Thursday, December 28, 2023

BWorld 667, Top 10 trends in fiscal program and illicit trade in 2023

Dec. 21, 2023.

Here is this column’s take on the major events and stories on the fiscal condition and shortfalls in revenues related to illicit trade this year.

1. The revised fiscal program released by the Development Budget Coordination Committee (DBCC) last Friday, Dec. 15, showed that disbursements would rise from P5.3 trillion this year to P7.8 trillion in 2028. It should be noted that disbursements kept rising even when revenues significantly declined during the lockdown dictatorship of 2020-2021.

2. Revenues are rising from P3.8 trillion this year to P6.6 trillion in 2028 but they cannot cope with sustained high spending. So the budget deficit (revenues lower than spending) will remain elevated at P1.5 trillion this year to P1.2 trillion in 2028. The consolation is that the deficit as a percentage of GDP is projected to decline from 6.1% this year to 3% in 2028 (see Table 1).

Budget Secretary Amenah F. Pangandaman said “certain big spending are in various laws and we have to implement them but we are improving spending utilization and efficiency, make sure that every program, every action plan that we implement is a make-or-break for our people who are dreaming of better quality and decent lives for a better Philippines.”

3. Lower actual revenues than potential revenues are mainly due to leakages, corruption, and product substitution. One clear example is the excise tax on tobacco, the most taxed commodity in the country. As tax rates doubled from P25/pack in 2016 to P50/pack in 2021, tax revenues initially increased then started falling in 2022 and by Bureau of Internal Revenue (BIR) estimates, would further decline in 2023 by up to 20% of 2022’s level. This means tobacco tax revenues will go from P176.5 billion in 2021 to P160.4 billion in 2022, and further down to possibly only P142 billion in 2023. Collections until October were only about P120 billion. This is due to users’ substitution of legal tobacco with illegal or smuggled tobacco, plus a shift to e-cigarettes both legal and illegal.

4. Tobacco control measures and policies were generally successful across countries in reducing smoking prevalence among adults. In the Philippines for instance, from 35% of adults in 2000, tobacco users declined to only 23% in 2020. But this applies only to legal tobacco because consumption of illegal or smuggled tobacco continues to remain high as their prices are so low compared to legal, taxed tobacco. Plus, there is the shift to e-cigarettes.

5. Life expectancy continues to rise across countries including those with high smoking incidence. Consider for example France, where smoking prevalence remained flat at 33% of adults from 2000 to 2020 but where life expectancy has increased from 74 years in 1980 to 82 years in 2021 (see Table 2). One must note that there are many other factors to human mortality and tobacco is one of them but not necessarily the main factor.

6. An expanded anti-agricultural smuggling bill is now in Congress. It will replace the old “Anti-Agricultural Smuggling Act of 2016” (RA 10845) and will cover more agricultural products including tobacco, perhaps the most lucrative smuggled products at tens of billions of pesos yearly in foregone taxes from imported tobacco alone.

7. Key legislators that championed this bill include Representatives Sandro Marcos and Margarita “Migz” Nograles who included tobacco when they filed the bill in the House, and Representatives Mark Enverga and Mika Suansing who are pushing the general Anti-Agricultural Smuggling Amendments Bill in the House. In the upper chamber, Senator Lito Lapid filed the counterpart bill in the Senate, Senator Koko Pimentel ensured the constitutionality of anti-agri smuggling bill, and Senator Cynthia Villar championed it in the Senate, with JV Ejercito as co-author.

8. Illicit trade in e-cigarettes — the case of Flava and Denkat. In a House Committee on Ways and Means public hearing last week, Dec. 12, Committee Chairperson Joey Salceda said that “Vape sale is not yet particularly classified under PSIC (Philippine Standard Industrial Classification) … The brands found in the warehouse were all registered with the BIR (RMC 93-2023), with Flava Corporation registering as a ‘manufacturer’… Flava Corporation, however, is not registered as an importer… TopKing Logistics, which supposedly billed Flava, is also an importer, not a manufacturer.” 

Denkat Trading supposedly got its supply from China suppliers then sold them to Flava, and Denkat should pay the excise tax but did not. See also these reports in BusinessWorld: “E-cigarette listing, taxing sought” (Dec. 12), “British chamber backs law vs agri smuggling, 5-year EO 10 effectivity” (Dec. 14).

9. Estimated tax losses from illicit e-vapes, especially from Flava, are about P4.9 billion in 2022. Congressman Salceda said that the e-cigarettes market in the Philippines is about P13.24 billion in 2022, so the projected tax revenues should have been P5.56 billion, but the BIR collection was only P0.63 billion, or a difference of P4.9 billion.

10. The Laffer Curve — as tax rates increase, tax revenues increase initially then plateau and decrease later — is real and actually happening in the taxation of tobacco and other “sin” products. People simply shift to illegal products that are much cheaper.

The rule of law is still ignored on a large scale in the country. Manufacturers and traders are bringing in unregistered products from abroad and selling them openly here, health warnings are not displayed, and tax rates are not paid so government revenues decline.

We should have fast and sustained growth, the denominator (GDP size) should keep expanding so that when the numerators — budget deficit, public debt, etc. — rise slower than the rise in denominator, our deficit/GDP ratio or debt/GDP ratio will decline. Following the rule of law plus having more realistic lower tax rates will help plug revenue leakages and control corruption in the country.

See also:
BWorld 664, Stabilizing growth with low inflation, low unemployment rates, and more PPP investments, December 19, 2023
BWorld 665, Top 10 trends in the economics of war and global peace, December 23, 2023
BWorld 666, Top 10 news stories on power and electricity of 2023, December 26, 2023.

Agri Econ 39, Land conversion to solar farms contributing to high food inflation

A creeping threat to food price stability and food security in many countries is the large-scale conversion of agri land to solar farms, "to save the planet" and in the process fail to save the hungry.

Here is an example, 500 MW solar farm by Solar Philippines by Leandro Legarda-Leviste. Phase 1 is 225 MW (should have been finished this 2023) and Phase 2 is 275 MW. See the photo, it is largely a ricefield to be converted, or already converted, to solar farm.

The old SPNEC leadership should have been ashamed that they posted this photo of wide rice fields to become solar farms. Their contribution to high food inflation is clear. I hope the new SPNEC leadership would put another photo, not showing the rice fields that would no longer contribute in  food production in the country.

