Saturday, March 15, 2025

Philstar 16, CREATE MORE and Trump tax, spending cut plan

CREATE MORE and Trump tax, spending cut plan

 

ENERGY, INFRA AND ECONOMICS - Bienvenido Oplas Jr. - The Philippine Star 

November 21, 2024 | 12:00am

https://www.philstar.com/business/2024/11/21/2401691/create-more-and-trump-tax-spending-cut-plan

 

The Corporate Recovery and Tax Incentives for Enterprises to Maximize Opportunities for Reinvigorating the Economy (CREATE MORE), signed into law last Nov. 11, is another good law pushed by the Department of Finance (DOF) and the economic team.

 

A key provision is the further reduction in corporate income tax (CIT) rate to 20 percent from 25 percent for Registered Business Enterprises (RBEs) under the Enhanced Deductions Regime (EDR) on their taxable income derived from registered projects or activities during the taxable year.

 

DOF Secretary and Fiscal Incentives Review Board (FIRB) chairperson Ralph Recto has been pushing for this proposal. I see at least four ways that this law will make the Philippines even more globally competitive in attracting and keeping investments.

 

One, our 20 percent CIT will put us at par with Vietnam (reduced from 22 percent until  2015), Thailand (from 23 percent until 2012), Taiwan (increased from 17 percent until 2017) and Cambodia (flat 20 percent for decades). It will be lower than Indonesia’s 22 percent,  Malaysia and South Korea’s 24 percent and China’s 25 percent, but higher than Singapore’s 17 percent and Hong Kong’s 16.5 percent. Tax competition in East Asia is real and not fictional.

 

Two, our 20 percent CIT under EDR will put us nearer the global minimum tax (GMT) rate of 15 percent under Pillar Two of the Organization for Economic Co-operation and Development (OECD). Thus, businesses from rich OECD member-countries can easily align with Philippines’ CIT and still enjoy deductions on research and development, seminars and related expenses.

 

Three, RBEs have the option to choose between the Special CIT (SCIT) of five percent or EDR right from the start of their commercial operations, and these incentives have been extended from maximum of 10 years to 17 or 27 years.

 

Four, it increased the deduction for power expenses to 100 percent from 50 percent so that energy-intensive industries like manufacturing and tourism can further reduce their cost of business. This is in recognition of the fact that the Philippines has a higher cost of electricity than most East Asian neighbors, many of whom subsidize their power costs. There is additional 50 percent deduction for expenses related to trade fairs and tourism reinvestments until 2034.

 

Secretary Recto said during the signing ceremony of the law that “CREATE MORE will certainly fast-track the entry of more foreign investors into the Philippines, as evidenced by the bullishness and strong interest from nearly a thousand investors who attended our recent economic briefings abroad. This will help facilitate more partnerships and joint ventures with our local companies.”

 

Trump tax and spending cut plan

 

The US had a CIT rate of 46 percent in the 1980s, then former president Ronald Reagan cut it to 34 percent in 1988 during his second term. Succeeding presidents (Bush Sr., Bill Clinton, Bush Jr., Obama) raised and kept it at 35 percent. Trump came in 2017 and cut CIT to 21 percent. In his second term, Trump plans to further cut it to 15 percent.

 

Initial reduction in tax revenues will be compensated by (a) revenues from higher tariffs, especially imports from China, (b) a bigger number of companies from abroad that will locate to the US and (c) spending cuts.

 

Trump will create a Department of Government Efficiency (DOGE) to “slash excess regulations, cut wasteful expenditures and restructure federal agencies” and make the US government more efficient and non-burdensome to taxpayers. DOGE will be jointly led by Elon Musk and Vivek Ramaswamy. They will not get any government compensation along with their staff who will all be volunteers.

 

Elon is the richest man in the world because he created super-efficient and super-innovator companies like SpaceX, Tesla, and Starlink, and revolutionized X, formerly Twitter...

 

When Elon took over Twitter, he removed up to 80 percent of personnel and new technology allowed X to keep running even with a higher number of users and subscribers.

 

DOGE will not be a regular Department but an advisory Commission that is time-bound and not a forever bureaucracy. It will start work when Trump takes over Jan. 20, 2025 and end by July 4, 2026, or one and a half years only.

 

Elon stated that they can possibly slash up to $2 trillion yearly of the federal budget, both salaries/allowances and subsidies/freebies. That is equivalent to one-third of the $6.1 trillion federal spending in fiscal year 2023.

 

Our DOF made good timing slashing the CIT to 20 percent by 2025 as Trump will soon create shockwaves across Europe and Asian businesses with his planned 15 percent CIT possibly by 2026. Many European countries have 25 percent CIT, Germany has 30 percent. Great job, Secretary Recto and DOF team for pushing this kind of tax cut reform early enough.

