BWorld 765, Necessary cuts in the 2025 budget; Argentina’s fiscal reforms

Necessary cuts in the 2025 budget; Argentina’s fiscal reforms

December 24, 2024 | 12:02 am

My Cup Of Liberty

By Bienvenido S. Oplas, Jr.

https://www.bworldonline.com/opinion/2024/12/24/643174/necessary-cuts-in-the-2025-budget-argentinas-fiscal-reforms/

 

The big public backlash against the proposed budget for 2025 was triggered by the big reductions made this month by the Bicameral Conference Committee from the proposed budget submitted last August: that of the Department of Social Welfare and Development (DSWD) was reduced by nearly P100 billion (its Ayuda sa Kapos Ang Kita Program or AKAP was cut by P12.8 billion, 4Ps by P50 billion, others by P33 billion), the Philippine Health Insurance Corp. or PhilHealth’s budget was cut by P74.4 billion, the Pension and gratuity fund by P36 billion, the Commission on Higher Education’s (CHED) was cut by P26.9 billion, the Department of Health (DoH) by P25.8 billion, the Department of Agriculture (DA) by P20 billion, and the Department of Labor and Employment (DoLE) by P18 billion, among others.

 

Then the Bicameral Committee significantly increased the budgets for the following: unprogrammed appropriations were increased by P373 billion, the Department of Public Works and Highways (DPWH) by P288.7 billion, Congress’ own budget was increased by P18.8 billion, and the allocation to local government units (ALGUs) went up by P10.6 billion, among others.

 

My quick reaction to the cuts in the budgets of the social agencies (DSWD, the Department of Education or DepEd, DoH, State Universities and Colleges, among others) is that this should have been done in 2022 or 2023, not 2025. There were big increases in their budgets in 2020 to 2021 because of lockdown, the virus crisis leading to an economic crisis, so the big increases were understandable.

 

But there was no more virus crisis and economic crisis in 2022 and beyond, but heavy welfare spending funded by heavy borrowing continued which should not have been done.

 

The DoH experienced a big jump in its budget, from P98 billion in 2019 to P177 billion in 2020, and P236 billion in 2021. The DSWD also experienced a big jump, from P139 billion in 2019 to P347 billion in 2020, and P230 billion in 2022. DepEd has had consistent increases in its budget. PhilHealth’s went up from P68 billion in 2019 to P80 billion in 2022 and P100 billion in 2023 (see Table 1).

 

Meanwhile, government revenues suffered heavy declines in 2020 due to the lockdown and the mandatory shutdown of taxpaying businesses and people. Revenues fell from P3.13 trillion in 2019 to only P2.86 trillion in 2020 and P3 trillion in 2021.

 

The budget deficit increased, from P660 billion in 2019 to P1.37 trillion in 2020, P1.67 trillion in 2021, and P1.61 trillion in 2022. Financing or borrowings increased from P876 billion to an average of P2.2 trillion yearly from 2020 to 2023. Interest payments from higher public borrowings jumped from P360 billion in 2019 to P503 billion in 2022 and are projected to reach P767 billion in 2024 (see Table 2).

 

I support the reduction in the budgets of many social agencies, but I do not support the increase in those of other sectors, particularly the DPWH and the unprogrammed appropriations.

 

There should be forced savings via the consistent reduction in the budget of many welfare agencies because high public debt, high interest rates, and high interest payments have big “diswelfare” effects on the poor themselves.

 

Last week I went to Buenos Aires, Argentina, to attend the Tholos Forum 2024. I was with fellow leaders of free market think tanks, institutes and taxpayers’ associations from many countries in South America, North America, and Europe. I was the only participant from Asia. The local sponsor of the Tholos Foundation was the Argentina Taxpayers Association.

 

Many of the speakers were high officials and legislators from La Libertad Avanza, the political party of Argentina’s new president, Javier Milei. Argentinians suffered from horrible high inflation for decades under previous administrations. There were huge, wasteful, and corrupt bureaucracies, the irresponsible printing of money, and a great deal of cronyism in business.

 

Milei cut the number of Ministries or Departments in government from 19 to nine. He abolished 10 Ministries, not just reduced the budgets of these agencies. He attained a fiscal surplus for Argentina within two months of his administration. This year is the first time in 123 years that Argentina will experience a budget surplus and economic recovery has been visible: inflation has been declining, there has been GDP growth and an escape from recession, business confidence is improving. He is now on another path to reduce the number of taxes and reduce tax rates.

 

The Philippines need not follow Argentina’s hard U-turn in public spending, but big reforms in social spending are possible because we are not in any crisis, viral or economic. We should do this before a real fiscal crisis occurs if the consistent increase in our public debt stock is not controlled.

