Government and Taxes

Monday, June 17, 2019

BWorld 339, MORE passenger safety and the LTFRB

* My column in BusinessWorld last June 14, 2019.

Passengers and commuters want convenient, safe, and faster mobility to reach their destinations. There is great inconvenience for people who take multiple rides (tricycle, jeep or bus, MRT/LRT, jeep again to destination, reverse the process going back home). Taking a taxi is good but there are many complaints like choosy drivers, robbery, or sex molestation inside the cab, etc.

I made a small experiment, I Googled “robbery inside _____ in Philippines” for regular taxi, jeepneys, city buses and Grab. I counted the top 8 entries that refer only to my subject search, and stories like “robbery of a bank” or “taxi/jeepney accident” are not included. I was surprised by the result (see table 1).

And that explains why many people choose taking the transport network vehicle service (TNVS) or transport network companies (TNCs). Cost should not be a factor because passengers know that Grab cars are more expensive than a regular taxi but they still choose the former. It’s like parents know that Ateneo and La Salle are more expensive than other private universities but they still enroll their kids at these two schools. People value the brand, their service quality, etc.

My little experiment is consistent with the findings of a paper, “Innovation Versus Regulation: An Assessment of the Metro Manila Experience in Emerging Ridesourcing Transport Services” (2017) published in the Journal of the Eastern Asia Society for Transportation Studies, Vol. 12, by Ma. Sheilah G. Napalang (UP School of Urban and Regional Planning) and Jose Regin F. Regidor (UP College of Engineering). The authors cited a study by de la Pena and Dizon (2016) on passenger preference between Grab taxi vs regular taxi (see table 2).

So if many people prefer TNVS or TNCs, how come that the Land Transportation Franchising and Regulatory Board (LTFRB) is further bureaucratizing and even deactivating many TNVS cars and drivers?

See these three reports in BusinessWorld this week, I quote portions of the stories:

1. “Grab drivers seek amnesty for uncertified operators” (June 11):

“the process to secure a CPC is difficult for drivers to follow after the LTFRB added new requirements… produce a bank certificate of conformity… Many operators cannot comply, some banks will ask for thousands of pesos in fees, plus an increase of monthly amortization… proof of financial capability… has been increased to P50,000 from P15,000 previously”

2. “Grab calls on LTFRB to allow deactivated drivers temporarily” (June 12):

“‘The best scenario for the Filipino people, is to have more drivers which results in passenger convenience, and less traffic as car owners will just need to hail a ride… If LTRFB will allow the deactivated drivers to resume work while it processes the application of 10,000 new drivers, that would be the best win for the Filipino people,’ Grab Philippines President Brian P. Cu was quoted”

3. “LTFRB won’t ease driver norms for ride-sharing industry” (June 13):

“LTFRB said it will not ease its accreditation requirements to deal with a potential shortage of ride-share drivers, despite appeals to temporarily allow TNVS operators with pending documents to stay on the road.”

Reports #1 and #3 show that LTFRB seems to violate its own mandate — to help ensure passengers safety and convenience. Why has it imposed new strict requirements that will effectively ease out many TNVS cars that passengers precisely want?

Report #2 is true, it is basic economics. If LTFRB and passengers want lower, cheaper price per ride, just allow the supply of service to rise relative to demand. The “equilibrium point” of supply-demand dynamics will lead to a decline in price while the supply of service will increase.

The market-oriented reforms for efficiency (MORE) that LTFRB can take is to allow more TNVS cars and drivers, not reduce them. If it is more convenient, waiting time to book a ride is shorter, price or fare is lower due to competition, then more people will leave their cars at home and that will help reduce traffic.

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BWorld 337, Smart energy: Use more conventional sources, June 11, 2019

BWorld 338, MORE employment and labor productivity, June 12, 2019

Thursday, June 13, 2019

Friendship with ATR and Grover Norquist

I have met the President of the Americans for Tax Reforms (ATR), Grover Norquist, also visited their office in Washington DC, first time in 2004. I was then an Atlas' International Fellow and was meeting free market leaders in the US.

I have no photo of that meeting in 2004, but the 2nd time I met Grover again and his ATR team was in Honolulu, Hawaii in 2007. ATR, IPN and several other free market think tanks sponsored the first Pacific Rim Policy Exchange (I shortened it to PRPX). Below from left, with ______, me, Mr. You of the Japanese for Tax Reforms (JTR), Grover and his wife.

Then ATR sponsored me to participate in the 2nd PRPX in Hong Kong in 2008, then 3rd PRPX in Singapore in 2009.