 

Our Department of Budget and Management (DBM) also has a plan to improve government efficiency via the National Government Rightsizing Program (NGRP) bill in Congress. It intends to abolish, merge and restructure certain agencies to create a more efficient bureaucracy. Passed in the House, it is now in the Senate.

 

In a Viber message, DBM Secretary Amenah Pangandaman said that “the DBM intends to have the NGRP bill become a law soon. We need to make the government more efficient and less costly to the taxpayers.”

 

Go for it, Madame Secretary. And if you can suggest to the President to possibly follow the DOGE model – high caliber business people working for the government for a year, not receiving any tax money and proposing to make the government bureaucracy and welfare programs less burdensome to the taxpayers.

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BWorld 757, Philippine energy realism and Trump’s energy policies

Philippine energy realism and Trump’s energy policies

November 14, 2024 | 12:02 am

My Cup Of Liberty

By Bienvenido S. Oplas, Jr.

https://www.bworldonline.com/opinion/2024/11/14/634706/philippine-energy-realism-and-trumps-energy-policies/

 

I attended the afternoon session of Stratbase’s “Pilipinas Conference 2024” on Nov. 7. It was on “Energy transition and green industries.” The keynote speakers were Energy Secretary Raphael Lotilla and Environment Secretary Toni Yulo Loyzaga.

 

Mr. Lotilla highlighted huge targets for offshore wind, plus the slow introduction of nuclear power in our energy mix. Ms. Loyzaga started with the usual climate fears, talking about the high number of deaths and destruction of property because of too much water and flooding.

 

On the panel were Manny Rubio, president and CEO of Meralco Power Gen Corp. (MGen); Sandro Aboitiz, chief financial officer of Aboitiz Power Corp.; Paul Everingham, CEO of Asia Natural Gas and Energy Association; Michael Toledo, chairman of the Chamber Mines of the Philippines; and Martin Antonio “Dennis” Zamora, president and CEO of Nickel Asia Corp.

 

I liked the points made by these three gentlemen — Messrs. Rubio, Aboitiz, and Toledo.

 

Mr. Rubio emphasized the need for energy security and a balanced mix of reliable baseload with intermittent renewables. He noted that their 3,500-megawatt (MW) Terra Solar facility — the world’s largest contiguous solar plus battery storage facility — is equivalent to 850 MW of mid-merit reliable energy with battery.

 

I like the kind of energy realism shown by Mr. Rubio, not the usual energy alarmism or hyped-up optimism about renewables that we often hear or read. It is good that MGen has a portfolio of coal and gas plants that can deliver electricity 24/7 even if the sun is not shining at night or is behind heavy clouds, even if the wind is not blowing.

 

Mr. Aboitiz made similar realistic statements, saying that “the energy transition journey is not linear and is extremely complex, [it] needs alignment with the country’s needs and circumstances, [there is] no one-size-fits-all solution or silver bullet.” He is correct to remind us that we are still “a developing country that aspires for continued growth, to become an upper-middle-income economy and eradicate poverty. Striking a balance between energy security, affordability, and sustainability requires the adoption of a tailor-fit transition strategy.”

 

He calculates that the Luzon grid alone will need 600-700 MW of new baseload energy per year, and this does not yet consider new power intensive sectors like data centers or the electrification of transportation. Thus, the need for a balanced mix of traditional and renewable energy sources, supported by new technologies in energy storage and emissions reduction.

 

Meanwhile, Mr. Toledo passionately and articulately highlighted four policy challenges and measures in the mining sector. One, the need for long-term policy consistency from national to local governments. Two, the need to simplify and expedite the approval process for mineral agreements. Three, the need to minimize business continuity risks from local ordinances. And four, the need to have a stable, predictable mining fiscal regime, including a “financial stability clause.”

 

I agree with all of these four points. I will add that open-pit mining should be encouraged for two reasons: it makes the extraction of ores and metals easier, and the mined-out area can serve as a man-made lake and water catchment. This will help reduce flash flooding.

 

TRUMP’S ENERGY POLICIES

 

During his first term as US President in 2017-2020, Donald Trump had a “drill baby drill” policy and significantly expanded US oil-gas production and exports. Take liquefied natural gas (LNG) for instance. US exports were only 0.8 billion cubic meters (bcm) at the end of Obama’s first term in 2012, increasing slightly to 4 bcm at the end of Obama’s second term in 2016. In Trump’s first year, this quadrupled to 17 bcm, and further ballooned to 61 bcm in 2020.

 

 

Looking at crude oil, US exports were only 2.68 million barrels per day (mbpd) in 2012, rising to 5.1 mbpd in 2016, and further increasing to 5.9 mbpd in 2017 and 8.1 mbpd in 2020. The Biden administration took off from the high momentum of oil-gas exports under Trump (see the table).

