NFA met suppliers’ price to ensure Dec. delivery
MEMBERS of the National Food Authority (NFA) Council had reservations about pursuing a government-to-government (G2G) rice procurement deal under which the Philippines had to pay a higher price to ensure delivery of Thai and Vietnamese rise by the end of 2018.
Ruth B. Castelo, NFA Council Member and an undersecretary at the Department of Trade and Industry (DTI), said in a text message: “Some had reservations but we had to prioritize bringing in the rice by year’s end.”
Ms. Castelo added: “G2G [is] a little more expensive but [the] Council fixed it to match the G2G price.
The initial reference price of the NFA was $447.88 per metric ton (MT) which resulted in failed consecutive bids after the agency declined to meet the offers from Thailand and Vietnam.
Agriculture Secretary Emmanuel F. Piñol said earlier announced that the NFA Council has decided to adjust the price after the failed biddings, noting that the $447.80 reference price reflected the price of rice in Pakistan and India — which were not involved in the auctions.
The latest G2G procurement exercise covered 203,000 MT, part of the 750,000 MT approved by the Council for this year.
“DTI supported the G2G scheme for now just to make sure that we have enough supply of rice in the country. It is faster and will ensure arrival within the year,” Ms. Castelo said.
“The bidding was completed yesterday [Nov. 28] and arrival of rice by tranches is assured to be completed by Dec. 31, 2018,” Ms. Castelo added.
Mr. Piñol said last week that the Department of Agriculture (DA) is projecting a rice buffer stock of 134 days, moving toward 2019, incorporating inventory held by NFA, commercial entities, and households. — Reicelene Joy N. Ignacio
Zubiri expects no issues with Senate budget review timeline
SENATE Majority Leader Juan Miguel F. Zubiri said Thursday that he does not expect his chamber’s review process for the P51 billion realigned in the budget by the House of Representatives to delay the approval process.
“It wouldn’t (delay) because (Budget) Secretary (Benjamin E.) Diokno has promised that we will discuss this with him, because Senator (Panfilo M.) Lacson just wants transparency,” he told reporters during the Kapihan sa Senado media forum.
He said Mr. Diokno will be attending an all-senators caucus next week to clarify the issues on the alleged pork barrel in the proposed 2019 budget and on the need to prevent a reenacted budget.
The House of Representatives realigned some P51 billion from the budget of Department of Public Works and Highways (DPWH) to fund other agencies. Mr. Lacson has claimed that P60 million worth of “pork” sourced from the realigned appropriations was given to each congressmen.
However, House Majority Leader Rolando G. Andaya on Wednesday clarified in a television interview that the P60 million allotted to congressmen was meant to fund local projects that the lawmakers were obligated to itemize.
Mr. Zubiri said the P51 billion realignment would be the most contentious issue for Senate will review in its budget deliberations. Mr. Lacson has promised to closely examine questionable “insertions” when the proposed budget reaches the Senate.
Mr. Zubiri also saw nothing wrong with “institutional insertions” made by legislators in the proposed budget because of their obligation to provide for the needs of their constituencies. However, he added that the funding must be used for actual projects and must not be pocketed.
“In fairness to the congressmen and some senators also, they have constituencies that they’d like to support… It’s also their job, their duty to be able to help provide these projects to their constituencies,” he said.
“What we don’t want to happen is for (the funding) to be stolen, to have problems in the bidding process… As long as the project stands and it is approved by the department. For me, I don’t see anything wrong,”
Nevertheless, the Senate leader added that the budget will face swifter passage once the issues on the P51 billion are cleared up. The chamber has committed to fast-track the budget’s third-reading approval and ratification before the Christmas-New Year break in order to have the budget signed by the President within the year.
“I believe if that (P51 billion) is accounted for and is transparent, I believe we’ll have no major problems,” Mr. Zubiri said.
However, Mr. Lacson maintained that the P60 million supposedly given to congressmen was pork barrel despite Mr. Andaya’s explanation.
“They excised P20 billion from the P51.792 billion proposed national budget and appropriated P60 million to each of their 297 members, probably more to a blessed few since a simple computation tells me there is an excess of P2.17 billion,” he told reporters in a text message.
“If that isn’t pork, tell me what it is,” he added.
The Supreme Court in its 2013 ruling declared the Priority Development Assistance Fund (PDAF), as unconstitutional. The pork barrel system allows lawmakers to nominate pet projects through lump sum allocations in the annual budget.
