Warming Hysteria: Typhoon Ondoy Flooding

Yesterday, I wrote this:


Yesterday’s flooding in Metro Manila and surrounding provinces was among the worst in recent memory. Lots of pictures and narratives were posted in the web like facebook. Here are some pictures in our place in Makati. Luckily, the flood in our street was only above the knee, while in other areas and cities, the flood would submerge a bungalow or even 2-storey houses.


Then some friends started posting, “because of global warming/climate change”, “mother nature getting back at us”, “Sign the Copenhagen Deal”, etc.

I countered with those friends’ postings, I argued that this is global cooling. If they read the Sun-climate link theory, they will realize that the Earth is approaching a Dalton Minimum type of global cooling -- for at least 2 decades.

Since last year, even in previous years, there was little proof that there is "global warming" happening in the Philippines and other parts of the planet. Last year, strong, early typhoon “Cosme” (a local name) dumped huge amount of rainfall in northwestern Luzon and killed several people due to flash flood. That was in May. The next month, June 2008, typhoon “Frank” dumped heavy rains for around 10 days straight in Panay island (with 4 provinces), Sorsogon, etc. and it caused the sinking of a big ship, “MV Princess of the Stars” which killed around 1,000 passengers and crew.

This year, there was practically no summer in the “summer” months of March-April-May. My friend who is in the business of manufacturing and selling umbrellas told me that she made big money since April this year due to the early start of the rainy season. Another proof: the rice farmers that I talked to last week in northern Luzon complained that with too much rains, their rice was growing well but after harvest, they cannot dry it because the Sun would hardly show up. When newly harvested rice is not dried the next few days, the moisture content would cause the unhusked rice to blacken and this will adversely affect the quality and taste of their rice. The selling price therefore, will be low.

The heavy rains and flooding that happened yesterday was somehow, not too "surprising". These days, especially this month, we seldom see the Sun. There are always dark clouds almost everyday. Sometimes it's sunny in the morning, then would become dark by 2 or 3pm because of the thick clouds. Clouds, not smog. And even if our drainage are as big as jeepneys, there would stil be flooding because of the huge amount of rainfall.

This climate alarmism is really a jerk. The UN and many governments, including the Philippine government, are warning the people and spending billions of pesos preparing for drought and hotter days, when we should prepare for the opposite -- too much rains and flood. And in temperate countries, long and severe winter. They create new carbon taxes, created big international bureaucracies like the UN FCCC and IPCC, they have plenty of international climate meetings in many countries and cities, instituted ecological central planning via the Kyoto Protocol and soon, Copenhagen Protocol/Agreement. Lie if they must, but they should continue scaring the public of global warming, which they later euphemistically called “climate change”.

The anthropogenic global warming (AGW) proponents like the UN, many governments, Greenpeace, WWF, etc. if they are honest, should simply say, "We believe AGW is a valid explanation for current climate change. However, we recognize that there are many other scientists and groups who believe that the Sun, cosmic rays, volcanoes, water vapor, etc. are the main drivers of climate change. We continue the debate." But they don't and never said that. They say, "There is overwhelming evidence, there is already a consensus; debate is over. CO2 is evil.” And they would quickly add, “So you taxpayers should shoulder all those new carbon taxes, carbon cap and trade, subsidies for renewable energy, etc.”

About having clean air, clean water, clean environment, Yes we should pursue those, as end by themselves and not say, "to save the planet" because the planet is never in danger. Not now, not yesterday, not tomorrow. Unless a huge asteroid will lose its GPS track and go towards the earth :-)

If interested, I have written/presented 2 papers on climate alarmism.

1. Global cooling vs. global money and power, May 28, 2009, 23 pages incl annexes,
http://www.minimalgovernment.net/media/mg_20090528.pdf

2. Global cooling reality vs. global warming politics, April 22, 2009, 24 pages incl. annexes,
http://www.minimalgovernment.net/media/mg_20090422.pdf

Three central themes are discussed by those paper:

a) This climate change is not global warming. This is global cooling.
b) This is not anthropogenic (man-made). This is nature-caused, mainly the Sun, the galactic cosmic rays from the universe, volcanoes and geologic de-gassing, etc. And
c) carbon dioxide (CO2) is not a pollutant. It is a useful gas.

