live their own lives. What I am against is large scale campaigns, parades, even legislations to "protect a marginalized" sector that will later morphe into things like organ mutilization, implicit war on population expansion, etc.

See also: Jemy Gatdula on LGBTQ++, June 24, 2023.

Thursday, June 29, 2023

BWorld 613, Financing sustained growth: Tax reforms

* BusinessWorld, June 15, 2023.
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(Third of four parts)

The government economic team or the members of the Development Budget Coordination Committee (DBCC) will hold another Philippine Economic Briefing (PEB) today in Singapore with a clear goal of attracting more foreign investments to create more jobs in the country. The economic team also went to Singapore and Jakarta for the first PEB in the second week of September last year.

Very likely among the important announcements to be made by the team will be on the recently enacted economic liberalization measures like the Public Service Act Amendment and Retail Trade Liberalization, the proposed Maharlika Investment Fund, and taxation policies.

I checked the revenues/GDP ratio of some ASEAN countries and saw that the ratio is generally similar among them — 15-18% in 2021. Vietnam’s was 20% in 2019 but there was no data for 2021. Note that this is for National Government revenues alone and does not include the revenues of local government units (LGUs) as they have their own local taxes, fees, and other sources of income. If LGU revenues are included, overall revenues/GDP ratio can easily rise to 16-17%.

One notable thing in the Philippines’ tax policy is that it imposes relatively high taxes on international trade, both exports and imports, at 3.3% of GDP. Whereas Singapore has zero, Malaysia has only 0.3%, Thailand 0.6%, and Vietnam 1.3%.

The Philippines has the highest VAT rate in the ASEAN at 12%, yet its revenues from general taxes including VAT is low, only 2%, while Thailand and Singapore with VAT rates of only 7% and 8% have general taxes revenues of 3.5% and 2.4% respectively (see Table 1).

Finance Secretary Benjamin Diokno has acknowledged the problem in the country’s VAT system. He noted that from 2016 to 2020, the Philippines collected an average of P723 billion from VAT, which is just 0.40 of the expected VAT collection. The ASEAN average is 0.57 — Thailand has the highest VAT efficiency at 0.79, while Singapore has 0.71 efficiency.

Mr. Diokno has attributed the low efficiency to the many VAT exemptions granted by the government in various sectoral laws. He is correct and I believe reviewing those VAT exemptions should have been done yesterday, or at least today.

Here are recent tax-related reports in BusinessWorld: “Government urged to consider inflation impact of new taxes” (May 14), “Excise tax collection below target due to illegal tobacco — BIR” (May 18), “Tax reforms generated P202.8B in revenues in 2022” (May 29), “PHL posts lowest VAT efficiency in region” (May 31), “Gov’t warned against overdependence on ‘regressive’ sin taxes” (June 4), “Tax system being outmaneuvered by digital companies” (June 5), “PHL needs a more ‘dynamic’ excise tax regime — solon” (June 5), “EV industry lobbying for incentives to support new-vehicle adoption” (June 13).

The DBCC has listed seven new tax measures, but they have not yet released updated revenue projections publicly. So, I built this table with projections of some measures mentioned in BusinessWorld. The first four measures are projected to give the government some P29 billion a year.

I add my own two proposals. One, imposing an income tax on military and uniformed personnel (MUP) pension which is big — P160 billion in 2021, P164 billion in 2022, and is projected to be P214 billion in 2023 and P241 billion in 2024, rising further in succeeding years. Currently the MUP pensions are big and tax free.

In 2022, the average monthly pensions were P4,528 for the Social Security System, P13,600 for the Government Service Insurance System, and P40,049 for the MUP. The projected average MUP pension in 2023-2024 would be about P43,000/month and up. This falls in the 25% income tax rate.

My second proposal is to bring the Philippines VAT rate back to 10% from 12%, then remove the VAT exemption of many sectors (see Table 2).

Imposing a VAT of 10% on the sales of renewables will have an upward price effect on power consumers. But bringing down VAT from 12% to 10% for coal, gas, and oil plants, which constitute about 80% of total power generation, will have a price deflation effect for the consumers. Overall, the consumers will likely be better off.

Many MUP pensioners may likely oppose taxation of their pension and they are wrong to do so. First, while in active service they contributed nothing for their own pension; second, their pension comes 100% from taxes and they do not want to contribute to the tax too. This will give them a bad image and public perception that their motto “To serve and protect” refers more to themselves, their superiors, and their pension, and less the public.

The above tax measures should be coupled with spending cuts, borrowings cuts, and, later, tax cuts as the public debt continues to decline. Then more public and private resources will be devoted to more infrastructure, better justice administration, and more business innovations.
---------------

See also:
BWorld 610, Financing sustained growth: MUP pension reform, June 22, 2023
BWorld 611, Declining inflation and Germany’s energiewende, June 24, 2023 
BWorld 612, Financing growth, fiscal discipline and Maharlika fund, June 28, 2023.

Tax Cut 38, My paper in 2021 about tobacco taxes and smuggling

This is my paper in 2021 published by Tholos Foundation in the US.


It's 65 pages long but the body is only 18 pages. The rest are annex news reports on smuggling, 2017-2021. Here are some tables in my paper.