 


In his second term, Mr. Trump will resume his “drill baby drill” policy and pursue US energy dominance — not just energy security — to be a powerhouse producer of oil, LNG, and coal, plus nuclear technology, and export more to its allies worldwide, helping strengthen their economies. Trump explicitly announced energy deregulation, not energy heavy regulation and rationing, and the streamlining of permitting processes for energy infrastructure. He also intends to repeal the Inflation Reduction Act (IRA), even partially. The IRA is expanding the mandates and favoritism for intermittent renewable power sources like wind-solar, among others.

 

We should have similar policies here in the Philippines, as should other developing countries. We should prioritize saving our jobs and businesses from high energy prices and big bureaucracies. Not saving the planet or saving climate bureaucracies.

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


See also:

Fiscal Econ 1, Trump's plan of zero income tax below $150,000/year

US outstanding public debt, data from Debt to the Penny, Dept of Treasury.


Nearly 2 months old Trump admin until Feb 13, public debt did not increase, declined by $1 billion. In contrast, Biden admin two months before the Nov. 4 elections, public debt increased by $540.6 billion or average of $9 billion/day increase hoping they could bribe more voters to support Kamala and the Democrats.

The former is an example of fiscal discipline and responsibility. The latter is an example of fiscal imprudence and irresponsibility. And many people are angry at Trump (smiley)

Next fiscal move by Trump is a new law that will have zero tax on tips, zero tax on overtime pay, zero tax on social security payments. And soon zero tax on income below $150,000/year. 

Income tax revenue decline will be compensated by spending cut, bureaucracy cut, higher revenues on sales tax and import tariff. The never-Trumpers and TDS camp will be unhappy again.  

No taxes if you earn under $150k in the US: Trump’s radical plan to rewrite America’s tax code revealed

Trump’s proposal, if implemented, would exempt anyone earning below $150,000 — about ₹1.3 crore a year — from paying taxes. Lutnick emphasized that making this goal a reality is his current mission.

Business Today Desk, Mar 13, 2025,

https://www.businesstoday.in/world/us/story/no-taxes-if-you-earn-under-150k-in-the-us-trumps-radical-plan-to-rewrite-americas-tax-code-revealed-467957-2025-03-13 

Trump eyes no taxes for Americans making less than $150k, says Lutnick

The plan could offer $24,000 in relief for some taxpayers, but experts warn of consequences.

Leo Almazora, MAR 14, 2025
https://www.investmentnews.com/tax/trump-eyes-no-taxes-for-americans-making-less-than-150k-says-lutnick/259713

 

Lutnick Explains Trump Plan To Eliminate Taxes For Those Earning Under $150,000

Tyler Durden, MAR 15, 2025
https://www.zerohedge.com/political/lutnick-explains-trump-plan-eliminate-taxes-those-earning-under-150000

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Friday, March 14, 2025

Philstar 15, The Freeman energy forum; avoiding carbon tax

The Freeman energy forum; avoiding carbon tax

ENERGY, INFRA AND ECONOMICS - Bienvenido Oplas Jr. - The Philippine Star 

November 14, 2024 | 12:00am

https://www.philstar.com/business/2024/11/14/2399887/freeman-energy-forum-avoiding-carbon-tax

 

As mentioned in this column last week, I attended The Freeman energy forum on the theme, “Powering Cebu,” at Waterfront Hotel in Cebu IT Park. The Freeman is a leading regional newspaper in Cebu and Central Visayas, and is part of the Philippine STAR Media Group.

 

The opening message was given by Miguel G. Belmonte, president and CEO of the Philippine STAR Media Group. He emphasized the economic dynamism of Cebu and the region, the fast demand in power and the challenge of significantly expanding energy infrastructure.

 

Department of Energy Assistant Secretary Mario Marasigan discussed the lineup of big wind power, onshore and offshore that are projected to provide big power supply into the future.

 

Niel Martin Modina, assistant vice president for Visayas System of National Grid Corp. of the Philippines, showed maps of new transmission lines dotting and connecting major economic corridors of Luzon, and between major islands of Visayas and Mindanao.

 

Engr. Raul Lucero, president and COO of Visayan Electric Co.(VECO) mentioned that the Philippine Energy Plan itself projected that peak demand in Visayas would leap from 2,464 megawatts in 2023 to 10,678 MW by 2050. The power situation in Cebu is critical to the economic fate of the Visayas as it is the connection hub of energy transfers from Luzon and Mindanao to reach the rest of the Visayas.

 

He then discussed their consumer app “MobileAP” that will “enable customers to track their electricity consumption, help raise their appreciation of the industry, and understand that they have a huge stake in the energy transition in the Visayas and the rest of the country.”

