Tuesday, June 30, 2020

BWorld 441, Decline in pneumonia incidence

* My column in BusinessWorld, June 25, 2020.


While we have gotten used to this continuing COVID-19 scourge, there is some good health news somewhere, particularly the decline in other infectious and communicable diseases like pneumonia incidence.

While checking data on comorbidity and leading causes of death in the Philippines, I noticed an interesting trend — the decline in pneumonia incidence in the country from 12.3% of total deaths in 2013 to only 9.6% in 2018, according to data from the Department of Health (DoH) and Philippine Statistics Authority (PSA, see the table).

Effective anti-pneumonia vaccines, particularly against pneumococcal diseases caused by the bacteria Streptococcus pneumonia, are among the reasons for this good news. This bacteria can affect people from all ages and pneumococcal diseases are a leading cause of death among children below five years old. When the bacteria reach the lungs, they can cause pneumonia and death. When they invade the bloodstream or the tissues and fluids surrounding the brain and spinal cord, they can cause meningitis and death.

Thanks to continuing health innovation, pneumococcal conjugate vaccine (PCV) against the bacteria was invented. PCV10 is among the early and effective vaccines, it protects against 10 strains of the bacteria and the DoH procured the vaccine in 2012.

In 2014, the DoH shifted to tridecavalent PVC13 as it protects against 13 strains of the bacteria including serotypes 3, 6A and 19A which are not covered by PCV10. This is after World Health Organization (WHO) cost-effectiveness studies showing that PCV13 is more cost-effective than PCV10. Serotype 19A in particular is a serious bacteria, can lead to meningitis, invasive diseases and severe pneumonia. As shown in the table above, pneumonia has killed about 57,000 people in the Philippines yearly from 2016-2018, it is the fourth most deadly disease in the country.

Then late last year, some controversy arose when PCV procurement of nearly P5 billion for 2020 was questioned by some individuals.

I searched several scientific studies on the comparative medical advantages of PCV10 vs PCV13. These two papers I found to be cool and useful.

1.) “Do Pneumococcal Conjugate Vaccines Represent Good Value for Money in a Lower-Middle Income Country? A Cost-Utility Analysis in the Philippines” by Manuel Alexander Haasis, Joyce Anne Ceria, Wantanee Kulpeng, Yot Teerawattananon, and Marissa Alejandria (PLoS One. 2015; 10(7): e0131156. Published online July 1, 2015, https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4488861/). They noted that “PCV13 achieves better value for money compared to PCV10, thus, PCV13 should be a better choice in the Philippines…. PCV13 is superior to PCV10 in terms of its broader coverage of serotypes; a universal vaccination program with PCV13 would lower the potential for serotype replacement….”

2.) “Comparison of the Impact of Pneumococcal Conjugate Vaccine 10 or Pneumococcal Conjugate Vaccine 13 on Invasive Pneumococcal Disease in Equivalent Populations” by Pontus Naucler, Ilias Galanis, Eva Morfeldt, Jessica Darenberg, Åke Örtqvist, Birgitta Henriques-Normark (Clinical Infectious Diseases, Volume 65, Issue 11, Dec. 1, 2017, Pages 1780–1790.e1, https://academic.oup.com/cid/article/65/11/1780/4061316). They observed that “Invasive pneumococcal disease incidences decreased between 2005 and 2016 in vaccinated children (by 68.5%), and in the whole population (by 13.5%), but not among the elderly (increased by 2%)… serotype 19A increased in PCV10 counties… Serotype 6C increased in PCV10 counties, but not in PCV13 counties, suggesting cross-protection with 6A, which is included in PCV13.”

These and other studies show the medical superiority for PCV13 but it has a higher cost, about 10% higher than PCV10 or about P500 million. Comparing this additional cost with protecting additional thousands or millions of children from more virulent and fatal diseases, the health advantage should be higher than the fiscal disadvantage. This should be an important consideration for the Health Department and the Department of Budget andManagement in vaccine procurement.

Meanwhile, new treatments and vaccines against COVID-19 may be available by late 2020 or early 2021. The bad news is that while these will be quickly available in the US, Europe, Japan, Singapore and other developed and emerging countries, they may be available in the Philippines only after one or two years delay. We have drug price control policies (EO 821 in July 2009, then EO 104 in February 2020) which discouraged many innovator companies from entering the Philippines or staying here, or, among those that stay, the registering and launching of new medicines and vaccines are delayed by about 26 months on average.

Ensuring quicker and greater access to more modern, more effective new medicines and vaccines should be a higher priority than per unit cost. People value their health and lives more than monetary savings from old, less effective treatments.
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See also:

Drug Price Control 48, DOH orientation on MWP, MRP

There was a DOH orientation for patients and consumer groups about EO 104 last week, June 26. I learned about it from CHAT googlegroups, I forgot to register early, I registered midnight the night before, DOH said registration already closed. I wrote to Saiym of DOH Secretariat, she replied late because her messages were swamped and saw my mail evening that day.
 
Anyway, I heard from some friends that (1) Ric Samaniego, Chairman of the Philippine Coalition of Consumer Welfare Inc. (PCCWI) and a consultant of Sen. Bong Go, dominated the discussion because Doc Meme Guerrero of DOH left the virtual meeting for another meeting. And (2) Ric mentioned that PHAP infiltrated some groups to echo their campaign. I posted these two pooints at the Adv Council email loop hoping for correction, there was no reply or correction, so I assume these two points did happen.

I asked Ric if he was referring to me. No reply. I wrote several articles in my column in BusinessWorld arguing that EO 104 should be rescinded. My last paper on the subject, 

I was also interviewed in some radio-tv programs like in DZBB hosted by Joel Zobel and Mr. Salvacion last June 04.


Also in Agila TV (Eagle Broadcasting Corp.), hosted by Partylist Cong. Angelo Palmones, last March.


Peter Wallace also argued the same in about two his columns in the Inquirer. And the Joint Foreign Chambers (JFC, composed of the US, Canada, EU, Australia-NZ, Japan, Korea Chambers of Commerce, plus PAMURI) also argued the same. 

I told Ric that if here referred to me, then he is wrong and spreading disinformation and fake news. I don't need "infiltration" or influencing because I have been writing against drug price control as soon as RA 9502 was enacted into a law in 2008.

My first article about drug price control was in June 2008,

The first Medicines Transparency Alliance (MeTA) forum, a big one, was held in January 2009 and price control was among the topics, I wrote it here,

Then the Advisory Council meeting June 05, 2009, presided by then USec Alex Padilla, and the head of Secretariat and chief spokesman for price control was Dr. Robert So. I attended it,

PHAP was then headed by Reiner Gloor, PCPI headed by Edward Isaac, PPhA headed by Leonie Ocampo, PMA represented by Dr. Art Catli, Private Hospitals Assn. still headed by Dr. Rustico Jimenez, etc. Edward said in one of the Council meetings in 2009 that it was the first time that PCPI has the same position as PHAP, opposing drug price control. It was easy for them to take a position on issues because whatever PHAP takes, they just take the opposite, but price control has united them.

What I write and argue today are generally the same as what I wrote 11-12 years ago. A collection of my essays on price control plus paper presentations in two health conferences (Cebu and Singapore) published in my first book (2011, 233 pages), 

Now DOH is planning to expand price control to more molecules, the 4 criteria it uses are all technically illegal, not in RA 9502 or its IRR, they just arbitrarily invented the criteria. Take criteria #4 of EO 104, "Drugs where the innovator product is the most expensive yet most prescribed and/or dispensed in the market." Similar to criteria #4 of EO 821 (July 2009), "If the innovator is the top selling product."

The fault and illogic of this criteria -- if it's a successful, more disease-killing, more modern medicine, more prescribed by doctors -- then demonize and penalize it with price control. Hoping that the manufacturers will pull it out and not sell at a loss, then the less-prescribed, less-effective medicines will make money, and DOH jumps with joy?

Electricity from gensets is expensive, around P15-20/kwh generation cost, which is 3x-4x more expensive than average generation charge in Meralco of around P5/kWh. Yet companies -- like hotels, hospitals, BPOs, others that run 24/7 -- will keep their gensets in case there are blackouts, at least they have continuous electricity. Darkness or using candles are more costly to their business than running a genset.

Similar to "expensive" but more powerful medicines. Don't buy it if cost is a higher priority than saving lives. But if things become desperate, if the doctor says to patient, "Hey, this drug is more expensive but you have not improved in other cheaper drugs, we should use it if you want to get well fast, or survive this disease."

If these DOH-penalized effective drugs are pulled out by their manufacturers, who will the public and patients blame when they desperately need them -- Sec. Duque and President Duterte? Sens. Bong Go and Imee Marcos? Will they accept responsibility? Very likely deadma lang.
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See also:

Sunday, June 21, 2020

BWorld 440, Growth recovery via stable, cheaper electricity

* My article in BusinessWorld, June 17, 2020.

There is a direct and close relationship between electricity consumption and GDP growth so the former with real-time data can be used as a proxy to estimate the latter which are often announced about six weeks after the end of the quarter.

From the Independent Electricity Market Operator Philippines (IEMOP) data for the Luzon-Visayas grids, here are the changes and demand contraction in April, May and June 1-15 in 2020 versus same period in 2019: April -20.3%, May -15.6%, June 1-15 -7.9%, average -14.6%.

At this rate, a GDP contraction of -10% or higher is possible for the second quarter (Q2) 2020, much worse than -0.2% in Q1 2020, which was already a big dip from +6.4% in Q4 2019.

Note also the April 2020 labor force data: 7.3 million unemployed in the labor force plus 3 million working age Filipinos who did not join the labor force anymore, did not look for a job because they knew that there will be no jobs available. Total of 10.3 million working age but idle Filipinos, a huge number.

This plus the projected deep GDP contraction in Q2 2020 and beyond should set a panic mode for the government’s economic managers. Since they and other members of IATF (Inter-Agency Task Force for the Management of Emerging Infectious Diseases) cannot admit that the hard lockdown was wrong, at least they should have further relaxed and opened up the economy in the second half of June, but they extended the general community quarantine (GCQ) instead, another wrong move.

Now as the Philippines and many countries figure out how to recover early from the economic damage of prolonged lockdowns, there are many sectors that push irrational proposals of higher environment and energy taxes, more expensive energy.

Two proposals stand out: One, small and poor countries pressuring rich countries that regardless of their current hardships, they must honor their commitment in the Paris Agreement 2015 to give $100 billion/year of climate money starting 2020. And, two, the Frankfurt School-UN Environment Program-BloombergNEF (FS-UNEP-BNEF) study and lobby to raise investments for solar-wind and other intermittent sources by $3.1 trillion from 2020-2030 or average of $300 billion/year.

Two recent reports in BusinessWorld reflect these pressures: “Renewables seen key in powering post-pandemic recovery” (June 11), and “ADB makes pitch for more clean energy investment in stimulus spending: (June 17).

I checked the comparative electricity prices of selected countries, and I saw two reports from the International Energy Consultants (IEC) and the Global Petroleum Prices (GPP). Then I checked the solar-wind use of countries, data from the BP Statistical Review of World Energy (SRWE) 2019, to see if there is any connection. The result is interesting (see the table).

European countries, especially Denmark, Germany, Belgium and Spain, have high electricity prices, double or triple those of the US, Thailand, and South Korea, partly or largely because of their high reliance on intermittent solar-wind.

These intermittent sources need large batteries, and the grid transmission and distribution systems need extra devices and mechanisms to stabilize wild swings in power surges and dips. These automatically raise their cost. Then consider the endless subsidies like feed in tariff allowance (FIT-All) that all electricity consumers in the Philippines have to pay now and many decades to come.

Many East Asian economies actually hardly pay attention to injecting more solar-wind into their national electricity grid. Singapore, Hong Kong, Vietnam, Malaysia, and Indonesia have a solar and wind share of only 0.1 to 0.6% of their total electricity generation.

As the Philippines moves towards more house-based online work and education, the need for more stable reliable power, with no blackouts for even a minute, and cheaper electricity becomes even more important than before.

People may have the gadgets, electronics, and faster internet, but if they have unstable power from intermittent sources, their work and online education will be disrupted and affected. Reason and economic realities must prevail over ecological biases and alarmist climate projections.
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Weekend Fun 71, Father's day, Husband's day

A cool Father's Day meme,

(All photos and memes here I got from the web or shared in various social media)

Q: Difference among Complete, Finished and Completely finished?

A: If you married the right woman, your life is Complete.
If you married the wrong woman, your life is Finished.
And if your (wrong) wife catches you with another woman, you are Completely finished.

The wedding day changes the  woman from a relatively permissive to an aggressive wife. Why?
As she walks down the church to the altar, there is a repeated music... 

Altar hymn, Altar hymn,
Alter hymn, Alter hymn,
Alter Him, Alter Him. 

When couples argue, remember Econ 11.
Talk is cheap because the supply is larger than the demand.

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Now I want to share a short note written by my eldest daughter, turning Grade 9 this school year. Ahh, the joy of fatherhood :-)

Dear papa,

I thank you for being my slave at times when I want to relax. You pamper me in times when I am lazy or sad. You feed me food that make my taste buds happy, and you help me deal with things i sometimes don't want to do.

You have made a big impact to my life and taught me that even if you can be lazy and stubborn, you can still achieve many things if you actually put some effort.

And that no matter how often your relationships seem to be at an end, it doesn't always mean its not meant to be but that you are not perfect. You have influenced me to become more mature, responsible and caring. and i thank you for all the years you have raised me -

Love, your eldest daughter,
Elle

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See also:

Friday, June 19, 2020

Covid 14, It's abnormal, not lousy "new normal"

This pandemic started with natural human fear of the unknown (Fotu). Then the socialists and authoritarians jumped in and expanded the hysteria. Socialists believe that many corporations, multimillionaires and billionaires are evil, so seeing many of them going bankrupt or poorer by the billions give them happiness.

Authoritarians hate individual freedom so closing all public parks, beaches, pools, malls, churches, etc.  give them happiness. Authoritarians by nature are hypocrites and always double talk. Take the BLM, Antifa rallies and protests in the US by tens of thousands, bonus of looting, stealing, burning. No social distance, hardly masks but ok with some city Mayors so long as public parks, churches, etc are closed to avoid crowd gathering together.

(this photo from https://www.theatlantic.com/photo/2020/06/images-worldwide-protest-movement/612811/)

Socialists, explicit and implicit, are rejoicing that formerly huge corporations like airlines, hotel chains, fast food chains, are on massive financial bleeding and reduced to begging for state bail out money otherwise they will go bankrupt. This will weaken the corporate sector while strengthening the State and its powers. Money is no problem for the state because they can borrow or just print money by the billions and call it as QE or MMT or Econ Stimulus.

So from natural and spontaneous Fotu to deliberate, planned prolonged lockdown and massive restrictions on human mobility and entrepreneurship. The socialists and authoritarians, from politicians to NGOs, consultants and media, they are winning. A very successful political grab, simply by prolonging the hysteria and endlessly announcing and sharing 2nd wave, 3rd wave, nth wave. Keep scaring the public, forever if possible.

We should not call this as "new normal" or "better normal." This is abnormal. Thousands of consumers coming together benefit from huge bargains, Sales in malls and Dept stores. Thousands or millions of passengers benefit from budget airlines that pack people in tight seats but cheap air fares, also in mass transit like trains, and so on. But these are now prohibited or will soon be prohibited. Mass transit are cheap Bec people are packed tight. Beautiful resorts and parks in the provinces are seen by many people Bec of cheap airlines that pack people inside.

The consumers, passengers, entrepreneurs are the big losers of these abnormal policies and prohibitions. Invented by the socialists and authoritarians.

NYT headline "Trump trying to spread Covid-19" because he will hold a political rally. But no headlines like "BLM, Antifa trying to spread Covid-19" with their daily or nightly rallies and protests.

Similar to the city Mayors of Seattle, Minneapolis, NYC, DC, Chicago, LA, etc. Huge protest rallies, no social distance are ok. But churches and parks are not ok and should be closed.

Meanwhile, I like these two stories: 

(1) Tear Down this Plexiglass! 
Tony with readersAnthony Gill   June 17, 2020
https://www.aier.org/article/tear-down-this-plexiglass/

I pray that masks are not the new normal. I implore our leaders to understand that the lack of trust in society is what prevents poor neighborhoods and cities from flourishing. Work to banish mistrust, not spread it further.

To paraphrase Ronald Reagan, who challenged Mikhail Gorbachev to eradicate another major symbol of fear and mistrust in the world, I urge us to tear down this plexiglass. 

(2) Americans Should Never Again Comply With Pandemic Lockdown Orders
By John Daniel Davidson  JUNE 18, 2020 
https://thefederalist.com/2020/06/18/americans-should-never-again-comply-with-pandemic-lockdown-orders/

BLM Rallies Are Safe, Trump Rallies Are Not? 
The starkest contradiction of all might be the reactions to President Trump’s rally planned for Saturday in Tulsa, Oklahoma. Local health officials are warning it could become a disastrous “super spreader” event—a term media outlets like The New York Times have been eager to repeat under headlines warning, “Trump’s rally in Tulsa Could Spread Virus,” using language they would never use to describe any of the large-scale protests, rallies, and riots nationwide…

Public officials in Tulsa have also adopted this double standard. The mayor and a cadre of other officials have publicly implored Trump not to go ahead with the rally, citing concerns about COVID-19. But these same officials dared not say a word against recent BLM rallies held in the city and suburbs, including a large one that got out of control and spilled onto a busy highway, where several protesters were injured.
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See also:

Tuesday, June 16, 2020

BWorld 439, Inter-Agency to Terminate Functional businesses (IATF)

* My column in BusinessWorld, June 11, 2010.

The Philippines has perhaps the most draconian, most hysterical lockdown policies in East Asia and even in other countries in the world. From mid-March to end-May, all public transportation — planes, buses (provincial and Metro Manila), jeepneys, regular taxis and TNVS, tricycles and motorcycle taxis — were disallowed. Taxis were allowed to operate starting June 1, the rest were still prohibited.

Three economic dysfunctions have occurred. One, our GDP contracted at -0.2% in the first quarter (Q1) of 2020, the second biggest drop in the region from Q4 2019 next to China. Two, our unemployment rate in April rose more than three times the January level, the second highest next to India in the whole of Asia. And, three, our stock market is -18% lower than it was a year ago, the second lowest to Indonesia. Even though our COVID-19 deaths per million population are among the lowest in the world (see the table).

Other notable things and comments from the numbers shown in the table are as follows:

One, among the selected European countries, no-lockdown Sweden is the only one that did not experience a growth contraction in Q1 2020. It experienced a rise in unemployment but not as high as that in Spain, and has had growth in the stock market.

Two, hard lockdown US experienced modest growth in GDP and the stock market (DJIA) but it experienced a four-fold increase in its unemployment rate.

Three, no or light lockdown South Korea, Taiwan, and Japan have growth in their stock markets, also in GDP, except Japan which has had a contraction in growth even before the pandemic.

Four, the Philippines’ GDP was pulled down by low growth in household consumption (only 0.2% growth) while private investments contracted to -18.3%. The big challenge is to raise these two which constitute about 83% of GDP.

Five, aside from the Philippines’ three-fold increase in its unemployment rate, new entrants to the labor force declined from 44 million in April 2019 to only 41 million in April 2020. The corresponding labor force participation rate thus declined from 61.3% to only 55.6% over the same period.

Six, the big decline in the Philippine stock market reflected not only the closure of many businesses starting mid-March, but also the deterioration in the investments climate. Two recent high-profile examples:

One is President Duterte’s unreasonable outburst against the two water concessionaires and the cancellation of their contract extension until 2037. Two is the non-renewal of ABS-CBN’s franchise, partly because of its issuance of Philippine Depositary Receipts (PDRs) to foreign investments, even while other media outlets like GMA have also issued PDRs and the issue was not taken against them.

I saw several documents with plans to jumpstart the Philippine economy. Many of these papers are good and proactive, except that there is nothing in them that admits the hard lockdown was wrong. Since it was not wrong, then the government can continue it today and tomorrow.

In particular, there is a big focus on the government’s Build, Build, Build (BBB) program. With so many restaurants and bars, hotels and shops, bus lines and other businesses already bankrupt or shutting down in the next few weeks and months, are the waiters and cooks to become construction workers? The bus drivers and plane pilots, are they to become backhoe drivers and crane operators? Are these easily doable? Likely not.

Then there is the mandatory social distancing which means that the cost of people mobility in public transportation — planes, boats, buses, vans, jeepneys — must further increase, or these public utilities will go bankrupt.

It is not what businesses should do to survive bankruptcy. Rather, it is what government should NOT do. There are too many bawal-bawal, restrictions and prohibitions in our lives already. Government should step back from too many restrictions that so far have succeeded in crippling and terminating many functional businesses. Open up the economy, wide and clear.
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See also:

Sunday, June 14, 2020

Jayant Bhandari on the recent US riots

I am reposting some recent fb postings by an Indian-Canadian friend, Jayant Bhandari. I don't agree with everything he says but he's frank and clear, I like it. So here goes...

June 13

It is much easier to clean a swamp of crooks who know they are crooks but cleaning an ideological swamp of indoctrinated, politically correct, virtue-signaling people is not easy. Trump has certainly exposed how deep and wide the swamp is, but he cannot drain it.

I think as long as there is a democracy it is impossible to drain the swamp. The institutions must reflect the character of those who vote. Under the current form of democracy, it is the bottom 50% (plus 1) who decide. Populists get to the top, for that is what the psychology of the bottom 50% enables. Then the elected truly believe in what started as populism. After 3 generations, the way of thinking enabled by universal suffrage is set in concrete.

We should progress towards no government. And all efforts should be to minimise the size. Whosoever runs should be of merit.

I think the only thing that can help without burning the whole place down is to restrict democracy to 6% of the population. I know doing this sounds impossible, but no more impossible than burning down Harvard. Restrict to landowners, tax payers, men, above 35 years of age with a productive life, etc. This is what the US was like in 1780.

(US getting for another civil war) I think it is inevitable. This not because there are crazy people in the society, but because their craziness has been rationalized by the larger society, and the institutions are morally incompetent to put the crazies on a leash.

June 12

This is Minneapolis Sheraton after it passed through the hand of the rioters. This is what leftists do. They reduce everything to medieval existence. They have a natural pull towards subsistence, wretched, Malthusian existence.

June 11

Leftism is a product of low-IQ. Leftists have no goals and no values. They throw stones and destroy monuments. They don't understand production. They are feral. They have only animal instincts.
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This is truly sad that politically indoctrination has corrupted the passions of so many Americans. They have become do-gooders, with their emotions unconstrained by reason. They have bought into the leftist narrative. Secretary of Defence and Chairman of Armed forces have gone against Trump, again, mostly because they genuinely believe in it. The rot in the US institutions is far too deep and wide for Trump to change the course of its future. I wonder how different these Guardsmen are from what the kids during Mao’s Cultural Revolution were.

‘What I saw was just absolutely wrong’: National Guardsmen struggle with their role in controlling protests 
https://www.politico.com/news/2020/06/09/national-guard-protests-309932

June 9

The Left is parasitical. It is anti-civilization, regressive and feral. Unchecked, it eats away the innards of any society. Universal suffrage was an unmitigated disaster for the West.

Police unions under fire from left as calls for reform ring out in aftermath of Floyd death 
https://www.foxnews.com/politics/police-unions-george-floyd-aftermath

June 8

Rioters are always a tiny minority. 1% of society? Behind them are the vast majority who give their acquiescence. The biggest culprit is the tiny minority that has the responsibility to be asking to shoot the arsonists. This minority is missing, made impotent by political correctness, and comfortable life that they don't want to put at risk.

June 5

NYC mayor's daughter was arrested in NYC. I wonder how a mayor could let her daughter go out late at night when the city was burning. Theirs has to be a family of true-believers and do-gooders. And they must be an extra-ordinarily pervert. Look at the rings on the face. Perhaps, this is a mature stage of democracy, which throws out very pervert go-gooders as leaders. Look at Modi, Trudeau, etc. I wonder how their minds are structured.

Mayor Bill de Blasio’s daughter arrested at Manhattan protest 
https://www.marketwatch.com/story/mayor-bill-de-blasios-daughter-arrested-at-manhattan-protest-2020-05-31
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 On the China-India territorial conflict:

June 13

Rule of thumb: When the US is not watching, the rest of the world starts to fall apart. China has a history of being non-aggressive. And why was India caught sleeping during Kargil? And why again now? Indian local-language media is going crazy talking about how much better the Indian army is compared to the Chinese. In 1962, the Chinese and the Indian GDP were similar. Now the Chinese GDP is 5x that of the Indian. And, contrary to the Indian media, the Chinese army is far better equipped and trained.

India-China Standoff: India Counters China's Design; India's Build-Up From Ladakh To Sikkim
Jun 11, 2020
https://www.youtube.com/watch?v=bKpt3awnFco&feature=youtu.be
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See also other reposts of Jayant's ideas: 
Pol. Ideology 64, Big World Government or Smaller Countries and Governments? June 03, 2015 
Jayant Bhandari on Democracy, Trump and Soleimani, June 04, 2020.

Saturday, June 13, 2020

Welfarism 36, On mandatory 20% discount for seniors, PWDs

On mandatory 20% discount for senior citizens (SCs) and persons with disability (PWDs) -- it should be voluntary, not mandatory and hence should not have been legislated. If it's voluntary, cost is on the resto. Like a marketing come on to seniors hoping they bring their children and grandchildren too. If it's mandatory, government should shoulder the cost, but govt regardless of administration doesn't think this way.


The mandatory discount results in price distortion upwards. Say the price of a ChickenJoy meal shd be P100. But with forced discount not assumed by the govt, the resto raises the price to say P105. So it's the non seniors who pay for the discount.

It was somehow ok before this Covid hysteria and business shutdowns, many non seniors have stable income. Now many non seniors minimize eating out and cook food at home instead. So the restos will have fewer customers to pass on the price distortion, barely surviving and forcing them to give 20% discount might push them to bankruptcy.

The (PWDs), non seniors deaf, blind, on wheelchair, etc also get discounts. In drugstores, hospitals, clinics, restos, bars, airlines, bus lines, etc.

Also 20% discount for students in fares during classes. Another law last year made the 20% discount for students all year round, even during sem break, summer break, holidays. And covers not just buses, ships, planes, also taxi, TNVS.

Some resto chains give 20% discount to all of their card holders, seniors or not. 30% discount on Mondays. This is voluntary type of price discount and it's working.

The legislators just make mandatory and forced discounts left and right bec the cost does not come from their pockets while expanding their pol mileage to run for reelection or higher posts.

The forced discount on medicines caused many small, non-chain drugstores to go bankrupt even before this Covid hysteria. Since they are small, small volume purchase, they get small discount from the drug manufacturers and they can't price higher or similar to Mercury, Watson's, so their average margin is around 5-10% only. Forcing them to give 20% discount means selling at a loss. To avoid further bleeding and bankruptcy, they stop selling drugs often bought by the seniors and PWDs. The typical case of "cheap but not available."

SCs can use their 20% discount in big chains like Mercury, Watson's, TGP, Generika, because these are big volume purchasers, they get big discount from drug manufacturers, have economies of scale. But for small, non chain drugstores, better not use the SC discount at least during this period because you may contribute to their bankruptcy.

For airlines and hotels, I would like to think that rich seniors should also not use their SC discount. The losses 3 months are horrible, next 2-3 months losses may be bearable.

Ultimately, mandatory price discounts, another form of state price control, should be avoided, and existing laws on the subject should be reversed or cancelled.
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See also:
Welfarism 33, Janitor turned lawyer, self-reliance vs welfare-dependence, May 05, 2017 
Welfarism 34, Larry Reed on poverty and self-reliance, December 07, 2019 

Welfarism 35, Healthcare is not personal/parental responsibility, only state responsibility, February 14, 2020.