BWorld 542, Growth, electricity, vaccination, and the new administration

* My column in BusinessWorld last May 16.
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This article will cover four different topics so we go straight to them.

GDP GROWTH IN FIRST QUARTER 2022

Last week the Philippine Statistics Authority (PSA) released the country’s economic performance in the first quarter (Q1) of the year. Growth was 8.3% compared to the level a year ago — nice. But in terms of pesos worth of goods and services produced, there was little to celebrate actually if we compare Q1 2022 vs Q1 2019 or three years ago.

One, the P4.62 trillion output in Q1 2022 was only P160 billion higher than the P4.46 trillion output three years ago while there was an increase of 4.5 million more Filipinos over the same period. So the per capita income has continued to decline.

Two, the increase was due to more government consumption and spending — a difference of P150 billion — plus household consumption which increased by P168 billion, mainly due to higher spending by politicians and sponsors in this year’s presidential election than in the mid-term election of 2019.

Three, capital formation decreased by P106 billion and is practically comparable to the 2018 level four years ago. Meaning the investment environment remains poor and unattractive (see Table 1).

GROWTH AND ELECTRICITY GENERATION

One of the major man-made “growth killers” in the Cory Aquino administration (1986-1992) was the killing of the 620-MW Bataan Nuclear Power Plant (BNPP) with no alternative set up to replace it. Many big potential investors saw that major blackouts would happen, so they did not come in. And frequent blackouts did happen in 1990-1991. The other man-made “growth killer” was the series of bloody but unsuccessful coup d’état attempts by Gringo Honasan and Johnny Ponce Enrile from 1987-1989.

I compared the annual growth in power generation (in terawatt-hours, TWH) and annual GDP growth of many Asian countries plus Australia from 1986 to 2020, and until 2021 for GDP growth. I averaged them by decade and the result is consistent — high or fast power generation led to high GDP growth, and slowing power generation led to slowing GDP growth, for the past 35 years.

The Philippines has the third lowest power generation growth next to Japan and Australia (which have high base already), and is comparable to Pakistan. Consequently, we have low decadal GDP growth similar to Pakistan, while Japan and Australia have much lower GDP growth.

TRANSMISSION CONGESTION BY NGCP

Aside from the low increase in power generation due to various bureaucracies, some of the power plants that were successfully built experience transmission problems. As the power system operator, the National Grid Corporation of the Philippines (NGCP) is occasionally remiss in its mandate of ensuring sufficient transmission lines between actual and potential power plants to distribution utilities, corporations, and cooperatives.

Previously in this column, I cited the Philippine Independent Power Producers Association, Inc. (PIPPA) estimates of “1,000+ MW of stranded capacity in Bataan and Quezon due to transmission line limitations; another 1,000+ MW of power surplus in Mindanao that cannot be exported to the Visayas and Luzon” (see https://bit.ly/Oplas050322).

Table 3 tackles some details, the affected power plants, and expected time of completion (ETC) of transmission projects.

If the power plants are already there but there are no working transmission lines up yet, and construction and commissioning are delayed, then no new power can be dispatched. And this contributes to business uncertainty. Why build a new power plant when the NGCP may not be able to complete the new transmission project or expand the capacity of an existing congested transmission line to connect it to?

This uncertainty caused by the NGCP will hit the brakes on potential high growth. Big investors will factor in the cost of buying big gensets and their maintenance, since the threat of red-yellow alerts and potential blackouts will remain over their heads.

MANDATORY VAX BROUGHT BEFORE THE SC

The Inter-Agency Task Force (IATF) Resolution 148-B issued in November 2021, plus related government orders, on mandatory vaccination of on-site workers are coercive. They require on-site workers who are unvaccinated to take RT-PCR tests regularly at their own expense. The resolution also barred unvaccinated individuals from boarding and riding public transportation with very few exceptions.