VI. Conclusions and Recommendations

As clearly demonstrated, the higher the taxes the more illegal tobacco trade, leaving consumers in more jeopardy. Laws that over-tax, even prohibit legal tobacco will encourage and generate illegal tobacco. In this situation, the losers are (a) government finance department or ministry with lower than potential revenues, (b) legal tobacco companies with lower revenues, and (c) consumers who are tempted to patronize cheaper but illegal cigarettes.

The winners are (a) corrupt government officials who allow and protect smuggling in exchange for high monetary rewards, and (b) criminal gangs and terrorist groups engaged in this and related activities. And overall corruption in government increases, not decreases.

Going back to the three quotes at the opening page of this paper, the reworded Newtonian 3rd law of motion by von Mises and this author – for every government intervention and taxation, there is an equal opposite distortion – is confirmed.

If Cong. Joey Salceda’s estimate of P30 B/year illegal tobacco in the country is correct, then the reported estimate of P16 to P20 B/year in foregone taxes is also correct. That is equivalent to the full year budget of the Department of Trade and Industry (DTI) or Department of Foreign Affairs (DFA) in 2020.

Instead of introducing another round of higher tobacco tax, Congress and the Executive would benefit from strictly implementing the existing tax laws and plug loopholes. To this end, controlling the proliferation of smuggled and other illicit products would go a long way. This will achieve three goals (a) increase government revenues, (b) decrease corruption in government, and (c) deprive funding for criminals and terrorist groups.
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Wednesday, June 28, 2023

BWorld 612, Financing growth, fiscal discipline and Maharlika fund

* BusinessWorld, June 13, 2023. 

Financing growth, fiscal discipline and Maharlika fund
June 13, 2023 | 12:02 am

My Cup Of Liberty
By Bienvenido S. Oplas, Jr.

(Second of four-parts)

Last week, the Development Budget Coordination Committee (DBCC) or economic team kept the Philippine growth targets of 6-7% this year and 6.5-8% for 2024-2028, having considered the risks of El Niño, global trade tensions and value chain disruptions, among other factors.

Among their assumptions are inflation of 5-6% in 2023 and 2-4% in 2024-2028; peso-dollar rates of P54-P57 this year and P53-P57 in 2024-2028; Dubai crude at $70-$90 per barrel in 2023-2024 and $60-$80 in 2025-2028.

I think these growth targets are achievable and should be maintained. I can think of at least three reasons.

One, the Philippine growth momentum is way above the pace of neighboring Asian economies, and triple or quadruple those in G7 countries. Out of 72 economies that reported first quarter growth, the Philippines was the fifth-fastest growing and among the medium-to-large economies worldwide, the Philippines has the fastest growth.

Two, the average growth for the fourth quarter of 2022 and the first quarter this year was 6.8%, the fastest among the countries listed below, and it was a fast growth over a high base and high growth of 8% a year earlier.

Three, job creation remains fast as shown by the unemployment rate of 4.5% in April, which is almost one-half of 8.7% registered in April 2021 (Table 1).

The DBCC also showed its medium-term fiscal scenario from 2023 to 2028. The revenue-to-GDP ratio will rise from 15.2% in 2023 to 17.3% in 2028, and the budget deficit-to-GDP ratio will decline from 6.1% in 2023 to 3% in 2028.

These are good targets by the DBCC, but we should aim for a drastic reduction in the annual budget deficit. This can be done via fiscal discipline — controlling spending and borrowings during noncrisis years, retiring public debt and saving on interest payments. When crisis years occur again, we will have wider fiscal leeway to engage in higher deficit spending and higher borrowings at lower interest.

Here, I propose that the disbursement-to-GDP ratio should decline from 21.3% this year to 20.3% in 2025 and 19.2% in 2028. Assuming that the revenue-to-GDP ratio will stay at DBCC targets, then the deficit-to-GDP ratio should significantly decline from 6% in 2023 to only 1.9% in 2028 (Table 2).

Where can spending cuts be made? One in some subsidies and welfare programs. There are many subsidies and freebies that started many decades ago, including in healthcare and medicines, education from elementary to university, irrigation and agriculture credit, condoms and pills, monthly cash transfers, etc. Recently, food stamps were unveiled. New subsidies imply that some or many existing subsidies are hardly working. To finance new subsidies, some old subsidies must shrink or be stopped and rechanneled to new welfare programs.

Two, in National Government subsidies where there is high or rising subsidy programs by local government units (LGUs). LGUs now have more resources as a result of the Mandanas ruling, in which their share in national tax revenues have significantly increased.

Three, in big infrastructure projects via the Maharlika Investment Fund. Once the fund is established, many big projects that otherwise would be funded by taxes and public borrowings can be taken by the fund.   

These include inter-island bridges (Panay-Guimaras-Negros bridge, new Samar-Leyte bridge, Cavite-Corregidor-Bataan bridge, etc.); small modular reactors for off-grid islands and provinces to stop endless subsidies to National Power Corp. gensets. We can also revive the Bataan Nuclear Power Plant, which has potential generation (assuming a capacity factor of 85%) of 4.62 million megawatt-hours yearly, much larger than solar and wind’s combined generation of 2.71 million MWh in 2021, and reduce electricity prices. The plant was killed in 1986 due to politics. Even business conglomerates would be hesitant to revive this plant because of heavy politics in the energy and environment sectors.