In Solar Philippines' solar farm in Calatagan, Batangas, they killed many trees to covert to solar farms. The mother, Sen. Loren Legarda, been campaigning for "Plant trees to save the planet." The son, Leandro is silently campaigning for "kill trees to save the planet."  And both are rich and powerful. Double talk.

The Ayalas' ACEN is also engaged in agri farm to solar farm. This is their Arayat-Mexico solar farm in Pampanga, 116 MW.

Solar has low capacity factor, recently only about 18%. Meaning a 100 MW solar can actually produce only 18 MW on average, 0 at night and 36 MW daytime.

My latest computation showed that PH solar has capacity factor of only 14%. Why, well it's been often cloudy the past 3 years or more. For instance, from 2021 to 2023, there have been rains all 12 months in a year, including this El Nino 2023 that started last May. It's late December already and always cloudy with occasional rains in Metro Manila and nearby provinces. Solar hates shade -- from trees, clouds and rains.

And solar requires huge land area, average 1.5 hectare per 1 MWp (peak output). So a 100 MWp solar would need 150 hectares. Since that 150 hectares can produce only 18 MW average electricity, then to produce real 100 MW would require about 475 MW installed capacity and about 600 hectares of land. In contrast, a 100 MW coal or gaa plant would need only about 10 hectares, freeing land for Agri, residential or other uses. Solar is about 60x more land intensive than coal and gas. More solar land, more hunger someday.

DUs dilemma

The big private distribution utilities (DUs) in the Philippines are forced to get REs like huge wind solar because of the renewable portfolio standards (RPS) provision of the RE law of 2008 (RA 9513). If they cannot meet the minimum RE share of electricity being distributed to consumers, they will be penalized by the government. So I think the evil here in dangerous land conversion from agri and/or forest use to solar farm is the RE law of 2008. It is coercing, armtwisting the DUs.

Similar to TRAIN law of 2017 (RA 10963), starting 2018 government has imposed diesel tax from 0 to P6/liter by 2020, gasoline from P4 to p10/liter, kerosene, aviation turbo, LPG, etc also affected. Expensive diesel means higher operating cost for tractors, harvesters, irrigation pumps, trucks, fishing boats etc. So higher cost of farming, fishing and their transport is beautiful "to save the planet" according to the TRAIN philosophy, lousy.

One effect, PH has the highest inflation rate in 2018 compared to many Asian neighbors, even other countries around the world. Data from IMF WEO database.

This year, food inflation is the second biggest pull up in overall inflation, after alcoholic beverages and tobacco. Data from the PH Statistics Authority (PSA).

Those stuff of expensive oil, expensive electricity, expensive transportation, expensive food, etc "to save the planet" are lousy and dishonest. The lobbyists and campaigners just want tax tax tax (direct and indirect) from the people by invoking climate. Corrupt.

One long term solution is to abolish the RE law. If people want solar wind, they can have supply contract with many solar wind generators, no need for mandate (mandatory mandatory) by law. Then for people who prefer cheaper food, cheaper electricity, they can get their electricity source from fossil fuel plants like coal and gas. Or from nuke power in the future.

Tuesday, December 26, 2023

BWorld 666, Top 10 news stories on power and electricity of 2023

Top 10 news stories on power and electricity of 2023
December 19, 2023 | 12:02 am

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

For this column, here are the top 10 power and electricity news stories of 2023.

1. Philippine power generation is back to a yearly increase of five terawatt-hours (TWH) after a big decline during the 2020 lockdown dictatorship. In 2022, generation reached 111.5 TWH or 111,500 gigawatt-hours (GWH), according to the power statistics released by the Department of Energy (DoE) in mid-2023. This is almost double the 60.8 TWH in 2008 when the Renewable Energy (RE) Act or RA 9513 was enacted. According to the 2023 data from the Independent Electricity Market Operator of the Philippines (IEMOP), the Luzon and Visayas grids have produced 75.4 TWH for April-November alone.

2. Of the 111.5 TWH generated in 2022, 60% of it came from coal plants, 16% from (Malampaya) natural gas, and 9% each from geothermal and hydro. Solar and wind combined contributed only 2.5% of total, this after 14 years of political favoritism, fiscal incentives and tax exemptions, and energy mandates.

3. Coal was tops when considering the implied capacity factor, which is the ratio or percent of actual electricity generated by a given energy source in a given year, measured as: Capacity factor for the year (in %) = Generation in TWH/(installed capacity in MW x 24 hours/day x 365 days/year). Coal had 61%, natgas had about 50%, wind had about 23%, and solar had only 14%, which is very low and inefficient (see the table).

Items four to 10 were selected reports from BusinessWorld and mostly written by Sheldeen Joy Talavera:

4. The expansion of energy reserves and power capacity as seen in these reports: “DoE to resume certification of projects for expedited permits” (Nov. 6), “Malampaya exploration raises prospect of gas supply expansion, BMI says” (Nov. 9), “PHL coal, oil reserves valuation rises sharply as gas dwindles” (Nov. 23). We should have continuously expanding oil, gas and coal reserves via endless exploration and drilling. As shown in the table, fossil fuels contribute about 79% of total power generation in the country. A reduction in their share with no significant increase from non-fossil fuel sources would mean regular, wide-ranging blackouts in the country.

5. The endless lobbying for power de-generation, deindustrialization and degrowth economics: “Coal power phaseout by 2035, gas by 2040 deemed feasible” (Nov. 15), “ACEN, partners to retire coal plant in the Philippines” (Dec. 5), “DoE calls for accelerated retirement, repurposing of coal-fired power plants” (Dec. 6), “USAID helping PHL regulator effect clean energy transition” (Dec. 10), “Gov’t urged to develop timeline to retire coal-fired power plants” (Dec. 10).

As discussed above, coal is the main workhorse for power generation. It is why even climate and RE activists have 24/7 electricity, and yet coal is the most demonized energy source. The double talk is like when tens of thousands of climate leaders who demonize fossil fuels use lots of fossil fuels to fly from all around the world to the UN’s Conference of Parties (COP) annual meetings.

6. There have been good moves towards nuclear power development in the Philippines: “US, Philippines ink landmark deal on nuclear cooperation” (Nov. 17), “Nuclear deal seen addressing PHL need for baseload power” (Nov. 19), “House approves bill creating nuclear regulator” (Nov. 22).