With many reports of displaced workers and vaccine injuries, several groups went to the Supreme Court on May 12 and asked the Court to stop the enforcement of all government issuances and policies that impose mandatory vaccination against COVID-19 which the groups say violate Constitutional provisions on due process, equal protection of the law, security and privacy, religious freedom, and freedom of movement and travel.

The petitioners were led by Nick Perlas and lawyers of the group COVID Call to Humanity, doctors and scientists of the Concerned Doctors and Citizens of the Philippines, Legal Lightworkers for Life and Liberty, and Juan Dakila Movement, plus COVID vaccine-injured employee, religious leaders, government and private sector employees, and public-school teachers.

The respondents named in the petition were the IATF, Health Secretary Francisco Duque III, Executive Secretary Salvador Medialdea, Interior and Local Government Secretary Eduardo Año, Transport Secretary Arthur Tugade, Education Secretary Leonor Briones, and Makati City Mayor Abby Binay.

Mandatory orders mean zero choice. It means full government authoritarianism, and that individual freedom and individual choice is disrespected. The mandatory lockdowns and many business closures in 2020-2021 largely contributed to a GDP contraction in 2020 of 9.6%, the worst in Asia, then anemic recovery in 2021 of 5.6% which put the GDP level only at the level of 2018.

The new administration of Bongbong Marcos-Sara Duterte should learn the lessons of the past few years: heavy coercion and authoritarianism is a growth-killer. Insufficient power and repeated threats of blackouts is a growth-dampener. Economic freedom and individual liberty remain the single biggest growth-creator and enhancer.
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See also:
BWorld 539, Under scarcity: Leni service, BBM welfarism, and Isko overspending, May 11, 2022
BWorld 540, Power supply-demand in elections, nuclear energy, and transmission issues, May 30, 2022 
BWorld 541, Post-election economic issues to prepare for, May 31, 2022.

Energy 165, ESG and more impact of sanctions vs Russia

JP Morgan CEO Jamie Dimon is reported to be worried about high inflation due to the Ukraine war. He and many western corporate and government leaders, media, keep blaming the Ukraine war and not the sanctions. Ukraine war is mainly over eastern territories Crimea and Donbas region + NATO membership. Sanctions are about oil-gas-coal supply and prices, about wheat-corn-poultry-urea-ammonium supply and prices, about zinc-nickel-magnesium-aluminum supply and prices.

Dimon's focus on ESG financing greatly contributed to global inflationary pressure. Underinvestment in oil gas coal while over-investing in intermittent RE already showing in higher inflation in EU and US compared to many countries in the world.

See Dimon's ESG, $285 B in 2021 alone, https://www.jpmorganchase.com/news-stories/jpmc-releases-2021-esg-report.  Endless blaming of Ukraine war is just CYA move
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The other day, former NEDA Secretary Ciel Habito wrote a good paper about the need for higher PH exports, https://opinion.inquirer.net/153456/doing-a-vietnam. 

Among the policy reforms, he failed to mention, or ignored to mention, that VN, ID, MY, TH, SG, have high merchandise exports because they have high fossil fuel use. Manufacturing plants for exports need lots of energy -- stable, predictable, dispatchable, available 24/7, no blackout even for a minute, even if the wind does not blow, even if the Sun does not shine.

There is clear pattern actually especially for VN and ID that he repeatedly mentioned -- as they increase their coal power, their merchandise exports also increase.

In 2020, ID, VN and MY coal power generation were 181, 119, 90 terawatt-hours (TWH) respectively. PH has only 58 TWH from coal. 1/2 of VN, 1/3 of ID.

SG and TH use more gas than coal, still fossil fuel. And they have high exports too.

In 2017, Ciel lobbied hard through his column in PDI to over-tax coal, he proposed coal tax to rise from P10/ton to P600/ton. Coal tax was not part of TRAIN orig bill, only petroleum products. With his consistent lobbying, and followed up by Loren Legarda in the Senate, coal tax was included in the TRAIN law, from P10/ton to P150/ton.

If we want to expand our exports big time, we should have more fossil fuel plants big time too. But climate drama will forever prevent us from achieving that. In which case we shd have more nuke power plants.
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Some good articles recently that I saw, enjoy.