The Philippines has big metallic mining potentials especially for gold, copper and nickel. The Maharlika fund should go there and generate more jobs, more forex revenues and pay more mining taxes. The single-biggest foreign direct investment for the Philippines would have been the $5.9-billion Tampakan gold-copper project by Sagittarius Mines in South Cotabato. The provincial government simply disallowed open-pit mining and the project failed to take off.

Potential projects like these may have failed to register in the minds of the authors of “Maharlika Investment Fund: Still Beyond Repair,” a 27-page paper written by faculty members of my alma mater, the UP School of Economics. Among the reasons they oppose the fund are the inability to articulate implications of the fund’s dual-bottom line objective, funding the MIF poses huge risks to strained public coffers and is vulnerable to moral hazard, and the unlikely ability to crowd in investments and eke out large returns.

Several government agencies are ironically the hurdles and disruptors of important infrastructure and energy projects. If the Maharlika fund is involved in reviving the Bataan plant and in big mining projects, local governments and national bureaucracies can’t easily delay or stop the operation of these big projects knowing there is National Government involvement. Thus, these objections are addressed. The second objection is also addressed as big private capital comes in.

If the fund is questioned or opposed, my question is why Malampaya royalties, which averaged P23 billion a year from 2018 to 2022, were not included in the funding.

The Philippines should endlessly push for fast economic growth. Financing and sustaining it via rechanneled public resources from nonworking subsidy programs, plus government resources outside taxes and borrowings like the Maharlika fund, are noteworthy initiatives.
--------------

See also:
BWorld 609, NGCP, low power generation, and the Maharlika Fund, June 21, 2023.
BWorld 610, Financing sustained growth: MUP pension reform, June 22, 2023
BWorld 611, Declining inflation and Germany’s energiewende, June 24, 2023.

Foreign Aid 20, Why government to government transfer of resources can be wasteful

Scrolling through the pages of the book, "The Concise Encyclopedia of Economics" (2008) by David R. Henderson, I saw this article by Prof. Depak Lal on Foreign aid.


Right. Because foreign aid is not people to people transfer of wealth and income (between international traders, exporters and importers; between foreign employers and migrant workers from Philippines or other developing countries). Foreign aid is transfer of money between and among governments.

Below, good points by Prof. Lal, where government to government transfer of money can also be  government to government inefficiency, wastes of resources.

Saturday, June 24, 2023

BWorld 611, Declining inflation and Germany’s energiewende

* BusinessWorld, June 8, 2023.
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On Tuesday, the Philippine Statistics Authority reported that the country’s inflation for May was 6.1% — still high, but it is the fourth month of consistent decline from 8.7% last January. So it is good news.

Compared to other Asian economies over January to May, the Philippines has had the highest inflation rate, at the same level as Germany. Over the same months in 2022, India and Singapore had the highest inflation rates in Asia (see Table 1).

The main areas pulling up inflation in May were: 1.) Alcoholic beverages and tobacco, 12.3%, 2.) Restaurants and accommodation services, 8.3%, and, 3.) Food and non-alcoholic beverages, 7.4%. The first two show that people are drinking, smoking, and partying more; that people are going out more to eat and party in restaurants and hotels, and going to provincial hotels and resorts.

I think GDP growth in 2nd quarter could be high. Household consumption is 75% of GDP, so high consumption there can pull up the overall GDP level and growth.

ERRATUM

I would like to apologize to the readers for the error in transposition in headings in Table 1 of my column last week, “NGCP, low power generation, and the Maharlika Fund” (June 1). The table’s column on Population should have been for Power generation and vice versa. Sorry for that mistake and the confusion it created. Nonetheless, the column and computed kWh/person remains valid and correct. Also, the numbers on average growth in power generation and GDP remain valid and correct.

Meanwhile, here are some points about the National Grid Corp. of the Philippines (NGCP) that I did not include in my column last week.

One, the Energy Regulatory Commission (ERC) in previous administrations had issued a lot of show cause orders with penalties to private distribution utilities (DUs) and generation companies (gencos), but when it comes to the NGCP, only one has been issued, last year, with a penalty of P5 million for non-compliance with a Department of Energy circular.

Two, show cause orders for DUs and gencos have high penalties and even come with customer refunds amounting to billions of pesos. Maybe this is because the ERC does not have a group monitoring transmission, only groups for monitoring DUs and gencos. The ERC should consider having a group for monitoring transmission performance.

MORE RENEWABLES, MORE EXPENSIVE ELECTRICITY, THE CASE OF GERMANY

Germany is the biggest economy in Europe although in power generation, it is second only to Russia. But Germany is the powerhouse in renewables, the biggest in installed capacity for wind and solar — it adopted early the “energiewende” or energy transition from fossil fuels to renewables, starting around 2000. Among the policies is the imposition of EEG or Feed-in Tariff (FiT) like in the Philippines, with guaranteed high prices for intermittent renewables for 20 years.

