Budget and Taxes

* My column in  BusinessWorld  last August 1. -------------- There were a number of important economic events that occurred last week, I will discuss four of them here. FIRST SONA OF PFMJ Last Monday, July 25, President Ferdinand Marcos, Jr. (PFMJ) delivered his first State of the Nation Address (SONA). It was a 3S — sane, statesman, sensible — address by a head of state. No cursing, no threats like “I will expropriate your business” that we heard in the SONAs of the previous administration. Instead, the opening statements were all about the economy: “sound fiscal management… Tax administration reforms… spending efficiency… Productivity-enhancing investments… Ecozones supported… tax system adjusted to the digital economy… ease of paying taxes.” “GDP growth targets 6.5 to 7.5% in 2022, 6.5 to 8% in 2023-2028… 9% or single-digit poverty rate by 2028. Three percent deficit to GDP ratio by 2028. Less than 60% debt-to-GDP ratio by 2025. At least $4,256 income (GNI) per capita and the attain

* My article in  BusinessWorld  last July 25. ------------- This paper will expand my hypothesis that I mentioned last week — that Europe and North America will deindustrialize in the short- to medium-term and many companies there will migrate to Asia. The Philippines should prepare for this. DEGROWTH AND BLACKOUT ECONOMICS I encountered for the first time the concept of Degrowth economics from these articles: 1. “Climate Change Modeling of ‘Degrowth’ Scenarios — Reduction in GDP, Energy and Material Use” by University of Sydney,  scitechdaily.com , May 11, 2021; 2. “1.5°C degrowth scenarios suggest the need for new mitigation pathways” by Lorenz T. Keyßer and Manfred Lenzen,  nature.com , May 11, 2021; 3. “Degrowth: Universities Push Permanent Poverty as the Solution to Climate Change” by Eric Worrall,  wattsupwiththat.com , May 13, 2021. To argue for reduced production of material goods and services to “save the planet” is irresponsible and insane, and the idea comes from the academe

* My column in  BusinessWorld  last July 18.  ------------- There were five events last week that I want to comment on.... I also checked some components of the Philippines’ recent inflation rates — it turns out that ready-made food products like noodles have price increases that were nearly one-half of overall inflation (See Table 1). Thus, ample supply of those ready-made foods actually temper and control higher inflation. The public and government agencies should junk the leftist lobby and ignore the EU’s zero tolerance for EtO. The FDA is starting from a good scientific argument in this case. We should have a better food supply, both of raw and manufactured food. We should have more food security and lower food inflation. And we should have more big Philippines transnational companies exporting more commodities to the world. BUREAUCRACY RIGHTSIZING On July 13 and 14, I saw two television/radio interviews of Department of Budget and Management (DBM) Secretary Amenah F. Pangandaman w

* My column in  BusinessWorld  last July 11. -------------- ... It is good that the SC has realized the mistake it made eight years ago and upheld the electricity rate hike. Good decision. And I hope that the SC will avoid the same problem of price intervention in the future, whether in electricity, food, transportation, and other sectors. BIDENFLATION, NOT PUTINFLATION There is a continuing narrative that the high inflation in the US, Europe, and rest of the world is “Putin caused” via Russia’s invasion of Ukraine last February. This is not true; this is a dishonest narrative. The truth is that from January 2021 to January 2022, 12 months of US President Joseph R. Biden’s being in power and prior to the Russian invasion of Ukraine, the inflation rates in the US and Europe had been rising fast (Table 2). I arranged the countries into four groups: A is North America, B is Europe, C is North Asia, and D is ASEAN. Other countries do not have June 2022 inflation numbers yet as of this writ

* My article in  BusinessWorld  last July 4.  ---------------- A number of important policies and events caught my attention last week. I will discuss three of them. PRESIDENTIAL VETO OF BULACAN ECOZONE BILL One big news on day 1 of President Ferdinand “Bongbong” R. Marcos, Jr., is his letter to the Senate dated July 1 expressing his veto of House Bill 7575, “An Act Establishing the Bulacan Airport City Special Economic Zone and Freeport” (Bulacan Ecozone). Among the reasons given are that Bulacan Ecozone “poses substantial fiscal risks and conflict with other agencies’ mandates and authorities… Ecozone Authority has rule-making powers on environmental protection not found in other Ecozones, … [and] close proximity to Clark Special Ecozone.” I initially saw the logic of those reasons. I also saw the 12-page Memorandum of former Finance Secretary Carlos Dominguez to former President Rodrigo R. Duterte why he should veto that bill. To see the bigger picture, I read the 12-page bill (thir