Presentation in 2009 in the US, Tear down our wall

I dug an old presentation in 2009 in one of the Atlas events. Well, it was the last Atlas event where they gave me a travel grant. Here are portions of that 28-slides ppt.

I thanked Jo Kwong, then Atlas VP for Institute Relations, for finding resources to make me participate in that conference. Jo resigned from Atlas in 2010, and Atlas gave me zero travel grant since that year until today. Oh well, no problem.

BWorld 310, MORE stable electricity and competition

* This is my article in BusinessWorld last April 3, 2019.

In a September 2017 paper, “Implementing the 10-point Socio-Economic Agenda,” the Arangkada Philippines Project (TAPP) made 22 recommendations for the power sector, among which are: (1) Support and approve the massive energy investments, (2) Increase the system reserve requirement to 25% of peak demand vs the current 17%, and (3) Formulate an energy road map (generation portfolio mix) with power supply quality, reliability and affordability as key objectives.

These are good recommendations to expand and ensure more stable power supply, more competition among more players, more consumer choices, and cheaper energy prices. Which are the main advocacies of the Market-Oriented Reforms for Efficiency (MORE) series in this column.

It is not possible to have sustained fast growth if there is no reliable, stable, 24/7 electricity in major economic centers if not nationwide. And the Philippines remains among the laggards in East Asia in terms of total electricity generation and kWh per capita. Then there is the persistent promotion plus subsidies to variable renewables solar and wind starting with the RE law of 2008 (RA 9513) but after 9 years, their combined output remains very small (see table).

  

The good news is that the Energy Virtual One Stop Shop (EVOSS) law has been signed as RA 11234 on March 8. This will hasten approval and permitting system in power construction and development.

In a paper, “When There’s Too Much Sun and Wind” (WSJ, March 10, 2019), Rupert Darwall (author of “Green Tyranny: Exposing the Totalitarian Roots of the Climate Industrial Complex”) argued:

  

“(T)he most destructive consequence of wind and solar power result(s) from periods of oversupply… Coal and gas plants have to be kept on standby and ramped up to cover the shortfall resulting from still air and darkness. That forces them to operate less efficiently and pushes their costs up. During periods of low demand, wind and solar can produce too much electricity, creating gluts and driving wholesale prices negative, meaning grid operators have to pay consumers to burn unwanted energy.”

While the Philippines is still far from having wind + solar oversupply, strong legislative and executive lobbying point to that direction.

The interest of electricity consumers — more stable electricity at cheaper/competitive price, no additional taxes and subsidies like the feed in tariff (FIT) allowance — should prevail over government, as well as the RE lobby and environmental NGO interests that oppose fossil fuel power plants which can provide stable, cheaper power.

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See also: 

BWorld 307, MORE airline competition, March 28, 2019 

BWorld 308, MORE debt reduction please, March 31, 2019 

BWorld 309, MORE local government responsibility, April 05, 2019

Energy 122, TAPP roundtable on the power sector

Last Tuesday, April 2, I participated in a roundtable on "Challenges Facing the Philippine Power Sector" organized by The Arangkada Philippines Project (TAPP) and the US Chamber of Commerce, at Amcham office, Makati.

Participants were from Amcham, Quezon Power, Aboitiz Power, Alternergy, GE, PIPPA, IEMOP, ECCP, GPDP, NGCP, DREAM, MBC, MAP, PCCI, PCFR, PSPA, PhilExport, USAID, etc.

Meanwhile, one way to reduce power rates is to remove tariffs, non tariff barriers (NTBs) for both renewable and conventional power systems. Currently what we have are lots of taxes, tariffs, NTBs for conventional and few taxes, even subsidies for renewables.

RA 9513 or the RE law of 2008, Section on fiscal incentives, lots of these and there were already legislated, 11 years ago. In contrast, no such fiscal incentives for conventionals.

Leandro Leviste, son of Sen Legarda, is a special kind of entitlement thinker, that even many or all other RE developers hate him and his Solar sa Bayan franchise bill. Could become a law by May or June.

PH has low electricity production nationwide. Even if we double our electricity output say 15 years from now or in 2034, that level would perhaps be what Vietnam produced this year or last year. Or that PH output in 2034 would be what Thailand produced in around 2010 or a decade ago.

Many people demonize the so called "big" power companies and players. But without them, our electricity output maybe on the same level as Cambodia or Myanmar. 