I saw data from the German Association of Energy and Water Industries (BDEW), listing electricity prices for household/residential and industrial. The trend in prices is horribly anti-consumer and anti-business. Among the culprits are: a.) high procurement for generation as Germany bought more gas from the US, Middle East, and Africa because they avoided cheap Russian gas; b.) a high EEG surcharge, which had been temporarily discontinued last year and this year as prices are almost double the 2012 level; and, c.) rising Grid fees as adding more intermittent power sources to the grid will require more costs to stabilize the grid.

Then I checked Germany’s energiewende, they added lots of wind and solar capacity — installed power in 2021 was twice the 2012 level. Power generation by wind and solar more than doubled, from 12.5% of total in 2012 to 31.5% in 2020. Meanwhile, power generation from coal plus nuclear decreased from 60% in 2012 to only 35% in 2020.

Germany saw its mistake and, in 2021, they slowly and silently raised their coal plus nuclear generation to 40% of the total (see Table 2).

There are important lesson for the Philippines and many developing countries — having more intermittent renewables and less conventional power like coal and nuclear will lead to more expensive electricity, a higher overall inflation rate, and even deindustrialization and degrowth economics.

The main reason is that intermittent sources will always require huge backup power. When the wind does not blow, when it is night, or a cloudy or rainy day and solar output is very low, backup power from fossil fuels and nuclear must be available to avoid blackouts — and this is not cheap. Consumers will have to pay double, first for intermittent sources with high prices (EEG/FiT surcharge, ancillary power for grid stability), and second, for the cost of backup power.

We should avoid deindustrialization and degrowth economics. We should focus on sustained fast growth for our people and businesses. We should stay the course of using more fossil fuels in power generation. Add nuclear power too — revive the Bataan Nuclear Power Plant (BNPP) plus add small modular reactors (SMRs) for off-grid islands and provinces.

When the Maharlika Fund is finally established, I wish that among its big-ticket projects are: getting majority control of the NGCP, doing more offshore oil-gas exploration and development, buying out many inefficient and wasteful electric cooperatives in many provinces, and going into nuclear power generation via the revival of the BNPP and setting up many SMRs in off-grid islands and provinces.
--------------

See also:
BWorld 608, The digital future, rising productivity and economic growth, June 20, 2023
BWorld 609, NGCP, low power generation, and the Maharlika Fund, June 21, 2023.
BWorld 610, Financing sustained growth: MUP pension reform, June 22, 2023.

Jemy Gatdula on LGBTQ++

I am reposting here portions of four recent articles by a friend and fellow BusinessWorld columnist, Atty. Jemy Gatdula. 

The Supreme Court celebrates Pride Month. It shouldn’t. (Part 1, June 2)
https://www.bworldonline.com/opinion/2023/06/02/526271/the-supreme-court-celebrates-pride-month-it-shouldnt/

“A community with likely a 2-5% share of the Philippine population, smaller than the indigenous peoples (20%) and Muslims (10%), and yet able to make universities, local government units, businesses, and even the Supreme Court itself feel obligated to pay homage to it can hardly be considered marginalized. The LGBTQIA++’s influence goes beyond the month of June: corporate policies, university courses, advertising, public parades, restaurants and churches compelled to adapt their facilities, even legislation or ordinances proposed or enacted. The LGBTQIA++ are practically extolled and celebrated every day all year round. That is not a marginalized community.”

The Supreme Court celebrates Pride Month. It shouldn’t. (Part 2, June 9) https://www.bworldonline.com/opinion/2023/06/09/527618/the-supreme-court-celebrates-pride-month-it-shouldnt-2/

Which brings us to this reiterated point: the freedoms of religion and speech are expressly and specifically declared in the Constitution, enjoyable by all. To give the LGBTQIA++ treatment not available to others is not upholding equality, it is the imposition of a privilege. The Supreme Court — on terms of prudence alone — would have done well to refrain from making itself vulnerable to appearances of preference, especially when no Constitutional or legislative provision requires it.

The LGBTQIA++: Marginalized and powerless. Who is? And are they? (June 16) https://www.bworldonline.com/opinion/2023/06/16/528887/the-lgbtqia-marginalized-and-powerless-who-is-and-are-they/

Nevertheless, this also has to be considered: even assuming that the LGBTQIA++ are identifiable and even assuming that the LGBTQIA++ should be classified as a “protected” class, what Philippine law or policy actually and expressly discriminates against them? Even marriage laws (i.e., the Family Code) does not discriminate on the basis of sexual orientation. The members of the LGBTQIA++, like any individual, are all protected under the same constitutional rights as everyone else. That is why this “honoring” by government offices and politicians of the LGBTQIA++ by way of urging Pride Month on everyone is not “equality,” it is privilege.

The myth of LGBT discrimination (June 23) https://www.bworldonline.com/opinion/2023/06/23/530148/the-myth-of-lgbt-discrimination/

Congress alone gives the lie to the discrimination argument: a known transgender has been elected to the House and an LGBT party-list registered to run for a seat. Members of the LGBT community are prominent members of business, the academe, and showbusiness — with many of them occupying top positions and enjoying high earnings. And the political and social influence of the LGBT clearly goes beyond its 2-5% share of the population.