 

Engr. Don Paulino, chief engineering and projects officer of Aboitiz Power Thermal Group, discussed the need for Cebu to grow its power plant capacities “using all forms of technologies especially reliable, continuous, and affordable electricity coming from baseload sources that would also support the entry of more renewable energy.”

 

The energetic and fast-talking engineer is correct because Cebu’s high demand and Visayas grid’s perennial low reserve margins should be an important factor for people there to realize that what is needed are more baseload thermal plants.

 

Cebu Gov. Gwen Garcia gave a long, passionate extemporaneous speech about their past experiences of power failures, of dependence on geothermal power from Leyte because Cebu did not have enough domestic supply of power. She argued many years ago that Cebu should have more embedded power plants in the island, within Cebu itself. Many manufacturing, hospitality and hotels, IT and IT-BPM industries are all energy intensive and they are in Cebu and are Visayas’ growth drivers and help Cebu become more globally competitive.

 

She mentioned a few times environmentalist groups that oppose Cebu having many thermal coal plants. For the charming and frank governor, priority should be the jobs and businesses of her people in the province and neighboring islands that do business with Cebu.

 

Jay Yuvallos, president of the Cebu Chamber of Commerce and Industry; Alfredo Reyes, president of Hotels, Resorts and Restaurant Association of Cebu, and Fred Languido, editor of The Freeman, joined the panel discussion and provided more in-depth analysis and experiences as local business and media leaders who see the economic realities on the ground. I enjoyed listening to sharing local perspectives on Cebu’s real needs in business and electricity.

 

Overall it was a fantastic, dynamic and high caliber forum. No heated or antagonistic debate, only sincere dialogue and sharing of ideas and business outlook. The room was full with enthusiastic audience.

 

Congratulations, The Freeman and PhilStar Group, for holding that wonderful and intellectually engaging forum.

 

Recently there have been lobby especially from the ADB that the Philippines should impose a carbon tax. See for instance these reports this year: “ADB: Carbon tax has potential in Philippines” (PhilStar, May 7), “Philippines seeks P28 billion ADB loan to ramp up climate action” (PhilStar, Aug. 30), “Carbon tax seen generating essential revenue for Asia-Pacific, ADB says” (BusinessWorld, Oct. 31).

 

I think the ADB and other multilaterals, some business and environmental groups are wrong in pushing this lobby. Consider the following.

 

The Asian Development Fund (ADF) has a total fund of $35.39 billion. The top five contributors to ADF are: Japan 38.2 percent, US 13.7 percent, Australia 8.0 percent, Canada 6.0 percent, Germany  5.7 percent (Source: ADB, “Donor Contributions on Asian Development Fund”).

 

Now see the coal power generation of these five countries in terawatt-hours (TWH) in 2023: US 738 TWH, Japan 304 TWH, Germany 129 TWH, Australia 126 TWH, Canada 24 TWH.

 

Other Asians have these coal power generation in 2023: China 5,754 TWH, India 1,471 TWH, Indonesia 217 TWH, South Korea 203 TWH, Vietnam 130 TWH, Taiwan 119 TWH, Malaysia 81 TWH, and Philippines only 74 TWH.

 

The ADB should tell its four big country donors – Japan, US, Germany and Australia – to significantly cut their coal power generation and be at the level of the Philippines with only 74 TWH, before pressing the Philippines to have a carbon tax.

 

I hope that the economic team will ignore this irrational lobby by the ADB. A carbon tax is inflationary and can lead to premature closure of some cheap, reliable and dispatchable on demand thermal plants. Which can lead to thin power reserves and power failure.

 

Recently I bumped into Manny Rubio, the president and CEO of MGen Power Corp., and I asked him about his company’s plans for the Visayas grid. He replied that “MGen is considering expanding our Toledo Power Unit in Cebu to supplement existing 83.6 MW capacity. We are also evaluating modifications to our oil-based plants to offer competitive ancillary services in the co-optimized market.”

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BWorld 756, Growth forecast and Trump’s trade policies

Growth forecast and Trump’s trade policies

November 12, 2024 | 12:02 am

My Cup Of Liberty

By Bienvenido S. Oplas, Jr.

https://www.bworldonline.com/opinion/2024/11/12/634122/growth-forecast-and-trumps-trade-policies/

 

Last week the Philippine Statistics Authority (PSA) released the gross domestic product (GDP) data for the third quarter (Q3) of 2024. It showed that the GDP grew 5.2% from the level a year ago. This is low compared to the estimates made by economists in a BusinessWorld poll, with a median estimate of 5.7% for the July-to-September period. But this is still high compared to other Asian and European economies (except Vietnam) that reported their Q3 GDP too.

