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Tag: Bienvenido S. Oplas Jr.

Energy and elections: The Philippines and Australia

Sydney – The Philippines held its mid-terms elections last May 13, and “man-made” climate change, “more renewables” were marginal if not non-issues altogether for many of the national and local candidates. The energy issue was whether there would be any blackout because of the series of yellow and red alerts (insufficient power supply and reserves) many weeks before Election Day.

Jeju Forum and smart cities

ON May 29-31, the big “Jeju Forum for Peace and Prosperity” conference will be held at the International Convention Center Jeju, South Korea. It is an annual international and geographical platform to discuss diplomatic, economic, political and cultural subjects that include the North-South Korea relations, Korea-China-Japan-US relations and many more.

Innovation, competitiveness and development in Asia

Kuala Lumpur -- I just attended the “Asian think tanks dialogue on Innovation, Competitiveness and Development” in Kuala Lumpur sponsored by the Geneva Network (UK). The event, last Wednesday, was attended by mostly free market-oriented and independent think tank leaders with participants from China, India, Indonesia, Malaysia, Myanmar, Philippines (me), Singapore, S. Korea, Thailand and Vietnam.

Senatorial elections and economic legislation

Kuala Lumpur -- During the May 2018 Malaysian elections between former PM Najib and returning PM Mahathir, the latter was an underdog, he promised that if he wins, he would abolish the gross sales tax (GST) of 6%. He won, he did what he promised, and GST went down from 6% in May to zero in June. Result was drastic, across the board price declines and inflation rate went down from 1.8% in May to only 0.8% in June 2018. The average inflation January-May 2018 of 1.7% became 0.6% in June-October 2018.

Low growth, high taxes as election issue

In election years, the Philippines’ GDP growth rate is always above 6.5% – except in 2001 (terrorist attack in the US, Gloria Arroyo anemic growth) and 2019. Philippines’ growth trajectory is on a downhill: 6.9% in 2016, 6.7% in 2017, 6.2% in 2018, and only 5.6% in the first quarter of 2019. Growth deceleration since Dutertenomics was invented is further confirmed.

Power shortage as election issue

Until last week May 3, another yellow alert has been issued by the National Grid Corp. of the Philippines (NGCP) because of insufficient reserves due to the following: (a) forced outage due to earthquake of GN Power Mariveles (316 MW), (b) unplanned/forced outage of SEM Calaca U2 and Team’s Pagbilao U1 (582 MW), and (c) derated/reduced capacity of five power plants (736 MW). Total 1,634 MW unavailable, that’s big.

MORE price declines, less Dutertenomics

As the mid-terms election approaches, we see and hear more “good economic news” coming from the administration. The goal is to dupe the voters into voting the administration senatorial and congressional candidates. Numbers below show that the administration is spewing half-truths.

MORE smart cities… with sufficient water

Metro Manila is expanding fast with 13+ million residents, plus an estimated 2+ million from surrounding provinces going to the big city for work,...

MORE transparency in China deals

Three China-related business stories in BusinessWorld last week caught my attention, short quotes from them are shown:

IPR and MORE investments

A report in BusinessWorld reiterated the value of IPR protection: “PHL remains out of US IPR watch list for 6th year’ (April 27, 2019)

Good news, MORE power plants coming

“Whatever that can go wrong will go wrong.” -- Murphy’s law.

MORE tourism via PSA liberalization

The Philippines’ tourism sector is among the more dynamic ones in the economy. The Department of Tourism (DoT) targeted 89.2 million domestic tourists in 2022 but this was already surpassed in 2017 with 97 million.

Earthquakes and MORE sturdy buildings

Earthquakes and volcanic eruptions are 100% part of the Philippines’ “geological DNA.” This is because we are in the “Pacific Ring of Fire” and our entire archipelago seems to have protruded from under the sea. Thus, if there were no “violent” volcanic activities, there would be no Philippines.

MORE Senators for rule of law

Rule of law means the law applies equally to unequal people, no one is exempted and no one can grant an exemption. Granting exemptions, say, in the law against stealing or murder automatically leads to the rule of men where the powerful and the mob are exempted from penalties for violating certain rules.

MORE IPR protection

Unlike physical property which is tangible, intellectual property rights (IPR) are intangible, like copyrights of songs, patents of newly invented medicine molecules, trademarks of known brands, and trade secrets. Thus, public appreciation of IPR protection is not as high as physical property protection.

MORE power supply needed: Attention ERC

After the water shortage in many areas in Metro Manila last March, next is power shortage and brownouts in many areas of Luzon including Metro Manila this month.

MORE de-bureaucratizing laws, please

From January to March 11 this year, Congress has created and passed 77 new laws, 28 of national application (table below) and 49 being local or franchise laws. The dates when they were approved by the President this year are also here.

MORE international tourism

The Philippines, with more than 7,500 islands and islets, lots of white sand beaches, waterfalls and mountain resorts, has a huge potential in tourism yet we are not optimizing it due to certain policy and infrastructure bottlenecks like small airports and small number of airlines per airport.

MORE price decline please

The good news in Philippine inflation is that the numbers are declining in the past three months of 2019. The bad news is that even such “low inflation” is actually the highest in East Asia, among the more mature economies with updated numbers. Dutertenomics should be ashamed of this.

MORE ride-hailing competition

The ride-hailing, food- and cargo-delivery, other technology-based service sector is a modern and fast-rising one in the Philippines and in Asia. It helps people and companies conduct their travels and businesses become more convenient and safe. The sector should get further Market-Oriented Reforms for Efficiency (MORE) to aid further modernization and competition, which will benefit the public.

MORE stable electricity and competition

In a September 2017 paper, “Implementing the 10-point Socio-Economic Agenda,” the Arangkada Philippines Project (TAPP) made 22 recommendations for the power sector, among which are: (1) Support and approve the massive energy investments, (2) Increase the system reserve requirement to 25% of peak demand vs the current 17%, and (3) Formulate an energy road map (generation portfolio mix) with power supply quality, reliability and affordability as key objectives.

MORE local government responsibility

The official campaign period for local and Congressional candidates for the May 2019 started last Friday, March 29. Tens of thousands of candidates plus their supporters went out on the streets and reached out to media to get the support of the undecided.

MORE debt reduction please

How dangerous or non-dangerous are China loans to the Philippine economy?

MORE airline competition

The Market-Oriented Reforms for Efficiency (MORE) series continues and tackles the air transportation sector. For an archipelago of more than 7,500 islands and about 20 are big islands with big populations, and air travel is necessary to hasten the movement of people and goods.

More stock market development

Continuing the Market-Oriented Reforms for Efficiency (MORE) series in this column, we look at one of the important indicators of an economy’s attractiveness to private business, entrepreneurship and job creation, the stock market.

MORE electricity supply in East Asia

Continuing the Market-Oriented Reforms for Efficiency (MORE) series in this column, we tackle the importance of more electricity production in the development of Asia-Pacific economies.

MORE tax relief in CIT

Starting this week, this column will produce a series of Market-Oriented Reforms for Efficiency (MORE) articles related to recently enacted laws and proposed legislations in the Philippines on various sectors. Thus, recent Republic Acts (RA) and some pending bills for bicameral committee meetings after the May 2019 elections will be discussed.

Water surplus vs water shortage

In terms of water supply for the Philippines and many other tropical countries, we have a mixture of news. First the good news -- we have too much rain water yearly, floodings damage lots of public and private properties, crops, and drown or kill many people.

Energy favoritism by legislation

Going through the Economy section of BusinessWorld last week, I checked these four energy-related reports.

Inflation, Interest Rate, BSP Governor, and Travel Tax

“Many people want the government to protect the consumer. A much more urgent problem is to protect the consumer from the government.” -- Milton Friedman (1912-2006), Nobel Prize economist

IPR, innovation and growth

“The natural effort of every individual to better his own condition...is so powerful, that it is alone, and without any assistance, not only capable of carrying on the society to wealth and prosperity, but of surmounting a hundred impertinent obstructions with which the folly of human laws too often encumbers its operations.” -- Adam Smith, Book IV, Chapter V, The Wealth of Nations (1776).

Capitalism and freedom in Asia

“The over-all speed of advance will be increased by those who move fastest. Even if many fall behind at first, the cumulative effect of the preparation of the path will, before long, sufficiently facilitate their advance that they will be able to keep their place in the march.” -- Friedrich Hayek, Chapter 5, The Constitution of Liberty (1960)

On Trump-Kim summit, implications for ASEAN and China

The second Trump-Kim Summit in Vietnam this week, February 27-28, points to many good and optimistic scenarios not only for both US and N. Korea but also for the ASEAN, East Asia and the rest of the world.

The economics of coal power

Most anti-coal activists would resort to disinformation and deception to advance their ecological leftist agenda and in the process, deprive energy consumers of the opportunity to have cheaper, stable and reliable 24/7 electricity, badly needed to sustain fast growth and generate more jobs for the people.

Mandatory fare discount as socialistic policy

MODERN day socialists and populists in governments, explicit and implicit, are aware of the limits of governments giving all sorts of endless, no timetable subsidies, discounts and other welfarist programs. So they invented a new form of welfarism — forcing private corporations to give mandatory discounts (restaurant food, medicines, fare in public transportation, etc.) to people, rich and poor no distinction. Politicians and governments get the credit while corporations get the financial burden as those forced discounts cannot be used for tax deduction.

Growth and electric cooperatives

On the Philippines’ GDP growth rates, the good news is that from 2010 to 2018, the Philippines has been growing above 6% yearly except in 2011. High growth was experienced in 2010 with 7.6% (recovery from 2008-2009 global financial turmoil) and 2013 (election year) with 7.1%.

The freedom to fly

“Once you have tasted flight, you will forever walk the earth with your eyes turned skyward, for there you have been, and there you will always long to return.” -- Leonardo da Vinci (Italian polymath, 1452 -- 1519)

Solar para sa pulitika, Rice Tariffication para sa masa

The cronyist “Solar para sa Bayan Corporation” (SPBC) franchise bill (HB 8179) was magically passed by the House of Representatives despite opposition by many groups in the energy sector. Among the oppositors is the Developers of Renewable Energy for AdvanceMent, Inc. (DREAM), the umbrella organization of all RE associations in the Philippines.

Inflation and the Transportation sector

The Philippines registered a 4.4% inflation rate for January 2019. The good news is that it is a lot lower than the past four months’ average of 6.1%, but the bad news is that compared to our neighbors with January 2019 data, it is the highest. In the ASEAN-6, three have near-zero inflation while Indonesia and Vietnam have below 3%.

Mining, tobacco tax hikes, MACR and PSA liberalization

The Senate is once again the battleground of public debates on many issues. This is because it is still deliberating its own versions of House Bills (HBs) passed on third reading, and the official campaign period will already start on February 12 -- which means all congressional activities and meetings will cease and resume only after the May elections.

Growth by elections and FDIs by PSA liberalization

At the UP School of Economics Alumni Association (UPSEAA) sponsored “Economic Briefing” on Jan. 25, the speakers were DBM Secretary Benjamin Diokno and NEDA Secretary Ernesto Pernia. My former teacher in undergrad and graduate economics, Sir Ben Diokno said in his presentation that with high GDP growth in 2017 and 2018, “Duterte hit the ground running.”

Economic prospects 2019 and cement tariff

To be frank about it, Dutertenomics is lousy in macroeconomic management. Inability to sustain fast growth of 6.5% or higher, inability to control inflation rate below 3%, and inability to control interest rates below 5% for government bonds.

Public transport mess and traffic congestion

There are many factors to frequent heavy traffic congestion in Metro Manila and other big cities in the provinces. This short article will narrow it down to five factors.

Henry Sy, a hero of Philippine capitalism

Until about the 1960s and 70s, Philippine business was dominated by the land-based and a few real estate wealthy families like the Zobel-Ayalas. Things changed in the 1980s in both politics and business and when the Marcos dictatorship collapsed along with its huge cronies.

Consumer and employment interests and the Public Service Act

The Philippines has a huge and increasing economic potential mainly because of its big population, estimated at 108 million as of mid-2018 and the 13th largest in the world. Which means more entrepreneurs and workers, more producers and consumers.