Meanwhile, this afternoon I saw a huge "Pride" parade by supporters of LGBTQ++ advocacies. At JP Rizal St. and surrounding areas in Makati. Many young folks, mostly middle class.

Oil/energy crisis, hunger/food crisis, population crisis, NCDs crisis, garbage crisis, climate crisis, virus crisis,... next is gender crisis? Ano main agenda, population control? More same sex union with no children?

A friend replied to me, "Destroy motherhood. Separate motherhood from being a woman. And then, destroy the family once the woman-hood and (it’s natural consequent) motherhood is destroyed.
That’s what I think the end game of the devil is."

See also other articles by Jemy Gatdula at 
Covid 31, Articles arguing for lifting the PH lockdown, April 18, 2021

Thursday, June 22, 2023

BWorld 610, Financing sustained growth: MUP pension reform

* BusinessWorld, June 6, 2023.

(First of four parts)

This is the first of a four-part series on the subject of financing sustained growth. We start by looking at the cash operations report as of April this year which the Bureau of the Treasury (BTr) released last week.

HIGHER REVENUES, ANOTHER BUDGET SURPLUS

The good news is that tax revenues have reached P400 billion for the first time, while expenditures have not increased by a proportional amount — so we experienced a big fiscal surplus of P67 billion in April, compared with a deficit of P274 billion in 2020.

I computed the comparable January-April totals from 2019 to 2023 — the good news is that the deficit this year is the lowest since 2020, and while borrowings are still at P1 trillion, this is lower than in 2020. National Government (NG) spending and interest payments for public debt are the highest this year (see Table 1).

So, revenues have acquired a momentum of their own as the economy expands its recovery and this is good. The immediate and medium-term goals are to significantly reduce the deficit and annual borrowings, and reduce interest payments and amortization. There must also be a significant reduction in some items of the expenditure side.

During non-crisis years (whether caused by economic issues, a virus, etc.), the government should aim to have a fiscal surplus and retire some public debt so that the debt/GDP ratio can go down to 30%, even 20%, and we can save on interest payments and get higher credit ratings. Then, when a crisis hits, the debt/GDP ratio can go up again to 40% or higher. Once a crisis is over, it is time to again retire more public debt and aim to get the debt/GDP ratio back to 30% or less. We should target more fiscal responsibility, with a government living within its means, and welfare dependents learning how to let go of subsidies and contributing to the economy someday.

MUP PENSION REFORM

The annual pension for military and uniformed personnel (MUP) remains a big and major deficit generator yearly. The full amount is taken from taxpayers because MUPs themselves make no contributions to their retirement — they keep all their salaries and bonuses monthly.

I computed government revenues, expenditures, and public debt per employed person in the Philippines, then the MUP pension burden. The bad news is that public debt per employed person has jumped from P193,000 in 2019 to P294,000 in April 2023.

Expenditures for active personnel include their a.) basic pay, b.) other compensations (combat duty pay, combat initiative pay, hazard duty pay, etc.), and, c.) other benefits (terminal leave, retirement gratuity, PhilHealth and Pag-IBIG contributions by government, etc.).

Active-duty personnel like soldiers are not just put in harm’s way, they are well protected by taxpayers with high spending on capital outlay (CO) like tanks and trucks, fighter jets and choppers, boats and battle ships, and with high maintenance and other operating expenses (MOOE) like ammunition, bombs and gasoline.

The numbers show the following.

One, for active personnel, CO + MOOE rose from P106 billion in 2019 to P145 billion this year. Their basic pay also rose consistently.

Two, the MUP pension burden per employed person has increased from P2,400 in 2019 to P3,300 in 2022, and is projected to reach P4,400 this year.

Three, the MUP pension alone over the basic pay of active-duty personnel has increased, from 63% in 2019 to 94% last year, and is projected to reach 115% this year. And pension over total expenditures for active personnel has increased from 24% in 2019 to 41% this year (see Table 2).

The economic team led by the Department of Finance (DoF) and Department of Budget and Management (DBM) recently conducted consultations with the Armed Forces of the Philippines, the Philippine Air Force, and the Presidential Security Group.

The MUPs’ optional retirement beneficiaries can choose from any of these three options: 1.) Receive all their pension benefits in one lump sum upon retirement, 2.) Get 60 months pension in advance then a monthly pension after five years, and, 3.) receive pension benefits at the age of 57.

These proposals are fine. What I am proposing to the economic team — and I hope the MUP pensioners will consider this — is that their pensions should be taxed. Currently their generous pension is tax-free. The pensioners contributed zero to the fund when they were still on active duty, and as pensioners contribute zero to it in the form of tax. Since they benefit from tax money, they should contribute to such a fund.

(To be continued.)
---------

See also:
BWorld 607, Philippines ratings upgrade, energy policies to sustain growth, June 19, 2023
BWorld 608, The digital future, rising productivity and economic growth, June 20, 2023
BWorld 609, NGCP, low power generation, and the Maharlika Fund, June 21, 2023.