 

GROWTH IN 2024 AND PMI

 

The Philippines’ average growth in the first three quarters (Q1-Q3) of 2024 is now 5.8%, second fastest to Vietnam’s 6.8%. Other East Asian countries have had modest growth of 2.4% to 5.2% while European nations have either been crawling, or contracting like Ireland’s -3.9%. Spain and Turkey are the exceptions to this European trend.

 

I also checked the Manufacturing Purchasing Managers’ Index (PMI), an indicator of companies’ optimism or pessimism towards the short-term business outlook. The Philippines’ PMI was the second highest in Asia at 52.9 last October, next to India’s 57.5. Most European countries’ PMIs were below 50 (see Table 1).

 


At Stratbase’s “Pilipinas Conference 2024” on Nov. 7, held at the Manila Polo Club in Makati, Finance Secretary Ralph G. Recto gave the keynote message and highlighted the expansion of the country’s GDP size. He said that “The Philippine economy has already doubled its size since 2013 in terms of nominal GDP. And by 2030, our projections show that we can grow by another two-fold.”

 

He also mentioned the country’s demographic dividend (a young, big population of producers and consumers, entrepreneurs and workers) as a “golden moment to strengthen our already dynamic labor force.”

 

Budget Secretary Amenah F. Pangandaman was also scheduled to speak at the event, but as she was in the Singapore Fintech Festival that day, she delivered a virtual but live speech. She highlighted the rapid push in digitally transforming the government’s bureaucracy, with P72.1 billion support for ICT-related programs and projects of government agencies. She also mentioned a new law — the New Government Procurement Act (NGPA), meant to make official procurement more transparent — that will help reduce waste and corruption.

 

FORECAST 2025

 

This is the theme of the BusinessWorld Economic Forum (BWEF) 2024, which will be held on Nov. 26 at the Grand Hyatt Manila. The annual BWEF has become an institution, a big national economic and business conference that features the ideas and outlooks of key leaders in government and corporations.

 

As shown in the accompanying table, the IMF forecast for the Philippines’ full year growth in 2024 is 5.8%, and 6.1% in 2025. The IMF sees the Philippines and Vietnam tied as the second fastest growing major economy in the world next year after India’s 6.5%.

 

TRUMP’S TAX AND TRADE POLICIES

 

US President-elect Donald Trump’s plans for one-two punches of low taxes and high tariffs in 2025 are creating mixed feelings in many countries around the world.

 

Trump’s main concern is the US’ perennially high trade deficit, so he plans two major policies. The first is to further reduce the US corporate income tax rate — which was 35% until 2016, then was brought down to 21% in 2017 during his first term — to around 15%. The second is to raise tariffs on products made by companies abroad that sell to the US, with a target tariff of 60% on goods from China, and 20% on those from other economies. This is meant to reward companies that locate and stay in the US and directly create jobs there and penalize companies that locate their facilities in other countries and sell their products to the US and thus do not directly create jobs there.

 

I checked just how big the US trade deficit that angers Trump is. For the purpose of brevity, I chose to highlight only three years. The US trade deficit in 2019 was $924 billion or $2.53 billion/day, in 2021 it was $1.181 trillion or $3.24 billion/day, and in 2023 it was $1.153 trillion or $3.16 billion/day. This is huge.

 

While the US has the highest trade deficit in the world, China has the highest trade surplus: $421 billion in 2019 and $823 billion in 2023. The country with the next highest trade surplus is Germany followed by Russia (see Table 2).

 


Instead of fearing Trump’s tax and trade policies, we should welcome them. Let us also cut the taxes on individual and corporate income, letting the people and companies keep more of the product of their hard work and savings, thus encouraging more businesses and job creation. When people have jobs — good paying jobs — they become more self-reliant and less dependent on state subsidies for their household’s education, healthcare, housing, food and other needs. Thus, the government’s high spending on subsidies, and the high borrowings needed to cover the budget deficit, can be controlled.
---------------

See also:

 

Free Trade 75, US trade deficit and Trump's 'tariff equalization' policy

The US has perennial trade deficit, about $2.6 billion a day in 2022-2024. Yes, per day. Biggest deficit recorded last January 2025 at $131.4 billion, last December at $98.1 billion. These were reactions by many importers in the US to get as much goods as they can before President Trump would impose higher tariff rate on many countries.


Trump is a free trader.  June 2018 G7 summit, he challenged all the six other member leaders of G7 to a zero tariff zero subsidy world. All of them were silent implying No. They are all funny protectionists. But in many media reports, Trump is often labelled as protectionist.


In international trade econonomics, there is a concept called factor price equalization (FPE) theory, and commodity price equalization (CPE) theory when there is full free trade, meaning tariff is zero or similar level for trading countries. And no non-tariff barriers (NTBs).