In its decision, the SC said PDAF created a system of budgeting where items are not specified, thus denying the President the power to veto appropriations. — Camille A. Aguinaldo
DILG, BFAR plan to add teeth to inshore bottom-trawling ban
THE Department of Interior and Local Government (DILG) and the Bureau of Fisheries and Aquatic Resources (BFAR) signed a joint memorandum circular on Wednesday strengthening enforcement of the ban on bottom trawling within municipal waters.
JMC 2018-03 states that bottom trawling disturbs the seabed and destroys the complex structure of benthic habitats by direct removal of biological and topographic features.
Bottom trawling is a fishing method using a bag-shaped net which is dragged or towed along the bottom.
The catch often includes juvenile fish and spawners as well as non-commercially valuable, endangered, threatened and protected marine species and organisms.
The liable parties include the boat’s owner, operator, captain and master fishermen, chief executive officer of the fishing company or the managing partner of a partnership, who will be liable for confiscation of the catch, fishing gear, and a fine of three times the value of the catch, or the following fines, whichever is higher:
• P20,000 for municipal fishing, or community service if unable to pay;
• P50,000 for small-scale commercial fishing
• P100,000 for medium-scale commercial fishing;
• P500,000 for large-scale commercial fishing.
Upon conviction by a court of law, the violators also face imprisonment of two to six years and a fine equivalent to twice the administrative fine, confiscation and forfeiture of fishing gear and catch, according to the circular.
Gloria E. Ramos, lawyer and vice-president of environmental group Oceana Philippines, told reporters in Mandaluyong on Thursday: “The Fisheries Code of 1998 declared bottom trawling illegal, but what actually happened was that small vessels with gross tonnage of less than three tons continued to do it but were unregulated. The boats were also unregistered. The LGUs [local government units] did not register the boats.”
“We have a study. We came up with a policy and then we used that to present to the government. Last December, they all agreed. All agencies agreed to come up with the joint implementing guidelines to ban bottom trawling. There is a technical working group chaired by BFAR and DILG to oversee the implementation,” Ms. Ramos said.
Ms. Ramos said that many livelihood will be affected by the strict implementation of the ban, and there needs to be collaboration with the government to provide livelihood assistance.
In the JMC, livelihood assistance will be facilitated by the Department of Social Welfare and Development (DSWD), Department of Trade and Industry (DTI), Department of Labor and Employment (DoLE), Department of Tourism (DoT) and the Technical Education and Skills Development Authority (TESDA).
“In the public consultation, the issue of livelihood came up in case boats need to be decommissioned. Many agencies committed to help,” Ms. Ramos said.
“LGUs have the primary responsibility. They should decommission boats, issue ordinances, provide a transition period. After a certain period, the guidelines say that the crews of any boats caught in violation and forced to decommission can no longer access the livelihood program,” Ms. Ramos said. — Reicelene Joy N. Ignacio
Bill adding energy efficiency office to DoE bureau approved
A BILL reorganizing the agency in charge of promoting energy conservation and efficiency was approved on second reading at the House of Representatives via voice voting.
House Bill No. 8629, or the Energy Efficiency and Conservation Act, reorganizes the Energy Utilization and Management Bureau (EUMB) to include an Efficiency and Conservation Enforcement Division (EECED).
Currently, the EUMB’s organization includes the Alternative Fuels and Energy Technology Division (AFETD) and Energy Efficiency and Conservation Division (EECD).
The bill outlines the AFETD’s role as to formulate plans and policy relative to alternative fuels and new and advanced energy technologies. The EECD is to evaluate and promote the use of energy efficiency and conservation technology.
The measure also places energy efficiency projects in the government’s Strategic Investments Priorities Plan (SIPP), which will entitle it to incentives.
“At the end of (the incentive period), the Fiscal Incentives Review Board may suspend or cancel the grant of such incentives upon a joint recommendation by the DoE (Department of Energy) and the BoI (Bureau of Investments),” according to the bill.
The incentives include a six-year income tax holiday, zero percent value-added tax rate on capital purchases, a 10-year tax and duty exemption on imported capital equipment directly used for energy efficiency operations.
The DoE, as the implementing agency, has been empowered to hold on-site inspections to assess energy management systems and make recommendations when violations are committed.
The DoE may also impose fines, ranging from P10,000 to P1 million, which may be doubled depending on the damage caused, and seek the imprisonment of violators for one to five years. — Charmaine A. Tadalan
Moody’s maintains stable outlook for Asian steelmakers
MOODY’s Investors Service said its outlook for the steel industry in Asia in 2019 is stable as China reduces capacity and enforces tough environmental rules.
In 2019, demand for steel in Asia will likely stay at levels similar to that in 2018, indicating a softening from the robust growth seen in 2018,” Kaustubh Chaubal, Moody’s Vice-President and Senior Credit Officer, said in a statement Thursday accompanying a Moody’s report, “Steel — Asia: 2019 Outlook.”
The stable forecast also reflects the direction taken by China’s Purchasing Managers’ Index, which has sustained a score above 50 in recent months. A score above 50 signals expansion.
“As for profitability, rated Asian steelmakers will see their profitability levels weaken mildly because of a decline in Chinese demand growth but stay strong overall,” he added.
Moody’s noted that business conditions and profitability vary by company and the particular economy that steelmakers operate in.
India, for instance, with the consolidation of its steel sector accompanied by solid demand, will allow robust profitability for Tata Steel Ltd. (Ba3 positive) and JSW Steel Ltd (Ba2 stable).
Meanwhile, the profitability of Japanese and South Korean steelmakers will diverge due to their exposures to various end-markets.
“For Japanese companies, profitability will hold steady or improve slightly, but for South Korean steelmakers like POSCO (Baa1 stable) and Hyundai Steel Co. (Baa2 stable), profitability will fall moderately in 2019,” it added.
Moody’s noted that the escalation of the Sino-US trade tensions will have a minimal effect on Asian steel demand because of the moderate indirect impact through supply chains and “manageable” direct impact on the macroeconomy.
“Our forecast of flat steel demand in China for 2019 reflects higher infrastructure spending that will limit the negative effects of the ongoing Sino-US trade dispute, and slower growth in China’s real-estate investments,” Kai Hu, a Moody’s Senior Vice-President, was quoted as saying.
However, it also cautioned that potential US tariffs on imported vehicles pose key downside risks to Japanese and South Korean steelmakers. — Janina C. Lim
ADB to fund technical assistance for three PHL transport projects
THE ASIAN Development Bank (ADB) is preparing $5 million worth of technical assistance grants for transport projects in Southeast Asia, with the Philippines getting funding for three projects.
The ADB approved the Southeast Asia Transport Project Preparatory Facility on Nov. 16, which provides technical assistance grants for eight infrastructure projects across the region.
The Philippines will obtain assistance for three projects: the Bataan-Cavite Bridge Project, the Laguna Lakeside Road Project, and the Manila Mass Rapid Transit Line 4.
“The regional transaction technical assistance (TA) facility will provide project preparation support and capacity building to a series of ensuing transport sector projects in Southeast Asia,” the ADB said.
The fund will also assist Cambodia’s Second Road Network Improvement Project, provide additional support to the Second Northern Greater Mekong Subregion (GMS) Transport Network Improvement Project in Laos; and Thailand’s Bangkok Urban Transport Development — West Orange Line, Regional Airports Improvement Project, and Tak Mae Sot Road Tunnel Project.
“The Vision 2030 of the Southeast Asia Department’s aims for ADB to become the go-to partner in Southeast Asia by improving the efficiency of delivery mechanisms, providing innovative finance and knowledge solutions,” the ADB said.
ADB’s pipeline for transport projects for the next three years includes 27 new loan and periodic financing request approvals worth $7.2 billion and over $12 billion on a facility basis, which will add to the existing 55 loans and grants worth $5.3 billion.
“The pipeline is on one side expanding into new subsectors such as railways, road tunnels and air transport in Thailand and large bridges and railway infrastructure investments in the Philippines. On the other hand, more traditional road projects in Cambodia and Lao PDR shall increase in size of the project for better relevance of ADB’s investment and reduced transaction cost,” the bank said.
The ADB’s country partnership strategy has set aside $7.8 billion for lending in 2018-2021, after more than the $5 billion worth of loans approved in 2011-2017. Some 47% of the current lending pipeline will go to the transport sector, with public sector management taking 21%, and financial sector reforms 13%.
“This significant increase in portfolio size will come together with a reduction of the number of projects financed, hence the individual projects will increase in size and complexity. Therefore, efforts to increase project readiness while preparing these more complex and larger projects must be taken, while at the same time, the portfolio performance needs to be improved.
“This indicates that more emphasis must be drawn on project preparation and project implementation for the significantly increasing portfolio to avoid start-up delays such as often phased-in procurement or safeguards implementation of newly-approved projects,” it added. — Elijah Joseph C. Tubayan
Honoring George Ty
By Manuel V. Pangilinan
We lost George Ty only days ago, but we will miss him for a long time. We will miss his kind person, his large presence, and the long and happy life we had wished for him.
I cannot recall exactly when I first met Mr. Ty, or the circumstances. It must have been in the ’90s, when I was still based in Hong Kong.
I do know that I first me Mr. Ty in an “official capacity” in the year 2000. That was five years after Metro Pacific had won the bid to develop Fort Bonifacio. It was bad timing, as you know. The Asian financial crisis hit Asia in 1997, and all of a sudden, we were saddled with debts, which we started to pay down largely by way of dacion. I recall we went to see Mr. Ty at his office at Metrobank Plaza to offer our Fort Bonifacio properties for the unsecured loans extended by Metrobank to Metro Pacific, aggregating about P2 billion. We proposed to settle this by way of real estate — 55% of the 11.5 hectares in the northern part of Fort Bonifacio plus a number of Pacific Plaza Tower units we owned. We gave up our last holding in Fort Bonifacio in exchange for finally wiping our slate clean with Metrobank.
If you’re doing the math: Metrobank got the Fort Bonifacio property for P20,000 per square meter, after netting out the value of the Pacific Plaza units. Just five years earlier, we had paid P33,000 per square meter for the same piece of land.
I’m sharing this story not to highlight how astute a businessman Mr. Ty was — although he was that. I’m telling this story to tell you that throughout this process of finding our way out of paralyzing debt, there was never rancor or resentment. And we never looked at him only as a lender, or as a collector. Indeed, we — and I personally — looked to him as a friend and savior. The meeting went beyond business — there was genuine empathy. Ultimately, he helped us back on our feet. I remember him admonishing us: You got caught in a perfect storm, and who wouldn’t be hurting after that. He added: Tomorrow you could dust yourselves off, wisened and humbled, and you will remain proud and dignified, and ready for a new day.
My regard for Mr. Ty rose immensely on that day, and it hasn’t dwindled to this day. To bookend this first encounter account — the last time I met Mr. Ty was at the lobby of the Grand Hyatt, that magnificent hotel standing right there at the land we used to own. It was his hotel, on the place that will forever mark an important chapter in Metro Pacific’s story. On my birthday this year, he waited at the hotel lobby to greet me. I was so touched by the gesture, yet felt deep empathy for him because he looked weak that evening — to the point where I respectfully suggested that he shouldn’t be here — but at home resting. Being the vintage Mr. Ty, he insisted on joining me at the ballroom, where he stayed to have tea for 20 minutes. When he left, I fought hard to control my tears, because Mr. Ty’s birthday gift of friendship was priceless — and memorable. That the only gift I received that day or ever — which I will remember for the rest of my life was his caring presence.
In between these two memorable private encounters with Mr. Ty, I remember as well the many lunches and dinners he hosted, here and in Hong Kong, over the two decades I’ve known him. But more than the food were the advice he would give.
When the future of PLDT was at a crossroads in 2002, between being sold to the Gokongweis or staying with First Pacific, the debates and passions were very public. Mr. Ty was not an invested stakeholder in any of the groups involved, and yet, because he was friends with all, he provided the calming figure and sober voice. I took his counsel for the wisdom and weight it carried.
He asked me to see him three times about this episode in my life. I particularly remember how he reminded me to value the relationships I’ve built with Anthoni Salim, and the histories between people that should count for something. He valued people and relationships, and showed it.
And this mentor often preached prudence. “Be prudent,” he would say to me. “This calls for prudence.” This line is so etched in my mind — he preached prudence so often in my presence — that I began to ask others around me: Bakit sa akin siya nakatingin? Aggressive daw kasi ako.
We all know Mr. Ty goes through every detail of every operation and every deal. I probably have some of that quality in me as well. I do know I share his work ethic, and his emphasis on integrity. The conventional admonition — relax and enjoy life — does not belong to both our vocabularies.
He never missed sending gifts for my birthdays or on Christmas. I can only imagine how he expressed his love to his family. He told me once: Please take care of Alfred. Which I took to mean, be a mentor to him, even though, Alfred already had the best mentor in his life. He also told me to continue working with Arthur, and, specifically, he said — forget that he is my son — by which I took to mean — You could trust my son because I raised him well. Arthur, your father saw in you as he saw in Alfred, not just the professionalism the rest of us only glimpsed and heard of with reverence, but the lessons he personally imparted.
I heard Mr. Ty was a man of faith, and for all that he did and for all whom he helped, that explains a lot. But it is Mrs. Ty whom I regularly see at San Antonio Church. Mrs. Ty, I am reluctant to approach you in any of those Sunday mornings, because I do not want to encroach on your personal, spiritual space. But clearly God smiles on your family, Mrs. Ty.
In business, strong passions are the norm. Mr. Ty was a strong man. He was shrewd. He was decisive. I have seen him make decisions that could determine the fortunes of a business — as in our case 18 years ago. Those were his finest hours.
Where did that confidence come from? Where was that strength acquired? It is the courage of a boy who left China when he was young. It is the courage of a young man who dared to dream big things and act on them — Metrobank being the outstanding example. It is the courage of a man who waited on the Lord to finally call him home.
When the sun sets on our shores this Monday, December 3rd, a great success story will close.
I heard it said that people die twice — once, with their last breath, and once more, later on, when people say their name for the last time. I’d like to think that Mr. Ty made sure that his second death does not happen — that indeed we will remember him for a long time.
So in these final days, we say our formal goodbyes. It is a fond salute to a man we cherish. It is a grateful salute to a man whose exceptional life was devoted to service. It is a respectful salute to a man who by any standard was one of the giants of our time.
Finally, let me recall what the Romans of Antiquity said as they bade goodbye to their beloved departed — which I say now — Ave atque vale — hail and farewell, Mr. Ty.
A union for a dangerous trade
Press freedom is protected by the 1987 Constitution because of the vital role of the news media in providing the information the citizenry needs in making intelligent decisions on matters of public interest. But despite Article III, Section 4, journalism is still a dangerous calling in the Philippines.
The killing of journalists and its impact on the democratization process initially alarmed only a very few media advocacy groups. And yet 164 journalists, most of them from community (provincial) newspapers and radio stations, have been deliberately targeted and killed in this country since 1986, when the restrictions on the institutions of Philippine elite democracy, among them a free press, were lifted with the overthrow of the Marcos dictatorship.
The killings nevertheless happened during all the administrations that followed that of Marcos — from the Corazon Aquino, Fidel Ramos, and Joseph Estrada regimes to those of Gloria Macapagal-Arroyo and Benigno Aquino III. They are still happening during the Duterte regime, with 12 so far killed for their work since 2016.
It was the murder of Pagadian, Zamboanga del Sur journalist Edgar Damalerio in 2002 that convinced major media organizations and advocacy groups as well as journalists’ associations of the gravity of the situation, and called the attention of international press freedom watch networks to what was happening in this “peaceful democracy.” But the Nov. 23, 2009 killing of 32 journalists and media workers who were among the 58 men and women massacred in Ampatuan town, Maguindanao, made the safety of journalists a key national and global issue.
Journalists’, media advocacy and free expression groups marked this year the ninth anniversary of that foul attack on journalists — it was also the worst incident of election-related violence in the Philippines — with forums, conferences and statements, in some instances with the support of international press freedom advocacy organizations.
Among those activities was the multi-stakeholder consultation on crafting a national plan of action on journalists’ safety organized by the Asian Institute of Journalism and Communication (AIJC) and the European Union’s International Media Support (IMS) last Nov. 7.
Two conferences on the present state of the media were also held in Quezon City on Nov. 9 and in Davao City last Nov. 16-17 by Freedom for Media, Freedom for All, a coalition that has for members the Center for Media Freedom and Responsibility (CMFR), the Philippine Center for Investigative Journalism (PCIJ), the National Union of Journalists of the Philippines (NUJP) and the Philippine Press Institute (PPI), among others.
The quest for the means that will address safety issues and hopefully reduce the instances of, if not completely end, journalists’ being killed for their reports, opinion pieces, and commentaries on public issues has included engagement with government agencies, the introduction of media literacy and safety courses in the country’s schools, and the further training of journalists in ethical and professional responsibility. All have been tried with mixed results, since, despite these measures, the killings are still going on, and so are the threats, physical assaults, and other forms of harassment from mostly State actors (local and national officials, police and military personnel).
What has not been tried as a means of reducing corruption and other ethical issues, improving coverage, as well as protecting journalists, is an industry-wide trade union. The NUJP was originally founded by the late Antonio Nieva with that in mind, but was diverted from that path by the many challenges to press freedom and free expression in the Philippines. But it can still be the union Nieva envisioned.
The disparities in wages and benefits, as well as the often uncertain provisions for safety equipment and insurance for journalists covering potentially dangerous events and areas such as armed confrontations and conflict zones, were among the concerns raised by journalists as well as media advocacy groups during the AIJC consultation.
An industry-wide journalists’ union — in which every journalist, whether in print, broadcasting, or online, must be a member as part of his or her terms of employment — could address these and other economic and safety issues.
Such a union could compel the adoption of the “equal pay for equal work” standard among all media organizations. It would correct a situation in which some journalists in the communities are not paid for their work as journalists but as solicitors for advertising contracts from which they earn commissions.
The practice not only leads to conflicts of interest, in which journalists are unable to freely and honestly report on the local politicians and officials who are the usual sources of advertising revenue in the communities. In addition, it identifies journalists with the camps of politician-advertisers, who, in too many instances, compel them to either report favorably on them or to be critical of their rivals, or both, which in turn leads to their being threatened, harassed or even killed by their patrons’ political enemies.
The union can craft the conditions of work of journalists including their being provided with safety equipment, insurance, and even hazard pay. It can assure practitioners of job security, and as a result improve their coverage of public events and issues by enhancing their independence from the political and economic interests of the media organizations in which they’re employed.
The terms of their employment can specify that they cannot be prevented from reporting newsworthy issues and events of public relevance. Because journalists would be better paid, the union would also be helping reduce corruption by making accepting bribes in exchange for favorable reporting less tempting.
Among the consequences of a better, more ethical and more professional press is public support and appreciation for the work journalists do, and therefore their being alerted on, and protected from threats by the communities they serve. In the independent exercise of their craft, for example, nothing would prevent the members of an industry-wide union from supporting policy initiatives beneficial to those communities, or combating those that are not, thus earning them the gratitude and protection of the population. That would be in contrast to the indifference with which much of the public today regards the harassment and threats many journalists experience.
But against an industry-wide journalists’ union, it has been argued that some newspapers and radio stations, particularly in the communities, cannot afford to pay just wages, or provide safety equipment and insurance, and are compelled by their financial limitations to “pay” practitioners through the commissions they make as advertising solicitors. They claim they would otherwise go out of business.
This self-serving argument in effect legitimizes in the name of economic sustainability the conflicts of interest, the corruption, and practitioners’ resulting endangerment as well as the persistence of biased, one-sided, incomplete and even inaccurate reporting.
It should be obvious that such media organizations are of no use to anyone except those who own and profit from them. Because neither the public nor journalism is made any better by their continued existence, the country, the Philippine press and the need for reliable information as a necessary input to democratic discourse would be so much the better off without them.
Industry-wide journalists’ unions have been tried and tested in Europe and other parts of the world for over a hundred years. They can help free journalists from the threats and harassments many are subjected to, and even reduce the number of journalists killed each year if not altogether end the killings. It is about time one is tried in the present Philippine context, in which journalists have to contend with one of the most hostile media environments on the planet: a country that the New York-based press freedom watch group Committee to Protect Journalists (CPJ) once described as “the most murderous place in the world” for journalists.
Luis V. Teodoro is on Facebook and Twitter (@luisteodoro). The views expressed in Vantage Point are his own and do not represent the views of the Center for Media Freedom and Responsibility.
www.luisteodoro.com
More smokers and drinkers needed to fund more UHC?
“The man of system…is apt to be very wise in his own conceit; and is often so enamoured with the supposed beauty of his own ideal plan of government, that he cannot suffer the smallest deviation from any part of it….He does not consider that in the great chess-board of human society, every single piece has a principle of motion of its own, altogether different from that which the legislature might choose to impress upon it.”
— Adam Smith,
Theory of Moral Sentiments
(1759)
That observation by Adam Smith also applies to the plan of many sectors to further raise tobacco and alcohol taxes to fund higher resources for universal health care (UHC).
There is a clear contradiction here. The stated goal is to further reduce smoking and drinking but there is implicit demand for more smokers and drinkers who will pay more tobacco and alcohol taxes to fund more UHC beneficiaries and health care providers.
There are four stories in BusinessWorld this week related to this:
1. House hearing bills on P40-P60 per pack increase in cigarette tax (Nov. 26),
2. Senate panel opens hearing on raising tobacco tax (Nov. 26),
3. Alcohol tax hike hurdles House committee on 2nd reading (Nov. 26),
4. Tobacco excise bill hurdles House on 2nd reading (Nov. 28).
In report #2, Senator Pacquiao’s bill proposes a cigarette tax hike to P60 per pack, Senator Ejercito’s bill wants to raise the tax up to P90 per pack, to cover the estimated P164-billion funding gap in UHC on top of current funding of only P93 billion.
In report #3, the plan is to generate P60 billion for five years in higher alcohol tax rates. Distilled spirits ad valorem tax on net retail price (NRP) per proof liter will rise from 20% to 22%, in addition to a rise in specific tax from P23.40 to P30 per liter in 2019, P35 in 2020, P40 in 2021, P45 in 2022 and annual increase of 4% be changed to 7% beginning 2023.
In report #4, the approved excise tax hike is P2.50 per pack per year on top of current P35/pack until it reaches P45/pack in 2022, then annual increase of 4%.
My 54-page paper, “Assessment of the Sin Tax Reform Act of 2012” was released last Monday Nov. 26 by Stratbase-Albert Del Rosario Institute (ADRi). I made my own estimates of price elasticity of demand (PED) for both alcohol and tobacco products based on estimated retail price (ERP), changes in tax revenues and volume removals. The various estimates of tobacco smuggling are also summarized here (see Table 1).
There was consistent decline in volume removals except in 2015, and consistent rise in ERP, resulting in average PED of -0.31 for 2013-2016. This paper’s estimate is lower than the PED findings of Quimbo, et al (2012) of -0.87 and DoH (2012) of -0.58.
But all three estimates have one conclusion: PED is below 1 and hence, is inelastic, meaning less- or non-price responsive. A 10% increase in the price because of higher taxes did not result in 10% decline in tobacco consumption, only 3% decline as estimated in my paper.
So for tobacco products, the Sin Tax law was successful only in raising more money for the government but a failure in significantly reducing tobacco use.
For alcohol products — beer, wine and distilled spirits — the average PED from 2013 to 2016 is 0.40 (see Table 2).
Both tobacco and cigarettes products exhibited inelastic demand. If government imposes even higher taxes, many smokers and drinkers will simply shift to (a) cheaper legal brands with lower taxes, or (b) cheaper illegal products with little or no taxes. Thus, a potential failure to address high smoking and drinking incidence and at the same time, revenue loss for the government.
Instead of calling for higher sin tax rates, government should focus on significantly controlling smuggled and illicit products that are cheap and readily available. Newton’s 3rd law of motion (for every action, there is an equal opposite reaction) restated — for every government intervention and taxation, there is an equal opposite distortion — seems to apply in our tobacco-alcohol taxation experience.
Bienvenido S. Oplas, Jr. is the president of Minimal Government Thinkers
minimalgovernment@gmail.com
Abortion and the tragedy of rape
A few years ago, this column tackled the issue of “Rape and the hook-up culture” (May 17, 2014). Sadly, the rape numbers for the Philippines essentially remain disturbing.
According to the Philippine Commission on Women, 4% of women age 15-49 experienced forced first sexual intercourse and 10% of women age 15-49 experienced sexual violence.
The Center for Women’s Resource reported that cases of rape “have reached an alarming level. For the year 2010, a total of 4,572 cases of rape were documented by the Women and Children Protection Center of the Philippine National Police (WCPC-PNP), 19 of which were incestuous or perpetrated by a victim’s blood relative. This was equivalent to a 13% increase in reported cases of rape and incest from 4,048 in 2009.”
Philippine National Police data do indicate an 11.65% drop in rape, from 4,301 in 2015 to 3,800 in 2016. The true figures, however, could be much higher. Of course, there’s also the reported alleged rape committed by elements within the PNP itself.
It is partly due to the tragic reality of women impregnated due to rape that moves to legalize abortion in the Philippines became foreseeable. The argument has a strong emotional pull. Whether it is the right thing to do is another matter.
One statistic brought up was the Alan Guttmacher Institute’s finding that around 50% of Philippine pregnancies were unintended. This, however, should be distinguished from pregnancies arising from rape. To put a not too fine point: unintended pregnancies do not necessarily mean the sexual act was also unintended and non-consensual.
The Philippines is not alone with regard to banning abortions. From the World Economic Forum, “26 countries still ban abortion altogether, with no explicit legal reason for exception” and a “further 37 countries ban abortion unless it is necessary to save the life of the woman. These include major economies such as Brazil, Mexico, Nigeria, Indonesia and the UAE.”
In the Philippines (although our laws don’t expressly say so), if doctors fully intending to save a mother’s life effected fetal abortion as an unfortunate happenstance such should arguably not lead to criminal prosecution.
Nevertheless, whether the Philippines is alone or not isn’t important. The one question that truly matters is: can a deliberately intended abortion be ever considered right?
Sandra Mahkorn, (MD, MPH, MS and former counselor for sexual assault victims) puts that issue in perspective: “The number and percent of pregnancies resulting from rape is frequently overstated. There are two main reasons why relatively few rapes result in pregnancy. The average rate of pregnancy from a single act of unprotected sexual intercourse ranges from 2 to 4 percent. In addition, 10.9 percent of U.S. women of childbearing age are infertile and over 41 percent have undergone surgical sterilization or are using a continuous form of contraception, reducing (though not eliminating) the likelihood of pregnancy. A survey of U.S. women’s reasons for choosing abortion found that only one percent reported ‘rape’ as a reason and less than one half of one percent reported that rape was the main reason.”
“The abortion rate among rape victims (50 percent) is not substantially higher than among all women who report an ‘unintended pregnancy’ (40 percent). The majority of those who decided against abortion chose to raise their child, while a small percentage opted for adoption. A study of 164 such women found that the majority of those who had abortions regretted having done so and said the abortion caused them additional problems.”
Ultimately, however, as Dr. Mahkorn points out: “we are dealing not with a statistical issue, but a human one.”
So, setting aside what’s basically a tautological argument that abortion is “a choice”: what exactly is being aborted?
Princeton’s Robert George’s remarks before the American Political Science Association Convention is relevant: “A human being is conceived when a human sperm containing twenty-three chromosomes fuses with a human egg also containing twenty-three chromosomes (albeit of a different kind) producing a single-cell human zygote containing, in the normal case, forty-six chromosomes that are mixed differently from the forty-six chromosomes as found in the mother or father. Unlike the gametes (that is, the sperm and egg), the zygote is genetically unique and distinct from its parents. Biologically, it is a separate organism.”
Thusly, anybody can now logically conclude, as George does, that: “The scientific evidence establishes the fact that each of us was, from conception, a human being. Science, not religion, vindicates this crucial premise of the pro-life claim. From it, there is no avoiding the conclusion that deliberate feticide is a form of homicide.”
This is why abortion, intended or in negligence, is considered criminal under the Revised Penal Code.
This is why rights are granted to the unborn under the Civil Code
This is why the unborn is protected under the 1966 International Covenant on Civil and Political Rights.
This is why we call pregnant women “nagdadalang tao.”
A good society knows this.
Jemy Gatdula is a senior fellow of the Philippine Council for Foreign Relations and a Philippine Judicial Academy law lecturer for constitutional philosophy and jurisprudence.
jemygatdula@yahoo.com
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Twitter @jemygatdula
Peso climbs vs dollar
THE PESO strengthened on Thursday as the greenback slid against major and Asian currencies following the dovish speech of US Federal Reserve Chair Jerome Powell.
The local unit ended the week at P52.45 versus the dollar, stronger than the P52.585-per-dollar finish last Wednesday.
The peso traded stronger the whole day, opening the session at P52.47 against the dollar. It climbed to as high as P52.29 and logged an intraday trough of P52.48.
Trading volume climbed to $1.161 billion from the $1.053 billion tallied the previous day.
Foreign exchange traders interviewed yesterday said the peso climbed against the dollar following Mr. Powell’s speech.
“The peso strengthened further following a dovish remark from Federal Reserve chairman Jerome Powell that US policy rates might be closer towards the neutral rate, which is suggestive of possible fewer US rate hikes for next year,” a trader said
“Interest rates are still low by historical standards, and they remain just below the broad range of estimates of the level that would be neutral for the economy — that is, neither speeding up nor slowing down growth,” Mr. Powell told the Economic Club of New York.
“What we heard from Powell was quite different from his speech last Oct. 3 wherein he said that the Fed was ‘far from neutral,’” another trader said. “After his speech, the market reaction pushed the dollar lower versus major currencies and even Asian currencies.”
The second trader also speculated that the Bangko Sentral ng Pilipinas offered huge bids in the afternoon session that pushed the closing rate near the intraday low.
Markets are closed today in commemoration of the Bonifacio Day. — Karl Angelo N. Vidal