Deindustrialization 15, Germany turning from Greens to AfD

I saw these 2 articles from Remix,

1. Germany’s anti-immigration AfD hits new polling high of 20%
The AfD’s 20 percent support nationwide is unprecedented
John Cody.June 21, 2023
https://rmx.news/germany/germanys-anti-immigration-afd-hits-new-polling-high-of-20/

2. Germany is a ‘sick’ country in decline, claims former EU commissioner
Günther Oettinger didn’t pull his punches in his criticism in describing Germany’s downward spiral
June 22, 2023
https://rmx.news/germany/germany-is-a-sick-country-in-decline-claims-former-eu-commissioner/

Related articles.

3. Voters flock to the AfD in search of energy realism
Germany's mainstream parties are stuck in an old ideology
RALPH SCHOELLHAMMER 8 June 2023
https://unherd.com/thepost/votes-flock-to-the-afd-in-search-of-energy-realism/

4. Germany faces electricity shortages and can expect to see industries leave the country due to green energy policy 'disaster' that saw nuclear power plants ditched for renewables, business chiefs warn
German energy chiefs warn that Germany will face a shortage in electricity
It comes after government decided to shut down its remaining nuclear plants
By RACHAEL BUNYAN  7 June 2023
https://www.dailymail.co.uk/news/article-12168981/Germany-faces-electricity-shortages-expect-industries-leave-country.html

5. German Government Prepares To End Meat Consumption – Rations Of Just 10 Grams Daily!
By P Gosselin on 7. June 2023
https://notrickszone.com/2023/06/07/german-government-prepares-to-end-meat-consumption-rations-of-just-10-grams-daily/

6. Costly climate rules are turning germans away from the greens
June 8, 2023
https://www.economist.com/europe/2023/06/08/costly-climate-rules-are-turning-germans-away-from-the-greens

7. 'No Bullshit', Germany is failing on climate change, says green vice chancellor
June 8, 2023
https://www.politico.eu/article/germay-failing-on-climate-change-vice-chancellor-robert-habeck/

8. Germany: Thousands in Bavaria protest Greens' heating law

Planned legislation to make heating systems more climate-friendly has been protested in Southern Germany. Attendees chanted "stop the heating ideology."
June 10, 2023
https://www.dw.com/en/germany-thousands-in-bavaria-protest-greens-heating-law/a-65879493

9. Green Remorse: Germany Cools on EU Boiler Ban
Elements in the ruling German coalition hesitate to back a ban, while consensus in the EU on the Green Transition begins to fall apart.
Thomas O'Reilly  June 10, 2023
https://europeanconservative.com/articles/news/green-remorse-germany-cools-on-eu-boiler-ban/

10. Germany Warns of Industry Shutdown If Russian Gas Stops Flowing
Economy Minister Habeck urges policymakers to learn from past
Russia-Ukraine gas transit agreement due to expire next year
Petra Sorge  June 12, 2023
https://www.bloomberg.com/news/articles/2023-06-12/germany-warns-of-industry-shutdown-if-russian-gas-stops-flowing

11. German eco-party ridiculed over failure to install HQ’s €5m heat pump
Project at Greens' headquarters has taken over three years because of drilling permit delays and difficulties finding qualified tradesmen
Jörg Luyken  12 June 2023
https://www.telegraph.co.uk/world-news/2023/06/12/german-greens-ridiculed-failing-install-heat-pump/

12. Green Party Headquarters’ Heat Pump Debacle: 5 Million Euros Cost, Still No Heat!
By P Gosselin on 13. June 2023
https://notrickszone.com/2023/06/13/green-party-headquarters-heat-pump-debacle-5-million-euros-cost-still-no-heat/

13. German Princess Gloria On Green New Deal: “Going To Be Worse Than Communist East Germany”!
By P Gosselin 18. June 2023
https://notrickszone.com/2023/06/18/german-princess-gloria-on-green-new-deal-going-to-be-worse-than-communist-east-germany/

Meanwhile, I attended tonight this online seminar by IAF, FNF, on "climate justice."


I wrote these comments in the chatbox:

* Cap and trade is not liberalism. It is dictatorship. The env bureaucrats put a cap on CO2 emission and ration it among companies. Similar to food rationing, gasoline rationing in former east europe communist governments.

*  FNF and FDP should consider taking the position of climate and energy realism, not alarmism. The political socialist SPD and ecological socialist Greens are slowly losing base to AfD.

* CO2 is not a pollutant, evil gas. It is a useful gas. It is the gas that we humans, animals exhale; the gas that trees, flowers, crops use to produce their own food via photosynthesis. More CO2 emission, more plant growth, more food production in the world. The narrative "carbon pollution" is a lie, dishonest and corrupt. The ecological socialists like Greens Party, WWF, etc are good in spreading climate lies.

* Top 3 countries in the world with most expensive electricity are wind+solar lovers -- Denmark, Germany and UK, https://funwithgovernment.blogspot.com/2023/05/deindustrialization-13-more-wind-solar.html.
Exporting cap and trade, similar mechanisms from Europe to the whole world is global dictatorship, degrowth and blackout economics.
---------------

See also:
Deindustrialization 12, Bypassing the usefulness of fossil fuels, more on net zero, April 09, 2023
Deindustrialization 13, More wind-solar, more expensive electricity, May 11, 2023
Deindustrialization 14, Net Zero slowly on the retreat in Europe, May 25, 2023.