At least two big generation companies, MGen and Aboitiz Power, have made explicit advocacies to develop nuclear energy in the future. Good move, guys.

7. The National Grid Corp. of the Philippines (NGCP) continues to be behind schedule in their transmission development projects in the country: “System impact studies approved for 32,000 MW worth of power projects” (Nov. 14), “NGCP seeks resolution of TRO on Panay-Guimaras tower sites” (Nov. 30), “NGCP sees Cebu-Bohol 230-kV link project completed in 2024” (Dec. 5).

8. News on energy pricing and regulations: “ERC caps NGCP allowable revenue at P36.7B annually, well below amount sought by grid” (Nov. 8), “ERC integrates with energy one-stop shop system” (Dec. 13), “Spot power prices fall in early Dec.” (Dec. 14).

The ERC, or Energy Regulatory Commission, is also reviewing the secondary price cap or price control at the wholesale electricity spot market (WESM). I hope that the ERC moves to abolish all forms of price controls there. The most expensive electricity is no electricity — blackouts — and the resulting damaged production, appliances, and inconvenience to people and businesses. If the spot price can jump to, say, P40/kWh for three hours due to transmission or generation problems and blackouts of three hours are avoided, then that is worth it. The average price can go down later.

9. Stories on Meralco being the largest electricity distributor in the Philippines: “Meralco baseload bid attracts interest from power providers with 3,000 MW in capacity” (Nov. 21), “Meralco starts bidding for 1,200-MW power supply” (Dec. 1). Securing huge power supply contracts from huge new power plants to ensure medium to long-term power security and stability are good moves by Meralco. Meralco’s electricity sales growth generally mirrors overall GDP growth. In Q1-Q3 2023, Meralco sales growth was 4.4%, not far from the overall GDP growth of 5.6% over the same period.

10. The DoE created an Energy Efficiency Excellence (EEE) Award for LGUs. The province of Iloilo was ranked the highest, and they will be rewarded by the DoE at the Hilton Hotel on Dec. 19. Iloilo Provincial Board Member Rolando Distura will receive the award on behalf of the Iloilo Provincial government. Mr. Distura was a former Mayor of Dumangas municipality and was one of our wedding godfathers when I got married in Iloilo City in 2005. Congratulations, Ninong.

We should prioritize energy realism, not alarmism. We should prioritize sustained economic growth, wealth creation and job creation for our people, not ecological central planning, not climate-related restrictions, taxation, and regulations.

See also:
BWorld 663, Energizing growth via fossil fuels, nuclear power, and unsubsidized electricity prices, December 16, 2023 
BWorld 664, Stabilizing growth with low inflation, low unemployment rates, and more PPP investments, December 19, 2023
BWorld 665, Top 10 trends in the economics of war and global peace, December 23, 2023.

Monday, December 25, 2023

Merry Christmas 2023

Dear readers,

Merry Christmas, and thank you visiting this site. 

I just checked on the blog's stats since July 2010 when metrics was introduced here, though I created this blog in October 2005 when I was a passionate libertarian and hence, the name "fun with government." 

From July 2010 to present, there were 2.23 million views, or an average of 13,700/month. The top viewing months were:

March 2011,     47,684 views.
Dec. 2017,       35,012.
April 2021,      56,845.
June 2023,       36,129.
August 2023,   43,374.
Sept. 2023,      54,980.
Dec. 2023,      41,650 (as of Dec. 25, 10.45pm)

The most popular blog posts were: (April 11, 2021), (Feb. 22, 2011) 

The top 5 sources of views were the US, PH, RU, SG and FR.

Thanks again, readers.
Advance happy new year.

Saturday, December 23, 2023

BWorld 665, Top 10 trends in the economics of war and global peace

Top 10 trends in the economics of war and global peace
December 14, 2023 

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

“And so this is Christmas, For weak and for strong/
The rich and the poor ones, The road is so long/
And so happy Christmas, For black and for white/
For yellow and red ones, Let’s stop all the fight.”

— John Lennon, “Happy Christmas (war is over),” 1971.

“There’s so many different worlds, So many different suns/
And we have just one world, But we live in different ones/
Now the sun’s gone to hell and, The moon’s riding high/
Let me bid you farewell, Every man has to die/
But it’s written in the starlight, And every line in your palm/
We’re fools to make war, On our brothers in arms.”

— Mark Knopfler/Dire Straits, “Brothers in Arms,” 1985.

ADVANCED Merry Christmas, dear readers. Those words above from two of my many rock idols occasionally hum in my head when I read and hear about the ongoing brutal wars in Europe and the Middle East, and there are hints of the wars ending soon. And I hope it will be by the first quarter of 2024.

For this column I constructed a table showing how much countries spend on armaments and other military spending, and I compared the spending data with their GDP size. The source of data on military expenditure is the Stockholm International Peace Research Institute (SIPRI).

I grouped the countries into six. In Group A are the US, Canada, and Australia which can join any war in the Atlantic and Pacific sides, with Australia more focused on the Pacific. In Group B are countries involved in the Russia-Ukraine war. In Group C are those involved in the potential conflicts between China and Taiwan and North and South Korea. Those in Group D are involved directly or indirectly in the Israel-Gaza/Hamas war. In Group E are India and Pakistan which have a big territorial conflict over Kashmir. And in Group F are the ASEAN-5, which are not directly involved in any of the above-mentioned conflicts. Other countries which are involved in any of those regional conflicts but whose military spending is below $4 billion were not included in the table for the purpose of brevity.

Here are 10 trends in the economics of war, and our path to global peace.

One, the economics of war is that for some countries, “war is business” and hence, more actual wars or war preparations mean more business. This applies largely to countries like the US (think of its companies like Lockheed, Raytheon, Boeing, Northrop, General Dynamics…), the UK (BAE), and China (Norinco, AVIC…).

Two, these major arms exporting countries are often also those with high oil-gas demands yet have limited oil-gas production and reserves. Hence, a lot of past and current wars are in the Middle East (the US invasion of Iraq, a big portion of Syria), plus Russia which has huge oil-gas-coal reserves. The presence of a non-Muslim Israel in the Middle East neighboring Palestine is, of course, a big factor for the endless instability in the region.