Here also, is a comprehensive report, http://www.climatechangereconsidered.org/.
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As the Philippines is reeling from the disaster caused by typhoon “Ondoy” hundreds of climate bureaucrats led by the UN FCCC (Framework Convention on Climate Change) are meeting in Bangkok, Thailand, since yesterday (September 28) up to October 9. The climate bureaucrats and negotiators are planning more ecological central planning, to be signed hopefully in Copenhagen this coming December. The current Kyoto Protocol is not enough for them, they want a post-Kyoto Agreement or Protocol to fight global warming which they now euphemistically call “climate change”.

The goal of ecological central planning is very clear: more environmental regulations and prohibitions, more carbon taxes collection, more energy rationing, more and bigger climate bureaucracies at the national and international levels.

The environmental planners will determine what kind of power plants we can put up and cannot put up. What kind of light bulbs to be used and which ones should not be used. How much carbon taxes to be slapped against “non-renewable” energy and how much subsidies to be given out to “renewable” energy sources.

They keep scaring us the public that unless we listen to them, we are doomed to extinction. And for these environmental socialists, the Sun and its magnetic field, the cosmic rays from outside the universe, “biosols” and volcanic aerosols, do not exist or do not affect the Earth’s climate, that only CO2 and other greenhouse gases (GHGs) are the main cause of global warming. Why? Because they cannot regulate solar magnetic field, they cannot regulate galactic cosmic rays, they cannot regulate volcanic aerosols. There's no money and political power for governments and the UN there. Whereas demonizing and regulating CO2 gives them lots of political and ecological power.

The environmental planners have made the global warming hypothesis a dogma. Even if both global temperature data (specially satellite data like UAH & RSS) and actual realities (like sustained rains in "summer" months, this heavy flooding) point to cooling, governments still collect huge tax money to sustain those national and international bureaucracies, their expensive frequent international meetings and agreements. There is a lot of coercion, lying and rent-seeking involved.

Meanwhile, more than 100 people have been confirmed to have died, 106 as of 8am update by the National Disaster Coordinating Council or NDCC). There are reports that if we account for the missing, the death toll could reach 700.

Some people, especially here in facebook, asked, “How come there were no (or not enough) standby rubber boats or amphibious boats in areas considered as "hot spots" for flooding? Billions of pesos poured into government agencies concerned with disaster recovery/relief and yet we don't have enough rub...ber boats.”

I replied to that post, I said that the government and its politicians have already spent the money preparing for global warming. They created new climate bureaucracies like the Presidential Adviser on climate change. Such Adviser (former Sen. Heherson Alvarez (and staff?) I think is travelling every 2 months abroad to attend meetings by the UN FCCC, other events organized by other governments. Since there will be drought, they constructed a number of dams (big and small), bought airplanes and chemicals for cloud seeding. Since there will be more hot days, perhaps they bought more powerful air-conditioners in their offices, more SUVs. Since CO2 is evil, they gave away big subsidies of taxpayers’ money to solar and wind farms, other “renewable” energy sources.

But if they can only be more honest, if they will only look up the sky more often, they will realize that the problem is not from rising ocean many years from now. Rather, the problem is the thick rainclouds that are always in the sky, almost everyday, with or without a typhoon. The Sun would hardly show up as those clouds block the sunlight. Consequently, there is general cooling, and lots of rainfall. And why is this so?

Because the Sun is not dead yet. Its magnetic field has become weak lately, less sunspots appear on its surface, its irradiance (or brightness) is slightly reduced, there is weaker solar wind. Solar scientists call it the “deep solar minimum” of this century. What is the implication?

Weak solar wind to push away lots of galactic cosmic rays (from exploding stars) to reach the Earth’s atmosphere. Such cosmic rays help catalyze the formation of aerosols, which are the nuclei of seed formation. So more cosmic rays, more aerosols, more low-lying clouds, less sunlight to reach the Earth’s surface, more rainclouds to fall anytime, global cooling.

