Thursday, June 26, 2014

Manila Flooding Torture

This afternoon, around 3:15pm, there was heavy rain for an hour in Makati, then light rains for the next 20 minutes or so. Many parts of Metro Manila experienced such downpour, also some surrounding provinces. Many streets were flooded.

(photo from ANC24; descent from Skyway, going to Buendia intersection, Makati)

Heaaaavvyy traffic followed in many areas of the metropolis, especially in Buendia and Ayala Avenue in Makati.  Productivity losses today is big; fuel consumption by cars and buses is big. I think this unresolved flooding in many Makati streets will affect the candidacy of VP Binay in 2016.

That area at the PNR rails, Mayapis st-Buendia near SLEX flyover, is a perennial headache. Flash flood from Ayala, Buendia, other streets go to that small and narrow creek. The Binays were the Mayors (father, mother, now the son) of Makati for 28 years now, uninterrupted. They could have done something significant in that area. 

(photo from; Skyway and Buendia-SLEX intersection below, Makati)

One reason why I support another reclamation project in Manila Bay is that the many creeks and rivers in the metropolis need large scale, monster and sustained dredging. Get all those mud, soil and solid wastes and dump them not in sanitary landfills in Quezon City or Montalban or Bulacan, but in a new land to be created at Manila Bay. It's the quickest and cheapest solution that I can think of to minimize frequent street flooding in Makati, other cities of Metro Manila.

A friend suggested that the projected sea level rise will endanger MM and other major urban centers of the country. Well, that projected sea level rise is more alarmist and sensational than realistic. A good paper from Ed Caryl in NTZ, Data Show Holocene Sea Levels TrendingDownwards…2 Meters Higher 4000 And 7000 Years Ago! (05 May 2014),

In the last 8000 years, sea level has been substantially higher than at present, up to 2 meters or more higher in two periods four to seven thousand years ago. Sea level during the Holocene has been falling since that period.
(See level rise from 22,000 to 6,000 years ago.)

A friend who has worked for more than 15 years in Makati, Eniale S.,said that there was major drainage re-piping on both sides of the railroad (intersection Buendia & SLEX) from former Eastern Telecoms and where the new Cash n' Carry is now, across the railroad up to Makati Med area. Huge drainage pipes, diameters that can accommodate a regular-sized car, and heavy equipment were used for more than a year. 

The creek in that area, Mayapis St. along the rail tracks, is simply too narrow, too shallow, to absorb huge volume of flood waters from many parts of Makati.

Good project by the Makati City government then. But I think the drainage is not regularly dredged. Just one heavy flash flood can bring in tons of mud and solid waste into the belly of those drainage pipes, and there are many flash floods yearly. If they are not cleared and dredged yearly, perhaps even a tricycle would no longer fit in those huge pipes. And that contributes to frequent street flooding.

It's a pity that Buendia-Ayala-Pasay Road network is where the employees, managers and CEOs of many of the country's big companies and financial institutions pass daily, and they are subjected to this regular traffic torture. 

See also:
Climate Tricks 23: Using Typhoon Haiyan for Climate and Energy Rent-Seeking, November 30, 2013 
Global Warming Hits the Philippines, Part 3, January 26, 2014 
Climate Tricks 27: More Risks and Danger Ahead, Send More Money to the UN, April 01, 2014

Tuesday, June 24, 2014

Agri Econ 13: What and Where to Plant, Nature vs. Government Planning

Rice trade liberalization, not rice protectionism and "anti-smuggling" campaigns, is a better alternative for the Philippines, Indonesia, Malaysia and other countries. What to plant where, nature itself provides the clue.

This is a good report from the International Rice Research Institute (IRRI), Rice self-sufficiency: A question ofgeography? It observed that

In theory, the reasons why the exporting countries might have more rice area per person could be that their land is more suited to growing rice (as opposed to other crops), cropping intensity (the number of crops planted per unit of agricultural area) is greater, more land is used for agriculture, or more land is available per person (low population density).  
Empirically, the proportion of total crop land devoted to rice, which is a measure of the suitability of land for growing rice, explains rice production per person across countries almost perfectly (the R2 of a simple linear regression is 0.92; see Fig. 1). Thus, the importers are all to the lower left of the figure, while the exporters are to the upper right.

Some folks would say, “My grandfather was a farmer, my father was a farmer, therefore I should be a farmer too."  

Yes, but while one's grandfather and father were rice farmers, he can be a vegetable farmer, or chicken or goat farmer. Very often, governments waste resources, like forcing rice "self-sufficiency" policy and compromising other policies and taxpayers' money. The endless agrarian reform (only 2-3 years in Japan, S. Korea, Taiwan) that is now 42 years, counting only from 1972 Marcos' agrarian reform, is mainly premised on encouraging or forcing rice self-sufficiency. That IRRI paper should help douse cold water in the minds of the rice protectionist groups. 

An American friend based in Iloilo, Bruce Hall, made a good observation early this year. He wrote,

Why is rice smuggling even a crime? Food should be a cheap as possible. If that means that I buy my rice from a poor farmer a thousand miles away in another country rather than hundreds of miles away, so be it. What is important is that food is cheaper so that the poor can afford to eat. Already 1/3 of Filipino children are underweight or under-height.