Of the roughly P10/kwh bill, only about P5.50 (+/- P1) is generation cost. The other 4.50/kwh? Transmission charge, distribution charge, supply charge, universal charge, metering charge, system loss charge, FIT allowance for RE, VAT, other taxes. Here's an example, power rates collected by Meralco as of March 2019.

On the Supreme Court TRO vs RCOA since February 2017 that remains indefinite -- SC legality can be ignorant on many economic issues like energy pricing and supply contracting. Without that SC TRO, we may be in the 500 kw level already and by two years more, perhaps down to household level.

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See also:

Energy 119, US oil output now almost 12 mbpd, January 20, 2019 

Energy 120, US-Russia rivalry in oil-gas dominance, February 04, 2019 

Energy 121, US oil and natgas production, February 23, 2019

BWorld 309, MORE local government responsibility

* This is my column in BusinessWorld on April 01, 2019.

The official campaign period for local and Congressional candidates for the May 2019 started last Friday, March 29. Tens of thousands of candidates plus their supporters went out on the streets and reached out to media to get the support of the undecided.

Also last Friday, I attended the “Benchmarking Cities: A roundtable discussion on infrastructure” sponsored by KPMG Manila, the speaker was Richard Threfall, the global head of KPMG Infrastructure. While Manila is not part of their initial coverage of cities in their report, a lot of the issues covered have relevance to the metropolis.

Local government responsibility and irresponsibility is the topic of this column’s Market-Oriented Reforms for Efficiency (MORE) series.

Last Friday this column discussed about fiscal irresponsibility of the national government as it keeps borrowing even without economic turmoil or crisis and the public debt stock keeps rising, already at P7.78 trillion as of end-2018 and interest payment alone at P349 billion that year.

One reason for that is the frequent free-riding attitude of most local government unit (LGU) leaders and congressional legislators. Many local projects are created and expanded without using local resources and rely on national funding. The result is having the national government in perennial budget deficit while LGUs have fiscal surplus, shown in their positive ending balance. Also many LGUs are still heavily reliant on their share of internal revenue allotment (IRA) from the central government (table 1). 

Many LGUs in Metro Manila do not follow this high IRA dependence, they rely more on local taxation, especially on business registration and real property tax (RPT), plus various regulatory fees and charges (table 2).

While low IRA dependence by these rich LGUs is commendable, it has also unleashed an itch for more taxation mentality at the local level. Many residents of Metro Manila are pampered with local government welfarism (free healthcare, free movies for senior citizens, protected squatter housing, etc.) which further attracts rural migration to the metropolis.

Both national and local governments should learn to respect the people’s right to keep more of their income and savings as a sign of fiscal responsibility. They should realize that the tax-tax-tax mentality for whatever populist agenda is a sign of public irresponsibility.

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See also: 

BWorld 306, MORE stock market development, March 26, 2019 

BWorld 307, MORE airline competition, March 28, 2019 

BWorld 308, MORE debt reduction please, March 31, 2019

On NAIA air traffic congestion

Yesterday, our plane flying Manila to Cebu left the terminal 8.35am on time. Then we were stuck at the tarmac for about 1 hour and 5 minutes before we got the go signal to fly, the usual airport congestion. It's boring inside the plane, the pilots and crew too should be bored while the airline spends huge volume of gasoline even if the plane is not flying.

Government – via CAAB, MIA, etc -- collects lots. From airlines: landing fee, parking fee, terminal fee, possibly take off fee? From passengers it collects terminal fee, aviation security fee, VAT on plane fare, etc.

(This photo of long queu of commercial planes waiting for their turn to take off, from abs-cbn news.) Government should compensate airlines for the wasted gasoline, delayed flights and extended working hours of pilots and crew. Compensate also passengers for delayed flights, delayed meetings if any at destination, worse missed connection flights or boat sked. But this seems wishful thinking because the main business of govt is just to collect collect collect.

When I posted this in facebook, several friends reacted. Among the other testimonies are:

(1) Cecil PB: That happened to my son last March 31 due to air traffic daw at NAIA. The flight bound to Taiwan was delayed and a lot of passengers missed their flight to Houston. They were booked to a hotel by the airline and flew the next day to Tokyo then Houston. He arrived 15 hrs later than the suppose ETA.

