Inequality 28, IBON and sensational analysis

IBON Foundation maintains its sensational and not-so-deep research, nice on graphics but shallow on comparative numbers. I am referring to these 3 infographics they produced and sent to local media. A friend sent this to me to get my reaction, I said that I will blog my comments.

IBON naman, sana man lang utak agila or lawin, wag naman utak maya :-)

On point #1, decline in Agri/GDP ratio means more agri jobs lost. Weird. 

Even socialist Vietnam and China, more developed Thailand and Malaysia, have shrinking share of Agri/GDP ratio. It's the natural progression of societies. Overall productivity across countries keeps rising, thanks to scientific innovation and market competition. We will need less rural labor, other inputs, to feed an ever-rising population.

The same point re decline in manufacturing/GDP ratio, leading to more manufacturing jobs lost. Decline in ratio is not automatically bad as other sub-sectors in the industry sector, services sector, have absorbed excess labor from manufacturing as the latter uses more machines and robots. 

On point #3, the number of poor people have increased. Well, the definition  of "poor" is evolving. Until a few years ago, it was earning $1/day/person or less, now it's around $1.5/day/person. Before, the poor were riding cows or horses, now they ride motorcycles or buy 2nd/3rd-hand cars or jeeps. Before, the poor were using smoke signals to send a message, now they have fb and twitter on their cheap smart phones.

 Source of 2 tables:  ADB, Key Indicators for Asia and the Pacific 2015.

Since 30+ years ago, and possibly 20 or 30 years from now, IBON reports and will only report the ugly, the uglier and ugliest about the PH economy. Kasi hindi pa tayo socialist Philippines eh, so things are bad and ugly and depressing. :-)
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See also: 

Inequality 24: Inheritance, Poverty and Envy, April 17, 2015

Inequality 25: On High CEOs Pay and Legislated Minimum Wages, April 30, 2015 

Inequality 26, Pew survey result on support for free market, July 27, 2015 

Inequality 27, ADR Institute forum on poverty and growth, August 18, 2015

UHC 28: Health Pessimism Despite Improving Public Health

It is common for many if not all left-leaning groups and NGOs to be pessimist and negative-looking at almost any social and economic indicators of any country or the world in general. This is because global trade and investments, mobility of goods, services/people, capital and technology, are under a market system of exchange, or what socialists and left-leaning groups call as "global capitalism".

Last Tuesday, April 07, I attended a health forum plus book launching of IBON, a known leftist think tank. Before the launching, there was a talk on "Health Privatization in the Philippines and Health Campaigns" by Rosalinda Tablang, Deputy Exec. Director of the Council for Health and Development, Inc. (CHD).

Her presentations were about the "worsening healthcare and health conditions" of Filipinos because of "state abandonment" of certain health services and giving more role to the private sector.

Among the number she showed were the list of government hospitals (DOH or by provincial governments) slated for public-private-partnership (PPP) modernization and corporatization. 26 such hospitals as of 2011.

The five hospitals under PPP of the Aquino government, as of November 2014.
Among her concluding points were: (1) Allocate 5% of GDP or P527 billion for health, (2) Resist imperialist impositions, and (3) Free comprehensive healthcare for all.

Open forum came, I raised my hand and pointed the following points.

1. While there are pockets of worsening healthcare in the PH, overall, public health  is improving as captured by the rising life expectancy of Filipinos, 69 years (67 for males, 71 for females) as of 2010 or 2012. This means that there are fewer mortality and deaths per age group today than in the past.

Source: NSCB, http://www.nscb.gov.ph/stats/statdev/2013/ch7_social.asp
http://www.nscb.gov.ph/stats/statdev/2006/healthservices/Chapter_Health_Services.asp

This is the trend globally, not just in the PH.

2. Total healthcare spending  in  the Philippines is around 5% of GDP already, if not higher. I discussed it here, PH Health/GDP Ratio 2011. Below are some recent data from the National Statistical Coordination Board (NSCB).

Source: NSCB

3. It is not true that PH health sector is dominated by the multinationals. All private hospitals, all drugstores and pharmacies, big and small, they are Filipino-owned. In pharma, the biggest pharma company here is Filipino, Unilab, it controls about 25 percent of the total domestic pharma market, much bigger than  the  combined sales of #s 2, 3 and 4 (Pfizer, GSK, I don't remember the other one) of around 22-23%.

4. Corporatization is not the same as privatization. When the PH Orthopedic Center (POC) is modernized and developed by Megawide and its other private partners, the DOH Secretary will still  be the head or Chairman of the Board and government people will most likely be the majority in the  board. The difference is that under the DOH-controlled POC, all board members are from the government while under a corporatized POC, there are representatives from the private sector who  developed the new POC.