Three, the US has the largest military expenditure in the whole world at $877 billion in 2022, three times larger than China’s $292 billion, and 10.2 times larger than Russia’s $86 billion. The US’ military spending/GDP ratio remains flat at 3.5% for the two decades from 2002 to 2022.

Four, Europe’s top five largest countries outside Russia (the UK, Germany, France, Italy, Spain) alone have combined military expenditures of $231.7 billion in 2022, which is 2.7 times larger than Russia’s. Ukraine military spending jumped from $1 billion in 2002 to $44 billion in 2022, much of its money and armaments sent by the US and NATO countries.

Five, Russia is not China. The Russian economy is “small” compared to China’s, its GDP nominal size of $2.2 trillion in 2022 is only 1/8th of China’s $17.9 trillion. And Russia’s military spending is only a third of China’s. If the US plus other big NATO countries cannot defeat Russia in their proxy war via Ukraine, there is big question mark over if the US and NATO can defeat China over the Taiwan issue.

Six, countries with the largest military spending/GDP ratio are not in NATO but in the Middle East. Saudi Arabia, Qatar, Kuwait, and possibly the United Arab Emirates (there is no data for 2021 or 2022) have 6-7% of GDP. But Iran, considering western media’s exaggeration that it has huge military spending, actually has a small ratio of only 2%. In contrast, poor Lebanon, with a GDP of only $22 billion in 2022 (smaller than Cambodia’s $29 billion and slightly larger than Brunei’s $17 billion) has military spending of 22% of GDP. Really weird and wasteful.

Seven, India, with its territorial conflict with Pakistan over Kashmir, also has a territorial conflict with China and hence is ramping up its defense spending. But its military/GDP ratio remains modest at 2.4%.

Eight, ASEAN countries with generally fast GDP growth continue to have modest military spending compared to many countries and regions in the world and this is good. Only Singapore has a military/GDP ratio of larger than 1.5% (see the table).

Nine, the so-called “rules based international order” (RBIR) is double talk. Invasion is wrong and anti-RBIR if the invader is Russia (invading Ukraine) or China (possibly invading Taiwan). But invasion is justified and consistent with RBIR if the invader is the US and other western NATO countries (see Vietnam, Afghanistan, Iraq, Syria, etc.). Invasion is invasion and we should condemn it whether the invader is Russia or America or China. We should focus on non-interference, stop these endless wars, stop regime-change via external aggression.

Ten, countries and humanity should focus on global peace and prosperity, diplomacy and wealth creation, not heavy armaments procurement and military destruction. We should devote our manpower to commerce, tourism, and investment and not on training so many soldiers and gun-toting warriors. Let John Lennon and Mark Knopfler’s words prevail in international politics and economics.

Hoping for peace and prosperity, hoping for an end to the Ukraine war and the Middle East war by early 2024. And hoping for no war whatsoever over Taiwan, over disputed atolls in the South China Sea or West Philippine Sea.

See also:
BWorld 662, Stabilizing growth via peace and order and free trade, December 15, 2023
BWorld 663, Energizing growth via fossil fuels, nuclear power, and unsubsidized electricity prices, December 16, 2023 
BWorld 664, Stabilizing growth with low inflation, low unemployment rates, and more PPP investments, December 19, 2023.

Migration 28, Big remittances in selected developing countries

Here are developing countries that are receiving at least $2 billion/month in remittances by their citizens working abroad, trend over the last 10 years. No data for China; Thailand and other countries have values in their national currencies, not in $ or €.

Only India, Mexico and Philippines have consistently rising remittances, the others have fluctuating values.

1. India, $17.15 billion in June 2023.

2. Mexico, $16.8 billion in Sept. 2023.

3. Pakistan, $6.3 billion in in Sept. 2023.

4. Nigeria, $4.9 billion in Dec. 2022.

5. Egypt, $4.6 billion in June 2023.

6. Philippines, $2.9 billion in Sept. 2023.

7. Indonesia, $2.7 billion in Sept. 2023.

Bangladesh, $1.97 billion in Oct. 2023.

The Philippines' $3 B/month average is much much bigger than yearly foreign aid (ie, new loans from multilaterals like WB, ADB, AIIB, IMF,...). The world needs more free mobility of people and goods but not elaborate freebies and subsidies that encourages illegal migration. Freedom to migrate but also freedom to starve if they cannot find work because other governments will not give them elaborate freebies.

See also:
Migration 23: Why Do Many Filipinos Work Abroad? January 14, 2015 
Migration 24: Rohingya Boat People to SE Asia, May 12, 2015
Migration 25, Creating new island-countries to address refugee crisis, September 28, 2015
Migration 26, More countries should be created, October 13, 2015
Migration 27, Border walls, welfare and rule of law, January 09, 2021.

Tuesday, December 19, 2023

BWorld 664, Stabilizing growth with low inflation, low unemployment rates, and more PPP investments

December 12, 2023

(Part 4)

There were three positive economic developments last week.

First, the Philippine Statistics Authority (PSA) reported that November’s inflation rate was a low 4.1%. This was down from 4.9% in October and 8% in November 2022, or just half of the level a year ago.

Second, the PSA also reported that the unemployment rate in October was a low 4.5%. This is very significant because it is the lowest unemployment rate the country has seen since April 2005. See these reports in BusinessWorld: “Inflation cools to 4.1% in November” (Dec. 6), and, “Unemployment rate drops to 18-year low in October” (Dec. 8).

I have consolidated and summarized the monthly inflation data plus comparable months’ unemployment data of other countries in an accompanying table. Group A is composed of the G7 industrial countries, Group B is made up of the big South Asian economies, and Group C contains the big East Asian economies. The Philippines has the highest inflation rate this year among its neighbors in East Asia and is comparable to those in Italy and Germany (see the table).

Budget Secretary Amenah Pangandaman has correctly observed that “Fiscal consolidation is bearing fruit, the high GDP growth of 5.6% average for Q1-Q3 of 2023 is creating more jobs, the January-October average unemployment rate of 4.6% is lower than the 5.3% to 6.4% target for 2023 in the Philippine Development Plan. Our public spending especially in hard and soft infrastructure is helping expand labor productivity of our people and business dynamism.”

The third piece of good news last week was the signing into law by President Ferdinand Marcos, Jr. of the Public-Private Partnership (PPP) Code of the Philippines (RA 11966) on Dec. 5.