The Trump approach should be technically called "tariff equalization" and not tariff or trade protectionism. If CA or MX slaps 250% to 390% tariff for imported US dairy products (milk, cheese, etc), then CA or MX is the protectionist and drew the first blood. If Trump goes for tariff equalization, meaning 250% to 390% tariff on imported CA or MX dairy or agri products, it should not be called as "Trump protectionism."

HK has unilateral zero tariff policy, whether other countries impose 5% or 50% for their imports from HK, HK slaps zero tariff on imports from all countries. Except on products of natl concern like imports of guns, explosives, hazardous chemicals etc. that are regulated.

Most protectionist groups want protectionism for their sector only but want free trade in all other sectors. Rice or vegetable farmers want high tariff for imported rice and veggies. But they want zero tariff and lower price for all their other imported needs -- clothes, gadgets, appliances, tractors, oil, spare parts, etc.

Even at zero tariff, local producers have cost advantage over imported goods -- no more shipping cost, insurance cost, especially for geographically isolated countries like PH.

Free trade creates good will among countries and people. A German or Mexican or Nigerian tourist would be happy to see that products from their country are available in malls and groceries at competitive prices here. Facilitating PH exports to their countries would be easier bec of that good will.

May 2006 I already argued that PH and other countries shd have unilateral free trade, zero tariff policy, https://funwithgovernment.blogspot.com/2006/05/free-trade-free-choice.html.
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Tuesday, March 11, 2025

BWorld 755, On the PEB in London, the PhilHealth funds, and the US elections

On the PEB in London, the PhilHealth funds, and the US elections

November 5, 2024 | 12:02 am

My Cup Of Liberty

By Bienvenido S. Oplas, Jr.

https://www.bworldonline.com/opinion/2024/11/05/632632/on-the-peb-in-london-the-philhealth-funds-and-the-us-elections/

 

Last week, from Oct. 29 to 30, the government economic team went to London for a series of investment roadshows and meetings, then another Philippine Economic Briefing (PEB) on Oct. 31. This was after they had been in Washington DC for a series of meetings with the multilaterals, credit agencies, and some big commercial banks there.

 

From the photos and press releases, the economic team members who were in London were Department of Finance (DoF) Secretary Ralph G. Recto, Office of the Special Assistant to the President for Investment and Economic Affairs (OSAPIEA) Secretary Frederick Go, National Economic and Development Authority (NEDA) Secretary Arsenio Balisacan, Department of Energy (DoE) Secretary Raphael P.M. Lotilla, and Bangko Sentral ng Pilipinas (BSP) Deputy Governor Francisco Dakila, Jr.

 

Department of Budget and Management (DBM) Secretary Amenah F. Pangandaman, a member of the economic team was not with the group. I checked the DBM Facebook page — she had been at the Philippine International Convention Center where she a speaker at the International Conference on Women, Peace and Security (WPS) on the third and last day, Oct. 30.

 

The Philippines Open Government Partnership (PH-OGP), chaired by Ms. Pangandaman, convened many notable women leaders from the Philippines and abroad for a discussion on the theme, “Empowered Women, Lasting Peace: Advancing the Women, Peace, and Security Agenda Through Open Governance.”

 

Meanwhile, at the PEB, Mr. Recto highlighted that “British investors brought 585.74 million British pounds of investments to the Philippines as of the end of July…. 97 British companies currently operate in our economic zones…. The Philippines is booming and has all the makings of a tiger economy…. we are among the best performing economies in ASEAN, with GDP growth averaging 6.1% since President Ferdinand R. Marcos, Jr. took office.”

 

Going back to Europe, London in particular, is a good move by the economic team mainly because Europe is limping economically now, so many companies there are looking for other countries as good investment alternatives. Asia in general, and Philippines in particular, should be a good destination for them.

 

Consider the economic performance of several European and Asian economies over first to third quarter (Q1-Q3) this year compared to last year (see Table 1).

 


Also at the PEB, NEDA Secretary Balisacan discussed many big infrastructure projects under the Public-Private Partnership (PPP): 214 projects which are under implementation (15 are Infra Flagship Projects or IFPs) with total estimated project cost of P3.575 trillion. And 173 projects are in the pipeline (29 are IFPs) with a total estimated project cost of P3.174 trillion. So, a total of P6.749 trillion — that is huge.

 

Aside from the PPPs, there are also many foreign assisted projects (FAP), or foreign aid from the multilaterals and bilateral organizations, for infrastructure. Local counterpart funding is needed for these FAPs to be disbursed.

 

ON PHILHEALTH AGAIN

 

We need more money for these FAP counterpart funds and for other social service spending in the unappropriated expenditures. The Philippine Health Insurance Corp. (PhilHealth) has the money from excess remittances by the National Government (NG) to PhilHealth to subsidize millions of non-contributing indigents, senior citizens, other government-sponsored individuals and households. 