Wednesday, June 21, 2023

BWorld 609, NGCP, low power generation, and the Maharlika Fund

* BusinessWorld, NGCP, low power generation, and the Maharlika Fund
June 1, 2023 | 12:02 am

My Cup Of Liberty
By Bienvenido S. Oplas, Jr.

Last week, the National Grid Corp. of the Philippines (NGCP) was a hot item. See for instance these reports in BusinessWorld, “Senate probe sought on delays in NGCP projects” (May 21), “DoE, ERC seek enhanced powers in EPIRA amendments” (May 23), “Senators slam NGCP over poor network, keeping high gains” (May 24), “NGCP says it invested P300 billion in grid since 2009” (May 25).

THE SENATE ENERGY COMMITTEE HEARING

The Senate Committee on Energy, chaired by Rafael Tulfo, conducted a public hearing on May 24. Among the resource persons, Prof. Rowaldo del Mundo of the UP College of Engineering said that “Out of 219 committed projects under the DoE (Department of Energy)-approved transmission development plan (TDP), 79 were not implemented and 49% of completed and on-going projects are delayed… Project delays are up to nine years.” Horrible NGCP.

Energy Regulatory Commission (ERC) Chairperson Monalisa Dimalanta was also a resource speaker, and she said that the NGCP has 72 delayed projects: 33 in Luzon, 19 in the Visayas, and 14 in Mindanao. And six of these 72 delayed projects are “Energy Projects of National Significance,” like the Mindanao Visayas interconnection and the Panay-Negros interconnection projects. Again, horrible NGCP.

The economic team of the Marcos Jr. administration has been going around major cities in Asia, Europe, and the US trying to attract more investors to come into the country as many economic liberalization measures have been institutionalized and legislated as new laws, like the amendment to Public Service Act, the Retail Liberalization Act, etc. But investors see and read about the frequent yellow-red alerts in the country, and the high-power rates due to the limited power supply relative to fast-rising demand, so many of them are not coming. We can call this NGCP- (or power undersupply-) instigated business uncertainty.

NGCP-INSTIGATED BUSINESS UNCERTAINTY

I wanted to possibly measure this uncertainty, so I constructed this table. My sources of basic data are: Power generation from the BP Statistical Review of World Energy (BP SRWE) 2022, and Population and GDP growth from the IMF World Economic Outlook (IMF WEO) 2023 database. I computed the kilowatt hour (kWh) per capita, the annual growth rate of power generation, then I averaged the generation and GDP growth rates.

I group the countries into three: Group A are the G-7 member-countries; group B are high generation Asian economies with 2,300 kWh/person and higher as of 2010; and group C are low generation Asian countries with 1,000 kWh/person and lower. The later are India, Indonesia, Philippines, and Vietnam.

I chose the year 2010 because that was the first year of operation of the NGCP and hence, the improvement in the grid stability and security, or the lack of it, would have been felt. The results are somehow revealing.

One, of the four countries in Group C, the Philippines had the slowest growth in power generation from 2010 to 2021. Some big new power plants would have started generating additional power, but with many delayed or unconstructed transmission and interconnection lines, or with the existing ones frequently conking out, this adversely affected overall generation.

Two, in average GDP growth, Vietnam and India had faster rates than the Philippines and Indonesia. I still have to quantify how many trillions of pesos of unrealized expansion in GDP were caused partly, or largely, by NGCP inefficiency. I will do so in future columns.

Three, looking at all the countries covered, those with fast growth in power generation also have fast GDP growth: China, India, Indonesia, the Philippines, and Vietnam. And countries with slow growth or a contraction in power generation also have low, anemic GDP growth: these were all the G7 countries (see Table 1).

Japan, the UK, and Italy, in particular, are slowly toying with deindustrialization and degrowth economics as they slowly unload their reliable coal, gas, and nuclear power plants, and embrace more intermittent wind and solar.

So, among the important energy policies that the Philippines and other developing countries should note are: One, power generation, especially from reliable conventional plants, should keep expanding and they should avoid adding more intermittent sources to the grid. Two, the transmission and interconnection system, especially for an archipelago like the Philippines, should keep expanding and modernizing.

Three, the electricity distribution system to end-users like households should also keep expanding and modernizing.

And, four, the government power price control like the secondary price cap (SPC) at the Wholesale Electricity Spot Market (WESM) should be scrapped or raised to a higher level. No new peaking plants and ancillary plants are being constructed because companies will not operate at a loss. The most expensive electricity is not P7/kWh or more (vs. the SPC of P6.25/kWh since around 2014). The most expensive electricity is no electricity, resulting in blackouts, and people forced to use candles, gensets, or manual fans.

MAHARLIKA INVESTMENT FUND PASSED BY THE SENATE

On the early morning of May 31, the Senate voted 19-1-1 to pass the Maharlika Investment Fund (MIF). That was almost unanimous voting by the Senate. All the economic team members, including the Bangko Sentral ng Pilipinas (BSP) Governor, are supporting it.

There seems to be no hard copy yet of the approved Senate version as of my deadline, but based on the May 30 version of the bill, Table 2 shows the proposed funding of the MIF.

These plus dividends from the Philippine Amusement and Gaming Corp. (PAGCOR) and other government gaming operators. Plus private funds.

I am wondering why Malampaya royalties are not included in the funding? This is big: P24.52 billion in 2018, P26.57 billion in 2019, P19.08 billion in 2020, P19.79 billion in 2021, P25.90 billion in 2022. Or an average of P23.17 billion a year over the last five years.

I am hoping that the bicameral conference committee will consider using Malampaya royalties for MIF funding.

Once established, I wish to see the MIF getting majority control of the only remaining private monopoly nationwide — the NGCP. Plus do more oil-gas-coal exploration and development.
---------------

See also:
BWorld 606, The Laffer Curve of Philippine tobacco taxation, June 18, 2023
BWorld 607, Philippines ratings upgrade, energy policies to sustain growth, June 19, 2023
BWorld 608, The digital future, rising productivity and economic growth, June 20, 2023.

Covid 83, Pfizer trial, EMA and CDC studies

Some reports on adverse events post-Covid vax.


Appendix 2.2. Cumulative and Interval Summary Tabulation of Serious and Non-serious Adverse Reactions from Post-Marketing Data Sources (393 pages)
Pfizer, as of 21 June 2022
https://www.globalresearch.ca/wp-content/uploads/2023/05/pfizer-report.pdf

EMA admits COVID Vaccination causes Infertility
May 31, 2023
https://davidicke.com/2023/05/31/ema-admits-covid-vaccination-causes-infertility/

On the 28th October 2022, the EMA published new guidance that states “heavy menstrual bleeding should be added to the product information as a side effect of unknown frequency of the mRNA COVID-19 vaccines Comirnaty (Pfizer) and Spikevax (Moderna)”.

Breaking: Family of 24-Year-Old Who Died From COVID Vaccine Sues DOD in ‘Groundbreaking Case’

The family of a 24-year-old man who died from complications of COVID-19 vaccine-induced myocarditis alleges the U.S. Department of Defense engaged in “willful misconduct” when it claimed Pfizer’s COVID-19 vaccine authorized for emergency use was “safe and effective.”
By Brenda Baletti, Ph.D. May 31, 2023
https://childrenshealthdefense.org/defender/george-watts-jr-pfizer-covid-vaccine-injury/

Hohmann: Death by Injection – Top insurance researcher provides data showing staggering numbers
By Jim Hoft Jun. 3, 2023
https://www.thegatewaypundit.com/2023/06/hohmann-death-injection-top-insurance-researcher-provides-data/

Those who trusted the system and took the Covid vaccines have a 26 percent higher mortality rate on average compared to those who declined the jab – and the death toll is even more staggering for vaccinated people under 50 years old, where mortality is 49 percent higher than for those unvaccinated.

Heart Disease Risk Soars 13,200% Among Vaccinated, CDC Confirms
Frank Bergman. June 15, 2023
https://slaynews.com/news/heart-disease-risk-soars-13200-among-vaccinated-cdc-confirms/

A bombshell study from the U.S. Centers for Disease Control (CDC) and the Food and Drug Administration (FDA) has confirmed that the risk of autoimmune heart disease is 13,200% higher in people who are vaccinated for Covid.

Official Document: Pfizer Knew of More Than 1.6 Million Adverse Side Effects from Vaccine
By: External News Source June 15, 2023
https://lizwheeler.com/trending-story/pfizer-adverse-side-effects-vaccine/

The documents reveal a total of 1,597,673 adverse events, one-third of which were classified as serious. A staggering 60% of cases were reported as “outcome unknown” or “not recovered,” suggesting a prevalence of non-transient injuries.

Notably, Pfizer reported over 10,000 categories of diagnosis from the vaccine, many of them severe and rare. 

Pfizer Recorded 5 Million Harmful Outcomes Across 1.5 Million mRNA Injected Victims

696,605 nervous, 317,811 gastro, 126,993 cardiac, 100,970 blood/lymphatic, 61,518 eye and 31,895 immune system disorders; and 167,382 victims developed bacterial, viral, or parasitic infections.
KAREN KINGSTON  JUN 16, 2023
https://karenkingston.substack.com/p/pfizer-recorded-5-million-harmful


Dr. McCullough Calls for Banning mRNA from the Food Supply on the War Room

Natalie Winters Interviews Dr. McCullough on mRNA Vaccines for Livestock, SARS-CoV-2 Lab Origins, and More

PETER A. MCCULLOUGH, MD, MPH™ JUN 17, 2023 https://petermcculloughmd.substack.com/p/dr-mccullough-calls-for-banning-mrna

Vax-Pushing Debate Dodger Linked To 'Chimeric' Coronavirus Creation In Wuhan
Tyler Durden JUN 19, 2023
https://www.zerohedge.com/political/vax-pushing-debate-dodger-linked-chimeric-cronavirus-creation-wuhan

All COVID-Infected At Health Conference Were Vaccinated: Study
by Zachary Steiber via The Epoch Times JUN 20, 2023 
https://www.zerohedge.com/political/all-covid-infected-health-conference-were-vaccinated-study
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See also:
Covid 80, 3rd anniversary of lockdown, March 25, 2023
Covid 81, Dr. Iggy Agbayani in my column, April 18, 2023
Covid 82, Political science that masquerade as medical science, May 12, 2023.