The new PPP Code will do many things: 1.) it will establish a stable, predictable business and financing environment for public and private collaboration; 2.) it will consolidate all legal frameworks and clarify ambiguities in the existing Build-Operate-Transfer (BOT) Law which was last amended in 1994; 3.) it will streamline project implementation process and update approval thresholds for national PPP projects; 4.) it will improve the framework for unsolicited proposals and it establishes a predictable tariff regime to protect public interest; 5.) it will promote autonomy in implementing local PPP projects; and, 6.) it will institutionalize the PPP Governing Board, Project Development and Monitoring Facility, and the new Risk Management Fund, among others.

The Marcos Jr. administration has identified 197 infrastructure flagship projects (IFPs) with combined investments of P8.7 trillion; 41 of these 197 IFPs will be financed through PPPs.

National Economic and Development Authority (NEDA) Secretary Arsenio Balisacan, as head of the PPP Governing Board, will issue the Implementing Rules and Regulations (IRR) within 90 calendar days from the law’s effectivity.

PPP Center Executive Director Cynthia Hernandez had an optimistic view and said that: “The PPP Code of the Philippines is a landmark [piece of] legislation that will prioritize job creation through the promotion of trade and investments, improve infrastructure, encourage more financially viable, well-structured and high-quality PPP projects to be delivered to Filipinos. The PPP Center looks forward to shepherding the stakeholder consultation process that shall be conducted to prepare the IRR of the new law. We want to make ensure a smooth transition period and to continue the progress that has already been achieved.”

Congratulations to the economic team plus the PPP Center leadership.

Back to Philippines inflation.

The top three sources of inflation from January to November were Food and non-alcoholic beverages (8.1%), Alcoholic beverages and tobacco (10.9%), and Restaurants and Accommodation Services (7.6%). Double-digit inflation continues for rice, fruits, and vegetables.

Among the reasons for this that I see is the slow but steady incursion and conversion of agricultural land into solar farms, on top of their conversion into residential and commercial land use. The average rice yield in the Philippines is about 3.5 tons/hectare, and with two harvests per year (three harvests for well-irrigated lands but this is not big) means seven tons/hectare/year.

Solar farms require about 1.5 hectare per 1 MW solar capacity. So, a 500-MW solar farm will require about 750 hectares of land, including roads, fences, etc. If that 500-MW solar farm was previously a rice field, then it has permanently displaced or deprived the country of 5,250 tons/year of rice (7 tons/hectare/year x 750 hectares). That is not good.

There are thousands of MW of solar capacity coming on stream in the next few years. Most are inland and some are floating solar in lakes and dams. Big solar farms on lakes will keep sunlight from penetrating the lake water and thus affect the food chain, and this can lead to reduced harvest of inland fishery.

While I am hopeful that more PPP investments, more productivity-enhancing infrastructure projects, more fiscal consolidation, more trade and economic liberalization will help stabilize food and consumer prices in the long term, I am less optimistic that this can be achieved when more agriculture and forestry land are converted to expand solar and wind farms to “save the planet.”

As a developing country with a big population, we should prioritize more food production, more price stabilization, more growth and job creation over hazy climate and ecology goals. We are lucky that El NiƱo 2023, that started last April, has not led to the feared “more drought, more warming.”

The previous articles in the “Stabilizing growth” series are, Part 1, “Stabilizing growth: Declining inflation and unemployment rates” (Nov. 9); Part 2, “Stabilizing growth of the fastest growing major economy in the world” (Nov. 14); and, Part 3, “Stabilizing growth via peace and order and free trade” (Dec. 5).

See also:
BWorld 661,Financing growth by improving revenue and controlling illicit trade, December 03, 2023
BWorld 662, Stabilizing growth via peace and order and free trade, December 15, 2023
BWorld 663, Energizing growth via fossil fuels, nuclear power, and unsubsidized electricity prices, December 16, 2023.

Deindustrialization 22, EVs impracticality, Energizing growth series

More stories about electric vehicles (EV) here. Enjoy.

Think tank says ‘true cost’ of EVs after subsides equates to $6.32 per litre
Shaun Polczer 28 Oct 2023

California EV HELL: QUEUING for chargers at MIDNIGHT!!!
By Paul Homewood NOVEMBER 5, 2023

Electric Vehicles and Africa: No Place for Rich Boys Toys
Vijay Jayaraj November 05, 2023

The Coming Collapse of Green Energy, and why EVs Will Never Catch On
Anthony Watts November 5, 2023

Solar Stocks crashed in the last quarter too, down 40% so far this year around the world
Jo Nova  Nov. 8th 2023

What happened to solar stocks? Investors ‘pick up the pieces’ after a brutal earnings season
By Claudia Assis Nov. 7, 2023

Solar Stocks Shaken By High Interest Rates And Supply Chain Issues
By ZeroHedge - Nov 03, 2023

Carmakers are struggling to make electric vehicles affordable for pinched consumers—and rethinking their investments amid sagging demand

Auto Industry Fears The Worst As Demand For EVs Fails To Meet Expectations
With billions of dollars already poured into EVs, many manufacturers are cutting back on their plans amidst high interest rates
Sam D. Smith November 4, 2023

Electric car sales continue to falter: Demand last month dwindled and manufacturers risk falling short of costly EV targets
Car registrations across all fuel types grew 14.3% to a five-year high, SMMT says
EV demand wanes as fewer than one in four registrations are private purchases
Makers well short of binding EV sales targets set out under ZEV mandate
ROB HULL  7 November 2023

EV Makers Turn to Discounts to Combat Waning Demand
Car companies and dealers are slashing thousands off purchase prices to attract wary shoppers
Sean McLain  November 7, 2023

The middle class is not buying electric vehicles as hoped
Charles J. Murray November 10, 2023

... General Motors, Ford, Mercedes, Nissan, Toyota and even Tesla have raised red flags about slowing demand. GM scaled back plans for 2024 and said it would delay the opening of a new electric truck factory. Ford is considering cutting shifts at its F-150 Lightning plant. Nissan is transferring more resources to hybrids rather than EVs. Mercedes has described the EV market as “brutal.” And Toyota’s chairman, Akio Toyoda, said last week that “people are finally seeing the reality” of EVs.

