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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.

‘WALANG’ forever: Universal charge in electricity and PSALM

We have the 2nd or 3rd most expensive electricity in Asia (after Japan and Hong Kong or Singapore) mainly because there are many charges that are imposed on our monthly electricity bill. The biggest item is the generation charge (goes to power generation plants) plus eight other items: transmission charge, distribution charge, supply charge, metering charge, system loss charge, universal charge, feed-in-tariff allowance (FIT-All), VAT and other taxes.

Public debt, budget deficit and sin tax hikes

When the Philippines public debt reached P7.2 trillion last November, I was curious which among the previous and current administrations were the major debt generators. I checked the Bureau of the Treasury (BTr) website and summarized the numbers below and computed the per year rise in public debt stock.

CHR investigates ‘carbon majors’ by using more fossil fuels

The Philippines’ Commission on Human Rights (CHR) has accepted the petition by Greenpeace and other environmental groups in mid-2016 and it has launched the “National Public Inquiry on the Impact of Climate Change on the Human Rights of Filipino People and the Responsibility of the Carbon Majors Therefor, If Any.”

Trump and Bolsonaro vs Xi and Duterte

“I stand before the whole nation on a day when people begin to free themselves from socialism, from the inversion of values, from state gigantism and from the politically correct.” -- Jair Bolsonaro, Brazil, President Inauguration Speech, Jan. 2, 2019

Provinces and New Year wishes for them

Last month, I traveled to several provinces. Below are my observations and my wishes for them.

Top 10 energy news of 2018

My list of top energy-related news that transpired this year, five global and five national.

Top 10 economic news of 2018

This list and analysis is more focused on East Asia but a brief discussion of the US and global economy is also made. Here we go.

Contestable market and the ride-hailing sector

“A contestable market is one into which entry is absolutely free, and exit is absolutely costless… Absolute freedom of exit is one way to guarantee freedom of entry, any firm can leave without impediment, and in the process of departure can recoup any costs incurred in the entry process. Their firms need not be small or numerous.” -- William Baumol, Presidential address at the 94th meeting, American Economic Association, December 1981

Fiscal irresponsibility vs household responsibility

A report in BusinessWorld yesterday, Dec. 17, said that the country’s foreign debt grew 5.6% to $76.4 billion as of end-September 2018.

The LNG bill

To have cheaper, stable energy sources, especially in electricity generation, there should be maximum competition and minimum taxation, distortion and government favoritism among players using different technologies and energy sources.

The ASEAN Single Aviation Market

Singapore -- Freedom means mobility and more mobility means more freedom. The modern symbols of mobility are comfortable and fast cars, buses, motorcycles, airplanes, fast crafts and roll-on/roll-off (RORO) ships.

The UAAP basketball ticket price inflation and Philippines inflation

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 ASEAN Prosperity Initiative

“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.

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)

Debating with Mr. RE

In a paper, “Setting up the debate with Mr. Coal,” published in BusinessWorld yesterday, Mr. RE and climate scam Eddie O’Connor of wind-solar lobby made new wild claims but did not answer the points I made against his previous paper.

IPR, private property and prosperity

“Every Man has a Property in his own Person. This no Body has any Right to but himself. The Labour of his Body, and the Work of his Hands, we may say are properly his.” -- John Locke, Two Treatises of Government (1689)

Market-oriented reforms in the Senate

“Every family should have the right to spend their money, after tax, as they wish, and not as the government dictates. Let us extend choice, extend the will to choose and the chance to choose.” -- Margaret Thatcher, UK Prime Minister (1979-1990)

Poverty data vs banking, mobile phones and Internet access

“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

Inflation, GDP and Duterte

Last week, the October inflation and 3rd quarter GDP growth data were released by the Philippine Statistics Authority (PSA) and the numbers confirm the fear of many observers of deteriorating macroeconomic fundamentals of the Duterte administration.

Integrated PPP vs Hybrid PPP: The case of Kaliwa Dam

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.

Energy by legislation promotes corruption

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.

Institutional decline and garbled competition regulations

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.

Capitalism and electricity distribution

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.

PPP, tunnels and mining

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.

Oil tax hike suspension and newbie electricity companies

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.

Inflation, fare hike petitions, and TNCs competition

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.

Corrupted science to justify renewables cronyism

In a letter “Response to ‘Cheap, stable electricity vs climate alarmism’” published in BusinessWorld yesterday, Oct. 10 2018, Mr. Eddie O’Connor of wind-solar lobby wrote the following weird claims:

Inflation king of Asia, world’s second worst stock market

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.

Mandatory and coercive welfarism by private enterprises

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.

Improving passenger convenience and safety, innovation vs regulation

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.

Duterte inflation in prices and political insecurity

President Duterte’s government can be described currently as having double inflation in both consumer price index (CPI) and political insecurity index.

Cheap, stable electricity vs climate alarmism

Most electricity consumers have that single most important concern and “vested interest” -- to have cheap, competitively priced and stable electricity supply. Meaning no brownout even for a minute and yet the price is affordable.

Mining, Itogon and Lee Kuan Yew

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.

Cure the big trade deficit, bring in the miners

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.

E-smoking and ASEAN integration, Part 2

THIS is a continuation of the earlier column published on Sept. 4, 2018. We are exploring some inconsistency in the formulation that “more smoking (and drinking) prevalence means more cardio-vascular diseases (CVD), cancer, etc.” and hence, people live less healthy and live shorter.

Reduce fares and increase passenger convenience by increasing supply

Economics is the study of proper allocation of limited resources mainly via market mechanism. If there is rising demand for a particular commodity or service, the price goes up as indicator of consumers’ willingness to pay for more services or goods, and this tells existing and potential providers to increase the supply as there is more revenue and profit to be made.

Inflation, energy prices and mini-greed

INFLATION has further jumped to high levels. Only 2.9% in December 2017 (no TRAIN law yet), it became 3.4% by January 2018 (first month of TRAIN law), 3.8% in February, 5.7% in July, and now 6.4% in August 2018.

E-smoking, smoked rice and ASEAN integration

TOBACCO, alcohol and fossil fuel products are among the most demonized, most bureaucratized, most taxed products in the country and abroad. Thus, the excise tax for them on top of VAT, income tax and related taxes.

LTFRB command and control, and passengers inconvenience

HERE’s a mixture of news for traffic-wary motorists and passengers in Metro Manila and other big cities in the country.

Renewables illusion and coal realism

THE “renewables cheaper than coal, fossil fuels” urban legend continues until today. For instance, three articles published in BusinessWorld recently:

Property rights and political lefts

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.

NAIA closure, passenger rights, and MIAA responsibilities

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.

Philippines defense spending and the South China Sea

On Aug. 13, Armed Forces of the Philippines (AFP) Chief of Staff Gen. Carlito Galvez, Jr. admitted that China’s radio warnings to Philippine aircraft and ships in the South China Sea (SCS) are “a daily occurrence.”

Land transport modernization and the bureaucracy

UNTIL five years ago, the Philippines had the lowest registered vehicles ratio per population in the whole of North and Southeast Asia. It only had 79 registered vehicles per 1,000 population.