1. The ESG Community Lacks an Understanding of What Crude Oil is Used For
by Ronald Stein May 6, 2022
https://oilmanmagazine.com/article/the-esg-community-lacks-an-understanding-of-what-crude-oil-is-used-for/ 

Unintended consequences of the ESG rage ridding the world of crude oil usage would be the restricted supply and resultant inflationary pressures on the limited supply of products and fuels manufactured from crude to meet growing demands that support:

 Asphalt for roughly sixty-five million miles of roads in the world.

 Tires for the 1.4 billion vehicles in the world.

 Fertilizers to feed the eight billion in this world on an increasingly resource-stretched and crowded earth.

 Medical supplies that are primarily made from oil derivatives.

 Jets that comprise more than 50,000 aircraft for military, commercial, private and the President’s Air Force One.

 Merchant ships that comprise more than 53,000 vessels that move products throughout the world.

 Vehicles that are mostly made of plastics.

 Renewable components of wind turbines and solar panels that are made from oil derivatives.

2. A Global ESG System Is Almost Here: We Should Be Worried
by Jack McPherrin June 1 2022
https://www.theepochtimes.com/a-global-esg-system-is-almost-here-we-should-be-worried_4501543.html 

Destroying free-market capitalism in favor of a new “stakeholder” model, in which global elites hold all the power, has been their objective for years. A single ESG system gets them much closer to this goal, and will be significantly more effective at eroding national sovereignty, circumventing democratic processes, coercing companies into compliance, and ultimately restricting individual choice.

3. World Economic Forum Urges People to Eat Seaweed, Algae and Cacti to Save the Planet
Paul Joseph Watson  30 May, 2022
https://summit.news/2022/05/30/world-economic-forum-urges-people-to-eat-seaweed-algae-and-cacti-to-save-the-planet/

World Economic Forum technocrats are urging people to ditch meat and other foods deemed to be harmful to the planet and instead consume “climate beneficial foods” such as seaweed, algae and cacti.
The WEF made the call as it wrapped up the 2022 meeting of global elitists in Davos, Switzerland.

4. Watch Western Sanctions On Russia Boomerang: A Global Energy And Food Crisis In The Making
Tilak Doshi  May 26, 2022, 10:21am EDT
https://www.forbes.com/sites/tilakdoshi/2022/05/26/watch-western-sanctions-on-russia-boomerang-a-global-energy-and-food-crisis-in-the-making/?sh=434081f1253c

Russia is a major food producer, being the world’s third largest wheat producer and leading net exporter. It is also the world’s largest fertilizer exporter and ranks number three in aluminium exports and number four or five among the world’s largest iron and steel exporters (depending on whether EU as a whole is ranked in this list). It is also a leading exporter of key industrial metals such as palladium, platinum, nickel and copper which are critical to the West’s ambitions for the “energy transition” to renewables such as wind and solar power and electric vehicles. Most critically, Russia is a heavyweight fossil fuel exporter in world markets. Fossil fuels, it should be noted, still account for some 80% of global energy consumption. It is the world’s largest natural gas exporter, the 2nd largest oil exporter (after Saudi Arabia) and the third largest coal exporter (after Australia and Indonesia).

5. What is the Full Cost?
by Kip Hansen – 20 May 2022
https://wattsupwiththat.com/2022/05/20/what-is-the-full-cost/ 

“Germany has reached a wind/solar share for gross electricity production of ~28%. The primary energy share of wind and solar (Note 2), however, was still only 5%. To achieve this “transition”, Germany’s installed power capacity had to double (Figure 2) [ above ]. Consequently, the renewable energy sector grossly underperformed, compared to its investment in real energy terms, and Germany’s electricity prices reached the highest among the G20.”
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See also:
Energy 162, Russia fossil fuels trade, random notes, March 25, 2022
Energy 163, Impact of sanctions on energy supply in Germany, rest of Europe, April 03, 2022
Energy 164, More Europe energy agony, May 7, 2022.