Battery electric vehicles are like Concorde
Sensible America never built a supersonic airliner. We should learn from that
MICHAEL KELLY 17 November 2023

The man in the street has failed to embrace BEVs for the same reason he failed to embrace Concorde nearly 50 years ago: the extra cost – of order £10,000 per vehicle – represents an insurmountable barrier. People might pay the extra if they were getting something better in performance terms, but range anxiety and the lack of convenient recharging infrastructure remain formidable hurdles. Insurance costs are high too, with figures as high as £6000 quoted in the media.

US Transition To Electric Vehicles Faces Delays
Elodie MAZEIN November 18, 2023

Electric car sales set to plummet with falling driver demand ahead of major announcement
Felix Reeves 23/11/2023

Car Dealers to Biden: EVs Aren’t Selling
Some 3,900 sellers ask for a reprieve from his onerous sales mandate.
By The Editorial Board Nov. 28, 2023

EV chargers, heat pumps may be curtailed in Germany as of 2024
Nikolaus J. Kurmayer | Nov 29, 2023

Germany’s residential grid operators will be empowered to restrict the flow of power to heat pumps and electric vehicle (EV) chargers from 2024 in order to preserve the stability of the grid, which is suffering from chronic underinvestment.

Brand new electric buses paralyzed in Oslo
Oslo's brand new fleet of electric buses is not designed for these temperatures - their batteries are failing miserably in the icy cold.

Oslo’s E-Bus Fleet Could Use Some Warming…City Paralyzed As Buses “Break Down” Due To Cold
P Gosselin 13. December 2023

Hazardous Electric Car Transport: Fires On Ocean Carriers Causing Environmental Catastrophes
By P Gosselin on 30. July 2023

“Energizing growth” series, My Cup of Liberty.

Part 6, “Energizing growth via fossil fuels, nuclear power, and unsubsidized electricity prices” (Dec. 7)

Part 5, “Energizing growth via grid ‘demonopolization’ and ‘declimatism’ policies” (Nov. 16),

Part 4, “Energizing growth via less intermittent wind, solar” (Nov. 7),

Part 3, “Coal and nuclear power as growth drivers” (Oct. 26),

Part 2, “Energizing growth: Lessons from UAE, France, and other countries” (Oct. 17),

Part 1, “Energizing growth: The role of fossil fuels in economic development” (Oct. 3),

See also:
Deindustrialization 19, UK and EU and rising cost of net zero, Sept. 17, 2023
Deindustrialization 20, Germany's departing companies, EV slowdown, September 29, 2023 
Deindustrialization 21, UK update, Net zero religion, November 13, 2023.

Saturday, December 16, 2023

BWorld 663, Energizing growth via fossil fuels, nuclear power, and unsubsidized electricity prices

Energizing growth via fossil fuels, nuclear power, and unsubsidized electricity prices
December 7, 2023 | 12:02 am

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

(Part 6 of a series)

There are two good things about the ongoing Conference of the Parties 28 (COP28) meeting with governments, multilaterals, corporations and other players in Dubai, United Arab Emirates (UAE): one, the host country is a big oil-gas producer and exporter and hence, will never agree to a phase-out of fossil fuels; and, two, the growing pivot to nuclear energy as the attractiveness of wind-solar as “decarbonization” alternatives is waning.

The bad thing, of course, is that the estimated 70,000 participants in the COP 28 meetings are using lots of fossil fuels while they demonize fossil fuels. There is continuing double talk and hypocrisy in the annual UN climate meetings. There are no solar planes, no commercial giant kites to bring people from around the world to Dubai. Only oil-guzzling commercial planes and private jets can bring them to Dubai.

The UAE’s reserves/production or R/P ratio for oil in 2020 is 73.1, meaning that despite its big annual production for domestic use and exports, its oil reserves will be depleted in 73 years (vs the US’ 11 years and the UK’s seven years). And the UAE’s gas R/P ratio, also in 2020, is 107.1 years vs the US’ 14 years and the UK’s five years. The UAE and Saudi Arabia, Qatar, Iran, Kuwait, etc. keep exploring and digging for more oil and gas — that is why their reserves are not falling — while the UK, US, other western industrial countries restrict oil-gas exploration in the pursuit of “decarbonization” and “net zero” aspirations.

I saw a copy of the International Energy Consultants (IEC) 2023 report on global comparison of retail electricity tariffs. The prices are for the years 2018 and 2022. The main explanation given why many countries have high electricity prices is because they have unsubsidized rates compared to countries with subsidies.

Seeking other possible explanations, I dug up the consumption data of fossil fuels, especially coal and natural gas plus nuclear power, of those countries listed in the IEC report over a one-decade gap, 2012 to 2022.

The quick conclusion is that European countries have high electricity prices — up to 31.6¢US/kwh for Denmark — because they have “decarbonized” and “denuclearized” a lot. The total consumption for coal, gas, and nuclear (CGN) for Denmark has declined by 62% in just one decade. Greece, Germany, Italy, and Ireland also have had double-digit declines in CGN consumption.

Many Asian countries did not follow the wild and irrational “decarbonization” push of the Europeans. Instead, they expanded their coal and gas consumption as many of them have no nuclear energy development yet.

The Philippines has a good record here. CGN consumption has expanded 102% over one decade. It has unsubsidized electricity and yet Meralco prices are at a similar level as the average for all 46 countries and US states at only 18¢US/kwh (see Table 1).

So good job, Meralco. Good job too, other private and corporate distribution utilities, for keeping electricity prices at competitive rates and yet avoiding occasional blackouts experienced by areas under electric cooperatives pampered by politics and the government agency National Electrification Administration (NEA).

I also checked the energy index and prices. The solar and wind energy index peaked in late 2021 then started falling until today. The EU carbon permit prices have plateaued since early 2022 and are now on a steady decline. More companies are less willing to pay high carbon permits and taxes — either they cut back on their energy use or simply close and move to countries outside of Europe.

The UK is a classic example of fast, wild, irrational decarbonization. Their monthly electricity production has been falling for the past 13-14 years now, and the UK’s economic growth has been crawling for the past decade or two. In contrast, in China (and also India, Vietnam, Indonesia, etc.) electricity production keep rising (see Table 2). Their pace of industrialization has quickened, and economic growth is high.

The priority concern for the Philippines and other developing countries is more sustained high growth so that they can create more jobs and businesses for their people, cut unemployment and poverty, and aspire to be wealthy and prosperous. Only cheap energy can provide this. Now that the anti-coal lunacy has deepened, the developing world should proceed to develop more nuclear energy.

See also:
BWorld 660, On Meralco PSA bidding and nuclear power development, November 30, 2023 
BWorld 661,Financing growth by improving revenue and controlling illicit trade, December 03, 2023
BWorld 662, Stabilizing growth via peace and order and free trade, December 15, 2023.

Dr. Romy Quijano on vaccines, Part 5

Critique of *Dr. Edsel Salvana’s presentation entitled “Excess deaths in 2021: A scientific explanation” at the Committee of Public Order and Safety November 21, 2023


Romeo F. Quijano, M.D.

Professor (Ret.) Department of Pharmacology and Toxicology, College of Medicine, U.P. Manila

*In this presentation, Dr Salvana presented himself as the “Leader of the Technical Advisory Group of the InterAgency Task Force for the Management Emerging Infectious Diseases (IATF); Director and Professor, Institute of

Molecular Biology and Biotechnology, NIH, UP Manila; Professor of Medicine, UP Manila and Adjunct Professor for Global Health, University of Pittsburg”

At the end of his presentation, Dr Salvana concluded that:

“1. Majority of the excess deaths in 2021 aside from Covid-19 is due to increased deaths due to chronic illnesses as a result of health system disruption (no clinic follow-up, outpatient services); trend started BEFORE the vaccination program.

2. Lockdown prevented a much worse situation which could have resulted in many times more deaths from Covid-19.

3. Vaccination prevented millions of deaths and allowed us to open up safely.

4. No evidence that widespread deaths were due to vaccines – only 9 deaths out of 78 million vaccinated were due to anaphylaxis.

5. Vaccination had NOTHING to do with excess deaths in 2021, no parallel increase in deaths in other countries who started vaccination program at the same time and had low COVID-19 cases; parallel increase locally is coincidental and started PRIOR to the vaccination program.

6. Deaths FELL after the vaccination program reached most of the population as seen during Omicron, with DECOUPLING due to vaccination .

7. Philippines did well compared to many rich countries due to decisive and early lockdown, vaccination campaign and boosting, and judiciuos use of masks and public health standards.”

Given his presented credentials, and from the title of his presentation, Dr Salvana was expected to give credible scientific rationale for his conclusions. There was none, whatsoever. All he could give are wild speculations, invalid inferences from erroneous modeling and biased, self-serving statements even surpassing the propaganda of his patrons in the pharmaceutical and vaccine industry. It must be noted that Dr Salvana is laden with conflicts of interests, having served Big Pharma on several occasions in various capacities. He did not cite any credible data nor any verifiable scientific evidence supporting his main conclusion that “Vaccination had NOTHING to do with excess deaths in 2021”.

On the other hand, several honest to goodness causality assessments, devoid of conflict of interest reveals beyond reasonable doubt that the excess deaths in 2021 is largely due to the covid-19 mass vaccination.

There were 265,493 excess deaths in 2021 compared to 2020 (879,429 total deaths 2021 – 613,936 total deaths 2020=265,493). There were no excess deaths in 2020. Excess deaths rose substantially from March 2021 and peaked in September 2021, practically in tandem with the Covid-19 mass vaccination . This excess deaths phenomenon is considered a “Black Swan” event, which comes rarely and only following a major disaster (ex. war, severe pandemic, severe earthquake, severe famine, financial collapse, nuclear disaster, etc). This could not be explained, however, by Covid-19 deaths during that period of the pandemic since there was only a total of 46,410 registered Covid-19 deaths during that time. Many deaths attributed to Covid-19, in fact, can also be attributed to Covid vaccines as the underlying cause since vaccination itself is known to disrupt the immune system and increase susceptibility to severe infections and other diseases. Besides, covid infection typically took the ill and fragile who were expected to be part of the usual deaths (as observed in 2020, when there were 8,209 identified covid deaths and 19,758 unidentified covid deaths, yet, there was no excess deaths during that period (compared to historical average). Excess deaths could not be explained also by “increased deaths due to chronic illnesses as a result of health system disruption” as claimed by Dr Salvana since “health system disruption” was already present in most of the year 2020 when strict lockdown and other  unscientific restrictions were already imposed. The top ten causes of deaths in 2020, including total covid deaths (identified and unidentified) amounted to a total of 416,745 deaths, presumably contributing 67.9% to the total deaths in 2020 (416,745/613,936 x 100 = 67.9%), yet, there were no excess deaths (compared to historical average) during this time. On the other hand, the top ten causes of deaths in 2021, including total covid deaths (identified and unidentified) amount to a total of 509,495 deaths, contributing 57.9% of total deaths in 2021 (509,495/879,428 x 100 = 57.9%), much less proportionately compared to the year 2020, yet, during this time, a staggering +43.2% excess deaths was recorded, . Clearly, these chronic illnessess cannot explain the excess deaths in 2021.

Additionally, increased deaths due to these chronic illnesses can also be attributed to the mass vaccinations because it is also known (with adequate scientific evidence) that the covid vaccines can cause or worsen chronic ilnesses or comorbidities leading to premature death. Besides, Dr. Salvana’s mendacious explanation cannot possibly explain why there were increases in excess deaths in younger age groups with no co-morbidities or chronic illnesses, including sudden deaths in athletes and ostensibly healthy adults. On the contrary, these deaths can very well be explained by the known mechanisms of toxicity and overwhelming scientific evidence (including autopsy evidence) of serious adverse effects and deaths due to the Covid-19 vaccines.

1. PhilsExcess Deaths in 2021-Overall 43.2% Excess Deaths_721 Excess Deaths per day
2. Scientific Investigation in Post Pandemic Diseases
3. Causes of Deaths-PhilsJan- Dec 2020_PSA

4. Leading cause of death Phils_2021_CNN_PSA

Friday, December 15, 2023

BWorld 662, Stabilizing growth via peace and order and free trade

Stabilizing growth via peace and order and free trade
December 5, 2023 | Bienvenido S. Oplas, Jr.

(Part 3)

This piece will cover three topics, so we go straight to them.

First is the growth of the top 40 largest economies.