Ms. Tablang responded to each point and argued that (a) healthcare is worsening in many areas, (b) out of pocket spending by the people remains high because of low public health spending, (c) Xrays, CT scan, other  laboratories in hospitals and clinics are imported and produced by multinationals, and (d) corporatization is just another term for privatization.

I went there not so much to convince the left-leaning people there who  are already so convinced of their position, but to present a counter viewpoint even briefly, so I did  not make additional rebuttals.

During the book launch and awarding of copy to a community organizer in Payatas, QC. From left: Rosalinda Tablang of CHD, Rosario Bella Guzman, IBON Exec. Editor, Glenis Balangue, IBON Senior Researcher, and the guy from Payatas. He's an articulate speaker.

I did not buy the book (P300), first because I did not have money that day, and second, I think there are several  important health data that it purposely omitted. Like the charts and table I showed above. Anyway, IBON people know that we are 180 degrees opposed on various issues but the disagreement is on the level of philosophy and issues, not personal. So after enjoying the sumptuous merienda, I left.

Hey wait, among  the books sold by IBON that day -- four books of Jose Maria Sison, the founder of the Communist Party of the PH (CPP) and exiled commie leader in the Netherlands, enjoying the good life there for 3+ decades now while fanning hatred and even violence in the PH.

See also: 

UHC 24: Corruption in Government Purchase of Medicines, April 02, 2014 

UHC 25: Some Physician Stories in Hospital ERs, Wards, July 29, 2014 

UHC 26: Public and Private Spending on Health, January 31, 2015 

UHC 27: Paranoia on Healthcare Corporatization and Privatization, April 06, 2015

The Interest Payment Burden

(Note: this is my article for People's Brigada News last weekend)

The President submitted its proposed 2011 budget to Congress last week. It is a staggering P1.645 trillion budget, that will constitute some 18.2 percent of the projected gross domestic product (GDP) next year.

If we include the total budget of local governments as they have revenues of their own aside from the transfers they receive from the national government, the consolidated or combined budget of the whole government bureaucracy should be at least 21 percent of GDP.

National Government Expenditure by Recipient Unit, In P Billion

Recipient Unit : 2009 / 2010 / 2011

1. National Govt Agencies: 815.3 / 927.6 / 964.6
2. Local Govt. Units: 272.9 / 297.5 / 300.0
3. Government Corporations: 67.1 / 39.3 / 23.3
4. Creditors/Interest Payment: 278.9 / 276.2 / 357.1

Total Budget: 1,434.1 / 1,540.6 / 1,645.0

Source: DBM, Budget of Expenditures and Sources of Financing (BESF), Table B.9

The interest payment for our public debt, both domestic and foreign, will be a big burden next year. The P357.1 billion will comprise 21.7 percent of the total budget next year, much higher than the 19.5 percent ratio in 2009 and 17.9 percent ratio this year.

Here is another way at looking at the above table. The increase in total budget from 2010 to 2011 is P105 billion. The increase in interest payment from 2010 to 2011 is P81 billion. Meaning P4 out of every P5 increase in total expenditure was accounted by increase in interest payment alone.

The only consolation in the budget next year is that subsidies to government corporations has drastically declined to only P23 billion, or only 1/3 of its level in 2009. But we should aim for zero subsidy for those government corporations. They are supposed to be net contributors to the total revenues, not net subsidy-seekers. This should be an important argument why many of those government corporations should be privatized soon.
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A related paper I wrote last June 29, 2010

Public Debt and Government Failure

On the roundtable discussion by IBON Foundation today in UP Diliman, "Global public debt troubles: the next phase of the global crisis?", I will argue that the current public debt woes of many governments around the world is a clear case of government failure.

What do you call a person or household who earns P20,000/month but spends P23,000/month (or higher) on average? Gastador, mayabang, iresponsable, engot...? I think all of the above.

So what do you call a government that earns 1 trillion (whatever currency) but spends 1.2 trillion, and the budget gap is repeated every year for several years or decades? Irresponsible, braggart, bleeding-heart,...? All of the above?

The Economist magazine last week (June 24 issue) also has a good interactive map and graph of the consolidated debt of key rich countries. Well, all G7 member countries, no exception, all Gof them are heavily indebted, especially Japan and UK.

Among G20 countries which met in Canada only over the weekend, ALL of them except Saudi Arabia, are running fiscal deficit (revenues lower than expenditures) and resort to lots of public borrowings. Many of them have been running fiscal deficit for the past decade or more.

Government failure is difficult to solve as the usual remedy by many politicians is to create another bureaucracy or to expand existing ones, that will look into the wastes, inefficiency and robbery that happened in other agencies. That is why it is important to remind governments and their politicians and bureaucrats, to stick to their more important function of protecting the citizens' right to life, right to private property, and right to liberty. Then let go of other functions that are better left to market players in a competitive environment.