There are many other natural factors that also contribute to more cloud formation. Geologic de-gassing and release of volcanic aerosols, release of gases from plants and trees that form “biosols” (aerosols from biological sources). Although their contribution is lesser compared to solar factors.

None of these natural factors are ever considered by the UN and those government leaders who are planning ecological central planning. So even with global cooling happening, they still insist that the world should prepare for global warming, meltic ice and snow, and rising ocean.

It's important that the public will realize the unholy desire and plans of the environmental central planners. They should not waste of our tax money. They should NOT:

a. create new climate bureaucracies, or retain existing ones
b. enact new carbon taxes
c. subsidize solar and wind farms from our tax money
d. over-tax coal and oil power plants
e. impose ecological protectionism
f. others.

Instead, governments should:

a. reduce if not abolish income taxes, let us keep our monthly or yearly income and allow us to build stronger houses against more heavy rains, against colder weather in the coming years and decades.

b. strengthen river banks, dredge heavily silted rivers and creeks, make them deeper again, so they won’t swell easily in anticipation of more heavy rains and more flash floods. There are dozens of consumption-based taxes and transaction taxes (VAT, excise tax, travel tax, doc stamp tax, franchise tax, etc.) where government can still collect big revenues.

c. build higher roads, cover up cracked and potholed road with a new layer of new roads on top, instead of removing the old layer and build a new road on the same elevation.

d. others.

Why cruise ships skip Manila

I got this email from a friend who used to own a travel agency here in Manila. The email she got from her former boss who is a respected player in the travel agency sector. Other than that, I have no way of verifying how true this story is, but judging from the quality of governance in this country, especially the Bureau of Customs, I think this story is between 90 to 100 percent correct.

Here's the message, my English translation (for my non-Filipino reader friends) of the Filipino sentences below it.
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Would like to share with you what we found out as the reason why cruise ships of the big cruise companies skip Manila . My wife and I are regular cruisers and we always talk to the Filipino crew. When we took the 12-day Mediterranean cruise I asked the Pinoy waiters (because we are in a big group, we usually request for Pinoy waiters to be assigned to us) why all their Asian cruises skip Manila when they go to all the neighboring countries of the Philippines . Tanong ko bakit ba wala sa itinerary ninyo ang Manila .

Ang sagot sa akin: Noong una ho may cruises kami na humihinto sa Manila but masyadong hong matakaw ang mga taga Customs sa atin kaya ang management ho namin nag decide na skip na ang Manila. When inspection time comes upon our arrival and departure, yung mga Customs inspectors ho kasama ang mga pamilya nila para kumain ng libre sa ship namin. Tapos bago mag bigay ng clearance para maka depart ang ship namin maraming hinihingi na sigarilyo at mga alak.. Sa Manila lang namin na
experience ang ganoon kaya nahihiya ho kaming mga Pinoy dito sa ship. Sa ibang ports sa Asia wala hong nang hihingi.

The new cruise ships have an everage of 2,000 to 3,000 passengers. Imagine the loss of tourism revenue for the Philippines because most cruise ships do not go to the Philippines . Pero paano mapapatino ang mga taga Customskung ang manga taga Malacanang, Congreso, governors, mayors who should set good example sa government service pareho din nila at mas malaki pa ang kurakot?
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Translation:

Author: Why is Manila not in your itinerary?

Filipino crew: Earlier, we have cruise ships that stop in Manila, but the (Bureau of) Customs people are too greedy, so our management decided to skip Manila. When inspection time comes upon our arrival and departure, the Customs inspectors bring their families to eat free in our ship. And before they give the clearance for departure, they ask for lots of free cigarettes and liquor. We only experience that in Manila and we Filipino crews are ashamed in the ship. In other Asian ports, no one extorts.

LP and liberal socialism

A number of my friends in facebook are fans and supporters of Sen. Noynoy Aquino for President in the May 2010 elections. Me too, am a supporter of the man. One posting today by a friend is the “acceptance speech” yesterday of Sen. Mar Roxas as the running mate for Vice President of Sen. Noynoy. Sen. Mar said the “Noynoy-Mar team up” will

“…Ito ang magbibigay ng trabaho sa taumbayan, dahil hindi na kokotangan ang mga mamumuhunan. Ito ang magpapaabot-kaya sa presyo ng gamot, dahil hindi na makikipagsabwatan sa mga abusadong pharmaceutical companies.”

(This will create jobs because there will be no more extortion of entrepreneurs. This will bring down medicine prices because there will be no more connivance with abusive pharmaceutical companies.)

As usual, I always ask, “where is the liberal philosophy here? I still have to hear the classic liberal agenda like less government and less corruption, less taxes and less bureaucracies, more enterprise competition and more personal responsibility.”

I see a contradiction between Sen. Mar’s 1st and 2nd sentences. The first wants to encourage entrepreneurship and free market capitalism. The second discourages some entrepreneurs by accusing the pharma industry of abuse, and the subsequent moves by Sen. Mar to force drug price control.

Price control is a favorite advocacy by the socialists and socialist-leaning groups and individuals. They believe that competitive capitalism is not working and should not be allowed as much as possible because this will later result in the emergence of monopolies and oligopolies. But monopolies are almost always created by governments – through executive or legislative franchising, so that other potential players are shut out.

Sen. Noynoy is closer to liberal philosophy than Sen. Mar. The former has few interventionist legislative proposals, while the latter lately sounded like a liberal-socialist.

So for now, my vote will go to Sen. Noynoy for President, and will still think of the VP candidate.

Patients' vested interest: more choices.

A friend, Winthrop, made a comment to the article by Cito Beltran. Wyn argued
that the "mandatory" car for medical representatives ("med reps") is a perk that he feels can be done away with, along with various incentives to physicians/dispensers. And that the current "live rep push-marketing and (effectively) payola incentive schemes cost more."

Middle of last month, there was a social dialogue between civil society groups (including those under CHAT) and the Pharmaceutical and Healthcare Association of the Philippines (PHAP). Officials of PHAP explained their "Code of Ethics" that apply -- with penalties and sanctions to violators -- to their member-companies. Even PRRM chief and former Sen. Bobby Tanada, former DAR Sec. Obet Pagdanganan, were surprised to hear about the strict code being imosed to member-companies. If companies are not happy with the Code, they can leave PHAP anytime.

PHAP officials and officials of some MNC pharma who were there were emphatic that for payola-type and other unethical promos by pharmas, "at least 85% probability, they are not PHAP members". Personally, I have heard admissions from some local pharma how they go out of their way to attract physicians. Since they are not MNCs and have no global brand or corporate name, it's difficult for them to get physicians' patronage, unless you are Unilab, the biggest pharma (you combine the sale of top 3 MNCs in RP like pfizer, GSK, another one, Unilab's sale is the same or even bigger).

I guess the use of med reps is inevitable. Unlike t-shirts, shoes, underwear, ballpens, etc., where an ordinary shopper can scrutinize these products in terms of price and quality, medicines are another stuff. Not even the best lawyer or the best solar physicist can analyze the properties and characteristics of what's inside those tablets, capsules and bottles. So physicians are sort of "guided" by the med reps sent by the drug manufacturers, or physicians are invited by the manufacturers to some continuing medical education (CME) to introduce their new products. There are costs to all those activities, so the producers pass on those costs to us, patients. In addition, because of the growing competitive nature of the local pharma industry (thanks to the generics law), manufacturers have to embark on certain ads and marketing, otherwise their competitors will beat them.

When manufacturers give cars to their med reps, maybe this is to also protect the quality of the drugs that those sales people bring. Most medicines require a particular temperature control, say below 25 C always. So an air-con car will help preserve the quality of those drugs. If the med reps wait several minutes under the sun to wait for a taxi or jeepney or tricycle, the quality of those delicate medicines may be affected. So the patient will still not be healed quickly from those sample medicines.

I dont know what else are the factors that manufacturers and distributors consider. It's not my field. Mine -- and ours -- is on public policy. Let the various players over-spend or underspend if they must, it's their business and it's their money that will be lost if they make bad business decisions. Our business as watchers and researchers of government policies, is to expose and fight those regulations that kill competition. As consumers, we have our own vested interest -- more choices. Let there be 200 or 400 different medicines against hypertension, and allow us consumers, our physicians or other health advisers, to decide which of those 200+ medicines will best fit our particular health needsgiven our budget and other health conditions. Government should not bow to the health socialists who want to kill competition via rigid and coercive policies like price control and compulsory licensing.

2 opinions on drug price control

There were at least two newspaper opinions on the drug price control subject recently in Philippine papers, below. The first is from Ding Generoso of Business Mirror last September 2. The second is from Cito Beltran of Philippine Star last September 14. Both have unkind descriptions of the current drug price control policy.
Earlier, Peter Wallace of Manila Standard also wrote an opinion about the subject.

If we list down the various forms of economic controls by the government -- rent control (max rental), wage control (min wage), fare control (max fare), drug price control (aka MDRP), possibly soon oil price control -- coupled with uncontrolled taxes and fees, uncontrolled bureaucracies and regulations, and of course, uncontrolled corruption, one may wonder if the Philippines is racing not with Singapore, Thailand, Malaysia, HK -- but with Laos, Cambodia and Myanmar.

If we look at the most recent 2010 Report of "Doing Business" by the WB-IFC, out of 183 countries, the Philippines ranked #144, among the countries with the most bureaucratic policies for entrepreneurs and job creators. Not far from the Phils' ranking are Ukraine and Syria (rank 142 and 143), Cambodia, Cape Verde and Burkina Faso (rank 145, 146 and 147, respectively),

I wrote an article last week on a similar topic, "Marx, Hayek and Property rights".
It shows some result of the recently released "Economic Freedom of the World 2009 Report". Similar ugly result, RP among the laggards, among the most bureaucratic and socialist-leaning policies, weak in the promulgation of the rule of law, and protection of private property.
http://www.thelobbyist.biz/lobbyist.biz/perspectives/columns/back_to_personal_responsibility/778.html

Gloria and the socialists, they have a number of things in common. Meanwhile, I heard that the DOH is considering expanding the list of drug price control. If DOH Sec. Duque will run for the Senate, I think this not a far out possibility. Let's see and observe.
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http://businessmirror.com.ph/home/opinion/15439-not-the-solution.html

Not the solution
Written by Ding I. Generoso / Second Opinion
Wednesday, 02 September 2009 01:11

Sooner than later, the government would have to review the cheaper-medicines law.
But before I get misunderstood, let me state clearly that I am not against bringing down the prices of medicines. I am all for it. I just don’t agree with the solution the government offers, because it does not address the root of the problem.

In a free-market economy that we proudly call ours, price control is not only an inefficient way to lower the prices of goods and services. It is anathema to the principles of free economics and contrary to the declared government policy of liberalization....
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http://www.philstar.com/Article.aspx?articleId=505125

A brooding volcano

CTALK By Cito Beltran (The Philippine Star)
Updated September 14, 2009 12:00 AM

Mayon Volcano is the perfect analogy for the brooding discontent among many sectors involved in the manufacture, distribution and sale of medicines in the Philippines.

I make the analogy between Mayon Volcano and all the people directly or indirectly involved in the production and sale of medicines because I recently returned from Naga City where I had a chance conversation with leaders of the Drug Stores Association of the Philippines (DSAP). Just like Mayon Volcano, these ladies were a very unhappy and grumbling lot.

For sometime now, I have quietly recorded information gathered from many sectors involved in the “medicine” business and I guess it’s about time people got an update as to how and what the “Cheaper Medicines Act” and the Maximum Retail Price or MRP on medicines has achieved....

CSOs and State 8: Gawad Kalinga, Health NGOs and Taxes

There was a good article two months ago at the Inquirer on the dramatic growth of Gawad Kalinga (GK) in the Philippines. Now there are 2,300+ GK villages in 400 towns in the Philippines according to prime GK advocate. The news report also narrated how some local politicians ride on the GK bandwagon, whether for serious or opportunist reason.

http://newsinfo. inquirer. net/inquirerhead lines/nation/ view/20090719- 216139/Local- execs-into- politics- of-caring- GK-way

I am not sure if those local and national politicians that hitch with the GK bandwagon understand that there is something in GK that is not present in government service: instant accountability.

GK lives off on pure donation, voluntary contribution. Once the donations are gone, GK is gone.

Government on the other hand, lives off on taxation, mandatory and forcibly collected taxation. Such revenues can never go dry, so the bureaucracies can never fade away.

GK people are driven by pure customer satisfaction. Their "customers" are the thousands of private donors who have extra money to give away if they are assured that their donations are well spent and not stolen or wasted. If those donors sense something is wrong, there is the instant result of donation reduction or evaporation. Whereas in government, there is rigid and looongg process of finding out accountability and wrong-doing, if ever.

I know a Pinoy friend from LA, who has been helping GK for the past 6 to 10 years now. He's on the lookout how the projects that he's supporting is going. A single news that he can confirm that the money is wasted in a par ticular GK project, he stops donating to that community, rechannels his contributions to other GK communities or other humanitarian projects. He even tells his other friends who give the same donation, so the news of wrong-doing can easily spread. Although so far, instances of wasteful GK projects are very few and isolated.

It's like Rotary, Lions, Masons, other private charity and civic groups, other civil society organizations (CSOs). They live off on pure voluntary support, membership and contributions. The moment a club or a district misbehaves, the "punishment" in the form of reduced membership may not be instant but can build a momentum.

More serious politicians who strongly believe in the GK spirit should consider drastically cutting the taxes and fees (local or national) that they impose, encourage investor confidence that results in more investments, more entrepreneurship, more job creation in the local community or the country as a whole.
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Civil Society Leaders Embracing High Taxes

In relation to my earlier discussion on taxes on medicines, I posted in our CHAT googlegroups that our think tank, Minimal Government Thinkers, does not solicit or receive any government money (local, national, foreign aid). A think tank or NGO that does not receive any tax money can be a tax activist anytime.

When the WB Philippines proposed -- and reported in the newspapers -- that the excise tax on gasoline (currently around P4.50/liter) should be hiked in order to help reduce the budget deficit, I posted a commentary in this blog and sent it to my various ygroups, cc'd my friends working or used to work in WB Manila. I said that the WB is a parasite for proposing such measure to further raise gasoline prices when many sectors are already debating or fighting each other how to bring down gasoline prices, how to bring down the fares in public transpo, etc. I think the Department of Finance (DOF) also did not entertain their proposal. 

If MG Thinkers receive funding from the WB, IMF, ADB, UN, USAID, AusAid, etc., it's difficult to become a tax activist because ALL of those institutions live off on tax money. Or difficult to attack international bureaucrats because ALL of them are international bureaucracies. 

One NGO leader narrated their experience. Early this decade, they campaigned for the removal of the tax for one anti-cancer (leukemia) drug. They succeeded, but he added that it did not result in price reduction, rather the prices of such drug kept rising. So he concluded that only the pharma company, not the patients, benefited from the removal of taxes on medicines.

I narrated my other observation. One of my Filipino friends in California (Monchit Arellano) is helping the Books for the Barrios (BftB, www.booksforthebarriors.com). He, his family, some Filipino officemates and friends, solicit and collect hundreds, thousands, of books, even toys, for elementary-level students in the US, pack them in boxes, which are later loaded in shipping containers, transport to the Philippines. BftB Manila receives those containers, and here's the catch:

Those books from America were donated FREE.
Those books will be distributed to public elementary schools in rural areas of the Philippines for FREE.

But when those containers of books from the US reach the Philippine ports, BftB Manila pays for the following:
1. Customs duties around P65,000 -- yes there are taxes for donated and used books!
2. Customs broker around P60,000 -- an agency that deals everything with the Bureau of Customs (BOC).

The BftB Manila staff who narrated me that story last year, said that what's worse, donated medicines and vaccines by volunteer medical missions from abroad, many of them are parked at the Customs area and allowed to deteriorate. Why? Those medical missions and volunteers have money for the airfare of the volunteers and shipment of free drugs and vaccines. But they never expected there are high taxes and Customs brokerage to pay for those donated medicines, so they did not bring money for such. Those vaccines are on refrigerated containers that run on electricity, of course. Since they cannot pay the taxes, and the medicines require continued electricity while the papers and payment are being processed, the BOC personnel disconnect the electricity as electricity charges are being borne by the Bureau. Within hours, those useful, essential, life-saving medicines become useless as they need to be kept at a particular temperature (say 0 or 10 Celsius). When the temperature goes up or down significantly, the medicines become ineffective for their intended patients.

For the imported anti-cancer drugs that the NGO leader above was talking, I think only the import tax (5%) was waived. This tax is collected by the BOC. On top of the import tax, there is the 12% VAT, also collected by the BOC in behalf of the BIR. This bigger tax has to be paid to the BIR even if the import tax or customs duties is waived.

For the pricing of whoever is the pharma company that sold that medicine, when it is the single seller or distributor of that medicine in any country, that is tantamount to a monopoly. A monopolist would tend to abuse its position and price its product at any level it wants to, considering demand elasticity (or responsiveness of consumers to changes in prices), size of the market, and purchasing power of that market. Government is an example of a monopoly. It can set its price at any level (personal income tax at 32%, corporate income tax at 35, down to 30%, travel tax at P1,620, with or without any service to the Pinoy traveler, etc.).

The solution to a monopolistic industry structure is more competition. Allow other players and producers to come in. As I have posted before here, there are hundreds of other multinational innovator pharmas, and tens of thousands of generic pharmas, that are not in the Philippines yet. India alone has more than 22,000 pharma companies. Its biggest pharma company, Ranbaxy -- like Unilab, the biggest pharma co. in the Philippines -- is not even here when Ranbaxy can put up stiff competition to anybody here, both local or multinational pharma.

I opined that the posting by said NGO leader was not to discourage the pursuance of abolishing taxes -- both import tax and VAT -- on medicines. This government hypocrisy need to be stopped. We all want cheaper medicines, so taxes that hike medicine prices, and regulations that kill competition, should be scrapped.

The guy replied, that even if the 5 percent import tax was waived, the anti-cancer drug price did not go down by a corresponding 5 percent. So he reasoned out that if the 12 percent VAT will be removed, then the profit of the pharma company/ies will become even bigger. 

He further argued that when government tax revenues fall, it's the public who will suffer because the government will have lesser money to develop the country.

Typical statist, if not socialist, argument. This logic says that government should tax and tax as much as possible on everything. Anyway the money will be used by the government for the public.

This is actually one perspective being embraced by many civil society leaders who hate free markets and competitive capitalism, they want more government intervention, regulation and taxation. More government responsibility to assume a big Nanny role. So those civil society leaders come to the defense of the State for ever higher taxes, including high taxes on medicines even if the same NGO leaders are supposedly campaigning for "cheaper medicines".

It will not be far that these NGOs receive lots of funding from the government -- national or foreign aid. As I posted earlier in this blog, such NGOs are NOT exactly "non-government". They are more of government-funded organizations (GFOs) although the funding is not direct. Usually through an international NGO that gets foreign aid funding, then channeled to national NGOs.


* See also:
CSOs and State 4: Local Government and Civil Society, August 12, 2008
CSOs and State 5: Subsidiarity, Decentralization and Privatization, September 04, 2008
CSOs and State 6: Stichting Kapatiran and Books for the Barrios, December 07, 2008
CSOs and State 7: Public School Library with Minimal Government, BftB, June 29, 2009

1 month of drug price control, initial assessment

Below is a news report, an initial assessment of a month of drug price control policy by the Philippine government.

Watsons drugstore says business was good, the federation of small and independent drugstores, DSAP, says they're bordering on bankruptcy. Private Hospitals Assn. of the Philippines(PHAP) also complain, while the Pharmaceutical and Healthcare Assn. of the Philippines (PHAP) and the Philippine Chamber of Pharmaceutical Industry (PCPI) have relatively neutral statements.

But for the first time, I read that the DOH, through USec Padilla, is talking to the Department of Finance (DOF) re government taxation of medicines, especially the 5 percent import tax and 12 percent VAT.

Theoretically, the DOF can't just remove the VAT on medicines because you need a new law amending some portions of the national internal revenue code (NIRC) to say that medicines should be exempted from VAT, also amend the tariff and customs code to say that medicines should be exempted from import tax. These cannot be done by administrative measures, only legislative measures. But then again -- if no one will protest and object -- the DOF can possibly issue an administrative order temporarily exempting medicines from VAT, until a new law is enacted. But such law will have to wait for the next Congress starting 2010.

It's important that government double-talk of "cheaper medicines" and expensive medicines via taxation be corrected. Taxes always distort prices upwards. Govt. can double the taxes on alcohol and tobacco products, but abolish the taxes on medicines.
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http://www.businessmirror.com.ph/home/top-news/16196-1-month-after-big-pharma-drug-stores-hospitals-assess-mdrp.html

1 month after, big pharma, drug stores, hospitals assess MDRP

Written by Sara D. Fabunan / Correspondent
Friday, 18 September 2009 04:00

BIG pharmaceutical companies, which feared the worst with the cheaper- drugs law, are slowly seeing a window of opportunity one month after the government fully enforced an executive order implementing the year-old law: the window is in the tradeoff between much lower prices, but bigger sales volumes.

Small drugstores, however, are complaining, and claimed the combination of cheaper prices and the mandatory senior-citizen discounts are driving them out of business.

A similar complaint is being made by hospitals, who said their in-house pharmacies, known to be adding on hefty sums on the usual prices in drugstores outside, have said they lost a vital profit center when the MRDP went into effect on August 15. Some even claimed they took a big chunk of manpower costs from the in-hospital pharmacy profits....

Patrick Swayze, cancer and medicines

Today, the actor of 2 famous movies "Dirty Dancing" and "Ghost", Patrick Swayze, died. He was 57 years old. He died of pancreatic cancer. He was diagnosed of that killer disease sometime 1 1/2 year ago. And today, a number of my friends in facebook expressed their sadness for the death of this good looking and talented actor. Me too.

One friend posted in her facebook status today this quote from the actor before he died: "I've had the time of my life. No I never felt like this before. Yes I swear it's the truth. And I owe it all to you."

Pavarotti also succumbed to pancreatic cancer. I know of a rich lady here in Manila, a good friend of my sister, had pancreatic cancer. When it was detected early last year, she was on stage 4 already. Within 4 months she died. A famous Filipino action star, Rudy Fernandez, also died of this disease.

Former Philippine President Cory Aquino died of colon cancer just recently. My sister in law died of colon cancer too, about 4 years ago. She's the wife of my elder brother who died of prostate cancer a few months after she died.

Some leftist guys push for IPR and patent confiscation of important medicines via compulsory licensing (CL) plus government-imposed price control. They say that many poor people die of cancer and other killer diseases because the medicines against these diseases are expensive, because of the profit-hungry multinational pharma companies that invented those medicines.

Well, cancer and other killer diseases do not choose their victims. Rich and poor, men and women, they can die. A number of rich people also die of those diseases even if they have the money to pay for those expensive medicines. Like Patrick Swayze and Pavarotti. Like former President Cory, action star Rudy Fernandez, wife of super-rich Congressman Charlie Cojuangco, Rio Diaz, who died of breast cancer. Like former Philippine Senator Robert Barbers who died of throat cancer. And even the wife of the owner of Mercury Drug, the biggest drugstore in the Philippines, also died of cancer.

Money can't kill cancer yet. That's why we need more medicine innovation, and patent-confiscation demand by the left does not help in encouraging medicine innocation. Diseases evolve, people's lifestyle evolve, medicines should also evolve. Demonizing the medicine innovators as blood-hungry multinational capitalists is wrong. They are capitalists, yes, and capitalists produce things which are most needed by humanity and in the process, they make profit. It's among their incentives for doing so.