Here is an update in GDP growth for Q1-Q3 of 2023, taking off from part 2 of this series, “Stabilizing growth of the fastest growing major economy in the world” (Nov. 14). I looked at the top 40 largest countries in terms of GDP size in 2022 at purchasing power parity (PPP) values. Four countries were not included in my analysis — Pakistan and Bangladesh (there is no quarterly data), and the United Arab Emirates and Egypt (which released Q1 data only). So I looked at 36 economies.

The Philippines, with 5.6% growth in Q1-Q3, is now the second-fastest growing economy in the top 40 largest economies in the world next to India. The economies which are contracting are Ireland, Sweden, Germany, and Poland (see Table 1).

Again, kudos to this administration’s economic team, the entrepreneurs and workers of the country, and overseas Filipino workers who kept working despite a worsening global economic environment, despite the negativism and brickbats of the naysayers.


The poorest region in the country in terms of gross regional domestic product (GRDP) is the Bangsamoro Autonomous Region in Muslim Mindanao (BARMM). Last Sunday, Dec. 3, a morning mass was bombed at the Mindanao State University (MSU) gym and four young people were killed and 50 others injured. The photos I saw were gruesome. I felt bad and weak because I kept writing about economic growth in this column and we see heinous crimes and killing like this which have outright negative impact on investor and consumer confidence.

Budget Secretary Amenah F. Pangandaman, whose family comes from Marawi City and who had just returned from a trip to South Korea that morning, immediately made this statement:

“As Chairperson for the National Government of the Inter-governmental Relations Board with the BARMM, this is a great setback to our efforts for lasting peace. As a daughter of Mindanao, it breaks my heart to see my hometown of Marawi as the setting of the explosion. I extend my heartfelt condolences to the families of the victims of the bombing. Rest assured I will be working very hard with the corresponding officials — both from the National Government and BARMM — to ensure peace and security especially in this area of Mindanao is restored.”

I send my condolences to the families of the dead. I still feel weak remembering the photos of the victims. And I feel deep anger at the perpetrators of the crime. Marawi City has not recovered yet from 2017’s “flatten the city”-all-out war between the Islamic militants and the Duterte administration.

The BARMM regional GDP of P280 billion in 2022 is even lower than the regional income of the Cordillera Administrative Region (CAR). Compared to the income of the top four largest regions, it makes only 1/22 of what the National Capital Region (NCR) has, 1/10 of Cavite-Laguna-Batangas-Rizal-Quezon (Calabarzon), 1/8 of Central Luzon, and 1/6 of Central Visayas (see Table 2).

The BARMM in general, and Lanao del Sur including Marawi City in particular, need more peace and order to attract more investors and job creators. With such a low regional economic base, sustained annual growth of 8% or higher is possible — provided that peace and order prevail, the perpetrators of the Marawi bombing are caught, and potential troublemakers in the region are convinced to drop whatever evil plans they have.


Also in Mindanao, a strong earthquake hit last Saturday, killing four people and injuring many others.

The Philippines experiences an average of about 30 earthquakes every day, 365 days a year, although we do not feel most of them and only instruments can detect them because they are weak (intensity 3 or lower), are very brief, or they occur under the sea. Last Sunday alone, the US Geological Survey listed 83 earthquakes in the Philippines with magnitudes of 4.5 to 6.9. If earthquakes with magnitudes of 4.4 or weaker were counted, there may have been 200+ that day alone.

With this high frequency of earth movement in the Philippines, people should build strong houses, buildings, and gyms. People should not scrimp in the use of steel because prices are high. Major construction materials like steel and cement should be cheap, not expensive, through more domestic production plus the abolition or the drastic reduction of import tariffs and other taxes.

Free trade in construction materials is pro-business and pro-poor. Cement and steel protectionism is fatal. Saving more lives and properties should prevail over protectionist corporate and political interests.

See also previous pieces in this column on cement free trade: “Cement tariff and the consumers” (Jan. 31, 2022), and “Inflation, cement importation, and electricity concerns” (June 13, 2022).

See also:
BWorld 659, Economic forecast 2024 (Part 2), November 29, 2023
BWorld 660, On Meralco PSA bidding and nuclear power development, November 30, 2023 
BWorld 661,Financing growth by improving revenue and controlling illicit trade, December 03, 2023.

Energy 173, Nuclear power renaissance

Uranium prices spiking big time. More countries are pivoting to nuclear power, good, especially if they avoid intermittent solar-wind. Some reports here. Enjoy.

Uranium Markets
(Updated July 2023)

World uranium production and reactor requirements, 1945-2022, tU
(source: OECD-NEA, IAEA, World Nuclear Association)

Uranium price makes fresh decade high as forecasts grow (even) rosier
Frik Els | September 12, 2023

Uranium primed to extend rally on resurgent nuclear power, say analysts
Mrinalika Roy and Seher Dareen September 20, 2023

Uranium Prices Have Renewed Momentum as Supply Risks Mount
Rohan Reddy Oct 5, 2023

The Big News from COP28: Nuclear Energy’s Triumph
Dal B December 7, 2023

Here are the key takeaways:

Nuclear Energy Capacity to Triple: Countries are committing big time to nuclear energy. This move shows a serious effort to cut down emissions and limit global warming.

USA Joins the Party: With John Kerry at the helm, the US is all in. This global unity means more support and potential funding for nuclear projects.

Demand for Nuclear is Soaring: As demand grows, so do opportunities in nuclear technology and infrastructure. It’s the kind of stable, sustainable energy source we’ve been looking for.

New Investment Doors Opening: Top players like Google and BNB Paribas are getting involved. We’re talking about a broader, more exciting investment landscape in nuclear energy.

IAEA’s Solid Backing: The International Atomic Energy Agency is fully supporting nuclear power. That kind of endorsement is great news for investor confidence.

China Launches World's First Fourth-Generation Nuclear Reactor

Uranium Prices Hit 15-Year High at $85 Per Pound
Jennifer L, December 13, 2023

Uranium Is Finally Running Hot, and Miners Can’t Keep Up
Supply setbacks have contributed to a surge in prices of the nuclear fuel to their highest level since 2008
Rhiannon Hoyle Dec. 14, 2023

See also: 
Energy 170, Electric cooperatives and NPC, May 07, 2023
Energy 171, Nuclear power plants, many are old but still working with zero accident, July 04, 2023
Energy 172, Wind energy surprises, energy realism series, October 27, 2023.