 

I looked through some PhilHealth finance reports where I saw that the P89.9 billion in excess funds came from three years of accumulated remittances by the NG (see Table 2).

 


That item “NG premium for indirect contributors” would be better called “NG collections from gamblers and bettors, drinkers, smokers and vapers.” That money comes from remittances by the Philippine Amusement and Gaming Corp. (better known as PAGCOR), the Philippine Charity Sweepstakes Office or PCSO, and excise taxes on alcohol and tobacco products. That money does not come from those employed in the formal sector, nor from indigents, not from senior citizens (who are non-contributing), and not from other sponsored individuals.

 

There are fears that PhilHealth’s equity is turning negative. This is because of the P1 trillion+ provision for Insurance Contract Liabilities (ICLs). ICL is Present Value of Future Outflows (benefit payments plus administrative expenses) minus Present Value of Future Inflows (Premium collections plus interest earnings).

 

So ICLs are just estimates, not backed up by actual claims or contracts with hospitals and health professionals. It should not be considered as a big parameter or factor in the reallocation of excess funds for current actual needs.

 

The government, through the DoF, has the legal right, has the moral ascendancy, to take back those excess funds to fund additional big infrastructure and additional social services that will create more jobs and reduce the number of jobless, and reduce the number of indigents.

 

Healthcare is first and foremost a personal and parental responsibility, secondarily a government responsibility. People should pay for their own healthcare, even at a minimal amount, and not everything should depend on the government.

 

THE US ELECTIONS

 

Meanwhile, the US Presidential and Congressional elections are being held tomorrow (Nov. 5 in the US, which is Nov. 6 in the Philippines). The US economy, the millions of new illegal immigrants, the ongoing US military involvement in many wars abroad (Ukraine, Israel, Syria, etc.) are among the key issues for the voters.

 

I checked the US’ total outstanding public debt and it is huge: As of Oct. 31, 2024, it comes up to $35.952 trillion. In comparison, on Oct. 31, 2023, it was $33.700 trillion; Oct. 31, 2022, $31.238 trillion; Oct. 29, 2021, $28.909 trillion; and Oct. 30, 2020, $27.135 trillion.

 

On Sept. 30 this year, it was $35.465 trillion; on Aug. 30, it was $35.256 trillion; and on July 31, $35.105 trillion. So, from October 2023 to October 2024, there was an increase in US public debt of $2.252 trillion or $6.17 billion/day. From September to October this year, there was an increase of $487 billion or $15.71 billion/day. From August to September, $209 billion or $6.97 billion/day. And from July to August, $151 billion or $5.03 billion/day.

 

So, last month, the last month before the US elections, the Biden-Harris administration was over-borrowing by $15.7 billion per day. Horrible fiscal irresponsibility.

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Climate 112, Billions $ to Popup NGO shell

More reports of corruption in the climate establishment. Enjoy.
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The Climate United Fund Outrage: $7 Billion in Taxpayer Money Squandered in a Sham of Transparency and Accountability

March 6, 2024

https://wattsupwiththat.com/2025/03/06/the-climate-united-fund-outrage-7-billion-in-taxpayer-money-squandered-in-a-sham-of-transparency-and-accountability/

 

Climate United Awarded $6.97 Billion Grant From National Clean Investment Fund

Apr 04, 2024 | Bethesda, MD

https://calvertimpact.org/about/press/climate-united-award

 

EPA calls for watchdog to probe $20 billion climate fund

By ZACK COLMAN  03/03/2025 

https://www.politico.com/news/2025/03/03/epa-probe-climate-fund-00208253

 

DOGE Hones In On Shady Climate "Popup NGO Shell" That Received Billions From Biden

TYLER DURDEN, MAR 07, 2025

https://www.zerohedge.com/markets/doge-hones-shady-climate-popup-ngo-shell-received-billions-biden

 

