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Tag: Introspective

Carpenter versus plunderer

“Lo! unto us a child is born!” Not just any child but a child of a carpenter who would follow in his father’s footsteps (Mark 6:3). Carpentry creates value as it transforms plain wood into a beautiful cabinet. Honest hard work is carpentry’s signature. It is the exact opposite of plunder.

Coping with FIRe

I had the privilege to listen to Dr. Aniceto Orbeta of the Philippine Institute for Development Studies (PIDS), the government think tank, when he made a presentation on Labor and Global Development before the People Management Association of the Philippines.

Good, not great

I am pleased to share with readers the executive summary of our quarterly economic outlook report for GlobalSource Partners (globalsourcepartners.com) written by Marie Christine Tang and me last Nov. 22, 2018. The second part of this column is a statement of the Foundation for Economic Freedom supporting TRAIN 3, on property valuation for taxation purposes issued Nov. 30, 2018.

Price controls on medicines: The zombie is back!

On Nov. 15, the technical working group organized by the Senate Committee on Trade, Commerce and Entrepreneurship chaired by Senator Pimentel met on the proposed Senate bill that would create the drug price regulatory board or DPRB.

Agriculture, agriculture, agriculture

My former college economics professor, Dr. Bernie “Dr. Boom” Villegas, was once quoted chanting the mantra of “agriculture, agriculture, agriculture” when asked about the development direction of the country. Indeed, while the political Left were enamored with “nationalist industrialization,” and rent-seekers with “import-substituting industrialization,” Bernie was an outlier. After all, agriculture was unsexy, while industrialization, with its image of mighty steel mills and factory sinews, represented progress and modernization.

‘Never waste a good crisis’

There has been much hand-washing among our legislators on TRAIN 1. The unfortunate part about this is they were responding to fake news.

The Third Telco Project, Winner’s Curse and Sustainability

The government’s third telco project managed by the DICT seems on the verge of naming the lucky winner of the third player race based on the highest committed level of service (HCLoS) involving price and internet speed. The winner will operate within a narrow corridor of performance: it has to offer faster internet service at the same or at a lower price than currently on offer. The winner shall have posted a performance bond of P14 billion which will be forfeited if its performance falls below committed levels. It will then have to spend P40 billion in the first year and P240 billion in the succeeding five years. Among the committed indicators is the allocation of the capital spending: 40% for operating expenditure, 20% for broadband and 40% for national coverage. By Nov. 7 at 10 a.m., we will know the lucky winner. Or will the prize be a “winner’s curse”?

Capitalism and inclusion under weak institutions

One could not have thought of a better title for the latest book of UP Economics Professor, former Dean and National Scientist Raul Fabella, a deceptively slim volume (120 pages) but a real heavyweight. It has amazing sweep and depth on what ails our economy, and provides possible solutions, cogently pulling together literature and research on what has worked here and elsewhere.

Structural weaknesses in our economy: What to do?

In my last column, “The Structural Weaknesses of the Philippine Economy,” I said that the recent economic data show the structural weaknesses of the Philippine economy: low agricultural productivity, weak export growth, and undiversified export base, with much export concentrated in low value-added electronics sector.

Red flags in rice tariffication

The House of Representatives has passed its version of the rice tariffication law. Apparently, they did that to make good (finally after 23 years) the country’s obligation under the WTO’s agreement of agriculture to convert a quantity restriction or QR on rice imports into ordinary tariff protection.

‘Weaponized’ Incentives and TRAIN 2

Most of the time, when passions are high it is because conflicting greeds are involved. Some rare times, when passions are high it is because conflicting principles are involved. Among the promontories of contention in the proposed TRAIN 2 or its TRABAHO version is the shift from gross income taxation and other “forever incentives” to net income taxation (e.g., CIT) and time-bound incentives for PEZA locators. Since the government is switching policy lanes, this question is a propos: “Is the old system broke?” By “broke” it means wasteful.

The structural weaknesses of the Philippine economy

Recent economic data show the structural weaknesses of the Philippine economy. In August, inflation accelerated to 6.4% pa from 5.7% pa in July, the...

End of the road for federalism?

IN his third State of the Nation Address (SONA) in July, President Rodrigo Durterte urged Congress to work on his proposal to change the Constitution to enable the Philippines to shift from the current presidential to a federal form of government. Curiously as we observed in our brief, he did it less forcefully then what many had expected considering that federalism, along with the drug war and anti-corruption drive, had been an oft-repeated subject of his lengthy monologues. Today, a month after that speech, the drive for federalism seems to be waning.

Q2 Growth: Old or New Normal?

THE one bright spot for the Philippines in the second half of the 21st century is its growth. The average growth rate of GDP in the last six years was 6.5%, which exceeded the 4.8% average growth under the Arroyo administration and thus was considered the “new normal.

The draft Constitution is terrible

Scratch that; the draft Constitution drawn up by the Puno Consultative Commission, is uber-terrible.

Legislation that Matters

Much drama accompanied the State of the Nation Address the other week. Hopes are high that action follows suit.

TRAIN 2: The failures it addresses

In the 2018 SONA, President Duterte affirmed his unequivocal ownership of TRAIN 1 and 2. What welcome news for TRAIN advocates who felt orphaned when, previously, the President hinted that he will leave the tweaking of TRAIN 1 (in view of inflation) to the ‘wisdom’ of Congress! A successful flagship economic program will ensure Duterte a bright legacy; a mangled one will sink that legacy no matter the political projects. Even so, TRAIN 2 still has ways to go.

Our looming electricity shortage

The Philippines faces an urgent task.

The BSP and Inflation: What Mission Creep?

The inflation rate reached 5.2% in June 2018 following 4.6% the month before. The June level is the highest in five years and breached the price target ceiling. Critics are lashing about to find fault. Demonizing TRAIN 1 is everywhere in the media and talks of rejiggering the act is afoot. Sadly, President Duterte revealed that he would leave the fate of his regime’s cornerstone economic program to a Congress that is facing midterm elections! That seems to leave his economic team in a lurch. Meanwhile, the detractors have extended the compass of their blame game to the BSP.

The Drama King

I voted for President Duterte.

Strongman in the Palace

I am pleased to share with you the political section of our latest quarterly report, (“Of Deficits and Rising Risks,” May 20, 2018) for GlobalSource Partners, a New York-based network of independent analysts (globalsourcepartners.com). Our subscribers are principally global asset managers and banks who are mostly focused on the more quantitative economic sections of our reports. Christine Tang and I are their Philippine Advisors.

Strong leader as miracle worker: Deng Xiaoping drilled down

It’s that time of year again and net gladiators are jousting on the red clay of the French Open (non-tennis buffs may skip this opener). One match in the round of sixteen kept me glued.

TRAIN 2 and The Fatal Conceit

“The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design.” -- Friedrich August von Hayek

Eight former Finance Secretaries support TRAIN 2

In a remarkable show of support for the public good, eight former finance secretaries signed a statement of support for TRAIN package 2. They are...

Endo and Manufacturing

HB 6908 or “An Act Strengthening the Security of Tenure of Workers” was approved on third reading by the House of Representatives. It proposes...

Not a new jockey, Mr. President, NFA needs to retire

The NFA reverts back to the Office of the Secretary of Agriculture. Through the years, administrative control of the NFA has shifted between the...

My problem with TRAIN 2

I have a full disclosure to make before I state my opinion on TRAIN 2 or the Tax Reform for Acceleration and Inclusion Package...

Kim Jong Un: Madman or genius?

It’s an Easter miracle! Kim Jung Un’s visit to President Xi Jin Ping and Kim’s pledge to “de-nuclearize” was an Easter treat. It lifted...

Is growth sustainable?

The answer appears to be yes. After a checkered history of boom and bust cycles since the founding of the Republic in 1946, punctuated...

TRAIN, inflation, and competitiveness

The government’s Tax Reform for Acceleration and Inclusion (TRAIN) began to make an impact on inflation this January and February, with a spike of...


In Shakespeare’s Act III of Julius Caesar, Mark Anthony joined the funeral of, after Brutus and kindred souls had done the Ides of March...

Weighing Alcala’s rice self-sufficiency program

The rice self-sufficiency program of former secretary Proceso Alcala was the banner program of the Department of Agriculture. No less than former president Aquino...

We need an Alfred Kahn

Alfred E. Kahn is considered the “father of airline deregulation” in the United States. A former professor in economics of Cornell University, he was...

Wishes for the economy in 2018

Happy New Year, dear readers! We start 2018 on a positive note: My wishes for the economy in January 2017 were largely realized. (To read...

Coal Tax Follies

Carbon tax is what the doctors prescribed to cure our fossil fuels’ addiction. This works when supplies shift to favor cleaner, affordable, and secure...

The Gravy TRAIN is leaving and common sense isn’t in it

Otto von Bismarck once said that “laws are like sausages. Better not to see them being made.” No one would agree more than observers...

Regulatory capture

Regulatory capture, according to Wikipedia, is “a form of government failure that occurs when a regulatory agency, created to act in the public interest,...

Without the US, the TPP is back but for how long?

On sidelines of the APEC summit in Danang, Vietnam, the remaining 11 contracting parties of the Trans-Pacific Partnership deal or TPP are expected to...

On Globalization, Inequality, and Inclusive Growth

Since Thomas Piketty came out with his book, Capital in the Twentieth Century (2013), it has become fashionable to blame globalization, open trade regimes,...

Two steps forward, one step back

In December last year, I wrote a column “One Step Forward, Two Steps Back,” describing the uneven progress six months into the Duterte administration....

Inclusion and delusion in TRAIN

What is the meaning of inclusion in TRAIN? If we understand acceleration to be sustained rapid increase in per capita income, what is the definition...

Uncreative distractions

“Will no one rid me of this turbulent cleric?” Tradition says these were the words spoken openly (and likely in French) by England’s Henry II...

Business model, disrupted

If the Philippines were a company, its business model would be facing disruption. Its business model, if you will, rests on OFW remittances and BPO...

Bye bye, Build Build Build?

The Tax Reform for Acceleration and Inclusion (TRAIN) has been billed as the administration’s flagship legislation for achieving sustainable seven percent growth, generating investments...

Vox populi vox Dei?

It is a common misapprehension that the essence of democracy is sufficiently defined as the popular will expressed through elections or plebiscites and as...