BWorld 541, Post-election economic issues to prepare for

 * My article in BusinessWorld last May 9.
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By the time this column is printed and posted online, the elections would have ended and counting should have started. I want to share some things related to the campaign rallies, then some post-election economic scenarios.

THE LENI-KIKO MITING DE AVANCE

I attended the last campaign sortie of the Leni Robredo-Kiko Pangilinan tandem on Ayala Ave., Makati City on Saturday, May 7. I was there for about 10 hours — afternoon to midnight — and here are some of my observations.

1. It was a huge crowd — estimates range from 700,000 to one million people. Ayala is long, eight-lanes wide, with wide sidewalks, and several wide perpendicular streets, which were all filled with people.

2. There were lots of freebies — from many private volunteer groups giving free medical assistance to free ice cream, taho (street food of tofu, syrup, and sago pearls), bread, cookies, and candies, to plastic fans and even free condoms. But there were no free T-shirts and caps from the candidates — people had to buy these from ambulant shops in the area.

3. They were civilized citizens — no pushing or shoving by people when they moved in an already dense area. After the event ended, there were many groups of volunteer sweepers and cleaners. One group I saw were rich-looking Filipino-Chinese who were awkwardly sweeping, suggesting that they are not used to doing it and have helpers at home who sweep the floor for them.

4. Security was decentralized — everyone has a mobile phone so any attempt at sowing disorder will likely be recorded and perpetrators likely be apprehended. But there were a few reports of petty stealing, like lost cell phones and wallets, or perhaps people dropped them somewhere.

5. High police visibility — most were unarmed, they just held a baton. After the concert ended and shortly before midnight, I looked for the PNP (Philippine National Police) head in the rally. I was guided to Police Lt. Col. Randy Moratalla, Deputy Chief for Administration of Makati PNP. He was the highest PNP official at the time when I came. I introduced myself as a BusinessWorld columnist and wanted to congratulate them on a peaceful rally. He quickly accommodated me and said that the PNP National Capital Region Police Office (NCRPO) plus Makati police had deployed around 700 police officers that day. The high visibility of uniformed cops not carrying guns helped preserve order and trust. Good job, PNP.

6. High visibility of Ayala security — to remind people that it is not a public park and there are private properties that can be damaged if there are unruly people, like the center-island flowers and glass buildings. Thanks for the nice wide venue, Ayala Corp.

ISSUES TO PREPARE FOR

When the next administration comes in, among the high-profile economic issues they will face will be the high government spending that will require high borrowing and high taxes. The Philippines’ government spending share to GDP (G/GDP) ratio was 21.7% in 2019, and it rose to 26.8% in 2021 or a 5.2 percentage point increase in just two years. This is the second highest increase in the ASEAN-6.

Take note that this is only general or national government spending and does not include spending by local governments. If local government spending is included, we would likely be in the 32-35% of GDP level or nearly twice that of Singapore which has no local governments. Socialist Vietnam has a low G/GDP ratio of only 20%. Very likely excluded in their numbers are the spending of state-owned enterprises and banks, and local governments (Table 1).

The Philippine bureaucracy and political class, from national down to barangay level, kept receiving their salaries, allowances, and bonuses even when many people in the private sector lost their businesses, jobs, and income during the lockdowns of 2020-2021. Really unfair.

The pandemic per se cannot be blamed for this anomaly because the same virus affected Asia and the rest of the world, which had different economic outcomes because different governments have different responses. In 2020, while the Philippines had a GDP contraction of 9.6%, Vietnam grew by 2.9% and Taiwan had growth of 3.4%.

Rising government spending even if revenues are declining means increased borrowing.

The Philippines’ gross debt/GDP ratio of 37% in 2019 rose to 57.5% in 2021 or 20.6 percentage points increase in just two years. It is the highest increase in the ASEAN-6.

Note also the huge increase in public debt of G7 countries including Japan. Only Germany in the G7 has not reached the 100% debt/GDP ratio in 2020-2021. This means those huge governments will keep borrowing huge amounts to pay old debts and push global interest rates even higher, which is not good (Table 2).

Overall, we will have more bad news than good news on the economic front. As US-EU economic sanctions against Russia expand, more commodities — from oil-gas-coal to minerals to agriculture and livestock — will be affected, supply restricted, and prices, and national and global inflation rates will further rise. Then global interest rates will further rise, and the taxes needed to pay high spending and borrowings will rise too.

There are many other economic issues to prepare for but suffice it to say that the next administration should make serious cuts in spending, cuts in borrowings, in order to limit tax hikes. Campaign promises to expand subsidies and spending should be relegated to one side as much as possible.

If spending cuts cannot be done, another option is to have large-scale privatization of government assets and enterprises, from wide lands to non-essential “services” like operating casinos and lotteries. Use privatization proceeds to retire some public debt to reduce principal and interest expenses.
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See also:
BWorld 538, Energy prices and renewables-gas lobby, May 07, 2022 
BWorld 539, Under scarcity: Leni service, BBM welfarism, and Isko overspending, May 11, 2022
BWorld 540, Power supply-demand in elections, nuclear energy, and transmission issues, May 30, 2022.

Macroecon 17, Germany's near half-century inflation rate

Germany inflation rate May 2022 is 7.9%, the highest since Dec. 1973, and almost same level in early 1952. 

Source: Trading Economics

Only -0.3% until Dec. 2020, started rising in Jan. 2021 with 1.0%, jumped to 4.9% by Jan. 2022 pre-invasion of Ukraine. Hence, no excuse blaming the Ukraine war as ain cause of inflationary pressure. By Feb 2022 when Russia invaded Ukraine, inflation rose to 5.1%, then March to May 7.3%, 7.4%, 7.9%.

See related reports:

1. German inflation at highest level in nearly half a century
Reuters, MAY 30 20229:36 AM EDT
https://www.cnbc.com/2022/05/30/german-inflation-at-highest-level-in-nearly-half-a-century.html

2. German inflation reaches highest in nearly 50 years
First Published: May 30, 2022 at 8:14 a.m. ET
https://www.marketwatch.com/story/german-inflation-at-highest-in-almost-50-years-271653912851

High energy prices, Germany's and EU's beloved wind-solar did not produce enough power and they have to buy more oil-gas to avoid blackout and prices were rising then. Europe and the world experienced less-windy, less-sunny, more cloudy 2021.

Merkel was a physicist. When she became a big time politician, her political science has prevailed over her physics natural science. And Germany climate-energy policy pivoted away from real natural science and moved towards media-NGOs-multilaterals political science.

Germany is now led by SPD (the political socialists) + Greens (the ecological socialists) + FDP (confused liberals?)

I really wished last year that FDP + CDU + AfD would have been a better coalition than SPD + Greens + FDP.
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See also:
Macroecon 14, Macro indicators, inflation rates in selected countries, September 23, 2021
Macroecon 15, US trade, inflation, public debt, November 12, 2021 
Macroecon 16, US inflation classmates in March 2022, April 19, 2022

BWorld 540, Power supply-demand in elections, nuclear energy, and transmission issues

* This is my column in BusinessWorld last May 2. Late repost.
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The Presidential and local elections next week generate not only political heat and drama but also climate and energy drama from some sectors that are warning of “power outages during elections amid coal plant shutdowns.”

Blackouts during elections because of coal-plant shutdowns — this is nice scare mongering to attract public attention. This is part of the overall plan to endlessly demonize coal power plants (which contributed 57% of total power generation in the Philippines in 2020) so that the agenda of pushing intermittent renewables plus gas will be hastened.

Last Friday, April 29, I attended the media briefing of the Independent Electricity Market Operator of the Philippines (IEMOP) and among the topics discussed was the power supply-demand projection for the second and third quarters of 2022, more specifically on election week.

IEMOP noted that during election day in 2019, peak power supply in the Luzon grid was 10,706 MW and peak demand that day was 8,962 MW, for a comfortable margin of 1,744 MW. And during election day in 2016, peak supply in the Luzon grid was 10,329 MW while peak demand that day was 7,721 MW, thus there was a wide margin of 2,608 MW.

The market operator listed the scheduled (maintenance) shutdowns until September, and made four supply-demand projections under four assumptions. For purposes of brevity, I will show only the most pessimistic assumption or scenario: Typical monthly offers with no additional capacities, and 1,000 MW in unplanned outage. The result for next week is a comfortable margin of 2,381 MW, minus the reserve requirement 1,722 MW and still having a net margin of 659 MW (Table 1).

So there. The assumptions are tilted towards the pessimistic scenario to widen the buffer for reserves. And still there are no blackouts foreseen. The public should be wary of scare mongering to further demonize coal, invite blackout economics, and push climate and business agendas.

INTERCONNECTIONS

Related to stabilizing power supply in the country, the Philippine Independent Power Producers Association, Inc. (PIPPA) was reported in some news outlets as urging the National Grid Corp. of the Philippines (NGCP) to hasten the greater interconnection of power supply and demand areas via providing more sufficient transmission lines and assets.

PIPPA said there are 1,000+ MW of stranded capacity in Bataan and Quezon due to transmission line limitations; another 1,000+ MW of power surplus in Mindanao that cannot be exported to the Visayas and Luzon; and hundreds of MW of mostly renewables stranded capacity in Cebu, Negros, and Panay as the inter-island transmission lines are not fully operational or remain not expanded. Good reminders, PIPPA.

NUCLEAR POWER

Last Saturday, April 30, I gave a talk — “If Leni wins, or if BBM wins, how will their policies affect our lives and businesses?” — for personnel and officers of China Bank Savings (CBS). I thanked Jo Fernandez for the invitation. My presentation was mostly quantitative, which complemented the bank’s prior session on non-partisan voter education, on what to expect and do during election day itself.

While my talk was mostly about economics, I devoted two slides comparing the energy policies of Vice-President Leni Robredo, Bongbong Marcos, Jr. (BBM), and Isko Moreno. All of them are in favor of more renewables, and while Robredo and Moreno are either non-supportive of or oppose nuclear power, Marcos is explicitly supportive of developing nuclear power.

In a previous column, I noted that the BBM-Sara team is engaged in deception and dishonesty in promoting the “golden age” of Ferdinand Marcos’ Martial Law years and the “good economic management” of the current administration (see https://www.bworldonline.com/opinion/2022/03/21/437319/a-campaign-of-disinformation/, March 21). But I must give credit to BBM for supporting nuclear power development in the country.

Nuclear power has the highest energy density of all energy sources, hundreds or thousand times higher than fossil fuels coal-gas-oil, and much higher than geothermal and hydro, more so intermittent renewables solar-wind.

If the Bataan Nuclear Power Plant (BNPP), a huge 620-MW plant, was allowed to operate in 1984 or 1985, the Philippines and South Korea would have been “nuke classmates.” In 2020, our total power generation from all sources was 101 TWH (terawatt-hour) — comparable to Korea’s 103 TWH from nuke power alone in 1999.

I showed a table on comparative nuclear power generation in my talk at CBS. I expanded it here in Table 2 to show their share to total generation. France, Belgium, Sweden, and Taiwan were the most nuclear-intensive users in the 1980s. France was 77% reliant on nuclear power in 2000 and 67% in 2020. France is the biggest electricity exporter in the European Union and seems to have no recorded nuclear accident, which is the main concern of many anti-nuke groups.

The next administration should seriously consider developing nuclear power, at least small modular reactors (SMRs) that can be put up and dispatched in big island-provinces like Bohol, Mindoro, Masbate, and Palawan.

And back to coal. The United Kingdom and Germany were 60% coal power-reliant until 1985. By 2020, it was down to 24% in Germany and only 2% in the UK. Big and poor countries China and India reach up to 78% coal use and this is one of the major contributors to their having lifted hundreds of millions of their people from poverty — by having cheap, stable, dispatchable energy for businesses and households.

There is no “man-made” climate crisis that necessitates demonizing and abandoning fossil fuels. There is only natural or “nature-made” climate change, a warming-cooling cycle that characterized our planet’s climate since 4.6 billion years ago. Thus, the government should not distort our power supply-demand dynamics via more politics and energy rationing. Government should not impose more carbon taxes or oil taxes. We should have cheap, competitively priced, stable, and dispatchable on-demand energy.
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See also:
BWorld 537, Duterte’s Philippine Economic Debriefing, April 19, 2022
BWorld 538, Energy prices and renewables-gas lobby, May 07, 2022
BWorld 539, Under scarcity: Leni service, BBM welfarism, and Isko overspending, May 11, 2022.

Winners and losers in the 2022 elections, by Jop Yap

This is what my friend, Dr. Josef "Jop" Yap, former President of the Philippine Institute for Development Studies (PIDS), wrote about the PH elections last Monday. Enjoy.
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given a chance, e.g. Chel Diokno.

Perhaps that is what many politicians lack nowadays: a dose of humility. What will bring that about? Being overtaken by Viet Nam? Or suddenly waking up one day to find out that Cambodia, Lao PDR, and Myanmar have surpassed us? But I am not holding my breath waiting for change to happen. Till 2028 then."

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See also other articles by Jop here:
Welfare Economics: Philippine Institutional Issues, November 14, 2011 
Free Trade 33: ASEAN Economic Community 2016, February 16, 2014 
Winners and losers in the 2016 elections, by Dr. Jop Yap, May 10, 2016
Telcos, Pacquiao and China, by Dr. Jop Yap, July 13, 2016
Jop Yap on Trump-Putin connection, November 12, 2016.

Weekend Fun 82, Bawal Party, BBM supporters

I like this old poster, Bawal (Prohibition) Party, and yet "everything is  permitted", haha.

Meanwhile, I posted this in my fb wall yday. Not alluding to anyone and yet it seems most pro-BBM and pro-Isko supporters feel they are being alluded to. Well, elections are always emotionally charged. My wall is public anyway, so these comments are visible in public, reposting them here.

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See also:
Weekend Fun 79, Ang Ano, by PRRD, August 29, 2021
Weekend Fun 80, Political jokes for 2022 elections, October 10, 2021
Weekend Fun 81, Sic o'clock News - Rewind, January 15, 2022.

BWorld 539, Under scarcity: Leni service, BBM welfarism, and Isko overspending

* My article in BusinessWorld last April 25.
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The first lesson of economics is scarcity: there is never enough of anything to fully satisfy all those who want it. The first lesson of politics is to disregard the first lesson of economics. 
— Thomas Sowell, American economist, historian and social theorist

This piece will quickly review some of the fiscal and economic performances of the three leading candidates for President in the coming May 9 elections — Vice-President Leni Robredo, former Senator Bongbong Marcos (BBM), and Manila Mayor Isko Moreno.

THE UPSE ALUMNI, STUDENTS STATEMENT

Ms. Robredo is a graduate of the University of the Philippines School of Economics (UPSE) batch 1986, before she took up Law. More than 400 of her fellow alumni and some 150+ students signed a Manifesto expressing support for her and her running mate Kiko Pangilinan for Vice-President. The signature drive was initiated in early March and cut off was March 31. Alumni range from as old as batch 1968 to batch 2019.

The main reason given by the nearly 600 UPSE alumni and students for their support is that the Leni-Kiko pair is “subok na sa kakayanan at integridad at may track record. Si VP Leni ay ekonomista at isang public interest lawyer…. Si Kiko ay abogado (UP Law batch 1993) at batikang Senador (tested in competence and integrity and has a track record. VP Leni is an economist and a public interest lawyer… Kiko is a lawyer (UP Law batch 1993) and a veteran senator).”