Elizabeth MacDonald

@LizMacDonaldFOX. March 6, 2025

https://x.com/LizMacDonaldFOX/status/1897358225650991288


This is disturbing – Biden and Obama Democrats created a new beast, the “popup nonprofit shell” they suddenly launch to take in your taxpayer money supposedly for things like climate change and illegal immigration. Major front for taxpayer abuse with accusations of grift growing by the hour. Never saw it like this in decades covering IRS/taxes.   Check out the tax returns for one of these popup NGO shells, the Climate United Fund which got the biggest nonprofit grant in history out of Biden’s massive climate slush funds.   Kamala Harris and Biden’s EPA chief Michael Regan gave $7 billion total to the suddenly created Climate United Fund in April 2024 after it launched just five months earlier in November 30, 2022 when Its tax returns show it started with a tiny $547K in revs. But it spent a massive $451K of that $547k in just two months in 2023, a quarter of that on legal fees and the majority $323K mysteriously blown on no one knows what because its tax returns don’t say.   It has no stipulated plans for how it will spend your $7B in tax $$, just ephemeral solar projects in Idaho, Arkansas, and Oregon that amount to only about $50M total, a fraction of the $7B. It also gave money out of that $7b to Power Forward Communities linked to Stacey Abrams.   It has little to no details on how much its officers get paid that you typically see on NGO 990s, in fact virtually no details, red flags that it’s a shell. It supposedly is a partnership betw Dem insiders at investment firm Calvert Impact Capital, Community Preservation Corp. and a group called “Self-Help” (irony noted).   Beth Bafford is its CEO, a former “special assistant” in Obama’s OMB and a regional field director for the Obama Campaign.   As we tweeted about a month ago, it has ties to Democratic Party of California chairman and California State Treasurer Phil Angelides, Obama’s Transportation Secretary Anthony Foxx, United Farm Workers of America co-founder Dolores Huerta and Patrice Willoughby of the Congressional Black Caucus.   Judge Glock, the Director of Research and Senior Fellow at the Manhattan Institute, noted on X that the Climate United Fund got your $7B ater submitting a small 49-page report. That was all it took.



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BWorld 754, GDP expansion and PhilHealth’s excess P90 billion

GDP expansion and PhilHealth’s excess P90 billion

October 31, 2024 | 12:02 am

My Cup Of Liberty

By Bienvenido S. Oplas, Jr.

https://www.bworldonline.com/opinion/2024/10/31/631711/gdp-expansion-and-philhealths-excess-p90-billion/

 

In 2023, the Philippines was the 31st largest economy in the world in GDP size at purchasing power parity (PPP) values, and the 34th largest economy at current or nominal values. Our GDP size of $1.26 trillion was not far behind our neighbors: Malaysia with $1.28 trillion, Vietnam with $1.5 trillion, Thailand with $1.68 trillion, and Taiwan with $1.74 trillion.

 

The expansion of the Philippines’ and other East Asian economies was fast. From 2015 to 2023, Vietnam’s economy expanded by 102%, China’s by 98%, the Philippines’ by 77%, Singapore’s by 74%, Indonesia’s by 72%, and Malaysia’s by 70%. In contrast, G7 countries have expanded between Japan’s 28% to the US’ 52% (see Table 1).

 


 

Last week the Bureau of the Treasury (BTr) released the government’s cash operations report for September. In my second table, I compared the January to September data on public finance over three years, 2022 to 2024.

 

The good news is that the budget deficit is declining, from P1 trillion in 2022 to P984 billion in 2023 and P970 billion in 2024.

 

There are two notable things in the report this year. One is the big expansion of “Other non-tax” revenues, from P82 billion in 2022, to P79 billion in 2023, and P234 billion in 2024. The other is the fast expansion of interest payment of our public debt, from P400 billion in 2022, to P460 billion in 2023 and P583 billion in 2024. If this trend continues, the full year 2024 interest payment may reach P875 billion (see Table 2).

 


That is a huge increase in interest payment — no thanks to the Bangko Sentral ng Pilipinas’ high interest rate policy,  supposedly to control inflation, and the ever-rising expenditures of national agencies, including the military and uniformed personnel pension (which should be zero if only they would pay for their own pension) to around P164 billion a year.

 

The transfer to the National Treasury of P60 billion out of the P89.9 billion in idle funds of the Philippine Health Insurance Corp. (PhilHealth) has greatly contributed to the expansion of “Non-tax revenues.”

 

TRO ON PHILHEALTH’S EXCESS FUNDS

 

Last Tuesday, the Supreme Court issued a temporary restraining order (TRO) on the transfer of the remaining P29.9 billion (round this off to P30 billion). This means either P30 billion in unprogrammed expenditures in the national budget will not be implemented, or the Department of Finance (DoF) will borrow P30 billion at an interest rate of 6% (government bond 10-years) and pay P1.8 billion in interest alone plus principal amortization.

 

The petitioners and the Supreme Court wrote in largely legal arguments, which is not my field. But if they considered the economic arguments of the DoF and the economic team on why the P90 billion in excess PhilHealth funds — which come not from members’ contributions but from portions of the tobacco and alcohol tax and portions of the remittances from the Philippine Amusement and Gaming Corp., better known as PAGCOR, and the Philippine Charity Sweepstakes Office, meaning money from the pockets of gamblers, drinkers, and smokers — has been tapped to fund certain unprogrammed appropriations, they should have seen the logic and virtue of this move.

 

I hope that the TRO will be lifted soon, and the remaining P30 billion released so it can be used for certain programs and projects with unfunded appropriations.

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See also: