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Tag: Bienvenido S. Oplas Jr.
The University of the Philippines (UP) Fighting Maroons reaching the University Athletic Association of the Philippines (UAAP) championship this year was so spectacular, the spectacle is easily seen in two things: quick scarcity of game tickets and hyper-inflation of available ones.
“The rapid economic advance that we have come to expect seems in a large measure to be the result of this inequality and to be impossible without it. Progress at such a fast rate cannot proceed on a uniform front but must take place in echelon fashion, with some far ahead of the rest.” -- Friedrich Hayek, The Constitution of Liberty (1960), Chapter 3.
“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)
“Something terribly wrong with a program that grows ever larger even when prosperity for everyone else is increasing. We should measure welfare’s success by how many people leave welfare, not by how many are added.” -- Ronald Reagan, 40th US President
Integrated Public-Private Partnership (PPP) means the construction then operation and maintenance (O&M) phases will be done by a single entity while Hybrid PPP means the construction is done by one entity, the O&M to be done by another entity. Funding of the former therefore will be fully shouldered by that entity while in Hybrid PPP, construction cost to be funded via ODA/foreign loan or Philippine government budget appropriation, O&M by a local private firm.
When a “bright idea” needs legislation, 90 to 99% it is a lousy idea that will not work if not implemented by force, coercion and state favoritism. In contrast, many of the brightest innovations and successful business projects in the country and the world were born without legislation, they just prospered under a competitive environment.
The Duterte government is known for political environmentalism and recycling -- it recycles its heavily tainted officials, sacking them from one post only to be given another post in another government agency. The Bureau of Customs in particular is becoming more known as a “blinded” facilitator of multibillion pesos worth of imported shabu smuggled into the country.
Yesterday, a lecture on “Capitalism and inclusion under weak institutions” was delivered by national scientist Dr. Raul Fabella, my former professor at UP School of Economics and fellow columnist here in BusinessWorld. Another columnist Romy Bernardo mentioned the lecture in his column here last Monday.
Two weeks ago, I traveled from Manila to North Luzon by bus. Going up via NLEx, SCTEx, Tarlac, Pangasinan, La Union, Ilocos Sur, Ilocos Norte, finally to Gonzaga, Cagayan. I went there to visit a friend, also gave a talk on TRAIN law and inflation at Cagayan State University (CSU) Gonzaga campus. Going back I took the Cagayan Valley route, passed Isabela, Nueva Vizcaya, Nueva Ecija, SCTEx, NLEx.
The government recently announced that it will suspend part 2 of the oil excise tax hike this coming January 2019. So another increase of P2/liter for both diesel and gasoline will be temporarily suspended but the tax hikes in 2018 of P2.50/liter for diesel and P2.65/liter for gasoline (from P4.35 to P7.00/liter) will remain.
The Duterte economic team aka “Dutertenomists” composed of the DBCC, the Secretaries of DoF, DBM and NEDA and Governor of BSP have been peddling the “6.7% inflation rate will be the peak” statement after the September inflation was announced. They are daydreaming, of course.
The Philippines’ inflation rate has been rising nonstop ever since the TRAIN law was implemented: 2.9% in December 2017, 3.4% in January 2018 (first month of TRAIN law), 3.8% in February, 5.7% in July, 6.4% in August, and 6.7% in September.
The private sector and civil society groups are the domain of voluntary exchange and volunteerism. In a competitive environment, people sell something, a commodity or service. If the price is good and attractive to many buyers and donors, sellers can prosper; if the price is high compared to quality, buyers and donors will shy away and sellers/providers can go bankrupt.
People are rational, they seek convenience and safety for themselves, their families and friends. Thus, if it is very inconvenient and unsafe to take multiple rides from house to work and vice versa, say tricycle from house and village, jeepney or bus, MRT/LRT, jeep again to office, repeat the 4 rides going back home, then people would rather drive their cars or motorcycles even if they have to endure heavy traffic, high parking fees, and occasional street flooding during the rainy season.
President Duterte’s government can be described currently as having double inflation in both consumer price index (CPI) and political insecurity index.
Strong structures, transparent and properly registered businesses are among the important protection of people against natural calamities like strong storms. An informal business tends to have informal physical structures in order to evade being noticed by government regulators as doing well, that way they can evade paying many taxes and business permits.
The Philippines is suffering from a deteriorating merchandise trade gap. From January to July 2018, total exports was only $38.74 billion (vs. $39.87 billion same months in 2017) while total imports was $61.23 billion (vs $52.92 billion same months in 2017). So the trade deficit was $22.49 billion or an average of $3.2 billion a month. This is the worst trade performance of the country all these years.
PRIVATE property rights is among the cornerstone of a free and dynamic economy. If people have no sense of control and ownership over their house, car, cellphone, appliances, savings, they will not work hard, invest, and accumulate wealth both at the household and macro or country levels. They will be in perpetual stress and fear that some bullies can claim and expropriate such properties away from them.
On Aug. 16, 2018, Thursday near-midnight, a Xiamen Airlines plane skidded at the Ninoy Aquino International Airport (NAIA) and caused the runway closure for some 36 hours. The result was a nightmare for thousands of passengers. Many arriving flights were rerouted to Clark and Mactan-Cebu airports while passengers departing from NAIA were stranded for a day or two or even more as it was not easy to rebook a flight.
This title is rooted from three recent reports in BusinessWorld: 1. DoE gives up chair of PHL Electricity Market (Aug. 1), 2. PHL to become ASEAN’s most coal-dependent economy by 2030 -- ADB (Aug. 4), and 3. Renewables firms hoping to unify lobbying efforts (Aug. 7).
“It is the highest impertinence and presumption… in kings and ministers, to pretend to watch over the economy of private people, and to restrain their expense... They are themselves always, and without any exception, the greatest spendthrifts in the society.” -- Adam Smith, The Wealth Of Nations (1776), Book II, Chapter III, p.346.
The “sharing economy” involves strangers sharing several services among themselves without being forced or mandated by a government to do so. They do so voluntarily, allowing suppliers to earn income for services they are willing to provide to consumers who are willing to avail of them at a price both have agreed upon.
“Money cannot call forth goods, but goods can call forth money…” -- David Ricardo,
on the “mere increase of money” (1809)
on the “mere increase of money” (1809)
After two years in power, the Duterte administration, its economic team, and its policies can be considered as fair to the poor. Here are five reasons why I say this.
Government has the tendency to throw its weight around, especially affecting people and private enterprises that it regulates. If players are deemed “friends” or crony of the administration in power, they enjoy kid-glove treatment, allowing them to get off lightly in terms of penalties and fines. Otherwise, if the players are outside the circle, they get hefty fines or threatened with closure.
Next week, the Energy Policy Development Program (EPDP), a USAID-funded project implemented by the UP Economics Foundation, will have its last lecture and the launch of a book that incorporates conferences, lectures, and seminars the program has sponsored over the last four years.
Among the big topics that dominated last week’s global and national reports are (a) US-China ‘trade war’ which technically means equalized high tariff (EHT), and the hard push for Charter change towards federalism by the Duterte-appointed Constitutional Commission (ConCom).
The Electric Power Industry Reform Act (EPIRA) of 2001 or RA 9136 was among the most important pro-market reforms in the Philippines. Before that law, the government-owned National Power Corporation (NPC) was the single-biggest debtor agency and the single-biggest deficit generator, fiscally bleeding the taxpayers while providing unreliable power supply.
There seems to be a predominant sentiment to demonize the United States.
Last June 6, I attended the “Seminar on Protecting your Trademarks and Inventions Overseas” jointly organized by the Philippine Chamber of Commerce and Industry (PCCI) and the World Intellectual Property Organization (WIPO), held at the PCCI building in McKinley Hill, Taguig City.
In a free trade, an effectual combination cannot be established but by the unanimous consent of every single trader, and it cannot last longer than every single trader continues of the same mind. -- Adam Smith, The Wealth Of Nations (1776), Book IV Chapter VIII.
Two columns in BusinessWorld on May 28 jointly defended Dutertenomics’ Tax Reform for Acceleration and Inclusion (TRAIN). These are “Eight former Finance secretaries support TRAIN 2” by Romy Bernardo of FEF and “Coolly explaining inflation” by Men Sta. Ana of AER.