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Tag: My Cup Of Liberty
The new budget law or General Appropriations Act (GAA) 2021 was signed by President Rodrigo R. Duterte on Dec. 28, 2020. Due to space constraints, I will not include items and agencies with spending below P20 billion. For comparison I include spending and revenues in the last two years, and also those in 2016, the last budget of the previous Aquino administration.
At the BusinessWorld Economic Forum 2020 last month, Tourism Secretary Bernadette Romulo-Puyat and other speakers discussed the difficulties of the tourism sector in the current virus scare and lockdown environment and how they cope and plan for the near future. And at the 9th Arangkada Philippines Forum 2020 held by the Joint Foreign Chambers (JFC) of the Philippines this month, Tourism Undersecretary Benito Bengzon, Jr. narrated similar experiences and explained how the sector’s players intend to recover.
During the BusinessWorld Economic Forum with the theme “Forecast 2021: Reboot, Rethink, Reshape” which ran on Nov. 25-26, the government’s Build, Build, Build program and the construction sector as a path to post-COVID-19 economic recovery were among the topics highlighted. National Economic and Development Authority Director General Karl Chua and Ayala Corp. CEO Jaime Augusto Zobel de Ayala had partly mentioned this.
In the ongoing woke culture, demonizing fossil fuels and some big corporations while glorifying big government intervention are very common. The lobby against fossil fuels (oil, coal, gas) is based on a confused and irrational belief that fossil fuels, especially coal, cause less rain and more rain, less floods and more floods, less cold and more cold. The lobby against some big corporations is driven by envy and the socialist dream of forced equality.
Tax competition in the ASEAN is real and actual, not fictional. Vietnam and Thailand have corporate income tax (CIT) of only 20% while the Philippines has 30%. Last year, Vietnam and Thailand had merchandise exports that were nearly four times that of the Philippines. In addition, they have graduated CIT rates down to zero or 10%, and their VAT (value-added tax) rates are only 10% and 7%.
As of Nov. 18, 39 countries around the world have reported their third quarter (Q3) GDP 2020 and only the Philippines has had a double-digit contraction at -11.5%. The Q1-Q3 average is -9.7%, with Malaysia’s -6.4%, Indonesia’s -1.9%, Vietnam’s +2.2%. The Philippine government, in particular the Department of Health, Inter-Agency Task Force for the Management of Emerging Infectious Diseases and their consultants, should realize that their strict and indefinite lockdown policy is the main reason for this crippling of business.
The Philippine Statistics Authority (PSA) released a bad report, saying that the Philippines’ gross domestic product (GDP) contraction continued in the third quarter (Q3) at -11.5%. The second quarter (Q2) was also revised from -16.5% to -16.9%.
The Philippines is now into eight months of indefinite, no timetable lockdown since mid-March. The adverse impact on the economy and people’s livelihood is also indefinite. Estimates of the country’s GDP contraction this year range from -6% to -9.5%. At this rate, with this very low economic base in 2020, we need to grow by at least 10% in 2021 just to be at the economic level of 2019.
An important indicator of an economy’s development and maturity is the degree of its protection of private property rights, both physical and intellectual property. And one measurement of such protection is the International Property Rights Index (IPRI) produced yearly by the Property Rights Alliance (PRA, Washington DC).
I just checked the World Justice Project (WJP) Rule of Law Index (RoLI) 2020 Report. I like this annual report because of the subject it covers. I subscribe to Friedrich Hayek and other classical liberals’ definition — rule of law means the law applies equally to unequal people, the law applies to governors and the governed, administrators and the administered. No one is exempted and no one can grant an exemption. Granting exemptions leads to the rule of men.
Among the big headlines this week is the report that President Rodrigo Duterte is considering the environmentalists’ lobby to declare a “climate emergency.” Greenpeace in particular lobbies to phase out or kill coal and other fossil fuel power, mining. They want to plunge the country in blackout-friendly intermittent, variable renewable energies (VREs) like wind, solar and biomass.
Among the pernicious results of the Philippine government’s strict and draconian lockdown policies for nearly six months now is the steep increase in unemployment rate, 17.7% last April and 10% last July, data from the Philippine Statistics Authority (PSA). The underemployment rate also remains high, 18.9% last April and 17.3% last July.
I have been writing in this column about power and energy issues for about five years now and still the sector continues to amaze me with so many twists and surprises, good and bad for consumers. For instance, see these recent reports in BusinessWorld:
Governments around the world have to grapple with raising new revenues because their lockdown policies have crippled the businesses and people that pay them regular taxes while they expanded public borrowings. Raising tax rates would appear very insensitive — the likely direction is to cut taxes to help ailing businesses and this might lead to a new round of tax competition among neighboring countries and economies.
During the media briefing by the Independent Electricity Market Operator Philippines (IEMOP) last week, Aug. 11, data on electricity supply, demand, reserves and prices for the Luzon-Visayas grids from March to early August this year were shown, covering the various COVID-19 lockdown periods (ECQ, MECQ, GCQ).
For countries and economies that have GDP data for second quarter (Q2) 2020 so far, the Philippines has had the deepest contraction of -16.5% in Asia. The same virus that affected all countries in the continent has produced very different results in economic performance — Why?
Despite the incoherent rants against the country’s water, telecom, and electricity companies by President Rodrigo Duterte in his State of the Nation Address (SONA) 2020 last week, one good thing in his speech was the absence of reference to climate alarm and the need for more mandates, more subsidies to renewables which would mean more expensive electricity.
This year marks several important global milestones in macro-economy and the energy sector. These include the coveted $100 billion/year of climate money starting 2020 as promised by the rich countries to poorer countries during the Paris Agreement in 2015, and steep decline in global GDP growth and energy demand because of the various lockdowns by many countries in response to the COVID-19 pandemic. The world hit an all-time high primary energy demand of 584 Exajoules (EJ, 1 EJ = 23.88 trillion tons oil equivalent, or 277.78 tera-watt hours, TWH) in 2019, up from 576 Exajoules in 2018.
There is a direct and close relationship between electricity consumption and GDP growth so the former with real-time data can be used as a proxy to estimate the latter which are often announced about six weeks after the end of the quarter.
The Philippines has perhaps the most draconian, most hysterical lockdown policies in East Asia and even in other countries in the world. From mid-March to end-May, all public transportation — planes, buses (provincial and Metro Manila), jeepneys, regular taxis and TNVS, tricycles and motorcycle taxis — were disallowed. Taxis were allowed to operate starting June 1, the rest were still prohibited.
The adverse impact of prolonged community quarantine (CQ) in Metro Manila and the rest of Luzon since mid-March is shown by the huge decline in electricity consumption. From the Independent Electricity Market Operator Philippines (IEMOP) data for Luzon-Visayas grids, I compared the April-May 2020 data to the same months in 2019 and the result is really bad.
The hard lockdown countries experienced deep economic contraction in their GDP in first quarter (Q1) of 2020: France -5.4%, Italy -4.8%, Spain -4.1%, Belgium -2.8%, Germany -2.3%, and UK -1.6%. In Asia, the hard lockdowners and their contractions are: Hong Kong -8.9%, China -6.8%, Singapore -2.2%, Thailand -1.8%, and the Philippines -0.2%.
As the COVID-19 global pandemic lingers, the search for new medicines and vaccines continues as existing treatments and medicines cannot cope with virus mutation. Public policies on the pricing of innovative, newly invented medicines and vaccines are among the important considerations, whether these new treatments will become available in certain countries or not.
On April 24, President Rodrigo Duterte announced in his address to the nation, “...the bright Filipinos who are there working day and night trying to find out how to combat COVID, I’m raising the bounty to 50 million... Baka ‘pag sa ligaya ko, another 50 million... So kung kailangan nila ng additional funding... kung hindi masyado malaki, I will readily give it to them.”
First, the health frontliners in hospitals, clinics, and laboratory centers; and their “support cast” -- the people in the groceries and fast food chains, the delivery boys on motorcycles like Grab Food and Delivery, Foodpanda, etc. For the doctors and nurses, patients and their caretakers who have no more time to cook or cannot buy from cheaper carinderias that are also closed, food delivery boys save the day.
The virus scare has become an opportunity for some people to advance their populist and socialist agenda like calling for free electricity and free water for poor households that already receive 4Ps cash transfer plus additional cash under the social amelioration program (SAP). Some also receive cash and goods from private individuals, companies and charities.
In an address to the nation last Monday, April 13, about government policies to fight the China virus, a.k.a. SARS-COV2 which causes COVID-19, President Rodrigo R. Duterte said that a new treatment, an “antibody” has been developed by a giant pharmaceutical company. Problem is that “we are on the last ladder. Ang mauna niyan ‘yung mga mayayaman” (the first to benefit are the rich).
In the ongoing Enhanced Community Quarantine (ECQ) in the Philippines, there are many prohibitions and closures -- office or shop work, many businesses, and public transportation have been shut, strolling around and long travel are prohibited, etc. Also among the weird bans is a liquor ban in many cities in Metro Manila and provinces, and cigarette and e-cigarette bans in some small municipalities like General Luna in Quezon province.
Before the China virus -- a.k.a. SARS-Cov-2 which causes Covid-19 -- scare, pneumococcal diseases caused by a bacteria called Streptococcus pneumonia and their treatment were in the news. The bacteria can affect people of all ages, from babies to senior citizens, and pneumococcal diseases are a leading cause of death among children below five years old. When the bacteria invade the lungs, they can cause pneumonia and death. They can also invade the bloodstream and cause bacteremia, or invade the tissues and fluids surrounding the brain and spinal cord and cause meningitis.
This column will briefly tackle two discoveries related to the Wuhan/China virus, a.k.a. SARS-CoV-2 which causes coronavirus disease 2019, better known as COVID-19. Take note that global deaths from regular flu, pandemics not included, is between 300,000 to 646,000 per year.