VP Leni has shown that having big agency budgets via big taxes and huge borrowings is not a guarantee of real public service and improving the ordinary Filipinos’ lives. The budget for six years (2017-2022) of the Office of the Vice-President (OVP) was only P0.6 to P0.9 billion a year, always below P1B/year. The total budget for 2022 is P5 trillion, of which the OVP budget is only P0.71 billion, or 0.0001 or 1% of 1%. Thus, for every P100 in total budget, the OVP budget is only P0.01 or 1 centavo. Compare that to the budget of the Office of the President (OP) amounting to P8.24 billion plus discretionary and intelligence funds and other offices of P65.1 billion.

And yet VP Leni was able to inspire confidence and transparency and attracted many private donations during the pandemic that enabled her office to deliver PPEs to many frontline health workers and COVID treatment kits to poor households.

In Table 1, Other Executive Offices (OEO) under the OP include, among others, the Presidential Management Staff (PMS), National Intelligence Coordinating Agency (NICA), National Security Council (NSC), and the Office of the Presidential Adviser on the Peace Process (OPAPP).

BBM’S NON-ACHIEVEMENT AND PROGRAMS

Of public achievement over the past six years, BBM practically has none. His own official website shows no private business engagement, no government position even as a consultant — 2016-2022 is blank. He just spent the past six years campaigning and revising Philippine history to say that the country had great economic performance, often referred as “the golden years,” under his father’s Presidency from 1966-1985.

So, achievement-wise — zero. Yet he promises plenty of welfarist, bordering on socialistic, programs: 1.) free health insurance for all senior citizens, rich and poor; 2.) subsidized food nationwide via permanent Kadiwa rolling stores in every barangay; 3.) free EDSA Carousel rides all year round; 4.) immunization registry and mass vaccination in every local government unit (LGU); and, 5.) energy rationing by killing all coal plants and use mainly renewables.

He and his running mate Sara Duterte also promise to continue many economic programs of the current administration. Well, the Philippines had a GDP contraction of -9.6% in 2020, the worst in Asia that year and the worst in Philippine economic history since the post-World War 2 era. Public debt also rose big time, from P8.22 trillion (actual and guaranteed) in 2019 to P10.25 trillion in 2020, P12.15 trillion in 2021, and P12.51 as of February 2022. High public debt will require high and multiple taxes.

From 2016 to 2021, the Philippines has had the lowest increase in per capita income among the ASEAN-6 — only 15%, while Vietnam has had 37%, Singapore 28%, while Malaysia, Indonesia, and Thailand have had 19-22% (Table 2).

ISKO MORENO’S OVERSPENDING

While VP Leni’s office has an annual budget of only P0.6 to P0.9 billion a year for the past six years, Isko Moreno as Manila Mayor has had expenditures of P30 billion in 2021 and P71 billion in 2022. He is the only Mayor in the National Capital Region (NCR) to undertake annual and large-scale privatization of city assets. Here are the revenues or proceeds from the sale of City government assets: P90 million in 2019, P4.936 billion in 2020, P14.761 billion in 2021, and P44.146 billion in 2022.

So, with huge one-time revenues, he splurged in huge public spending. The ending share of Manila City’s expenditures to total NCR (16 cities and one municipality) rose from 10% in 2019 to 22% in 2022. (Table 3).

Let’s go back to the quote of Dr. Thomas Sowell. VP Leni is a practitioner of doing public service while given a very small budget and resources. BBM and Isko are the politicians who disregard the lesson of scarcity and just spend huge amounts or promise to spend for huge freebies. These spend-spend-spend politicians will also be the tax-tax-tax authoritarians when they splurge on nationwide public spending. Voters will note this when they cast their votes in two weeks.
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See also:
BWorld 536, Electoral campaigns, vaccination and causes of deaths, April 13, 2022
BWorld 537, Duterte’s Philippine Economic Debriefing, April 19, 2022
BWorld 538, Energy prices and renewables-gas lobby, May 07, 2022.