Another good article, from the Philippine Rice Research Institute (PhilRice) last January 14, 2014,  PhilRice Calls for Rice Competitiveness toCurb Smuggling

According to the two PhilRice economists, domestic price of rice was up to 75% higher than average global rice prices in 2000. The gap reduced in 2008, but price differential widened again to around 30% in 2012 mainly due to higher import tariffs (of about 50% beyond quantitative restrictions quota) and higher production costs... 
The economists say that Free Trade Agreements with ASEAN countries next year will force the government to reduce trade barriers which in turn will minimize rice smuggling in to the Philippines.

It's good that some government researchers are mindful not to keep punishing us average rice consumers with government-created expensive rice policy.

If global food production must double within 4 decades or so while the land area for agri cultivation generally remains the same, then productivity must increase 2x. More science, more genetic modification, more free enterprise will be needed. Chart from WEF.

Meanwhile, this policy of retaining quantitative restrictions (QR) for rice is wrong. See the news report today here.

I think the Philippines is the ONLY member-country of WTO that retains the QR. All other rice importing countries have converted their QRs into tariff. Even socialist China shun QR for their rice imports. And socialist Vietnam enjoys free trade of rice and other agri commodities. 

And this report last week.

(IRRI) last year said that global rice prices have been spiraling downward last year due to the excess production in major exporting countries like Thailand and India." Yet PH rice prices last year jumped. Rice protectionism is wrong. I wonder why a Liberal government still entertains protectionist policy. 

I think it is National Food Authority (NFA) protectionism and bureaucratism that is at the root of this expensive rice problem when rice prices should be going down. Of course the never-ending agrarian reform and dislike of corporate rice farming also contributes to the problem.

See also:
Agri Econ 9: On Agrarian Reform and Agri Credit, April 29, 2013
Agri Econ 10: On Rice Price Spikes, September 29, 2013

Agri Econ 11: Protecting Land Properties by the Poor in India, April 22, 2014

Agri Econ 12: Presentation at WASWAC-BSWM Seminar, May 13, 2014

Thursday, June 19, 2014

Pork Barrel 11: Impending Arrest of Sens. Enrile, Estrada and Revilla

I watched the local evening news today, on the impending arrest of three Senators accused of plunder (more than P50 million stolen public money). My immediate reaction -- Tense si Jinggoy, relaks si JPE, nag presscon-drama si Bong. 

I thought they would be arrested and imprisoned today. Sayang, bukas pa pala. Enjoy kayo sa kulungan ha.

Naalala ko yong post ng kaibigan kong si Cynthia na nanood ng "privilege speech" ni Bong last June 10 at nag post, "P___ MO BONG REVILLA! Not just for the pork barrel stuff but for that Godawful song." hahaha, ang lutong! 

Kaya nang makita ko sya sa tv kanina, may konting luha habang nag presscon-drama sa cavite, sabi ko, "behhh Bong, tinablan ka rin ng malas."

From another friend Majah: "Sino kaya ang unang uupo sa wheelchair? Si Pogi, si Sexy, or si Tanda?" :-)

Dati ganito. Bukas kaya, sino mauuna sasakay sa pambansang silya, the "national chair" of high government officials in big political/corruption scandals.

Some of the memes coming out. More should be coming, among the fun of social media.

Meanwhile, this Gigi Reyes, a former wife of my good friend in Rotary, also fellow UPSE alumni, Atty. Inky Reyes, she seems to be rich big time. She is linked romantically to Sen. Enrile, her boss for many years until she resigned early this year due to the "heat" of corruption and plunder scandal involving Enrile and herself. The two deny the romance angle of course.

Sorry ka na lang Gigi. Kulong ka rin. Total yumaman na kayo masyado sa gobyerno. At sana tumagal kayo sa bilangguan, madami naman kayo eh, barkadahan fun na lang sa kulungan. Ituloy nyo pagiging relihiyoso nyo, tulad ni Bong Revilla.

See also:

Tuesday, June 17, 2014

EFN Asia 39: Rainer Adam's Farewell Letter

I received this warm, friendly and well-written farewell letter today from Rainer Adam. I have met him first time -- along with many Friedrich Naumann Foundation for Freedom (FNF) officials, Asian free marketers and friends -- in 2004, 10 years ago in Hong Kong, for the Economic Freedom Network (EFN) Asia conference. After that, I would meet him yearly except in 2007 and 2009, for the annual EFN conferences or some FNF major events here in Manila.

Cool guy, always smiling. When I first met him in 2004, I immediately thought that he looked like Eric Clapton, among my favorite rock stars.

I am very thankful to Dr. Jo Kwong, the former Vice President of Atlas Economic Research Foundation, for bringing me to the EFN conferences in 2004 to 2006, even if Minimal Government was still not a member of the network. We became EFN member only in 2009 I think. If Jo did not bring me to the 2004-2006 conferences, Minimal Government may not have been part of the EFN and the Asian free market network, I don't know.

Rainer, good work. No. Rather, excellent work.
Siggi, expect the same support and friendship from us.
It's all about Freedom. And free trade, rule of law, personal responsibility and limited government.

PS: the above photo, plus another one below, I got from Rainer's fb wall.

Bangkok, 17.06.2014

To all FNF partners,

Dear friends, partners and Asian liberals,

Some of you already know that this year in June my term as the Regional Director for Southeast and East Asia of the Friedrich-Naumann-Foundation for Freedom will come to an end. After six years in Thailand and over 26 years of living and working in Asia, the time has come for me to say goodbye to you.

From September onwards I will take up my new position as FNF Regional Director for Central-Southern- and Eastern Europe in Sofia, Bulgaria. The place may be a different one; however, the goal stays the same: to promote freedom, liberal values, human rights, free trade, democracy and the rule of law.

I would like to take this opportunity to express my appreciation and gratitude for your support, friendship and cooperation during the last six years. Without your help the Foundation would not be where it is today, a trusted member of the Asian freedom community.

During my time in the region, I had the good fortune to witness many exciting developments. Let me share some of them with you:

* A major highlight of 2010 was the election victory of the Philippine Liberal Party (LP). Together with a delegation of the Foundation, I had the chance to witness President Noynoy Aquino’s celebratory inauguration in Manila. President Aquino kept his campaign promises. Today, the Philippines shows significant economic growth and a reduction in poverty. The government is fighting corruption and promoting people centred development.

* 2010 also marked the beginning of Myanmar´s journey towards democracy. After years of military dictatorship, President Thein Sein implemented a number of remarkable reforms: most political prisoners were released, opposition parties can participate in politics, markets opened up and the population enjoys a whole new set of civil liberties. The Foundation has supported democratic developments in the country for many years. Therefore, the opening of the FNF office in Yangon in 2013 was a natural development and a special milestone in our work, marking our long-term commitment to promoting freedom, human rights and the rule of law in the country.

* Myanmar was not the only office opening I witnessed. One year before, in 2012, the doors to the new FNF Vietnam office were opened in Hanoi. Philipp Rösler, at that time German vice-chancellor and minister for economy, gave the inaugural speech and honoured us with his presence.

* Liberal forces become increasingly visible in our region. In 2011, the Liberal International (LI) Congress in Manila was the first time this important gathering of Liberals from all over the world was held in an Asian country. Manila is also the home base of the regional network of Asian liberal parties, the Council of Asian Liberals and Democrats (CALD). The network is constantly growing. In 2012, the Mongolian Civil Will and Green Party was accepted as the 10th member party.

* Our regional partner in the promotion of human rights, a field of utmost importance to us liberals, the Regional Working Group for an ASEAN Human Rights Mechanism (RWG), has made good progress in its advocacy work.

* The Economic Freedom Network Asia (EFN) was able to hold annual conferences to discuss important topics of economic freedom, and bring political decision-makers and analysts together to foster better mutual understanding of the benefits of free trade, economic growth and free markets.

* Furthermore, I am proud that some of our programs – namely It’s all about freedom (Philippines), Dream Thailand and SIM Democracy (both from Thailand) – were included in the best practice manual of the Council for a Community of Democracies.

* Our Freedom Barometer Asia has become a well-established analytical framework and tool to measure freedom in the region and to stimulate debate and conversations about concrete policies increasing personal liberty and individual responsibility.

Monday, June 16, 2014

Charles Darwin, Science and Society

Four and a half years ago, I attended this forum in UP Diliman. I was invited by a good friend, mathematician Fidel Nemenzo, who was then the Director I think, of the Science, Technology and Society (STS) program in UP, aside from being a Math Professor.

Fidel rediscovered the Closing Remarks he gave that afternoon from his old files and sent it to me. Posting it below.

It was a big audience. And... Ahaa! I also found this from my old files of photos. That day, I was seated next to my former boss, Prof. Randy David. In front of us were Dr. Raul Fabella (left) and Dr. Perry Ong (right). The latter by the way, is among the natural scientists of UP who are non-believers of the "man-made" warming political science of the UN and various environmentalist groups.

Closing Remarks
Dr Fidel Nemenzo
Science and Society Program

Ideally, we ought to have a longer symposium—maybe even a week-long conference. We are after all examining the impact of one of the most innovative and influential scientific theories of all time.

This is our small way of commemorating the 150th year of the publication of Charles’ Darwin’s groundbreaking The Origin of the Species. We are holding this cross-disciplinary symposium to honor Darwin’s enduring legacy and examine how his ideas have shaped thinking within and beyond biology. Even the controversies that these have provoked have enriched discourse, within and across disciplines.

Dr Perry Ong (Institute of Biology) talked about the three F’s and power of Darwin’s theory as an explanatory framework for biology. I would not go as far as saying that evolution is fact and not merely a theory-  as some declare. A scientific theory, unlike abstract mathematics, is merely a testable, falsifiable approximation of truth, which is discarded once proved to be false, giving way to better theories. But Darwins’s theory of evolution has withstood the test of time and the rigorous scrutiny of the scientific community, supported by a growing body of evidence. And unlike Newton and Einstein who proposed only descriptive theories, Darwin proposed both a descriptive theory and a plausible mechanism—that of  heritable variation with natural selection.

Dr Maris Diokno (Department of History) posed the question: how should historians teach the ideas of Darwin, and science in general? She lamented the trivialization of ideas and the biased and sloppy treatment of science in textbooks, brought about by a misunderstanding of science, and as well as that of science as it develops within history. Both historian and scientist need to dispel these misconceptions, by effectively communicating science and the history of science within our schools and to the general public. The history of science needs scientists, she says. Historians and writers of textbooks, too on the other hand have to study science.

The global economic crisis, as Dr Raul Fabella (School of Economics) reminds us, was a reality check for theorists who viewed the neat formalism such as that of Newtonian physics as appropriate for economics. This mathematization of  economics has led to the worsening exile of much of theory from the reality of financial bubbles and crashes. The turmoil in economics calls for new ideas and alternatives. Dr Fabella asserted that insights from Darwin and evolutionary biology will contribute to the rethinking in economic theory.

Darwinism of course continues to provoke controversy, as all great ideas do.  Current debates rage between scientists like Richard Dawkins, author of The God Delusion,  and critics on the side of religion, who cannot accept purposeless natural selection as the shaping mechanism behind evolution.

Dr Michael Tan (Department of Anthropology) discussed how science developed in the context of history and culture, arguing that modern science, in a way, emerged from religion and cultures that grew around religions. He cited as example the spirit and methods of inquiry of ancient Muslim scholars, whose scientific and mathematical contributions are part of the foundations of modern science. The problem, according to Dr Tan,  is  that the voices that ring loudest are those of the religious fundamentalists and the atheist scientists, whose narrow views merely feed each other. Equating science with the abandonment of religion fits the prejudices of advocates of intelligent design and creationism.  A deeper look at science and culture show that there is much room for dialogue. It is only when assertions are made beyond the legitimate boundaries of these non-overlapping realms of knowledge that the theory of evolution and religion seem antithetical.

In behalf of the college of science, I would like to thank our four speakers, for their generosity, for sharing their views on Darwin with a broad public audience such as this. We thank the School of Economics for co-sponsoring this symposium, and the Diliman Interactive Resource Center for setting up the equipment to record this event and beam it overseas, and make it available online as podcast. This symposium grew out of a reminder by Dean Noel de Dios (School of Economics) that 2009, Darwin’s bicentenary, and 150th anniversary of his theory, was about to end. And how wonderful to end the year with a forum like this one, where we get together to share and debate ideas. We may come from different colleges but occasions like this remind us that we belong to   a community of scholars, and that while we do our research in our respective disciplines, we also need to explore the many ways in which our disciplines interact. We hope that we have more of these in the future. Thank you for coming, and good day to everyone.

See also:
An ever-expanding universe, June 25, 2010
Pilipinas Forum 12: Origin of Zero, Nothingness, Big Bang..., September 25, 2011
Pilipinas Forum 14: Math, Infinity and Limit, October 04, 2011
Pilipinas Forum 20: Turbulence, Chaos Theory and the Stockmarket, November 13, 2011
Pol Ideology 40: On Social Darwinism, May 23, 2013

Sunday, June 15, 2014

Weekend Fun 55: Sic O'Clock News, Again

It's "Father's Day" today, our day, cool. And two friends, Jimmy Fabregas and Ces Quesada, the wacky anchor news guys of the old Sic O'Clock News, have a photo of the gang in their facebook walls, so I thought of producing Part 2 of the Sic gang Part 1 which I wrote three years ago.

There is one youtube clip of Sic O'Clock. It should have been shown sometime in 1990, when the Senate was debating whether to renew the stay of American military forces in Subic Naval Base. The Americans voluntarily left and abandoned Clark Air Base after a very strong Mt. Pinatubo volcanic eruption. The entire base was covered by thick layers of ashfall, several meters thick of soil and rocks, and later, became mud and lahar.

Below, Jon Achaval acting as Uncle Sam, and Ces Quesada acting as Presidentita Cory Aquino, talking about the negotiations about Subic base renewal.

The photo posted at Jimmy and Ces' fb walls today.


In another episode from the same youtube clip, it featured a rally by some guys asking for rice price hike. Yes, price hike, not price cut. Jimmy was the reporter, the cast as the rallyists, in front of Malakanyakanyang (Malacanang) pala. The cast would laugh whenever Jimmy would say "comprador" or rice traders, and they would look somewhere else when Jimmy would say "rice farmers". All along, the reporter was thinking that he was interviewing farmers. The guys were actually compradors. Very wacky story, from wacky script writers Mads Lacuesta and Jobart.

From left: Errol Dionisio (partly hidden, RIP), Wilson Go, Jimmy, Ching Arellano (RIP), Manny Castaneda, Noni Buencamino, me, and Khryss Adalia (partly hidden, RIP). Although Sic started in late 1986, I joined the cast only around October 1989 to October 1990, about one year.

Another episode, still on the bases retention debate. Wilson Go and Manny Castaneda.

We have a facebook group, Sic O'Clockers. It's a close group, composed of the surviving cast and support team of Sic. Main writer, very wacky Mads Lacuesta (RIP) is represented in the gang by his son, Sarge. Nonong Buencamino was our ever-reliable musical director. Vincy Lirios was our wacky video researcher, he and his buddy, Jun Segovia (RIP) would find video clips from different movies or cartoons and put them as spoilers in the news clips. Vinch and Jun would spend many hours looking for the most appropriate video clips.