Photo below: (a) with Bjorn Tarras-Wahlberg, then President of the World Taxpayers Association (WTA) and Grover, in Singapore in 2009.

(b) 4th PRPX in Sydney, Australia in 2010. With Peter Wong of Lion Rock Institute (LRI, HK), Grover and Jim Lakely of Heartland Institute.

(c) 7th ALS Friedman Conf + 17th WTA Conf in Sydney, May 2019. From left: Michiel R, Grover, and Dan Mitchell.

I was happy to meet Grover again last May, after 10 years, also in Sydney. Plus his trusted leaders in ATR, Chris Butler and Lorenzo Montanari.

I am grateful of this friendship and partnership with ATR and PRA people. Thanks Grover, Chris, Lorenzo.

ALS-ATA 7th Friedman Conf Sydney, some photos

Some of my photos during the Australian Libertarian Society (ALS), Australian Taxpayers Association (ATA) + World Taxpayers Association (WTA) conferences in Sydney last May 23-26, 2019. Here, 3rd night during the Sydney Harbour night cruise, we watched Vivid Sydney, have a program and party inside the big boat. Most photos from the ATA fb page.

Second night, gala dinner by ATA, ALS and Tax and Super Australia. Among the huge free market gala dinner I have attended.

Tim Andrews, then ATA Exec. Director, posted this last June 10:

When looking at the success of the Friedman Conference, I was struck by a very simple thing the other day.

John and I were both asked what the point of the conference was, why we created it, what were the goals etc.

Our answer was not to educate people (Although with the leading pro- liberty speakers from around the world speaking we certainly did). It was not to provoked stimulating debate (Although with the wide variety of topics debated we certainly did that also). It was not even to teach and introduce new people to the benefits of small government (but from all the people who said their views had been changed as a result we did that also)

Rather, we both answered the same way: to create a community and to have fun.

To bring people together in a joyous celebration of the things that made Australia great, to celebrate the ideas of liberty together whilst having an awesome time.

Everything we do in planning the conference is centered around that. And you can tell this worked just by how wild the crowd goes every year at the awards - something you see at no other libertarian conference - because for us a core criteria is what will ensure that vibe of fun and commeraderie.

This is what makes the Friedman Conference stand above so many other pro-liberty conferences. That from day one it was about bringing everyone together, no matter minor policy differences, to have fun!

But it could only have happened with the work John firsty our into creating this vibe, but also the fact that we have so many amazing people who could make this vibe actually happen and work. We couldn’t create this community if there were not so many wonderful people to create it with in the first place (not to mention everyone helping out it together from behind the scenes)

So to all of you: thank you for helping us achieve - in ways far far greater than we at first could have imagined - an amazing, vibrant, but mostly fun pro-liberty community!

Onwards and upwards and let’s make 2020 be even better still!

I enjoyed that conference. Thanks again to ATR and PRA for sponsoring my trip.
Meanwhile, a summary photo of the 7 ALSFC posted by ALS in their fb page.

Agenda, One News, Part 1

My taped video interview about the continuing power supply problem was posted this morning at Agenda hosted by Cito Beltran, at ONE News PH. Thanks Ms. Knadine Brecio for the interview.

See my previous column, https://www.bworldonline.com/power-shortage-as-election-issue/

Last Tuesday I also have a live Interview at One Newsroom hosted by Ms. Shawn Yao and Charles Lejano, on various economic issues. Thanks to Madelaine Lacson for inviting me.

Last April 29, I was one of three guests in a live interview of “Agenda” by Cito Beltran (seated rightmost). My co-panelists were Paolo of Philippine Star and Macie of TV5.

Thank you, ONE News PH, for the opportunity to discuss certain social and economic issues of the Philippines.

Wednesday, June 12, 2019

BWorld 338, MORE employment and labor productivity

* My article in BusinessWorld on June 11, 2019.

The Philippine Statistics Authority (PSA) released the Labor Force Survey (LFS) April 2019 last week and the result was generally good compared to April 2018: both unemployment and underemployment rates in 2019 have significantly declined, and labor force participation rate (LFPR) has increased. Thus, the labor force Q1 data seem to contradict the GDP Q1 data where growth has decelerated further.

Are things in the labor force really improving? To answer this question, I backtracked and got data for the past five years, not just the last year. The numbers are interesting (see table 1).

One, the LFPR is declining. Meaning more people are postponing joining the labor force, choosing instead to pursue more studies or internships, or bum around. The K+12 must have contributed to this trend too. When LFPR is declining, both unemployment and underemployment rates tend to decline because those who join the LF are more equipped and more confident that they will be hired as full-time or part-time workers or entrepreneurs.

Two, both rates of unemployment and underemployment (people who work below 40 hours a week, or those already working above 40 hours but want additional work) are indeed declining and hence, the employment rate is increasing.

Three, compare election years 2016 (Aquino) and 2019 (Duterte) — higher LFPR in the former. In terms of absolute numbers in LF, 43.3 million vs. 44.5 million, or an increase of only 1.2 million in LF over three years, an average of 0.4 million per year was added to the LF under the Duterte administration. This is not good.

Therefore, labor force Q1 2019 data is actually not as rosy as it initially looks, and the numbers support — not contradict — the macro GDP growth deceleration: 6.9% in 2016, 6.7% in 2017, 6.2% in 2018, 5.6% in 2019 Q1.

Among the employed people, how is the labor productivity of the Philippines compared with its neighbors in East Asia?

I checked the International Labor Organization (ILO) Database (ILOSTAT) for Key Indicators of the Labour Market (KILM). Numbers show that ours is lower than Indonesia, Thailand, Malaysia, but higher than average for world lower middle income (see table 2).

I also checked the same database from ILOSTAT-KILM for the unemployment rate covering many countries. There seems to be wrong data for the Philippines 2017: an unemployment rate of 2.6%, and a combined rate of unemployment and potential labor force (LU3) of 5.9%. What??

The market-oriented reforms for efficiency (MORE) for the Philippines in the labor sector — more competition and deregulation, more investments and entrepreneurship, investors hiring more workers or people hiring themselves as entrepreneurs — mean faster growth.

The main hindrances to this — more/higher taxes and fees, more bureaucracies and business permits that take a long time to be secured, government-created monopolies and oligopolies via congressional franchising, agency and local government franchising, and low respect for rule of law.

We need fewer hindrances, we need more growth, more employment, more labor productivity and, hence, higher income for workers and entrepreneurs.

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BWorld 336, Inflation target below 2% is possible, June 10, 2019

BWorld 337, Smart energy: Use more conventional sources, June 11, 2019

Interview at One Newsroom

Yesterday, I was on live TV interview in the program, "One Newsroom" hosted by Ms. Shawn Yao and Mr. Charles Lejano. This is one of the programs of One News at Cignal TV channels 8 and 250.

It was supposed to be a short interview on economic issues, about 5 minutes, but we expanded a bit and lasted for nearly 10 minutes.

These were my guide notes, the numbers I tried to remember and discussed.

1. On GDP growth: We are not maintaining the growth momentum, only economy in East Asia with decelerating growth from 2016 to 2019 Q1.

Reference: https://www.bworldonline.com/low-growth-high-taxes-as-election-issue/

2. On inflation: We are the inflation valedictorian in East Asia, highest rate in 2018 (5.2%, 2^nd highest was Vietnam with 3.5%) and 2019 ytd (3.5%, 2^nd highest are VN and ID with 2.7%).

Reference: https://www.bworldonline.com/inflation-target-below-2-is-possible/

3. On taxes: We have high PIT, CIT, VAT compared to most East Asian economies. TRABAHO bill among the contributors for low growth in private investments.

Reference: https://www.bworldonline.com/the-global-taxpayers-conference/

4. On employment: April 2019 indeed better than April 2018 labor data but they are not good comparison years, better compare election periods April 2016 vs April 2019, former has more job generation.

Reference: https://www.bworldonline.com/more-employment-and-labor-productivity/

5. On oil prices: We expect low world oil prices, stable and lower domestic prices but TRAIN law’s oil tax hikes distorted prices upwards.

Reference: https://www.bworldonline.com/smart-energy-use-more-conventional-sources/

6. On power shortage: We lack power capacity + we have many old, ageing power plants. Variable renewables wind-solar cannot be relied for large-scale electricity demand because these are intermittent, weather-dependent energy sources.

Reference: https://www.bworldonline.com/power-shortage-as-election-issue/

Thanks to Madeline Lacson of One News for inviting me.

Tuesday, June 11, 2019

BWorld 337, Smart energy: Use more conventional sources

* This is my article in BusinessWorld on June 07, 2019.

Some good news in the world energy sector here. One, world oil prices keep falling, WTI is now only $51+ per barrel vs $62 a month ago and $75 in early October 2018. Two, the US cemented its role as the world’s largest oil producer, its output now 12.4 million barrels per day (mbpd) vs. 8.8 mbpd at the end of the Obama administration. Three, the oil-price decline is despite joint OPEC + Russia oil production cut to force higher prices. China is perhaps the world’s biggest oil consumer but it remains a mid-tier oil producer (see table 1).

President Trump and the US are winning the battle to keep world oil prices low. Saudi, the rest of OPEC and Russia are losers to force high oil prices. Russia and President Putin hate low oil-gas prices, these being their main bread and butter.

At the Jeju Forum for Peace and Prosperity 2019 conference in South Korea last May 29-31, I attended a panel discussion on “US-Korea energy cooperation.” The speakers were Melissa Simpson of the US State Department, Geoff Moody of the American Fuel and Petrochemical Manufacturers (AFPM), Prof. Shim Shangmin of the Korea National Diplomatic Academy, and Prof. Jung Yonghun of Ajou University.

Ms. Simpson explained the US government’s policy of more oil-gas production and more exports to allies like South Korea and Japan. Mr. Moody showed charts that: (a) US crude exports keep rising, (b) in 2018 the US’ top 3 export destinations for hydro-carbon gas-liquids are Japan, Mexico and South Korea, and (c) for crude oil export destinations, the top 3 are Canada, South Korea and China.

Prof. Shim explained that the South Korea government energy policy now is to shift away from nuclear and coal power and move towards renewables wind-solar. He is not very optimistic about power reliability and lower prices though. Prof. Jung emphasized the need for more US-Korea cooperation given the rising energy needs of his country.

The Friedrich Naumann Foundation for Freedom (FNF) sponsored a panel on “Smart cities” and one of its three speakers, Prof. Hwang Jie-Eun of the University of Seoul, partly mentioned the role of cheaper energy in SME tech start-ups in the Sewoon Campus project.

Here in the Philippines, three recent reports in BusinessWorld are worth noting:

1. “Luzon grid goes on six-hour yellow alert Tuesday” (June 5).

2. “Congress ratifies Solar Para sa Bayan bill” (June 5).

3. “Legislators urged to reduce Philippines’ dependence on coal-fired power plants” (June 6).

Report #1 shows that until today, we still lack sufficient power, stable and reliable power that can run 24/7 and not dependent on weather. Report #2 shows further energy cronyism via legislation while trying to expand intermittent and unstable solar power. Report #3 shows how some lobbyists spread fake news, that the Philippines has big coal power already and we need to cut or discontinue more coal power plants. Far out, see table 2.

The “smart energy” policy for the Philippines and other developing countries is to keep using conventionals — oil, gas and coal, even nuclear. With continuing rise in US oil-gas-coal production and exports, the prices of these three conventionals will further stabilize at low, competitive levels.

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BWorld 335, Smart cities with little congestion and regulations, June 07, 2019

BWorld 336, Inflation target below 2% is possible, June 10, 2019

China Watch 34, Beijing vs HK people on extradition bill

HK-Chinese have once again expressed their distrust against the China Communist Party (CCP) and Xi Jinping government. This time it's about a HK bill that would allow people to be extradited to mainland China. If HK has 4 M adult population (out of 7.5 M total), then one out of four HK people took to the streets.

A million take to Hong Kong streets to say no to Beijing

By Kirsty Needham

June 10, 2019 — 5.42am

https://www.smh.com.au/world/asia/a-million-take-to-hong-kong-streets-to-say-no-to-beijing-20190610-p51w20.html

The organiser's estimate of 1.03 million people marching the three kilometres from Victoria Park would make it the biggest protest since the former British colony was returned to China in 1997.

At handover, China and Britain had agreed Hong Kong would operate under "One Country, Two Systems", allowing Hong Kong's limited government control over immigration, borders and a separate legal system….

International television news channels reporting the mass protest in Hong Kong were blacked out in mainland China.

The CCP is a highly insecure and secretive government. All they do is to restrict, regulate, prohibit, ban, mainstream and social media that can expose their abuses and insecurities. Until now facebook, twitter, youtube, etc are still not allowed for ordinary Chinese.

Here in the PH, Duterte admin and supporters still trust Xi Jinping. And among Trump-hating free marketers, I won't be surprised that in the current US-CN trade war, they will be on the side of the protectionist-communists just to keep hating Trump.

China Watch 32, US to treat China 'non-naval' fleets as navy vessels, April 30, 2019

China Watch 33, US' 25% tariff on $200 B of CN exports, May 07, 2019

About Me

Monday, June 17, 2019

Thursday, June 13, 2019

Wednesday, June 12, 2019

Tuesday, June 11, 2019