Macroeconomic 32, GDP growth in Q1 2025, Germany degrowth, Japan inflation

Three related topics here.

(1) GDP growth in Q1 2025

India reported their Q1 2025 GDP and it's a whooping 7.4% growth. Here are the top 6 largest economies in the world in GDP size at PPP values, 3 are with BRICS, 3 with G7. Also the ASEAN-5. GDP growth in %, Q4 2024 and Q1 2025, respectively.

India, 6.4, 7.4

China, 5.4, 5.4

Russia, 3.3, 1.4.

US, 2.5, 2.1

Japan, 1.3, 1.7

Germany, -0.2, 0.

Indonesia, 5.0, 4.9

Thailand, 3.3, 3.1

Vietnam, 7.6, 6.9

Malaysia, 4.9, 4.4

Philippines, 5.3, 5.4.

Taiwan, 3.8, 5.5

HK, 2.5, 3.1

S. Korea, 1.2, -0.1.

VN, IN and PH still the top 3 fastest growing medium-large economies in the world, those in the top 50 largest GDP size.

(2) Germany degrowth

Germany has eight consecutive quarters of either 0, flat growth, or contraction of -0.1 to -0.3% GDP performance. From Q2 2023 to Q1 2025, two years straight. 

Any responsible leader/s should be ashamed of that, especially they are an industrialized economy, the largest economy of W.Europe. But shame is secondary to pursuing leftist and war mongering agenda.

Save Ukraine and Zelensky. Save Taiwan, save the planet, save illegal immigrants, save DEI. Save their economy from degrowth and deindustrialization is a secondary or tertiary priority. Bright Germany leaders. Really bright.

(3) Japan food inflation.

Japan inflation rate year on year (yoy) in %, Jan-April 2025: 4.0, 3.7, 3.6, 3.6, average 3.7.

PH inflation rate same period: 2.9, 2.1, 1.8, 1.4, average 2.05 or 2.0.

Some people still think our inflation rate is bad, it contributed kuno to defeat of half of admin candidates, ewww. 

JP inflation in 2023 and 2025 are among the highest in JP economic history, and it has little or nothing to do with Ukraine war, Mideast war, Trump tariff, other fall guys. And the killer inflation is high rice prices, 90% higher than year ago level.

https://asiatimes.com/2025/05/soaring-rice-prices-are-stirring-political-trouble-in-japan/.

They should have imported fast enough from TH or VN, just few days away of boat trip as short-term measure and not waited for this to happen. Or perhaps they also have rice trade cartels, the usual punching bag here?

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

See also:

Macroecon 29, Vietnam's high growth, non-war mongering stance, June 29, 2024

Macroecon 30, PH low unemployment, high GDP growth, August 08, 2024

Macroecon 31, Low oil prices, low inflation, September 05, 2024

BWorld 764, On airports and attaining fiscal balance

On airports and attaining fiscal balance

December 17, 2024 | 12:02 am

My Cup Of Liberty

By Bienvenido S. Oplas, Jr.

https://www.bworldonline.com/opinion/2024/12/17/641804/on-airports-and-attaining-fiscal-balance/

 

BUENOS AIRES — I just arrived here in the capital city of Argentina via Ethiopian Airlines. My route was: Ninoy Aquino International Airport (NAIA) to Hong Kong (HK), two hours; Hong Kong to Addis Ababa Bole airport (ADD), Ethiopia, 11 hours; Addis Ababa to Sau Paulo’s Guarulh (GRU) airport, Brazil, 12 hours with a stop to refuel; then Sau Paulo to Buenos Aires’ airport (EZE), three hours. Including the time spent waiting for flights at NAIA, HK, ADD, and GRU, the trip came to a total of about 36 hours.

 

This is a particularly long trip, but this is the first time that I set foot in Africa — at least the airport in Ethiopia — and my first time to set foot in South America. So, I welcome this trip with curiosity. I am here to attend meetings and lectures with leaders of free market think tanks and taxpayers’ associations from several countries around the world.

 

I came up with this short table to make a brief comparison of the airports I passed through over the past two days.

 

I arrived in the evening in HK, ADD in the early morning, GRU in the afternoon, and EZE in the evening. My quick observation of these airports is that the combined brightness at night of ADD, EZE, and possibly GRU — runways, passenger terminals, other structures — were perhaps just half as bright as the Hong Kong airport. The ADD runway is dark and not lighted enough. The same could be said perhaps for the size of passenger terminals.

 

About my fellow passengers, one thing I noticed was that from HK-ADD, there were plenty of African passengers. But from ADD-GRU and EZE, I think there was not a single African passenger. I hypothesize that perhaps Africans would rather do business with East Asians than South Americans. Especially now that China is now expanding its diplomatic and economic footprint in Africa, those Africans probably came from mainland China and Hong Kong.

 

From EZE to Buenos Aires city proper, three things surprised me when compared to Metro Manila.

 

One, their roads are much smoother — I did not see or feel a single pothole or bump on the road.

 

Two, the center island lights are much brighter than on EDSA or even the Skyway.

 

Three, there were very few motorcycles on the road.

 

The privatization of NAIA — the New NAIA Infra Corp. (NNIC) took over its operation last September — was a great development in Philippines airport modernization. The Department of Finance (DoF) got an upfront payment of P30 billion from NNIC plus P2 billion/year guaranteed payment, plus an estimated P120 billion from its 82.16% share on gross revenue excluding passenger service charges over the concession period.

 

NNIC will spend some P170.6 billion to modernize NAIA, increasing its airport capacity from the original 35 million passengers per annum (mppa) to 62 mppa, and increasing flight movements per hour.

 

LESSONS FROM ARGENTINA

On Dec. 11, Argentina’s President Javier Milei held a press conference tackling a very important issue — he said that Argentina has no budget deficit for the first time in 123 years. He explained that “The deficit was the root of all our evils — without it, there’s no debt, no emission, no inflation. Today, we have a sustained fiscal surplus, free of default, for the first time in 123 years. This historic achievement came from the greatest adjustment in history and reducing monetary emission to zero.”

 

It was indeed a big achievement. Many subsidies were cut and there was no major social and political backlash. President Milei’s policy is called “Unbreakable Fiscal Rule” — that the administration must cover debt interest payments before allocating further spending.

 

The Philippines can take some lessons from this new trend in Argentina. Since the National Government always has a budget deficit but the local government units (LGUs) always have budget surpluses, then certain national agencies and spending must be cut and the LGUs allowed to cover whatever they need to from their own revenues, both local and external like LGUs’ share from the National Tax Allotment or NTA (see Table 2).

 

Many LGUs, especially the rich cities, have their own expanded social welfare systems, have their own city-owned universities, science high schools, and city-owned hospitals.

 

So, candidate national agencies that can handle no increases in spending — with no need to decrease their budgets — in my opinion are the Department of Social Welfare and Development (DSWD), the state universities and colleges, the Department of Education (DepEd), and the Department of Health (DoH).

Attaining a fiscal balance (where revenues are equivalent to expenditures) by 2028 is a political and economic goal in itself for two reasons: it will free up huge resources away from high interest payments, projected to reach P800+ billion this year alone, and with the government borrowing less to cover old loans means lower interest payments and low inflation. 

PhilStar 20, Argentina’s economic recovery via free market policies and lessons for Philippines

Argentina’s economic recovery via free market policies and lessons for Philippines

 

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

December 19, 2024 | 12:00am

https://www.philstar.com/business/2024/12/19/2408313/argentinas-economic-recovery-free-market-policies-and-lessons-philippines

 

BUENOS AIRES – It’s my first time to set foot in South America and I am here in a country withthe first openly free marketer president in the continent, Argentina President Javier Milei.

 

I am here to attend meetings and forums with fellow leaders of free market think tanks, institutes and taxpayers associations.

 

The local host is the Asociacion Argentina de Contribuyentes, among the groups that supported Milei in the elections.

 

Argentina had a bad, anti-poor economic performance prior to Milei.

 

For instance, the average inflation rate from 2010 to 2019 and 2020 to 2023 were as follows: Argentina 22.1 percent and 74.1 percent; Brazil 5.8 percent and 6.3 percent; Philippines 3.0 percent and 4.5 percent and Indonesia 4.7 percent and 2.9 percent.

 

In GDP growth over the same period, Argentina had growth of only 1.4 percent and 1.1 percent, Brazil 1.4 percent and 1.9 percent.

 

The Philippines had 6.4 percent and 2.3 percent while Indonesia had 5.4 percent and three percent.

 

So public dissatisfaction with the previous administrations including the administration candidate versus Milei was high, and Milei won the second round elections in November 2023.

 

After 12 months, he has produced significant improvement in the country’s economic fundamentals.

 

Among these are the following:

 

One, a budget surplus in 2024, for the first time since 123 years ago.

 

For the January-November period, Argentina’s Treasury primary balance are as follows: -2.7 percent in 2017; -1.4 percent in 2018, 0.1 percent in 2019, -5.6 percent in 2020, -1.9 percent in 2021, -1.5 percent in 2022, -1.9 percent in 2023 and 2.2 percent in 2024, a significant primary surplus.

 

Two, the average month on month inflation rate in the last eight months of former Economy Minister Massa (with price controls), April-November 2023 was 12.7 percent. In April-November 2024 under Milei (no price control), only 3.1 percent.

 

Three, the seasonal or quarter on quarter GDP recorded a 3.9 percent growth in the third quarter of the year after contractions in the first two quarters.

 

Argentina has escaped recession.

 

Four, Milei cut the number of ministries from 19 to nine, or he abolished 10 ministries with 10 percent of public employees equivalent to 30,000 government jobs.

 

This, plus the reduction or abolition of some household subsidies like electricity and water bills explained for a significant fiscal surplus within a very short period of time.

 

Five, Milei’s Ministry of Deregulation implemented 672 deregulation reforms, like abolition of certain laws and liberalization of previously monopoly or oligopoly sectors.

 

I was curious how an “outsider,” a non-career politician and his supporters were able to defeat an established politician and political party. It turns out that Milei’s party and coalition, La Libertad Avanza, is composed of volunteers from the private sector. In one province, Chaco, about 99 percent of the supporters were from the private sector or non-political party members.

 

Jose Luis Espert, another free marketer businessman and politician and former presidential candidate in the 2019 elections and now the national deputy for La Libertad Avanza and the president of the budget committee of the Argentine Congress, said politicians should have a background in business and competition.

 

Then they can incorporate discipline in their government work.

 

The Philippines political and business establishments can learn from the hard lessons of Argentina and the tight economic and fiscal reforms needed to reverse the decline.

 

From 2020 to 2023, we have an average budget deficit of P1.54 trillion a year or -7.4 percent of GDP which is huge.

 

Over the same period, our new public borrowings were P2.2 trillion a year and interest payment alone from those old and new debts was P485 billion a year or 2.3 percent of GDP – again huge.

 

We have plenty of no-timetable, forever subsidies and freebies that were supposed to be temporary but became permanent. This leads to permanent dependence on the state of a lot of people, lulled by many “entitlements and rights.”

 

Since our local government units (LGUs) – municipalities, cities and provinces – have fiscal surplus yearly while the national government has fiscal deficit yearly, many national agencies should shrink in budget and size of bureaucracy and let the LGUs continue those high subsidies if they want these for their own residents and voters.

 

More free market policies and business competition, more personal and parental responsibility in running people’s households, more self-reliance, more freedom and liberty, less regulations-prohibitions-restrictions, less taxes and bureaucracies.

 

Humanity needs these. We need these.

 

The state should go back to its original functions, the “raison d’etre” (reason for existence) of government – protect the people’s right to life, right to private property, and right to liberty.

 

“Right” to free education until university, “right” to free healthcare even for non-infectious diseases, other entitlements are not part of the original functions of a government.

 

Fiscal reforms in non-core functions of government must be implemented.

BWorld 763, Philippine-Argentina trade and investment opportunities

Philippine-Argentina trade and investment opportunities

December 12, 2024 | 12:02 am

My Cup Of Liberty

By Bienvenido S. Oplas, Jr.

https://www.bworldonline.com/opinion/2024/12/12/640951/philippine-argentina-trade-and-investment-opportunities/

 

Last Tuesday, Dec. 10, I was lucky to meet Argentina’s top diplomat to the Philippines, Ambassador Ricardo Luis Bocalandro. Two officials joined him: the Chief of the Consular Section, Fabricio Sordoni, and the Head of the Cultural, Educational and Tourism Section, Gabriel Hernan Rivera. We talked about economics, inflation, trade, investments, sports, and a bit of history — how some Filipinos went to Argentina and vice versa in the 1780s. And of course, the new Argentina President Javier Milei. I am fond of this leader because he is also free marketer like I am and my allies abroad.

 

Mr. Bocalandro is particularly concerned about the high inflation suffered by his countrymen for decades, narrating the hardships that his own parents experienced many years ago, a problem that has persisted and even worsened until this decade.

 

I constructed two tables here on economics, energy, trade and investments. Argentina is very lucky to have a huge land area of 2.74 million square kilometers or nine times that of the Philippines. Their agriculture and livestock business and potential should be big. But our coastline is seven times larger than theirs, mainly because we are an archipelago, and there is lots of water between our many islands.

 

Our population is 2.4 times larger than Argentina’s but our GDP sizes at purchasing power parity (PPP) values are nearly similar. Our average GDP growth is two to five times faster than theirs. Argentina’s primary energy consumption (PEC) per capita is four times larger than ours, but in total power generation, the Philippines is closing the gap. The average inflation rate in Argentina is indeed bad at 22% in the 2010s and 74% over the last four years (see Table 1).

  

Argentina’s advantage in power generation is because they have been using nuclear energy since the 1970s. It was the pioneer nuclear energy innovator in South America — they already produced one terawatt-hour (TWh) or 1,000 gigawatt-hours (GWh) of nuclear power in 1974, increasing to 2.9 TWh in 1978, and to 5.8 TWh in 1985, the year that our Philippine Nuclear Power Plant (PNPP) in Bataan should have started operation. Then it further increased to 8 TWh in 1997, slowing down after this, peaking at 10.2 TWh in 2021 and 9 TWh in 2023.

 

Brazil is the only other South American country that went into this technology. They started nuclear power generation in 1984 with 1.6 TWh. These Brazil nuclear power plants are “twins” or “sister” nuclear plants of our PNPP, along with Korea’s nuclear plants: the three countries’ nuclear plants were all built by Westinghouse, all started construction in the 1970s, all experienced cost escalations, all were scheduled for commissioning and operation in 1984-1986.

 

The Brazil and Korean nuclear plants have been operating from the mid-1980s to present, with zero accidents. Our PNPP did not start operations — it was killed by domestic politics and nuclear scaremongering. As there was no alternative to that huge 620-MW plant in Bataan, many investors did not come because they foresaw huge blackouts coming. And indeed, we suffered horrible daily blackouts from 1990 to 1992.

 

I checked the merchandise exports of Argentina and the Philippines, and I was surprised by the following trends in Argentina.

 

First: Total exports are declining, going from $76 billion in 2013 to $66.8 billion in 2023.

 

Second: The bulk of their exports are agricultural products including livestock, with $35.7 billion out of $66.8 billion.

  

Third: There has been a deep industrial hollowing out, with their manufactured exports coming to only $12.6 billion in 2023 or just one-half of the level in 2013.

 

Fourth: Their exports of office and telecom equipment, and integrated circuits and electrical components, are very small.

 

The Philippines is trending in the opposite direction.

 

First: Our agricultural exports are low, and we are a net importer of these commodities.

 

Second: We are seeing a rise in manufacturing exports, especially in office equipment, integrated circuits and electrical components (see Table 2).

 

So this is the complementarity in trade between the two countries. The Philippines can buy more agricultural products from Argentina, especially livestock, and Philippines can export manufactured products like office and telecom equipment, integrated circuits and electrical components to Argentina.

 

Plus we can transfer nuclear power technology, nuclear applications in medicine and healthcare, agriculture and post-harvest treatment, among others.

 

There is net gains in trade, always. Some losses but more gains. I hope that Philippines-Argentina trade and investments should expand soon.

PhilStar 19, Gas power in Asia and Pacific Light

Gas power in Asia and Pacific Light

 

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

December 12, 2024 | 12:00am

(Part 2 of 2)

https://www.philstar.com/business/2024/12/12/2406668/gas-power-asia-and-pacific-light

 

In Part 1 of this topic last Nov. 28, I discussed the countries with the highest natural gas power generation/total power generation ratio. The top three are Singapore, Iran and Egypt.

 

Here I will discuss the proven natural gas reserves in trillion cubic feet (TCF) as of end-2020, and the reserves/production (R/P) ratio in years. The R/P ratio means the number of years that the reserves will be depleted if current production (for domestic use and exports) will continue unchanged.

 

Proven natural gas reserves and R/P ratio

 

In Middle-East Asia, the proven gas reserves in 2020 and R/P ratio respectively are as follows: Iran 1,134 TCF and 128 years, Qatar 871 TCF and 144 years, Saudi Arabia 213 TCF and 54 years, United Arab Emirates (UAE) 210 TCF and 107 years, Iraq 125 TCF and 336 years, Kuwait 60 TCF and 113 years, and Syria 10 TCF and 90 years.

 

In East and South Asia, gas reserves and R/P ratio respectively are as follows: China 297 TCF and 43 years, India 47 TCF and 56 years, Indonesia 44 TCF and 20 years, Malaysia 32 TCF and 12 years, Vietnam 23 TCF and 74 years, Myanmar 15 TCF and 24 years, Brunei eight TCF and 18 years.

 

In Central Asia, Turkmenistan has 480 TCF and 231 years, Azerbaijan 88 TCF and 97 years, Kazakhstan 80 TCF and 71 years.

 

Now consider the reserves and R/P ratio respectively of the following: US 446 TCF and 14 years only, Russia 1,320 TCF and 59 years, Venezuela 221 TCF and 334 years, Libya 50 TCF and 107 years. Again Iraq 336 years, Syria 90 years.

(Energy Institute, Statistical Review of World Energy 2024 database)

 

Some of these countries with high R/P ratio have experienced US political and military engagement: Iraq and Syria were invaded, Libya has successful regime change, Venezuela has unsuccessful regime change. Some analysts think that continued NATO expansion right into the border of Russia with unsuccessful (yet) NATO membership for Ukraine has long-term regime change projects in Russia.

 

Pacific Light in Singapore

 

Singapore is a very rich country with a huge energy demand to sustain its high standard of living. Its primary energy consumption – electricity demand plus energy use for transportation (air, land, sea) – per capita in 2023 was 577 gigajoules (GJ), the third highest in the world after Qatar and Iceland. Higher than UAE’s 539 GJ, Canada’s 360 GJ, US’ 277 GJ, S.Korea’s 240 GJ, Australia’s 228 GJ, Japan’s 141 GJ, Germany’s 137 GJ, France’s 134 GJ, China’s 120 GJ, UK’s 103 GJ and Italy’s 101 GJ.

 

Some 90 percent of Singapore’s electricity generation comes from natural gas plants. Like many developed countries, Singapore is very bright at night, even public parks with no people walking around at night are very bright.

 

Pacific Light has been both a power generator and electricity retailer in Singapore since 2013. It is one of only six power generator companies there. What I find fascinating is that its 830-MW gas plant in Jurong Island with space for an additional 100 MW of fast-start gas plant, is sitting in a small area of only 13 hectares, which is only 0.02 percent of Singapore’s total land area of 73,430 hectares as of 2022.

 

Pacific Light is a joint venture between Meralco PowerGen Corp. (MGen) with 58 percent and First Pacific Co. Ltd. with 42 percent ownership.

 

Two weeks ago, I met Pacific Light’s CEO, Mr. Yu Tat Ming, a straight-talking and articulate engineer who has worked in the electricity industry for more than four decades. When I asked him some economics-related topics like what is the market share of Pacific Light in the overall Singapore consumer base, he would answer in economics plus engineering stuff. Something like “generation share about eight percent but market share nearly 10 percent because of our high efficiency, lower cost plant using Siemens gas turbines plus steam turbines.” Cool guy.

 

In the same briefing I also asked MGen president and CEO Emmanuel Rubio about the lessons from Pacific Light that can be adaptable to operating liquefied natural gas (LNG) facilities in the Philippines. He mentioned four characteristics of modern LNG plants.

 

One, energy security. Pacific Light Power demonstrates how LNG can serve as a stable and cleaner alternative to coal and oil. For the Philippines, investing in LNG infrastructure can help address the imminent depletion of the Malampaya gas field, ensuring a consistent power supply while supporting the energy transition.

 

Two, diversity in energy mix.  Incorporating LNG in the energy mix balances reliability with sustainability, helping stabilize our grid especially during higher renewable energy penetration. Some 60 percent of Luzon grid’s energy mix comes from coal, imported coal mostly from Kalimantan, Indonesia.  It is not prudent to be highly dependent on one technology given the regulatory and market uncertainty around coal over the next 20-30 years.

 

Three, high reliability for both 24/7 baseload generation and fast ramp up or down for mid-merit generation.

 

Four, flexibility for liquid fuel or hydrogen fuel substitution when necessary. Plus, space saving, not occupying a big land area to generate thousands of MWH of electricity yearly.

 

This is cool. We need this kind of power plant in the Philippines. High reliability and high efficiency means price competitiveness, more affordable electricity prices for the consumers. Which is what we need to have sustained fast economic growth and job creation in the country given the fast increase in electricity demand with more electric vehicles, more data centers and AI, and rising standard of living of many Filipinos.

 

Related reports in Philippine Star by Brix Lelis, “MGen’s PacificLight allots $900 million, to bid for 600-MW Singapore plant” (Nov. 27), “MGen to spend $2 billion for expansion” (Nov. 28).

BWorld 762, On Philippine-Canada trade, and Argentina’s fiscal surplus

On Philippine-Canada trade, and Argentina’s fiscal surplus

December 10, 2024 | 12:02 am

My Cup Of Liberty

By Bienvenido S. Oplas, Jr.

https://www.bworldonline.com/opinion/2024/12/10/640249/on-philippine-canada-trade-and-argentinas-fiscal-surplus/

 

Last week a huge business delegation organized by the Canadian Embassy — the Team Canada Trade Mission (TCTM) — came to Manila. Upon the invitation of the embassy, I attended the Plenary Session, “Canada, the Philippines and the Indo-Pacific,” on Dec. 5 at the Grand Hyatt Hotel ballroom. It was full, with some 300 Canadian plus 400 Philippine business leaders, plus government officials from both countries in the room.

 

Keynote speakers were Minister Mary Ng of Canada’s Ministry of Export Promotion, International Trade and Economic Development, and Secretary Frederick D. Go, Special Assistant to the President for Investment and Economic Affairs of the Philippines. I also attended the TCTM gala dinner that day at the PICC.

 

Trade between the Philippines and Canada is not big yet. Data from the Philippine Statistics Authority (PSA) show that total merchandise trade (exports plus imports) was only $1.49 billion in 2023 and $1.05 billion in January-September 2024. The top three trade partners of the Philippines still are China, Japan, and the US, while other Asian neighbors fill up the top 10 (see Table 1).

 

 

Special credit goes to the Ambassador of Canada to the Philippines David Hartman, and Trade Counselors Eleonore Rupprecht, Guy Boileau and their staff for their hard work promoting the Philippines to Canadian business people. Thank you, Sirs, Madam.

 

INFLATION

Last week the PSA released the country’s inflation and labor data. The inflation rate in November was 2.5%, lower than the November 2023 level of 4.1%. The January-November average is now 3.2%.

 

The government economic team was understandably bullish. Finance Secretary Ralph G. Recto said that “We are very much on track in keeping our inflation within our target band for the entire year despite some challenges, such as strong successive typhoons that affected the agriculture sector.

 

“Economic Planning Secretary Arsenio M. Balisacan said that they focus on “price stability supported by prudent monetary policies and strategic trade measures in the near term, as well as improved access to quality job opportunities and productivity-enhancing reforms.”

 

Budget Secretary Amenah F. Pangandaman said that “public spending that raise agriculture and overall productivity especially infrastructures that facilitate faster mobility of goods and people continue to be prioritized to help stabilize prices and adequate supply of commodities.”

 

Later this week I will go to Argentina to meet some fellow free market leaders from other countries around the world. The choice of Argentina as the venue for the event was good because in November 2023, the people of Argentina elected a very articulate and dynamic leader, President Javier Milei.

 

Argentina has suffered from hyperinflation for many years, up to 133% in 2023 alone. Big government bureaucracies and spending that required heavy borrowing and money printing led to high interest and inflation rates. President Milei cut many subsidies and freebies, and certain bureaucracies, and this led to a sustained budget surplus this year.

 

I compared the budget balance of Argentina with five other large Latin American countries — Brazil, Mexico, Colombia, Chile, and Peru. All of them, especially Mexico, continue to suffer from large budget deficits. Argentina is the new odd-man-out in a positive way (see Table 2).

 

From the early to middle part of this year, Argentina’s inflation rate reached up to 200%+ mainly because President Milei removed price controls and slashed subsidies of various commodities and public services. But the inflation rate has since started to mellow. The fiscal surplus should lead to less borrowing, lower interest payments, and more public resources to finance public infrastructure that can reduce inflation pressure.

 

The Philippines has been moving to more market-oriented reforms, including the corporate income tax cut from 25% to 20% under the CREATE MORE (Corporate Recovery and Tax Incentives for Enterprises to Maximize Opportunities for Reinvigorating the Economy) law. Argentina is also moving towards more market reforms. There should be synergy between both countries if they enter into more bilateral trade and investment partnerships.

 

Those sectors should include energy, and Argentine exports of beef, poultry, and pork. Their nuclear technology — applications in power generation, medicine and healthcare, agriculture, etc. — plus satellites and biotechnology, forensic anthropology, should be something that we can learn from and tap.

 

Argentina can also tap the Philippines’ electronics products and exports — tropical fruits — among others. The list between two market-oriented emerging economies on both sides of the Pacific can truly expand. 

Energy 182, Blackout becoming more common word in Europe

See these recent stories and analysis, Europe, Asia.

Blackouts Surge: How Fragile Grids Threaten Global Energy Security

Why Blackouts are no longer rare events…and how this effects energy security

Lars Schernikau, May 28, 2025

https://wattsupwiththat.com/2025/05/28/blackouts-surge-how-fragile-grids-threaten-global-energy-security/

Kathryn Porter on British Thought Leaders (Blackout Britain)

May 29, 2025

https://wattsupwiththat.com/2025/05/29/kathryn-porter-on-british-thought-leaders/

New ETS-2 Climate Tax…Europe’s Green Raw Deal To Get Brutal Beginning 2027

By P Gosselin on 27. May 2025

https://notrickszone.com/2025/05/27/new-ets-2-climate-tax-europes-green-raw-deal-to-get-brutal-beginning-2027/

India Spurns Carbon Tax Threat, Promotes Trade and Fossil Fuels

By Vijay Jayaraj May 24, 2025

https://www.realclearworld.com/articles/2025/05/24/india_spurns_carbon_tax_threat_promotes_trade_and_fossil_fuels_1112303.html

Summer of European Blackouts Continues, with Outages in Nice and Cannes in France

French anarchists claim responsibility for blackouts.

Leslie Eastman, May 28, 2025

https://legalinsurrection.com/2025/05/summer-of-european-blackouts-continues-with-outages-in-nice-and-cannes-in-france/

Why “cheaper” wind and solar raise costs. Part III: The problem with power markets

by Planning Engineer (Russ Schussler) May 28, 2025

https://judithcurry.com/2025/05/28/why-cheaper-wind-and-solar-raise-costs-part-iii-the-problem-with-power-markets/

Financials Shift from ‘Green’ Agenda to Greenbacks

By Vijay Jayaraj May 28, 2025

https://www.realclearenergy.org/articles/2025/05/28/financials_shift_from_green_agenda_to_greenbacks_1113137.html

France blames sabotage for second Riviera blackout, boosts security

France boosts security after suspected sabotage at a Nice power substation caused a second major Riviera blackout in two days, cutting electricity to 45,000 homes and briefly hitting the airport. A similar attack disrupted the finale of the Cannes Film Festival on Saturday, forcing backup generator use.

FRANCE 24,  26/05/2025

https://www.france24.com/en/europe/20250526-france-sabotage-power-blackout-cannes-nice-riviera

Spain Boosts Natural Gas Capacity After Renewable Energy’s Failure Led to Historic Blackout

Meanwhile, the Iron Law of Electricity prevailed in Portugal’s recent election, as those who enjoy civilized living went to the polls and picked a “far-right” candidate.

Leslie Eastman, May 26, 2025

https://legalinsurrection.com/2025/05/spain-boosts-natural-gas-capacity-after-renewable-energys-failure-led-to-historic-blackout/

Spain Boosts Costlier Gas Power to Secure Grid After Blackout

By Thomas Gualtieri May 19, 2025

https://archive.is/qsmpT#selection-1149.0-1419.12

Spain's LNG imports from the US soar, represent 35% of all gas supply

By Reuters May 9, 2025

https://www.reuters.com/business/energy/spains-lng-imports-us-soar-represent-35-all-gas-supply-2025-05-09/

The Iberian Peninsula Blackout — Causes, Consequences, and Challenges Ahead

Raúl Bajo Buenestado May 2, 2025

https://www.bakerinstitute.org/research/iberian-peninsula-blackout-causes-consequences-and-challenges-ahead

https://x.com/ani/status/1919751686869922151?s=48

May 6, 2025

#WATCH | Delhi | At the Columbia India Energy Dialogue 2025, Union Minister Piyush Goyal says, "...Trade is a different issue. Trade talks are going on very well. If they (EU, UK) put in a carbon tax, we'll retaliate. There's no problem. And they will put it on products which will really hurt their own economy. The retaliation will be on products, which will further hurt their economy. So, I think it will be very silly, particularly to put a tax on friendly countries like India. I am in continuous dialogue with them, and I hope a wiser sense will prevail with the European Union."

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Similar analysis in the US:

Could Spain’s Blackout Become a Warning for America?

Bonner Cohen, Ph. D.,  May 29th, 2025
https://www.cfact.org/2025/05/29/could-spains-blackout-become-a-warning-for-america/

 

Billions In Green Projects Up In Smoke As Trump, GOP Slice Up Dems’ Climate Largesse

AUDREY STREB May 29, 2025

https://dailycaller.com/2025/05/29/billions-green-projects-canceled-delayed-biden-trump-democrats-subsidies-analysis/

 

A billion dollars worth of green groups join State suit to kill Trump’s no wind EO

David Wojick, May 27, 2025

https://www.cfact.org/2025/05/27/a-billion-dollars-worth-of-green-groups-join-state-suit-to-kill-trumps-no-wind-eo/

 

Reliance On ‘Renewables’ Makes Widespread Blackout Nightmare More Likely

GARY ABERNATHY, MAY 21, 2025

https://empoweringamerica.org/reliance-on-renewables-makes-widespread-blackout-nightmare-more-likely/

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See also: 

Energy 179, UAE's big jump to nuclear power, July 04, 2024

Energy 180, Non-windy years 2021-2024, September 28, 2024

Energy 181, EU degrowth in energy consumption, March 01, 2025