Marilou Diaz-Abaya of course was our Director and gang mother. While Mads Lacuesta and Jobart Bartolome would write the script, it was Direk Marilou who would think how to make the acting wacky, errr, wild. RIP Direk. Anthony "Noni" Buencamino also belatedly joined me in Sic; he's the younger brother of Nonong. I was not able to join the early cast with Pen Media, Rene Requiestas and Junix.

Direk is gone, other friends were also gone -- Ching, Errol, Khryss, Jun, etc. I hope we can have a reunion soon.

See also:
Transitions 4: Direk Marilou Diaz-Abaya, October 09, 2012

Saturday, June 14, 2014

Inequality 18: Piketty, Fabella, Equity-Efficiency Nexus and EPIRA

A good artice from my former teacher at UP School of Economics. The italics-red highights are mine, meaning I like them. The italics-blue highlights after the article are observations that I am skeptical or disagree with. Enjoy.

Raul V. Fabella
Posted on June 08, 2014 08:09:32 PM

INEQUALITY is back. The trigger is the book Capital in the Twenty-First Century by Thomas Piketty. Three allusions to the book have appeared in the BusinessWorld opinion section in the last month alone. Piketty claims that ever-rising income inequality is the inevitable harvest of unimpeded market economies. And the market cannot heal itself of this infirmity. Piketty flies in the face of the venerable Kuznets (1955) who claimed that in the process of development, income inequality first rises, reaches an apex and then falls as income per capita rises. Inequality was already the focus of the widely cited 2011 Ostry and Berg piece Inequality and Unsustainable Growth: Two Sides of the Same Coin? They showed that income inequality shortened the duration of growth even after taking on board other factors.

The Piketty thesis is being subjected -- as it should -- to a spirited academic debate. But whatever the final verdict on the thesis, the inequality aversion it triggered is now a global staple. We can expect this aversion in the West to wash up the shores of developing countries and recalibrate development policy. There is great promise but even greater risk here for developing countries.

 If equity must be served, how should it be pursued? In the past, many attempts to level the income distribution took the form of shackling the market. The most popular form is administered prices: price controls on basic commodities, productivity-divorced minimum wages, rent controls, and usury laws. Another is making illegal certain markets, such as for farm land in the rural areas. What they mostly accomplish is an empty cupboard that leaves most everyone but especially the poorest worse off. These efforts turn pro-poor intentions into anti-poor outcomes. This lesson has a long history.

According to Lactantius (300 AD), in the late 3rd century AD, Emperor Diocletian issued the Edict of Maximum Prices in an attempt to limit prices of commodities by law. As a consequence, much blood was shed for trifles, men were afraid to offer anything for sale, and the scarcity became more excessive and grievous than ever. Until, in the end, the law, after having proved destructive to many people, was from mere necessity abolished.” Unfortunately, Will and Ariel Durant’s famous paean to human frailty still holds: History teaches but man never learns.

 The fact of the matter is that equity could be pursued without stultifying the market. The main lesson of microeconomics venerable Second Fundamental Theorem of Welfare is that equity can be pursued without sacrificing efficiency. While this may be an unattainable ideal itself, the residual rule remains wise: Employ equity-pursuing policies which give the market the widest berth. Thus, wealth taxation is preferred to income taxation and income taxation when duly collected is preferred to commodity taxes.

 If you want to help the poor, give cash transfers to the targeted poor; don t artificially keep prices of commodities low. Artificially low prices, say, of electricity, are leaky buckets that benefit Forbes Park more than the poor. In general, fiscal transfers to expand opportunities for the targeted poor and their children, such as education, are the best equity strategy.

 It is now fashionable to attract investment through public-private partnerships (PPP). But the state must be ready to respect the pricing provisions of the contract despite populist pressure. The government, for example, has lately buckled on the treatment of corporate income tax in the concession contract for water in Metro Manila. This sours the PPP climate and will raise the cost of future procurements. As part of the original come-on for bidders, the tax treatment provision has been priced into the calculation and should be respected by the state.

 Currently, the government via the Energy Regulatory Board has embarked on a creeping administration of the Wholesale Electricity Spot Market (WESM) and bilateral contract prices on the pretext of market failure and abuse of market power. At the root of periodic spikes in electricity prices in the recent past and the highest electricity prices in the region is the dearth of new lower-cost baseload generation capacity coming on stream since Electric Power Industry Reform Act (EPIRA) became law. This makes the energy market a sellers market. If administered pricing becomes the rule, private investment in new capacity envisioned in EPIRA will be even less forthcoming.

 The Energy Secretary recently said that there is enough power for 2014 and 2015. If this is as much assurance as the government can give, potential investors in the Philippines will look elsewhere. The government can step in to procure new capacity to forestall a looming power crisis, but EPIRA prohibits the government from directly procuring new units unless there is a declaration of a power emergency by the President. Shouldn t PNoy seriously consider declaring a power emergency now and sign contracts for delivery of new baseload to ensure growth beyond 2016? After all, a zero or negative GDP growth is peerless in growing inequity.

I am skeptical of the observation that  if you want to help the poor, give cash transfers to the targeted poor.

Yes, but if government must invent new welfare programs for the poor, government should also shrink or abolish other welfare programs that do not work. Have a spending-neutral welfarist policies.

I do not like this part, Shouldn t PNoy seriously consider declaring a power emergency now and sign contracts for delivery of new baseload to ensure growth beyond 2016?

There are many baseload plants on stream, they need to be assured that NO unnecessary delays be imposed, like the usual bureaucratism (about 100+ signatures from barangay to DOE to BIR needed to get a power plant constructed to running).

Also, price control is now practiced by ERC at WESM. The original ceiling price of P62/kWh has been reduced to "primary ceiling" of P32/kWh. And last April-May, a "secondary ceiling" of P6.+/kWh was imposed. And ERC is considering of extending that secondary price ceiling to June-July, or even longer.

Bureaucratism + price control are good formula to discourage new power investors and hence, formula to court  brown outs in the future.

See also::

The Pope and Capitalism, December 03, 2013 
Are Markets Moral?, January 05, 2014 
Globalization, Mobility and Inequality, February 18, 2014

EFN 38: Report on Globalization and Inequality, Jeju Forum 2014, June 02, 2014

Friday, June 13, 2014

This Blog has a Mirror Site in UK

I just found out today that my blog has a mirror blog registered in UK. 
The original blog site is

Both are owned by and google.

I wondered if it is good or bad. My IT-techie friend Rad Basa said that it's ok, similar to and They segregate geographically to balance the traffic across their servers around the world.

I checked this blog's stats, overall viewership since July 2010, #4 blog readers are from UK, So the mirror site may have helped.

And I just discovered today too, that the China government now allows blogger/ to be viewed in China. Until about last year, this blog has zero readers from China, meaning blogger is blocked there. This year, there are more than 7,500+ pageviews from China.

There are also many readers from Russia, and Germany.

For the past 30 days' viewership, interesting data: most pageviews are from the US, China, PH (of course) and Europe. 

I also checked for the global rank. The original site. as of today is ranked 5,431,791. The mirror site's alexa rank is 12,530,350. I wondered if the latter is (1)  "stealing" or diverting my readers from the original site, or (2) expanding my readers overall.

Rad said that it is (2) Expanding my readers overall, the same content served by different servers. Like a magazine with two publishers, and They have their own circulation market.

That's good news for me, hehe. Recently I have more readers from communist China than in capitalist PH, And Europeans are reading my blog more than other Asians.

Rad joked that the communists in China are probably using my words as a source they can use against the Philippines.

Hahaha.  But I write few "PH bashing" compared to most bloggers and writers. I'm more of "Big government basher" so that the communists should be hurting by my papers, hehe. I think it's the few free marketers in China who read my blog.

Thank  you readers. Now I know that there are many of you out there. Cheers.

Energy Econ 22: FEF on FIT for Solar Power Plants

A good statement and warning from the FEF on guaranteed rate for solar energy producers. The average generation charge by various power generation companies (from coal, natural gas, geothermal, hydro, oil-based, some renewables) collected by Meralco is about P5.70/kWh (+/- 10 to 20 centavos). The solar producers are given guaranteed rate of P9.68/kWh, or about P4 more expensive than existing rates. We already have a high electricity cost in Asia, the FIT for solar, wind and other renewables will make it even more expensive.

Solar power, wind, biomass are cool, I am not against them per se. I am against the subsidy via FIT that is granted to producers of those renewables. That Renewable Energy Act of 2008 (RA 9513) is a huge energy robbery scheme engineered or inspired by various climate alarmist groups like the UN, WWF and Greenpeace, that will victimize Philippine-based energy consumers.


Foundation for Economic Freedom Opposes the Increase in Solar Installation Capacity Under the Feed-in-Tariff (FIT) Subsidy

         We, the Foundation for Economic Freedom, firmly oppose the plan of the Department of Energy (DOE) to increase the installation target for solar energy from 50 Megawatts to 500 Megawatts (MW) under the Feed-in-Tariff Subsidy of PHP 9.80 per KWh on the pretext that the country has to build energy reserves in the summer months of 2015 and 2016.

        We believe the DOE’s decision is illogical, arbitrary, and represents an unjust burden on Filipino electricity consumers.  It is illogical because while the perceived “emergency” is only during the summer months of 2015 and 2016, the decision will burden Filipino electricity consumers with additional power charges amounting to PHP 12 billion annually for the next 20 years, or a grand total of PHP 240 Billion pesos.  This gigantic burden is on top of the already approved subsidy for the existing installation targets for renewable energy that is conservatively estimated at PHP 8 billion pesos annually for the next 20 years.

        Solar energy developers will enjoy a Feed-in-Tariff (“FIT”) rate of PHP 9.68/kWh for the 500 MW when the Wholesale Electricity Spot Market (WESM) rate is at least half of that.  The difference between the WESM rate and the FIT rate will be shouldered by the Filipino consumers.

         We estimate that the total additional bill for Filipino consumers to be at least PHP 0.32/kW hour if the additional subsidies for the expanded solar installation capacity is taken into account.

         Under the existing rules of the Feed-in-Tariff system, the renewable energy developers, including the solar energy producers, will enjoy a guaranteed rate of return of 16% per annum for the next 20 years.  The FIT rates are fixed for 20 years, irrespective of advances in technology and reductions in cost of capital equipment.

         These developers will enjoy a greater amount of abnormal profits because the FIT rates calculated by the Energy Regulatory Commission two years ago may be too high given the drops in interest rates and the cost of capital equipment.

        The burden on Filipino consumers goes beyond the Feed-in-Tariff subsidy to Renewable Energy developers.  Solar is an intermittent power source:  it doesn’t generate power at night or when the sun is covered by clouds.  It has an efficiency rating of only 16 to 20%, which means that most of the time the equipment lies idle.  Because of its intermittent nature, the grid has to build additional reserves.  These additional energy reserves are added costs that will be passed on to the consumers.

             The additional electricity costs will further lessen the competitiveness of Filipino manufacturers and cause job losses.

    It is absurd that manufacturers and consumers have to bear  this additional onerous burden for the next 20 years to address a perceived problem that will last for a mere two months in 2015 and 2016 considering alternative solutions are possible and less expensive.  The plan of the Department of Energy will only fatten the profits of solar energy developers and their foreign equipment suppliers at the expense of Filipino consumers who must bear the additional unjust burden, which is effectively a tax, for the next 20 years.

    We, the Foundation for Economic Freedom, are not against renewable energy per se, but against the obscene prices that must be borne by the Filipino consumers due to the exorbitant Feed-in-Tariff rates and duration (20 years) given to renewable energy developers.

See also:

Wednesday, June 11, 2014

Pol. Ideology 56: Democracy and the Devils

A friend, Ms. M, posted this in her facebook wall. The images I just added, all taken from the web.

Demokrasya... government by the people, for the people. Ang nakararami ang mapagpasya.
de·moc·ra·cy [dih-mok-ruh-see]
noun, plural de·moc·ra·cies.

1. government by the people; a form of government in which the supreme power is vested in the people and exercised directly by them or by their elected agents under a free electoral system.
2. a state having such a form of government: The United States and Canada are democracies.
3. a state of society characterized by formal equality of rights and privileges.
4. political or social equality; democratic spirit.
5. the common people of a community as distinguished from any privileged class; the common people with respect to their political power.

I commented that democracy can be dangerous in certain instances, like if the majority decides that they should eat even if they do not work, then that majority decision can become a law, and it should be implemented. One danger of majority rule.

On the other hand, many countries do not practice democracy. Their people do not understand what "representative democracy" is, they do not know what election is, because a monarchy or dictatorship has ruled them for 100 year, 200, even 400 years, like several countries in the Middle East and Africa. In such situation, people will be happy that they live in a democracy, with all its warts and impurities, including abuses and robbery.

Then my friend and I have a short scenario building:

Ms M: How would you like a benevolent dictatorship with me at the helm, Nonoy?

Nonoy: I prefer a small government by devils, than a BIG government by angels. So if you wish to do evil things as a dictator provided your sphere of intervention is small and limited, I go with you. 

Ms M: I'll run it mafia-style-- gov't as business enterprise, streamlined bureaucracy, centralized corruption, everyone's beak will be wet but zero tolerance for greed, zero tolerance for dissent, family is sacred, quid pro quo, etc. You still with me, Nonoy? LOL!

Nonoy: that architectural outline is BIG government, so not joining you, hehe. Your minions will allow you to make such grand design, then eliminate you later. they will take over the set up you designed.

A small government run by devils would be like this: No government schools and universities, no government hospitals, no government banks, no government farms or agri trading and credit agency, etc. Govt will simply be a regulator and referee of many private players competing with each other. The devil regulators will definitely pick winners (their friends, family members, etc.) but other devils from other agencies will also come in to ensure their friends will not be totally wiped out. There is balance of terror among devils, but government is never a player itself. The sphere of evil deed is limited and that is a good protection of the public.

Ms M: How will this government be funded?

Nonoy: there will still be taxes, consumption-based taxes (VAT, excise tax, transaction tax) but no income tax, personal and corporate. The devils in government will be limited to enforcing rule of law, go after devils in the private sector who steal, murder, abduct and rape other people. The government devils will have the upper hand over private sector devils. Even the poor will benefit from this arrangement. They can save and invest, acquire simple things like cows, tricycles, boats, modest house and lot, assured that the smaller devils among the populace is checked and terrorized by the bigger devils in government.

See also:

Tuesday, June 10, 2014

Fiscal Irresponsibility 27: PH's P2.6 Trillion 2015 Budget

The Department of Budget and Management (DBM) has announced that the projected budget of the Philippine government next year will be around P2.6 trillion ($59.63 billion at P43.60/US$) or more than P300 billion than this year's P2.26 trillion budget. That means P2.6 trillion of taxes, fees and borrowings.

A P3 trillion budget for 2016, and P3 trillion taxes, fees and borrowings, is just around the corner. Government, national and local, keeps expanding. On years of no crisis or emergencies, a responsible government should have fiscal surplus, pay many loans and reduce the public debt, currently rising by around P400 B a year. In post-emergencies year, running a budget deficit and resume borrowings is understandable. But the government just keeps expanding and borrowing, with or without a crisis or emergencies.