(2) Gus C: My flight to Cebu was supposed to have left at 08:15. I arrived (with an on-line boarding pass) at the airport at 06:45 for boarding at 07:40 & learned that boarding time was delayed to 08:30 meaning our flight would depart at 09:00. Would you believe that we took off at 11:00. Good thing my first appointment in Cebu was for lunch. I still made it to the venue for a 13:30 late lunch. Coming back to Manila was equally stressful as the turn around plane was not able to take-off from Naia until past 21:00. I eventually got back in Naia at 23:15.

(3) Lorenzo G: That is our experience in every domestic flight Noy. 1 hour delayed in every take off, in Manila only, sa provincial airport hindi pumipila sa end of runway ang plane for take off. Too much congested ang NAIA.

(4) Bruce H: For the last seven days, my 10am flight to Dipolog was delayed each and every day by at least 50 minutes and sometime 90. However the time scheduled for the flight built in 45 minutes on the ground.

Bruce further added that “this is very predictable. In fact, so much so that the airlines have built the delay into their schedule. If you look at FlighTracker or another website or app you can see how every plane departs an hour after the schedule, or more. This is not caused by unforeseen circumstances. With a bit more thought, with a bit better planning, they could adjust flight slots so that when planes push back from the gate (which is defined by most airline-specific stats as "leaving on time") it can go straight to the runway to take off. Instead the powers-that-be make airlines queue, burning fuel, raising costs, polluting the atmosphere, etc. There is no reason for this. With a bit more thought, a bit better planning, then people would not be forced to wait on the tarmac, burning fuel, for longer than they are in the air.”

I thanked my friends for their observations and sharing of experience. It is frustrating that we directly pay taxes and fees on our plane fare, on top of taxes and fees that airlines indirectly pass on to us. Then we have delayed flight, delayed arrival at meeting or relaxation or connecting flight. And government is not accountable for such costs to the public and private enterprises, monetary or otherwise.

BWorld 308, MORE debt reduction please

* This is my article in BusinessWorld last March 29, 2019.

How dangerous or non-dangerous are China loans to the Philippine economy?

This is a valid concern but another bigger concern is the endless and irresponsible borrow-borrow-borrow policy of various administrations even without economic turmoil or crisis. This is the subject of the Market-Oriented Reforms for Efficiency (MORE) series of this column today.

The good news in the Philippines’ public debt is that the debt/GDP ratio has been declining since the last decade from 74% in 2004, 55% in 2009, to only 42% in 2016. The bad news is that the decline has been halted under the Duterte administration (see Figure 1)

The decline in trend was due to high borrowings by the current administration, even if they have big new tax revenues under the TRAIN law on top of natural increase in taxes. And high public debt means high interest payment.

Philippine government’s outstanding debt stock (actual + guaranteed) and interest payment, P billion

Now the China loans. One example often cited is Sri Lanka, with unpaid debt of $1.1 billion it was forced to lease out to China its strategic Hambantota Port for 99 years.

Some 21 projects worth P753.4 billion have been proposed for China funding by the administration, many of which can be done by big local firms at no cost to taxpayers. The Kaliwa Dam Project should be zero loan if the Duterte administration allowed the original Japanese proponent GUDC, or two local firms pre-qualified by the PPP Center, San Miguel and Datem, to build it under integrated PPP financing. But Duterte awarded the contract to China and we have a new loan of P18.7 billion.

We need less borrowings. We need to retire more old loans and we should pay low interest payment. There should be more fiscal responsibility in government.

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See also: 

BWorld 305, MORE electricity supply in East Asia, March 24, 2019 

BWorld 306, MORE stock market development, March 26, 2019 

BWorld 307, MORE airline competition, March 28, 2019

Climate Tricks 78, Catastrophe... Not, since 19 years ago

In June 1989, the UN has warned humanity that there would be global disaster, "entire nations could be wiped off the face of the earth by rising sea levels by the year 2000." Or 19 years ago, wow. So most of us now could be zoombies pretending like normal people roaming around the planet? See the story here,

https://wattsupwiththat.com/2019/03/03/icymi-the-u-n-told-us-wed-have-disaster-by-year-2000-if-global-warming-was-not-checked/

Then Peter Wallace of The Wallace Business Forum wrote one of his climate alarmist articles, and he warned "it wouldn’t take much to wipe us out as a race."

Apocalypse

By: Peter Wallace Philippine Daily Inquirer / 05:20 AM March 07, 2019

https://opinion.inquirer.net/119985/apocalypse

I wrote to Peter saying that those are ALL false claims, all fake news, all alarmist stories. And he seems to be parroting the alarmism. Their goal is to have more, bigger government, bigger UN, bigger carbon taxes and regulations.

See here stories of "last chance to save the planet" since 1992 or 27 years ago. And news reports in 2007 citing scientists saying that Arctic summer would be ice-free already by 2013 or six years ago. https://www.bworldonline.com/chr-investigates-carbon-majors-by-using-more-fossil-fuels/

All those thick snow and ice from the Arctic to US mainland until few weeks ago were fake? They were 'warm ice'?

More quotes from Peter:

(1) "CO2 emissions doesn’t seem to bother Trump. Where does he think all that pollution goes?" -- Peter Wallace.

He also believes that the gas that he and all humans exhale, the gas that our pets/farm animals/wild animals exhale, the gas that our crops/flowers/trees use to produce their own food via photosynthesis -- CO2 -- is a pollutant gas? If so, he and his friends should consider breathing as few as possible because they exhale a pollutant.

(2)"Stop cutting down trees, plant them."

Because Peter thinks that CO2 is a bad, pollutant gas and not a useful gas, he is not aware, or does not believe, that more C02 = more trees, more green planet. Little need to use huge taxpayers money for endless tree planting because trees regenerate on their own fast.

https://www.nasa.gov/feature/goddard/2016/carbon-dioxide-fertilization-greening-earth/

The "expensive energy (oil, lpg, coal) is beautiful" philosophy under the TRAIN law is partly inspired by climate alarmism. Oil, coal, lpg are fossil fuels that ‘warm the planet’, so government should make them expensive via higher taxes to reduce their use by the people. But see the result – expensive lpg forces many poor households to shift back to using firewood and charcoal, and this results in more cutting of trees in public forest land. Cheap LPG actually helps conserve the forest because demand for charcoal and firewood declines. Firewood gatherers have little incentives to cut down many trees illegally because demand for firewood/charcoal is low and the price is low.

Flooding also happens in parts of Baguio city that is more than 4,000 feet asl. Flooding happens in many cities, coastal or mountainous, esp when natural water catchments, low lying areas, were colonized by new houses, buildings, covered with soil then structures are put up. Zero relations with 'rising sea level."

Meanwhile the UN guys are untruthful, until now, of "nations covered by rising sea level" stories, dishonest of their claims of "unprecedented global warming" (no precedent? joke), "unequivocal global warming" (no global cooling to happen? joke).

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See also:
Climate Tricks 75, Brazil President Borsonaro is 'threat' to the planet? November 16, 2018 
Climate Tricks 76, Greenpeace deception model, December 23, 2018 

Climate Tricks 77, Stop human reproduction to 'fight' CC, March 05, 2019

BWorld 307, MORE airline competition

* This is my article in BusinessWorld last Tuesday, March 26.

The Market-Oriented Reforms for Efficiency (MORE) series continues and tackles the air transportation sector. For an archipelago of more than 7,500 islands and about 20 are big islands with big populations, and air travel is necessary to hasten the movement of people and goods.

For the Philippines, the good news is that from mere trickles of less than nine million local and foreign passengers transported in the past four decades (1986, 1996, 2006 data), things have significantly improved starting 2010 (global recovery from financial turmoil of 2008-09, then change of administration from Gloria Arroyo to Benigno Aquino III). That year, passengers jumped to 22.6 million, then 35 million in 2014 and 40 million in 2016.

The bad news is that compared to our neighbors in East Asia, we are not dynamic and liberal enough to allow more airline competitors, and/or we do not have more big airports, including budget terminals, to fly more passengers. Several neighbors with smaller populations than us — Hong Kong, Malaysia, Thailand, S. Korea — have more air passengers than the Philippines (see table). 

Note that of the Philippines’ 40 million passengers in 2016, only six million were international visitors (corresponding to 6 million foreign arrivals,) so some 34 million or 85% were domestic passengers.

We need to further liberalize airline competition in the country. We also need to expand physical infrastructures like bigger and more provincial airports, have more budget terminals, more toll roads that link the airports to big city centers and major tourist destinations.

These will have a combined effect of attracting more local and foreign fliers, and of hastening commerce, tourism, investments, job creation, business expansion and economic growth in the country.

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See also: 

BWorld 304, MORE tax relief in CIT, March 23, 2019 

BWorld 305, MORE electricity supply in East Asia, March 24, 2019 

BWorld 306, MORE stock market development, March 26, 2019