While politicians and legislators, and those in the Executive branch are directly to blame for endless expansion of government, the public also share the guilt. For any problem they see, they think that more government is the solution. They seek endless government subsidies, endless government new regulations.

People should be careful what they wish for or request from the government, especially new legislations. Almost ALL government subsidy programs created by legislation are forever, they never go away as all laws here have no sunset (timetable) provisions. All new regulations create new or expand existing bureaucracies that exist forever. And the BIR will keep inventing new harassments, new requirements, to doctors, entrepreneurs, even those in informal sector, so that it can raise more tax revenues. We already saw it in the BIR-doctors love-hate affair. Expect the worst to come in the coming years.

Another disappointment for the lefties too. Big money means big temptation to steal, or at least to waste. Big expectations often mean big disappointments. 2.6 trillion of disappointment.

I am curious how much will be the interest payment alone for 2015. Public debt stock is rising by around P300 B a year, with or without a crisis or emergencies.

source: Bureau of Treasury, 

Palpak din ang campaign ng Freedom from Debt Coalition (FDC). You will never have "freedom from debt" if there is no "freedom from (endless) borrowings" mentality and policy. If new welfare programs (and bureaucracies)are invented without phasing out or abolishing old and ineffective welfare programs (and bureaucracies), endless borrowings is the result. 100 percent.

Government should learn to live within its means. If projected revenues next year are P2.3 trillion, then the budget should be at that level only, not P2.6 trillion then borrow P300 billion. Government should stop borrowing even for one year. If new welfare programs have to be invented, then some old welfare programs that do not seem to work should be shrank, if not discontinued. The national government should focus on improving the institutions for rule of law implementation. The poor appreciate fast and credible delivery of justice as much as the rich. 

A physician friend engaged me in a private discussion. His ideas are useful, I am posting our short discussion here.

Him: Sir Nonoy, we cannot continue living beyond our means. Either cut the budget, impose new taxes, cut losses due to inefficiencies and corruption or a combination of the three.

Me: Yes, that was my point. The Executive, as tolerated by the Legislative branch courtesy of pork barrel, keeps living beyond its means. Too much fiscal irresponsibility. This makes tax cut proposals become more difficult. Too many spending.

Him: well sir, there are those arguing that if government spending contracts without the private sector coming in, our economic growth will be compromised. i would prefer living within our means, whether as individuals, families, communities, or as a nation. We are lucky interest rates are down. but what if it shoots up? just the interest payments will kill us hehe.

Me: PH government interest payment alone is P330 B a year. And it should rise to P350 B yearly soon. That is killing certain sectors of the PH economy already.

If government reduces spending, it reduces heavy taxation and borrowings too, more money in the pockets of people and firms, they can expand and hire more people. If people have stable jobs, what is the need for rising government spending, except to fatten the salaries and perks of those in government.

Him: although sir there will be expenditures for certain social needs which the  private sector cannot or will not spend for (i.e. national defence). but i agree that we must spend within our means

Me: Actually defense spending here is verrryyy bloated. The big threat to the people is internal -- criminals, thieves, rapists, murderers, etc. Police function, not military function. That is why private security agencies are everywhere. Peace and order has been privatized, what a horrible government failure.

Him: regarding defense spending, Im no expert but our AFP does need upgrading. hehe. also our PNP.

Me: AFP modernization can be funded by privatizing Camp Aguinaldo, all of the proceeds should go to AFP fund, so there will be no need for new taxes, new borrowings. AFP can move to Cavite or Bataan. Their function or mandate is external defense, not internal.

See also: 
Fiscal irresponsibility 12: More on US debt default, July 28, 2011

Hong Kong's Corporate and Forest Jungle

Among the things that fascinate me about Hong Kong capitalism is that they have both corporate jungle and forest jungle, and both jungles deliver money and utility or satisfaction for its people and foreign visitors. The three photos below I got from the web, none from my camera.

Well almost all developed economies have clean and green environment. Their economies create big surplus, economic and social surplus. So they can afford to retain some areas for non-commercial development and environmental conservation because they have a huge surplus.

This disproves the impression that capitalism destroys the environment. Poor countries need more capitalism and market exchange, not less. Then they can develop economically, and have more green environment.

The previously forested areas of the Philippines and other countries that became commercial, it's the same for HK What we see now as commercial jungle used to be forest jungle many decades ago.

HK and other developed economies have properly delineated their areas. Corporate jungle here, forest jungle there, open parks somewhere. If there are pockets of forested area in the corporate jungle side, they are few and small. It is a good model. It reduces the need for people to travel very far from house to work and school as they are concentrated in the same area.

Some people enjoy tourism capitalism of HK but they do not want tourism capitalism to develop in other areas, like the mountainous municipalities in Negros island, Salvador Benedicto and Canlaon. Such opposition is unjustified. There is demand for mountain resort facilities, there are people looking for work in the tourism-related industries, and there are investors willing to put their money (and lose it if they make bad decisions). Allowing such development will be a win-win scenario for many sectors.

See also: