It is reassuring to read that the Bangko Sentral ng Pilipinas (BSP) continues to sharpen its analytical tools particularly on predicting potential financial crisis and presenting a more detailed inflation outlook for more reliable forecasting. A good handle on the future is the heart and soul of the BSP’s flexible inflation targeting.

Reassuring, yes, because the BSP has not ceased producing more and more analytical tools for the macroeconomy and stress testing methodologies for surveillance of the banking system. Quite a mouthful, but all of these initiatives should further enhance the batting average of the BSP in projecting inflation and deciding on the most fitting monetary policy stance.

To be hawkish, or to be dovish, is not a question of fashion, or cut and paste, but a result of careful assessment of both past, current, and future data. It’s obvious that when the BSP can confidently manage price movements in the Philippines, we benefit from such positive consequences as more sustainable economic growth, more competitive exchange rate, and a more investment-friendly economic environment. Price stability also reinforces the economy’s resiliency to both global and domestic shocks.

But there’s something that BSP Governor Eli Remolona cited recently that should further keep the BSP economists and researchers busy in the next few years. He said: “We need to do what I call narrative identification. It’s not enough to have an index that’s based on averages. We have to somehow calibrate them so that they actually predict the crisis, especially our own crisis.”

The narrative approach, if applied to macroeconomic identification, uses qualitative sources of data and information like, but not limited to, newspapers, government records, or, in the case of central banks like the BSP, transcripts of Monetary Board meetings. This ragtag group of sources can provide information crucial in establishing causal relationships.

The husband-wife team of David H. Romer and Christina D. Romer, both of the University of California, Berkeley, employed this methodology first in 1989 in looking into the impact of monetary policy by reading the historical minutes and transcripts of the Federal Reserve Board meetings on monetary policy and incorporating these to statistical analysis. They opted for this approach to deal with the common problem of omitted variable bias to consider a more complete set of relevant explanatory factors.

In her January 2023 presidential address before the American Economic Association in New Orleans, Ms. Romer explained that their methodology allowed them to identify precisely “a subset of monetary actions that were not motivated by other factors affecting output.” The behavior of output following the US Fed monetary shocks “would provide relatively unbiased estimates of the impact of monetary policy.”

For economists, what the Romers are saying is that there are other relevant variables that do affect both output and the motivation of the US Fed to change the course of monetary policy. One common flaw, and this is something that both economists and non-economists are guilty of, is when one concludes that monetary policy does not matter when we see it morphing from hawk to dove without any perceptible effect on business activities.

Auspicious as it was, Ms. Romer’s presidential address presented her with the opportunity to revisit their 1989 paper in the context of the recent issue of the US Fed monetary policy allegedly motivating a possible recession in the US. After over three decades, the husband-wife team has learned volumes “about the pitfalls of narrative research” and how to turn it around.

Ms. Romer cited the key ingredients to a more meaningful use of the narrative approach in order to avoid being just “literary,” a term used to discredit their initial 1989 paper. First is the reliability of their source. Their 1989 paper was based on the abridged record of policy actions of the Federal Open Market Committee, or to some, minutes of those Committee meetings. This means they extracted very little information on the motivations of the Fed’s policy actions. With a shorter lag involved before these minutes were made public, the Romers felt that they were “less forthright.”

Their new research is anchored on “very detailed summaries of the discussion with extensive paraphrases, or verbatim transcripts.” As Ms. Romer stressed, they are contemporaneous with the Fed’s monetary policy decisions. With a long lag before the transcripts’ publication, the US Fed governors must have been more open and more forthright.

The second key to a good narrative approach is a clear sense of what one wants to extract from the source. Citing the genius of the iconic Milton Friedman and Anna Schwartz in employing the same methodology in their seminal work, A Monetary History of the United States (1963), proponents of the methodology should focus on those instances when monetary policy was undertaken without regard to economic activities, and the effects are expected to be unbiased estimates of causality between monetary policy and economic performance.

One drawback to this general approach is coming up with specific criteria to be used in judging for the period to be considered. It is difficult to tell whether the economy is at, or close to, potential output but it is perhaps even more difficult to determine whether the corresponding inflation target is just right, or needed some adjustment. Ms. Romer then argued that there is a scope for including not only contractionary monetary policy shocks but also expansionary monetary policy shocks. If monetary policy matters, output should be affected upwards.

The team sought to identify significant contractionary and expansionary changes in monetary policy that were not exactly considered to address real sector activities in the United States from 1946 to 2016. Based on this approach, they succeeded in identifying 10 instances when the Fed deliberately adjusted monetary policy to alter the path of business activities. There was only one case where the Fed adjusted monetary policy in response to high inflation. This is not surprising because, as Ms. Romer pointed out, no monetary shock was observed between 1988 and 2016. Even as they included almost 30 years of additional observations, inflation in the US had been steady during that period, until recently.

The Romers’ revisit confirmed most of their original findings with a few tweaks here and there on periodization and interpretations. Building on Friedman and Schwartz’ pioneering work, the Romers incorporated their narrative evidence into a more rigorous statistical technique, the Jordà local projection approach (2005). They admit that there are other statistical techniques available to achieve rigor and unbiased estimates. It was also shown that alternative specifications yielded only minor differences in the results. The results tested robustly.

How does the Romers latest study interpret current monetary conditions and US Fed policy?

For one thing, even as the transcripts of the US Fed monetary policy meetings will not be available until 2028, a reading of the narrative evidence based on the record of such meetings would indicate that the US Fed tightened monetary policy in response to record-high inflation in the last couple of years. The US Fed, on the record, announced that this was unacceptable, so monetary policy must respond. Fed funds target rate has risen a full four percentage points, or 400 basis points, something akin to the 1988 monetary policy action by the US central bank.

Ms. Romer, in her presidential address, was quite fearless in her prognosis of what to expect from such monetary policy action. She said we should not expect inflation to fall rapidly. It’s possible perhaps after two quarters after the shock. If the supply side is favorable, a more rapid decline is likely. From January 2023, the impact on unemployment should be felt throughout the same year. Finally, Ms. Romer suggested that the US Fed was facing a difficult decision on when to stop tightening monetary policy and start reducing the policy rate.

With long and variable lags of monetary actions, it is possible the US Fed might still be tightening until they see a more definitive trend decline in inflation. But that would signal that “they have gone farther than they needed to.” Ms. Romer admitted it’s an impossible call to say how much more monetary policy has to continue, and how much longer interest rates should remain high.

In our previous columns, we made the point that the BSP was correct in fighting inflation until it returns to the 2-4% target. Some of the expected effects of this monetary policy shock include economic moderation and weaker job creation. There is no way by which those factors affecting inflation could not affect output and the labor market.

Yet, we have seen that as the BSP maintains higher interest rate longer, inflation rates in the Philippines seem to have started to gravitate towards the 2-4% inflation target recently. Yet, it must be recognized that the impact on both output and jobs has not been as bad as some quarters expect. The Philippines is expecting output growth close to the lower end of the 6-7% target while the latest jobs statistics indicate lower unemployment and underemployment.

It would bring more completeness to the analysis of inflation and inflation prospects if the BSP would start implementing the call of the Governor in doing the narrative approach in addressing the usual identification problem in macroeconomic research. While other alternative techniques are available, the narrative approach is very promising, though difficult. For instance, it would require the Monetary Board greater understanding for more transparency and forthrightness in allowing the publication of the transcripts of monetary policy meetings. A longer lag may be considered to permit more open and frank discussion of monetary policy.

But we are optimistic that once this is done, inflation management in the Philippines would have a very interesting narrative.

Diwa C. Guinigundo is the former deputy governor for the Monetary and Economics Sector, the Bangko Sentral ng Pilipinas (BSP). He served the BSP for 41 years. In 2001-2003, he was alternate executive director at the International Monetary Fund in Washington, DC. He is the senior pastor of the Fullness of Christ International Ministries in Mandaluyong.

THE IRIS Alborz, pride of the Iranian navy, isn’t much of a warship. Commissioned in 1971, the frigate is both long in tooth and lacking in teeth: Decades of sanctions have obliged Iran to jerry-rig it with homemade combat systems, well short of the firepower of equivalent vessels in the world’s major naval fleets.

The ship serves important symbolic purposes, though. It is a reminder that the Islamic Republic is a maritime state, if not quite a power. Its armaments, limited as they are, also advertise Iran’s indigenous weapons-making capabilities. When it sails out of its home port of Bandar Abbas on the Persian Gulf, the Alborz projects not power so much as defiance.

Right now, the vessel is serving symbolic functions on the far side of the Arabian Peninsula, as reassurance and recognition for a key ally: the Houthi rebels of Yemen, who have been attacking international shipping on one of the world’s most important sea routes. They have also fired missiles in the direction of Israel, in support of another Iranian ally, Hamas.

The Alborz will not provide them with much protection from the US-led naval flotilla, known as Operation Prosperity Guardian, that is interdicting the Houthis’ missiles and drones, as well as sinking some of their boats. But Tehran is signaling to the rebels that they are not alone.

For Iran, this is an unusually open demonstration of military support for one of its extensive network of allies and proxies in the Middle East. Tehran typically uses cloak and dagger means to train, finance, and arm groups like Hezbollah in Lebanon, Hamas in Gaza, and the Hashd al-Shaabi in Iraq. In public, Iran’s leaders limit themselves to rhetorical encouragement and approval.

That is how it has been with the Houthis. Tehran developed ties with the rebels long before they burst onto the international scene nearly 10 years ago, by capturing the Yemeni capital Sana’a, and toppling the internationally recognized government. Since then, Iran has supplied the Houthis with increasingly sophisticated missiles and drones, as well as the means to produce them locally.

This support enabled the rebels to defeat an Arab coalition led by Saudi Arabia that sought to restore the now exiled government. Tehran’s weapons have also allowed the Houthis to strike deep into Saudi territory, most spectacularly with the 2019 attacks on the kingdom’s oil infrastructure. The Saudis were eventually obliged to sue for peace.     

Throughout, Iran maintained the fiction that the Houthis were acting alone. Only once, in the spring of 2015, did it send a naval flotilla — led by the Alborz, as it happens — to try and break a blockade of Yemeni ports by Saudi Arabia and the United Arab Emirates. But after the US sent an aircraft carrier group to intercept the flotilla, the Iranians quietly withdrew. Back then, the Houthis were one of Tehran’s lesser proxies, not in the league of Hezbollah or Hamas; the situation didn’t merit the risk of a confrontation with the US.

Iran’s more determined defiance this time on behalf of the Houthis reflects their elevation to the first rank of allies. It is a reward for their humiliation of one of the Iranian regime’s sworn enemies, Saudi Arabia, as well as an appreciation of their utility in the fight against another, Israel.

The promotion is especially timely for Tehran. Its main catspaw against Israel, Hamas, is being severely degraded by the war in Gaza. Iran is reluctant to deploy Hezbollah, partly for fear of depleting its oldest, most powerful client.

Boosting the Houthis makes more sense for Iran because they can be much more disruptive than any of the other proxies — as they have just demonstrated by essentially frightening off commercial shipping from a sea lane that accounts for 12% of world trade.

While Hezbollah’s main utility to Tehran is as the protector of Iranian interests in Lebanon and Syria, and Hamas’ principal purpose is to kill Israelis, the Houthis can wreak economic damage on Iran’s near enemies, the wider world, and, by extension, the US.

It helps the Iranian cause that the Houthis operate with fewer restraints than any other proxy. Unlike Hezbollah in Lebanon or the Hashd al-Shaabi in Iraq, the Yemeni rebels don’t need to manage complex multi-ethnic and multi-sectarian local politics. Unlike Hamas, they are out of reach of the Israeli Defense Forces. They command a large country, with plenty of remote redoubts from which to fire off Iran’s missiles. And their proximity to some of the world’s main sources of energy amplifies their threat potential.

It should surprise nobody, then, if the Houthis grow in Iranian esteem, and eventually match — and perhaps even exceed — Hezbollah. This prospect terrifies Yemen’s Arab neighbors; tellingly, neither Saudi Arabia nor the UAE have dared to join Operation Prosperity Guardian.

For the wider world, responding to the growing Houthi menace will require much more than naval flotillas to the Red Sea. Rather than react to provocations by the rebels and their masters in Tehran, the US and its allies will need to impose restraints on their ability to do harm (see my Bloomberg Opinion colleague Admiral James Stavridis’ recommendations on that score) while strengthening their domestic rivals. The latter include forces loyal to the government in exile and armed elements around Aden, known as the Southern Movement. That would present challenges, such as the inconvenient fact that the Southern Movement seeks separation from Yemen, and that corrupt and inept politicians make up the exiled government.

Given its age and condition, the Alborz’s deployment is likely to be short. It has already fulfilled its symbolic purposes. But long after the frigate’s return to Bandar Abbas, Iran and its newly elevated ally will represent a danger to the Red Sea.

BLOOMBERG OPINION

Happiness is abstract. It means different things to many individuals. It is a state of being, a fleeting emotion, a decision, a sense of balance between joy and despair, somewhere between ecstasy and delight. It could be the absence of pain, relief from pressure, or healing from illness.

The philosopher Lao Tzu once wrote, “By letting it go all gets done. The world is won by those who let it go. But when you try and try, the world is beyond winning.”

To be happy, we should change our attitude towards life, relationships, people, and, most importantly, oneself. It may be very difficult to struggle with ego and pride, but it is worth trying.

Here are some thoughts and quotes about giving up — both negative and positive.

We often want to be right — even at the risk of ending a great relationship or causing stress and pain.

Give up the need to be right. It seems that, in the long term, being kind is better than being right.

Give up the need for control. We should learn to allow people around us and things to go their own way.

Give up on blame. Blaming is passing the buck. We should not blame others for what we have, what we don’t have; for what we feel or don’t feel.

Give up on self-defeating self-talk. We must erase the negative, toxic, self-defeating mindset.

Eckhart Tolle wrote, “The mind is a superb instrument if used rightly. If used wrongly, however, it becomes very destructive.”

Give up your limiting beliefs. Spread your wings and soar! A belief is an idea that holds the mind.

Give up complaining. The power of positive thinking is essential. We must practice it daily.

Give up on criticism.

Give up on the need to impress others.

Give up your resistance to change. Change helps one to move forward from one point to another. Sometimes, sudden change may seem negative. It is a matter of knowing how to deal with it and how to accept it. One can learn how to make it positive.

Give up labels. Stop labeling people, things, and events that you don’t understand as being weird or different by opening your mind, little by little. The mind only works when it is open.

Wayne Dyer wrote, “The highest form of ignorance is when you reject something you don’t know anything about.”

Give up your fears. Fear is just an illusion.

US President Franklin D. Roosevelt once said, “The only thing we should fear is fear itself.”

Give up your excuses.

Give up the past. The past may appear much better than the present. (Nostalgia colors it somehow.) The future is worrisome. We have only the present moment and we should enjoy life. “Life is a journey, not a destination.”

Give up attachment. It is important to know how to detach oneself from material things, possessions. One can like a certain lifestyle level and enjoy some luxuries. But these pleasures are fleeting. They do not and cannot last forever. One could lose them all in an instant. A sudden economic downturn, a tragedy, a disaster.

One should be willing to let go. Then one can feel serene, tolerant, and attain understanding. It would be on a higher level.

Give up living your life according to other people’s expectations. Many individuals live a life that is not theirs — it is pretentious — instead of listening to their inner voice. It is not worth trying to please everybody because it makes one lose control over life.

We have only one life. We should own it and live it without the distractions and pressure of other people’s opinions.

It is time to take responsibility for our actions. That is how we become true to ourselves. Then one can attain a measure of happiness and contentment.

Happy new year to all!

Maria Victoria Rufino is an artist, writer and businesswoman. She is president and executive producer of Maverick Productions.

mavrufino@gmail.com

There are a few reasons for this. We have already seen the rise of less democratic leaders in the Netherlands and Italy, and there is a corresponding trend in Asia. China’s alternative model of governance, which prioritizes economic development over civil liberties, is increasingly appealing. Many voters have become disenchanted with Western democracies in a post-Brexit, post-Trump world, and are actively looking for something else. Combine that with social media amplifying the message of candidates who can now bypass a press struggling to keep them accountable, and it helps explain the allure of more authoritarian leadership. Artificial intelligence tools will only make things worse, as the proliferation of fake news, misinformation and disinformation inundate the timelines of a largely young and often unquestioning voter demographic.

Asia’s liberal credentials are under significant pressure, according to figures from the International IDEA’s Global State of Democracy (GsoD) Initiative. Only a tiny minority live in a high-performing democracy, with institutions appearing stuck.

From Bangladesh in the coming week to Pakistan and Sri Lanka toward the end of 2024, voters will be having their say. Three of the most consequential elections will be held in Taiwan, Indonesia, and India. Their outcomes will determine the region’s future and democratic trajectory in years to come.

TAIWAN IS THE BRIGHT SPOT
The island is a bright spot among less democratic neighbors. Taiwanese will choose their next president and legislature on Jan. 13. For the most part, they are expected to be vibrant, free, and fair, with an engaged electorate. Voters want a new administration that will manage issues like the economy and jobs but also navigate the difficult and tricky relationship with China. Taiwan regularly scores well on the annual Freedom House report on the state of liberties in countries around the world. Threats to its democracy are mainly external. Beijing poses the biggest existential risk and concerns have been building in the past few years over the Chinese government’s efforts to influence policymaking, media, and the democratic infrastructure.

It wasn’t always like this. For several decades, Taiwan was ruled under a dictatorship, harshly regulated by martial law that was finally abolished in 1987. In fact, it was Southeast Asia in the 1990s and early 2000s that seemed to be the beacon for the golden age for democratization, serving as a model for other developing countries. At that time, Indonesia, which will hold presidential elections on Feb. 14, was just beginning its experiment with democracy and decentralization, after the toppling of strongman dictator and former President Suharto. The rest of the region was also in relatively good shape.

Today, though, as Joshua Kurlantzick, senior fellow for Southeast Asia at the Council for Foreign Relations, noted recently, it is a long way from that promising period. Timor-Leste is the only fully free democracy in the region, according to Freedom House’s rankings, despite its poverty and isolation.

INDONESIA LOOKING BACK
Indonesians will almost certainly elect the former general and alleged human-rights violator Prabowo Subianto as their next president, along with the eldest son of the incumbent Joko Widodo as vice-president. Many have questioned why in a country of 270 million people, the man most likely to lead is a throwback to the old authoritarian era, the Orde Baru, as it was called, the 32-year rule under Suharto marked as one of the most corrupt and dictatorial in Southeast Asia’s history.

Those who fought against the old order are asking themselves what Prabowo’s ascendancy means for Indonesia’s democracy, and whether it implies a fresh role for the military in politics. That Prabowo’s past has failed to make a dent in his popularity is a testament to his social media game, which has seen him use the image of a cute and cuddly grandfatherly figure to appeal to younger voters. In another ominous sign, the choice of Gibran Rakabuming Raka as his running mate has raised concerns that nepotism and cronyism — hallmarks of the Suharto era — are making a comeback.

INDIA’S ‘MODI FACTOR’

Over several weeks in April and May, India will hold elections for over 600 million registered voters to determine whether Narendra Modi’s ruling Bharatiya Janata Party (BJP) will govern the world’s most-populous nation for five more years. All the signs point toward another Modi victory. The BJP is playing up his personal popularity, what’s often called the “Modi factor.”

The BJP is celebrating the results of the Dec. 3 state polls that gave it huge wins in the Hindi belt states of Chattisgarh, Madhya Pradesh, and Rajasthan. The opposition Indian National Congress won in the southern state of Telangana. There is no denying Modi’s pull — he regularly ranks as the most popular leader in the world. It is true that under his rule India has become more globally significant and has enjoyed impressive economic growth. But minorities feel less welcome and safe than ever before, with one report noting that the ruling party and affiliated groups were behind most hate speech incidents against Muslims during the first half of last year. Laws are passed quickly through a parliament, which meets for fewer and fewer days, and a once vibrant and free press has now largely been muzzled or accommodates the BJP and Modi’s hardline Hindu message.

It would be understandable then to feel dispirited and demoralized by the state of Asia’s democracy in 2024. Indeed, simply writing this column has made me wonder whether the experiment with this system of government has failed in the region. Still, it would be churlish to begin the new year with limited optimism, and it is in the very mechanisms of democracy that I keep the faith. Ultimately, voters must and should decide on whether their elected officials are delivering on promises. It would be wise for those in office and those who put them there to remember that the real power rests with them, the people. Another election is hopefully just one term away.

BLOOMBERG OPINION

And by this year, with the blessing of the House and the Senate, such fees will go up by 5% every year for all motor vehicles from 2026 onwards. For 2024 and 2025, there will be fixed rate hikes. But public utility and for-hire vehicles will get a 50% discount, while motorcycles and tricycles will be exempt. Obviously, the heavier the vehicle, the higher the fee.

I do not agree with the plan as approved by the House. And I hope the Senate can still make changes to the bill. It is as if the government wants private vehicle owners to swap their cars for motorcycles. Or to take public transportation, even when such is still severely lacking. In my opinion, if it is a road user’s tax, then all road users must pay. No discounts, no exemptions.

Taxes or fees or charges are paid for several reasons, which include: for the government to raise revenues; to collect money from road users for road improvement and road safety projects; to pay for the “negative externalities” of motor vehicle use such as emission and carbon footprint; in this case, to fund public transport modernization; and, even to dissuade excessive vehicle ownership through a “luxury” tax, etc.

Last month, the House of Representatives approved the proposed Motor Vehicle Road Users’ Tax (MVRUT) law to replace the annual registration fee called the Motor Vehicles Users Charge or MVUC. The fees collected will partly go to projects to modernize public transportation and to road crash prevention programs. Previously, MVUC collections partly went to the Special Road Fund of the Public Works department.

Obviously, the government desperately needs money and that raising the fees now primarily aims to fund the 2024 budget, which is the largest ever national budget in Philippine history. But if the intention is also to raise money to fund public transport modernization projects, then why discount fees paid by public utility and for-hire vehicles? The fund aims to benefit them.

And why exempt motorcycles and tricycles? As a revenue-generating measure, each centavo raised from the proposed law will matter. If I am not mistaken, there are now more motorcycles than cars on our roads. So, motorcycles’ revenue potential is high. Then, why exempt them from the fee or tax? All road users must pay, maybe including motorized scooters, motorized personal mobility devices, and perhaps even electric motor vehicles.

The House Committee on Ways and Means intends for the proposed MVRUT to be “a critical fiscal tool against traffic congestion and the overuse of the country’s road infrastructure.” Again, if this is the case, even motorcycles and tricycles occupy road space and contribute to congestion and “overuse” of roads? So why exempt them? And why give discounts to PUVs and for-hire vehicles such as school buses, tourist buses, transport network vehicles like Grab cars, and for-hire fleet vehicles, etc.?

The present MVUC is based on vehicle weight, with vehicles owners paying up to P4,000 depending on the type and weight of their units. Under the proposed law, this can go up to as high as P11,000 by 2025, with a guaranteed increase of 5% annually starting 2026. The heavier the vehicle, the higher the fee.

This I can understand as road damage and maintenance cost is impacted mostly by vehicle weight — the heavier the vehicle the bigger the road impact and damage. But even motorcycles and tricycles weigh something, and contribute to road damage. And yet, unlike the present MVUC, two-wheelers and three-wheelers will be exempt from the higher “registration” fees? Also, does this mean that motorcycles and tricycles will no longer be “registered”? Or that they will still be paying the old fees?

Moreover, the negative externalities or negative impact of vehicle use go beyond road space and damage; and time wasted in traffic jams. There is also vehicle pollution and possible accidents involving people other than the vehicle owner. So, more than just vehicle weight, perhaps emission and carbon footprint should also be taken into consideration.

In the last 20 years, we have been taxing vehicles based on their price, and computing registration fees based on their weight. There was a time when vehicles were taxed based on engine size and passenger capacity. If vehicles will continue to be taxed based mainly on price or value, then maybe registration fees should also consider engine size and not just weight. Thus, an emission charge may be necessary. But there should not be any exemptions, even for motorcycles and tricycles.

I believe the proposed MVRUT law requires more study. And if exemptions or discounts are to be given, then this should be for vehicles for seniors and persons with disabilities (PWD), or those who are particularly disadvantaged by the public transport system. To some degree, the proposed law appears anti-safety and anti-PWD by favoring motorcycles with exemptions and PUVs with discounts. Neither vehicle types are helpful or convenient to seniors and PWDs.

Moreover, while I lack data to support this, road observation leaves one with the impression that motorcycles are less safe than cars particularly for seniors, PWDs, and children. And yet, to an extent, the proposed law indirectly pushes the market towards this type of vehicle for owners to save on annual recurring costs. Even while safety enforcement is seemingly deficient.

After 20 years, perhaps it is time to raise registration fees. And maybe fees should be indexed to inflation. However, other than vehicle weight, pollution and emission should also be taken into consideration. In addition, motorcycles and tricycles should not be exempted from new fees. And all road users must pay, in full, even PUVs and for-hire vehicles.

Marvin Tort is a former managing editor of BusinessWorld, and a former chairman of the Philippine Press Council

matort@yahoo.com

Continuing this column’s “Top 10” series for 2023, we look at government debt indicators. Below are the 20 countries with the largest public debt (Russia is the 20^th) plus six other major indebted Asian countries. Here are the emerging trends.

1. The US remains the most indebted country in the world with $31 trillion in 2022. By end-2023, this has gone up to $34 trillion, according to the latest data from fiscaldata/treasury.gov. China, with $14 trillion in 2022, is second and Japan, with $11.1 trillion, is third but this is a decline from $13.1 trillion in 2022.

2. A big jump in public debt occurred in 2020 during the dictatorial global lockdown and the mandatory shutdown of many tax-paying businesses. This happened while expenditures kept rising as governments continued paying their personnel and bureaucracies plus creating new welfare programs. All countries in the table accompanying this story showed this trend except Brazil, Mexico, Argentina, and Pakistan. I think the decline was due to their currency appreciation that affected the conversion to US dollar value. Then these four countries’ public debt jumped in 2022.

3. The Philippines breached the $200-billion mark with $224.6-billion public debt in 2021. It then rose to $232.5 billion in 2022. Vietnam was correct not to have breached the $200 billion in debt level.

4. The government debt/GDP ratio jumped in 2020 for all countries in the table. From 2019-2020, these countries had big increases in percentage points: the US went from 109% to 134%, the UK from 85% to 105%, Italy from 134% to 155%, Canada from 90% to 119%. In Asia, it seems that the Philippines has had the biggest increase, from 37% to 52%. The countries that saw the smallest increases were Bangladesh, Vietnam, and Pakistan.

5.  The debt/GDP ratio in 2022 has declined from 2020 levels except seven Asian countries. These were China, Japan, South Korea, Singapore, Thailand, the Philippines, and Bangladesh. It seems many of these Asian countries contracted long-term debt that remained high even after dictatorial lockdowns were lifted in most countries.

6. The peak rates of 10-year government Treasury bonds doubled or tripled from 2019 to 2022 for Europeans. This was also the case for Japan, South Korea, and Australia. US rates touched 5% in some intra-day trading sometime last October (see table).

7. All G7 industrialized countries except Germany have debt/GDP ratios above 100%. This means fiscal discipline and responsibility is not in their vocabulary as they keep inventing new ways of spending (welfare, war, etc.) on top of existing ones. Asian countries, except Japan and Singapore, have ratios below 100% and somehow practice fiscal restraint.

8. Some rich countries suffered credit rating downgrades. The US went from Moody’s Aaa stable to Aaa negative last November. France went down from S&P’s AA stable to AA negative in December 2022. Italy went from S&P’s BBB positive to BBB stable in July 2022. In a way these are indicators of waning trust in their financial and fiscal capacity to service their long-term debt obligations.

9. The rise in price and value of alternatives to fiat money are additional indicators that many investors are slowly shying away from the US dollar and other currencies, anticipating small to big crashes in value. Gold is at an all-time high at $2,000+ per troy ounce, Bitcoin is recovering to $45,000+ and Ethereum is recovering to $2,300+, among others. Countries holding tens or hundreds of billions of dollars in US public debt will be scratching their heads if the dollar value would significantly depreciate and crash.

10. Most countries and governments are trending towards more profligate public spending and expanded borrowing instead of practicing more fiscal discipline and restraints. The Philippines and other Asian countries should actively and consciously aspire to reduce their debt/GDP ratio and retire much of their public debt — not via higher taxation but the privatization of certain government assets and corporations.

The Philippines’ economic team, headed by Finance Secretary Benjamin Diokno, has been very explicit about their stated goal of reducing the country’s debt/GDP ratio to below 60% by 2025, reducing the deficit/GDP ratio to 3% by 2028. I support their fiscal goal and I would add that we should aspire to have a debt/GDP ratio of 37% or lower by 2028. The numerator (public debt) should significantly decline via privatization of government assets. The denominator (GDP size) should keep expanding, with growth of 6-8% yearly. With more market-oriented reforms to encourage more private business dynamism and competition, the ratio will decline.

Bienvenido S. Oplas, Jr. is the president of Bienvenido S. Oplas, Jr. Research Consultancy Services, and Minimal Government Thinkers. He is an international fellow of the Tholos Foundation.

minimalgovernment@gmail.com

FOOD WASTAGE has become an environmental issue. The numbers are staggering. About one-third of food production for human consumption is scrapped. In 2022, this amounted to a worldwide waste of 1.3 billion tons of uneaten food worth $1 trillion. Compare this to Philippines’ 2022 GDP of $404 billion. The waste is even more staggering in the face of hunger in the world.

We’re not sure though how leftovers are calculated. Is the “trashed” food from a fast-food chain counted as waste, even when some collector picks it up to be eaten, or even resold?

What about “reconstituted” leftovers that are not really scrapped? The mantra of conservationists to “reuse, reduce, recycle” should also apply to food, not just toothbrushes. As a post-holiday reflection on food waste (as well as expanded waistlines), we should be mindful of our cultural definition of leftovers.

Local cuisine is hospitable to rescuing uneaten portions for further delight. Is this a function of economic status where the idea of wasted food seems obscene? Or maybe it’s just culinary creativity.

Certain recipes specify leftovers as main ingredients like the lechon paksiw (roast pig scraps stewed in vinegar). For this dish, only a leftover version exists as one cannot go straight to the saucy concoction without going through the roasted stage first. Even the inferior lechon with a chewy and tough skin achieves redemption in its recycled state. And this even has two versions using plain vinegar or the former sauce for marination.

Holiday leftovers, which by today can more properly be described as “remains,” challenge the homemaker. What does she do with all leftovers from guests who did not show up, perishable gifts, and assorted meals from Christmas Past (a culinary version of Uncle Scrooge’s ghosts)?

While clothes can be consigned to garage sales or businesses specializing in “previously owned” attire, perishable stuff like food can only be given away before their “best before” date. Aside from the usual second versions of a particular viand, here are some tips from someone who prefers to be considered an authority on behavioral economics rather than housekeeping mentorship.

Put leftovers in different containers with expiry dates. This categorizes the leftovers by their shelf life, the last day of which is defined as when the meat starts to host a colony of microbes and give off a distinct smell. Clearly, the longer lasting leftovers (like ham and cheese) can be consumed later, maybe at Easter.

Give it away. Forwarding food like text messages and fake news that one has received is considered recycling. Leftovers do not fall in this category, and the farther away from freshness and the Version 1 state, the more difficult it is to give away food. Especially to one who knows your home address. The key factor in this donation is edibility. The older food is in terms of carbon dating, the more embarrassing it is for the donor to unload it to anyone. (Yes, even garbage collectors have their standards.)

The tale of the wandering fruitcake is instructive. Because of the alcoholic content, this gift is often recycled (pay it forward) more than once and beyond one calendar year. There must be a “fruit cake” day declared where one is obliged to keep and eat the already moldy remains and declare it at the end of its earthly journey.

Leftovers are not limited to food.

If consumption rises at an unusually high rate during the holiday season, clearly a lot of it goes beyond normal use. How many of those umbrellas, stationery, and candy trays can be used by the gift recipient? He must give them away too. The desk diary is a special case. It seems to have dropped o- the corporate giveaway list. One must buy it at a bookstore since phones seem to have replaced the appointment book that records passwords, phone numbers, birthdays, and lunch dates.

Cash as a received gift is an exception. There is no leftover or recycling challenge involved, only ethical problems depending on the source. And is there really a problem of expiry dates and getting too much of it? (Where’s the nearest laundry?)

Still, the best leftovers deal with the immaterial. Warm memories of reunions and friendships are never scrapped. Photos of holiday celebrations are posted and reposted. And they never age… until compared to previous years’ posts.

Tony Samson is chairman and CEO of TOUCH xda

ar.samson@yahoo.com

In his Message for the 2023 World Day of the Poor celebrated on Nov. 19, 2023, Pope Francis recalled the 60^th anniversary of the encyclical Pacem in Terris of Pope Saint John XXIII by quoting the following from the encyclical: “Every human being enjoys the right to life, to bodily integrity and to the means necessary for the proper development of life, including food, clothing, shelter, medical care, rest, and, finally the necessary social services. In consequence, every individual has the right to be looked after in the event of ill health; disability stemming from work; widowhood and forced unemployment; as well as in other cases when, through no fault of his own, he or she is deprived of the means of livelihood.”

From these words of Pope Francis, we should be careful not to pooh-pooh “dole-outs” citing the well-known phrase “it is better to teach someone to fish than to give him fish.” Even Our Lord had to perform a miracle to give instant relief to thousands of hungry people by providing them some fish (and bread) to eat. There are many situations in which immediate relief is needed. In many of the cases, it should be the Government (through the Department of Social Welfare and Development or DSWD) who should decide who are the ones entitled to instant relief such as in the cases of cash gifts through the 4Ps (Pantawid Pamilyang Pilipino Program) itinerant program. This is the reason why the DSWD recently admonished private individuals to refrain from giving street beggars the usual cash gifts because such direct help may just encourage dependency even among those who are healthy enough to do some productive work. Let the DSWD decide who are the really deserving poor. For the others, the most effective help is to provide them with the necessary knowledge and skills to be productively employed.

It is heartening to see many business organizations like the SM group, the Metrobank group, the Madrigals, the Aboitizes, the Ayalas, and the Lucio Tan group and many others organizing educational foundations supporting the school-related expenses of numerous deserving but poor young people so that they can acquire quality education in some of the leading private educational institutions. These scholarship programs go a long way to uplift the lives of many poor households. Also very commendable are individuals or organizations that help establish skills training institutions like the Don Bosco Technical Schools, the Dualtech School, the MIF Institute of Technology (formerly the Meralco Foundation), the Center for Industrial Technology and Enterprise (CITE) in Cebu, and other Technical Educational and Skills Development Authority (TESDA)-certified technical training institutes that produce technically qualified people that are in great demand in the business sector.

In fact, Senator Sherwin Gatchalian recently called out TESDA for supposedly pushing training programs that do not align with today’s most-in-demand jobs. In his statement, the Senator lamented that TESDA’s programs with the highest enrollment do not align with the most in-demand jobs until 2025. It seems that none of the top five most popular courses offered by TESDA are aligned with industries that will grow in the next three to five years. It is important then for the big private donors supporting scholars to make sure that their beneficiaries are actually enrolled in the right courses. The right technical or vocational schools turning out people with skills needed by industry are even more needed than the run-of-the mill colleges or universities that often turn out college graduates who have no skills that are marketable. Often, there is a big mismatch between what is demanded by industry and the products of college degree programs. We have to re-examine the K-to-10 as well as the K-to-12 programs so that, as President Ferdinand Marcos, Jr. announced in his second state of the nation address, we can encourage more of our high school students to follow the tech-voc track and acquire more relevant technical skills (e.g., in the construction and hospitality sectors) instead of aspiring for a college degree that leads to nowhere.

But what do we do with the numerous poor who are illiterate and cannot qualify for formal education, whether college-oriented or tech-voc? The most recent data reveal that there are 363,683 illiterate youth in the Philippines and 2.8 million illiterate adults. Nine out of 10 Filipino children struggle with reading at the age of 10. The first solution is obviously to address the problem of Filipino children who have difficulties reading. This is where the Department of Education, i.e., the Government, has the primary responsibility of addressing this serious problem.

Let us quote Pope Francis again: “How much still needs to be done for this to become a reality, not least through a serious and effective commitment on the part of political leaders and legislators! For all the limitations and at times the failures of politics in discerning and serving the common good, may the spirit of solidarity and subsidiarity continue to grow among citizens who believe in the value of voluntary commitment to serving the poor. Certainly there is need to urge and even pressure public institutions to perform their duties properly, yet it is of no use to wait passively to receive everything ‘from on high.’ Those living in poverty must also be involved and accompanied in a process of change and responsibility.”

There are numerous individuals, both young and old, who can lend a hand to the efforts of the Department of Education to improve the reading ability of the youth. Vice-President Sara Duterte has launched a “reading along” program for children who will be grouped according to their reading ability. Private individuals can volunteer to help the public-school teachers in this initiative in very much the same way that for generations (including my own), students from Catholic schools and colleges volunteered a great deal of time to teach the Catechism of the Catholic Church to pupils and public elementary and high schools. I hope this practice continues unabated. The generosity of young people can be fostered by having them help in the improvement of the reading ability of public-school pupils, especially among the disadvantaged. Needless to say, even more important is the spiritual welfare of these children who need doctrinal formation in their faith. There are also many commendable efforts of NGOs to address the reading deficiency of Filipino children. One example is the Read Along program of the Metrobank Foundation in cooperation with the Philippine Daily Inquirer. This is one example of private individuals not just waiting for the solutions to the reading problem to come from “on high.”

Since the solution to the problem of illiteracy will take time to implement, there must be short-term ways of helping the illiterate to still become productive members of society. Here, the example of an award-winning “Hero of the illiterate” in India, named Sanjit “Bunker” Roy, is worthy of emulation. Roy firmly believes that illiteracy is not a barrier to achievement. His motto: “Illiterate people may not be able to read or write but they are not stupid.” How true. On many occasions, I would rather depend on an illiterate person to replace a bulb, fix a faucet, or change a tire than on a Ph.D. in mechanical or electrical engineering, much less on a Ph.D. in economics. Under the guidance of Roy, for 50 years, illiterate and near-illiterate people from the poorest of India’s rural poor have achieved marvels, built houses (using recycled plastic), repaired machinery, given reign to their artistry, and trained to become barefoot doctors, along similar lines to the model used in China. Most importantly, these illiterate people now know their worth and human dignity.

At first it was called SWRC — Social Work and Research Centre — but soon everyone around knew it as Barefoot College. It has been thriving since 1972, offering a cornucopia of good things, from clean water (collected and filtered from rain, not pumped from environmentally damaging wells) to basic education. Traditional skills and knowledge are blended with modern solutions — as long as those solutions are simple and kind to the environment, and work. Showing belief in people, giving encouragement and drawing out their best so that they could earn a living wage. I know that in the rural areas in the Philippines, there are already many initiatives of private individuals that are replicating the example of Bunker Roy. Let’s stop the futile lamentations about our illiterate Filipinos. Let us do something about it as Bunker Roy has been doing for more than 50 years among the rural poor in India.

(To be continued.)

Bernardo M. Villegas has a Ph.D. in Economics from Harvard, is professor emeritus at the University of Asia and the Pacific, and a visiting professor at the IESE Business School in Barcelona, Spain. He was a member of the 1986 Constitutional Commission.

bernardo.villegas@uap.asia

It is not uncommon to say “have a Prosperous New Year” when we greet friends and acquaintances at the start of the year. But what exactly do we mean by “prosperous”? Do we mean that we want the recipients of our greetings to be awash with cash (or its equivalent), more than they know how to spend?

More likely, we only mean that they should not want for anything, that they would be able to consistently meet their daily necessities — and perhaps have something extra for their reasonable wants with a little amount put away for emergencies. We could mean that they should not worry about whether they would continue to have an income in the foreseeable future, and that they are able to live the kind of life they envision for themselves.

This is the very definition of economic security.

It seems so basic, written down and spelled out, but unfortunately, this is an aspiration — not the actual situation — of millions of Filipinos. In the most recent Pulse Asia survey in December 2023, as commissioned by the Stratbase ADR Institute, economic issues remain the top-of-mind concern of Filipinos. Controlling inflation, cited by 72% of respondents, was at the top of the list. Other concerns include increasing the pay of workers (40%), creating more jobs (28%), reducing the poverty of many Filipinos (25%), and fighting graft and corruption in the government (19%).

That Filipinos should be concerned with the rising prices of goods is well-founded. To be sure, macroeconomic numbers are seeing marginal improvement. For example, headline inflation slowed to 4.1% versus 4.9% in October, driven by the lower year-on-year growth of the heavily weighted food and non-alcoholic beverages at 5.7%, followed by transport at 0.8%. This brings the national average inflation from January to November 2023 to 6.2%, making the 6% full-year target set by the Development Budget Coordination Committee (DBCC) likely. And then, data from the Philippine Statistics Authority (PSA) show that in October 2023, the unemployment rate eased to 4.2% from the 4.5% recorded in October 2022 and the 4.8% in July 2023.

Still, these are results from short-term, month-to-month data. The fact is that the cost of living remains a big concern in the long run, and 2.09 million persons remain unemployed. It is no surprise that consumer outlook in the Philippines for the fourth quarter of 2023 worsened and significantly became more negative at -19% from -9.6% in the third quarter, according to the Bangko Sentral ng Pilipinas (BSP).

This weaker confidence among consumers stemmed from their concerns about the following: 1.) faster increase in the prices of goods; 2.) lower income; 3.) fewer available jobs; and, 4.) the effectiveness of government policies and programs on inflation management, public transportation, and financial assistance to low-income households.

What must be done to improve the confidence of consumers and the general sentiment of Filipinos that things will be better for them in the future? Economic security, after all — and economic security alongside defense is an essential part of national security — goes beyond month-to-month improvements. Security, rather, is a long-term concern that affects the direction of the lives of families, and enables parents, for instance, to assure their children that their needs would be taken care of, and that they can actually contemplate a secure future ahead of them.

Going beyond individuals and families, the economic security of a nation hinges on structural reforms that make a difference years down the line. Achieving economic security means that our nation will be resilient and self-sustaining despite disruptions and other challenges that may arise from geopolitical and geoeconomic developments around the world, and will be able to achieve sustained, inclusive growth that would be felt by as many people in society as possible.

We know the challenges all too well, being a consumer-driven economy with a greater volume of imports than exports, resulting in a trade deficit. During the pandemic, when mobility restrictions disrupted the global supply chain, our economy suffered heavily with prices of goods increasing. Today we remain on edge as we anticipate further challenges in flashpoints and other areas, specifically China’s continued aggression and adventurism in the West Philippine Sea, and the conflict in Ukraine and in Gaza. We are also at the mercy of other developments like climate change and more erratic weather patterns, resulting in constant threats to our agricultural output.

A logical, strategic step, as Stratbase has been espousing and supporting for quite a time now, is to shift from consumer-driven to investment-led growth. Investments, in their essence, are all about the long term. They bring in infrastructure, jobs, income — all of which will be realized not today, not next month, but in the years and generations to come. Specifically, investments in the manufacturing sector will do much to make our economy resilient and less vulnerable to the complications of geopolitics. Imagine the jobs that such investments would generate, communities that would be empowered, and prosperity that would be attained.

Of course, a lot is demanded of our government to be able to effect this shift to investments, even though its initiatives thus far have been commendable. Investments come to countries where the regulatory environment is encouraging and conducive, where policies are fair, consistent, and evenly applied, where transactions and costs are transparent, and where officials are accountable.

We can take heart in the business sentiment as reported by the BSP: it remained upbeat in Q4 2023 as the overall CI stood at 35.9%, slightly higher than the 35.8% in Q3 2023. If the private sector can remain this optimistic about their prospects, then they must be given additional reasons for being upbeat about the Philippine economy.

With this, I wish our country and our people an economically secure new year and beyond.

Victor Andres “Dindo” C. Manhit is the president of the Stratbase ADR Institute.

Although I happen to know Speaker Martin Romualdez’ admirable mother from college days, I really have no particular opinion about him as yet. I only see that he seems to be preparing for more important posts in the future, with the politicking that he is already doing this early.

However, it happens that I am of the same mind when it comes to the need to change our system of governance. I think that we should seriously consider and work towards a system where a unicameral parliament determines National Government policy; and perhaps, a president, elected by governors and mayors of chartered cities who coordinates execution of policy at the local levels.

In a recent direct-vote presidential election, we ended up electing a president who publicly and blatantly flaunted his powers and encouraged uniformed personnel to kill, kill, kill. In many respects, he acted irresponsibly, including suddenly doubling the salaries of these uniformed personnel by announcing it on television: a decision we are having to deal with today with budget shortfalls, including from huge retirement benefits of these uniformed personnel which we really can’t afford. Meanwhile, nurses and other critical medical personnel in this time of infectious diseases are underpaid or paid too late and so we are suffering from a shortage of health professionals who prefer to work overseas. Teachers are overworked and have difficulty being effective in their real work of developing their students’ learning skills. Even many of the best of them have gone abroad for better pay.

We also now have a senate that, with a few exceptions, is comprised of many weird characters, including ex-convicts, a killer police head, publicly exposed grafters, and relatives of famous and infamous characters. No less than one fourth of our senators are related to one another: there are two Villars, two Cayetanos, and two sons by different mothers of the notorious Erap Estrada.

The same thing seems to be happening to the world’s leading “democratic” power with an ex-president who, while facing all kinds of civil and criminal cases in court, continues to lead in political polls. The notorious Donald Trump, who even violated the US Constitution, could be re-elected as president once more in the American voters’ direct presidential elections.

With a few exceptions, it seems to me that Parliamentary systems seem to produce leaders who tend to be more intelligent and responsible than ordinary politicians. Look at Japan, France, Australia, New Zealand, and many European countries. Also, such systems seem to strengthen political parties, rather than just be led by popular personalities, qualified or not. It seems that leaders who are chosen by their elected peers tend to be more responsible than those chosen these days directly by the citizenry.

The rapidly evolving media situation, where social media are becoming more and more influential, and more and more available to even the rural poor, is making it difficult to ensure more accurate appreciation of the character of public personalities, including politicians. And those able to fund social media campaigns, including the use of fake news, have become more and more influential in shaping public opinion.

In our Constitutional Commission of 1986-87, the presidential system won over the Parliamentary system by only one vote: that of delegate Felicitas Aquino who became the wife of Executive Secretary Joker Arroyo. The Senate, of course, will do its best to prevent a conversion to a parliamentary system since they would naturally lose their jobs. And they are not sure they can win a seat in Parliament.

Voters are more likely to choose local leaders who will work with their party to select the Prime Minister and President. Chances are, these leaders, elected by their peers, will tend to be more intelligent and responsible than those elected directly by voters who, given the media situation, would not know any better.

Bad policy making and poor governance by the chosen leaders will be easier to reform since political parties and their allies can elect new leaders in less time than a national election would require. This means government could become more responsive.

It will not be easy to make the change happen to a Parliamentary-cum-presidential system. It will certainly not pass the Senate if the votes are separate as in legislation. It might take a people’s initiative.

Can the private sector mobilize and support such a campaign?

Teresa S. Abesamis is a former professor at the Asian Institute of Management and fellow of the Development Academy of the Philippines.

tsabesamis0114@yahoo.com

In 2014, a group of about 20 women came together in Hanoi, Vietnam to found the ASEAN Women Entrepreneurs Network or AWEN. Headed by a strong leader named Madame Nguyen Minh Thi Tuyet, we formed friendships with like-minded women leaders from the 10 ASEAN member-states. After two years, the Philippines headed AWEN and I noticed, every other member had two or more business groups headed by equally headstrong ladies, and I had to think of a creative way to manage these women. Some were candidates for government positions or as we say, political leaders, while others were dyed-in-the-wool entrepreneurs leading businesses in renewable energy, consumer retail and manufacturing.

How do you manage a diverse group of women leaders? Let them all have a voice, was my thought bubble. We then thought of a coalition for every country, grouping three to five or more organizations under one umbrella. We formed the Philippine Women’s Economic Network or PHILWEN. With PHILWEN’s SEC papers tucked under my arm, we trooped to Cambodia and sold the idea of a coalition to the Minister of Women Affairs.  She listened and as they say, the rest is history. They formed CAMWEN or the Cambodia Women Economic Network.

Meanwhile, to promote networking with other member states, we organized seminars and conferences and invited everyone to the ASEAN Summit in Manila. The women were very pleased as they met former President Fidel Ramos or FVR, they sat with Vice-President Leni Robredo and met many dignitaries, along with Joey Concepcion’s group handling the ASEAN BAC or Business Advisory Council. Joey hosted us at his residence where our AWEN delegates met our business community with MAP members, the diplomatic corps and Philippine business community.

After our chairmanship of AWEN, Thailand took the reins until and during the pandemic, which led us to virtual meetings and fewer than usual face-to-face sessions. All along, we (PHILWEN) would represent AWEN in ASEAN BAC’s Joint Business Council meetings as our Filipino colleagues would always invite us to these important sessions.

What are these meetings about and how does one manage such groups? ASEAN works on policies and though it is not a very speedy process, things get done to benefit member-states as long as you understand the ASEAN framework.

As managers, we have to be mindful of cultural differences even if we are similar in looks and even if we can just speak English (ASEAN’s official language) and get away with speaking in idioms. We need to check if they actually understand what we are saying by checking back and putting ideas on paper.

Though we share many commonalities, like products, agriculture and even what songs and movies we patronize, much meaning is lost in translation. So we need to manage groups by being more prudent when we speak and more mindful of other people’s understanding of our tone and voice.

In a recent trip to Indonesia, the hosts and visitors agreed on everything when the music was played and everyone was asked to dance. There is a “dance” in the figurative sense of the word, too. Like courtship, we gently glide into the conversation and not haphazardly make declarations that may cause discussion failure. And no agreement can be reached despite both parties’ wanting to agree or agree to disagree. In the ASEAN way, tread lightly. This is why caution is the key.

In managing one ASEAN, we have to look at the benefits of coming together. We appreciate policies, like the ASEAN Free Trade Agreement (AFTA) allowing the flow of products from one country to another in the region. At a recent coffee conference where the European Union Deforestation Regulation was discussed, the ASEAN members in the conference simply agreed. We will sell to ASEAN if other countries are giving us a difficult time to enter their shores. ASEAN for ASEAN became the battle cry as the conference came to a close.

When you meet groups from other ASEAN member-states, engage them in a healthy discussion built on cooperation and change in policies for everyone’s benefit in the region, not elsewhere. As the ASEAN Coffee Federation (ACF), we are now sought by international coffee organizations because we have two producer-countries that can move the needle in global coffee production (Indonesia and Vietnam). Should these two countries stop coffee exports, many global importers will cry foul. That is a powerful stance ASEAN can take.

In the women’s groups, AWEN is poised to make sure that PHILWEN and other coalitions will make a positive change in regional policies toward gender equity, equality and women’s rights in free markets. The region will listen to its women leaders and give a voice not only on social issues but on economic issues as well.

So how do we manage ASEAN? We work together with our coalitions and deliver the influence to make regional commerce more viable and prioritize trade among ourselves. Only when we do this can ASEAN mean anything to our business, our community and our country.

You can join regional associations as a manager, as an entrepreneur or as a professional. There are many ASEAN groups like AWEN and ASEAN BAC, and you may find a group or coalition for your sector, so everyone can leverage ASEAN’s mighty power as a unified and united force.

Chit U. Juan is co-chairperson of the MAP Environment Committee and a member of the MAP Committee on Diversity, Equity and Inclusion. She was AWEN chairperson from 2016 to 2018 and is now a PHILWEN trustee and member of AWEN’s Advisory Council. She is also first vice-president of the ASEAN Coffee Federation.

map@map.org.ph

pujuan29@gmail.com

Hundreds of thousands of Filipinos must have seen the movie by this time and learned more about the three Catholic priests, about whom very little has been written in Philippine history books. And yet their crusade for Filipinization of the Catholic dioceses or parishes and their subsequent martyrdom inspired their countrymen, notably a 10-year-old boy named Jose Mercado, who would later become known as Jose Rizal, to start a movement that called for reforms in Spanish rule, equality of Filipinos and Spaniards before the law and eventually independence from Spain.

GomBurZa the movie was the topic of the after-dinner conversation at the family gathering on Christmas Day. Someone said the movie was produced by the Jesuits of Ateneo because the three priests were all Jesuits. No one around the dinner table, and there were many, interjected a correction. And yet, they all went to prestigious Catholic schools run by religious orders and therefore should know the difference between secular and regular priests. And having gone through high school when Philippine history was an integral part of the curriculum, they should have learned that the three priests were advocating the replacement of Jesuits, Dominicans, Augustinians and other friars in parishes or dioceses with Filipino secular priests.  I had to make the correction — as politely as I could.

That shows how little is written about Fathers Gomez, Burgos and Zamora in Philippine history books. What I remember distinctly from my high school Philippine history book, written by Gregorio F. Zaide, is that the three priests were executed with the use of an uncommon device, the garrote. That is because the book had an illustration of the execution.  I don’t remember reading the reason why they were implicated in the Cavite mutiny.

As far back as 2004, I was already pushing the production of a video that would depict the participation in nation-building of national heroes other than Jose Rizal, Andres Bonifacio, Emilio Aguinaldo, Apolinario Mabini and Antonio Luna, about whom movies have been made and tomes written. I was inspired by the Department of Tourism promotional musical video “Tara Na, Biyahe Tayo.”

In the video, 21 of the country’s top singers urged viewers to see the beautiful spots of the Philippines, witness the unique festivities of some cities and savor the famous delicacies of certain towns. The excitement and zest displayed, and the wonderful music rendered by Lea Salonga, Sharon Cuneta, Freddie Aguilar, Joey Ayala, the Apo Hiking Society, Janno Gibbs and others could not but induce one to embark on the journey they suggest. And to think they lent their pricey talent and time to the Department of Tourism for free.

The example of selflessness and patriotism shown by the singers and artists behind the production of “Tara Na, Biyahe Tayo” moved me to write in this space in 2004:

“I fervently hope that the laudable example of selflessness and patriotism shown by the singers and creative geniuses behind the production of “Halina, Biyahe Tayo” is followed by other star performers and artists in the near future.  Pride in our history and culture, homage to our national heroes and the promotion of Filipino values can be the themes of future music video productions.

“The bayanihan spirit and love of country demonstrated by Broadway star Lea Salonga, Megastar Sharon Cuneta and the 19 other marquee singers should inspire others to contribute their outstanding talent to future undertakings with as lofty purposes.  It would be wonderful to hear Robert Seña, Nolyn Cabahug, Martin Nievera, Gary Valenciano, Isay Alvarez, Regine Velasquez, Zsa Zsa Padilla, Celeste Legaspi, Basil Valdes and Marco Sison extoll the heroism of Mariano Gomez, Jose Burgos, Jacinto Zamora, Marcelo del Pilar, Graciano Lopez y Jaena, Emilio Jacinto, Melchora Aquino, Gregoria de Jesus and others who displayed their patriotism during the struggle for independence from Spain.

“Pfizer, a foreign company, illustrated the meaning of corporate citizenship when it extended its assistance to the Department of Tourism in the production of the music video promoting domestic tourism. Perhaps, local companies can collaborate with the Department of Education in producing a music video promoting love of country or extolling Filipino values. Definitely, we should have more music videos with patriotic themes that demonstrate ang galing ng Pilipino (the talent of the Filipino) and the bayanihan spirit like ‘Tara Na, Biyahe Tayo’ magnificently does.”

I first developed a special interest in the saga of GOMBURZA in 1992 when a long-lost boyhood friend, Geronimo B. de los Reyes, Jr. (we were neighbors and schoolmates back in the late 1940s) called. Having read my columns that made references to certain episodes of Philippine history and to Rizal’s article “100 Years Hence,” he wanted to bounce off me his plan to build a museum for his fabulous collection of photographs of historic events, including one of the  original copies of Rizal’s execution, and of sceneries during the 50-year period between 1880 and 1930.

Over lunch, he told me that he didn’t think a museum by itself would draw people. So, he was thinking of developing a theme park around the museum to attract people who could be funneled into the museum. Mr. De los Reyes is a builder. He built Pacific Plaza on Ayala Avenue, Makati and Gateway Business Park in Gen. Trias, Cavite. I suggested Philippine history as the theme of the park. He asked me to develop the concept further. I had pencil renderings done.

At the same time, he had extensive research conducted on a significant episode in Philippine history. It was about the mutiny of the Filipino troops and workers at Fort San Felipe in Cavite, an event that had gone down in history as the Cavite mutiny of 1872. Mr. De los Reyes is a direct descendant of Crisanto de los Reyes, one of those involved in that insurrection.

That is how I got to know well the true story of the Cavite mutiny and the specific involvement of all the people implicated in the mutiny. I joined their descendants at the formal dedication in 1995 of the memorial Mr. De los Reyes had built next to the vestiges of Fort San Felipe.   

Going back to the idea of a music video on the lesser celebrated national heroes, the success of the movie GomBurZa prods me now to suggest the production of biopics instead of music videos. Maybe movie superstars can follow the example of patriotism of the top singers by accepting roles in historical drama films for significantly lower talent fees.

It would be wonderful to see Piolo Pascual, Coco Martin, Dingdong Dantes, Daniel Padilla, Maja Salvador, Bea Alonzo, Kathryn Bernardo, Alden Richards, Enchong Dee, Marian Rivera, Alessandra de Rossi, Dimples Romana and other movie stars portraying the patriotic men and women who rose against Spain at the end of the 19^th century.

Perhaps, Ayala Corp., San Miguel Corp., SM Investments Corp., JG Summit Holdings, Inc., Aboitiz Equity Ventures, Inc., International Container Terminal Services, Inc., Vista Land & Lifescapes, Inc. and DMCI Holdings, Inc. can collaborate with the National Historical Commission of the Philippines in the making of history-based motion pictures like Jose Rizal starring Cesar Montano, Heneral Luna and Goyo, Ang Batang Heneral.

Happy New Year, dear reader.

Oscar P. Lagman, Jr. is a retired corporate executive, business consultant, management professor and an avid reader of Philippine history.

First, “decarbonization” and coal phasedown continued in Europe and developed economies in North America and Asia, while developing Asia added more coal capacity and consumption. Global coal consumption from 2002-2022 expanded by 55%.

Second, “denuclearization” of the power system also continued in Europe. Germany shut down all its remaining nuclear power plants in April; France had targeted to cut its nuclear power share to 50% from 75% of the total by 2035, but was forced to abandon the goal; Spain announced a nuclear phaseout by 2035. In Asia, only Japan and Taiwan have joined this trend. Global nuclear consumption in the past two decades declined by 11%.

Third, slow, anemic economic growth continued to plague “decarbonizing” Europe in the past two decades, and some countries there likely to have contracted in 2023 (Germany, Poland, Ireland, etc.). “Carbonizing” Asians that need cheap, stable energy sources keep humming with high growth except Japan (Table 1).

Fourth, all the gloom and doom scenarios in oil prices because of the continuing war between Russia and Ukraine plus NATO, and even with the war between Israel and Hamas plus Hezbollah and Houthis since early October 2023 did not happen. WTI crude price ended 2023 at below $73/barrel while it was $90 days before the Russian invasion in late February 2022.

Fifth, it’s the same trend for gas and coal. The end-2023 US natural gas price of about $2.5/mmbtu was much lower than $4.5/mmbtu in mid-February 2022 before the Ukraine war. The end-2023 coal (Newcastle) price of about $146/ton is again much lower than the pre-Ukraine war price of $240/ton.

Sixth, both the solar energy index and wind energy index are below $300, the lowest since October 2020. The EU carbon permits are below $85/ton, another low level since December 2021. In contrast, the nuclear energy index reached an all-time high of $2,007 in December.

Seventh, the biggest annual UN meeting, Conference of Parties (COP) 28 in Dubai from Nov. 30 to Dec. 12 attracted more than 70,000 foreign participants including media, activists and billionaires who lambasted fossil fuels while using lots of it flying from around the world to Dubai. The key agreement was not the phaseout of fossil fuels but the transition away from fossil fuels.

Eighth, the gloom and doom climate scenarios of the ever-warming, ice-melting and sea level-rising planet, more and stronger storms, did not happen, as shown by the two charts below from the Japan Aerospace Exploration Agency (JAXA) Arctic and Antarctica Data archive System (ADS), and climatlas.com/tropical by Ryan Maue. The JAXA-ADS data from 1978 to December 2023 showed ice-melt growing each year, or a 100% natural cycle. Arctic ice is lowest in September each year with only about 4 million sq. km, then the ice starts growing to the highest in March each year with up to 16 million sq. km of ice.  For context, the total land area of the Philippines is only 0.3 million sq. km; the lowest level Arctic ice is 13x larger, and the highest level Arctic ice is 53x larger than the total land area of the Philippines.

Ninth, the “scary droughty” El Niño of 2023 showed a fast rise in ocean temperatures, but was quickly followed by a fast decline in temperatures. This occurred after a triple-dip La Niña. Two lower charts below are from the Australia Bureau of Meteorology (BoM) and US National Oceanic and Atmospheric Administration (NOAA) Climate Prediction Center (CPC). The BoM data from May 2019 to Dec. 24, 2023 showed that the triple-dip La Niña and global cooling occurred from July 2019 to March 2021. Triple-dip La Niña is rare, and the last time it happened was 21 years ago. The NOAA-CPC data as of Dec. 24, 2023 showed that the current El Niño would end by May 2024, go to a neutral stage and go back to La Niña by September 2024 (Table 2).

Tenth, Uranium prices are at an all-time high. From the end-December 2021 price of only $44/lb, it went up to $49/lb by end-December 2022. During the COP28 meeting, it was up to $82. A week after COP28 ended, it went up to $86, and two weeks after it further rose to $91. It seems that the COP resolution of the “transition away from fossil fuels” means countries and companies will start investing in nuclear power, and not in intermittent wind-solar.

Philippines economic and energy policies should focus on sustaining fast growth to help create more jobs and attract more businesses. A number of big companies from Germany, the UK, Italy, etc. have either moved to other countries partly due to expensive energy in their home countries. The Philippines should attract more foreign companies and professionals by not following the folly of “decarbonization” and “net zero” fetishism and obsession.

Bienvenido S. Oplas, Jr. is the president of Bienvenido S. Oplas, Jr. Research Consultancy Services, and Minimal Government Thinkers. He is an international fellow of the Tholos Foundation.

minimalgovernment@gmail.com

This article will use the PESTEL (political, economic, social, technological, environmental and legal) framework to describe my micropreneurial journey. As a university lecturer tired of merely talking about business theories, I ventured to “walk the talk” by establishing my own food business. Despite facing setbacks and deciding to close before the New Year, I wish to share the lessons I have learned. Additionally, I would like to share insights gained from my trip to Vietnam and offer a unique perspective on the shared experiences of small businesses in diverse cultures.

The political climate was characterized by the cutthroat food market around schools. Witnessing the competition sidestep regulations on selling alcohol to students and violate safety regulations without suffering consequences stung. As a teacher of business ethics, I needed to set an example not only for my students but also for the broader community. I did not waver in my commitment to ethical standards and refused to go below the minimum threshold of the law. In this turbulent sea, understanding the intricate dance with local government emerged as a crucial skill. Our lessor’s unresponsiveness added complexity and underscored the need for astute formal and informal political navigation in entrepreneurial waters.

Like relentless tides, economic forces presented formidable challenges. Overhead expenses, notably rent and salaries, created a persistent undertow against the delicate financial balance of our small food business. The minimum wage in the Philippines for small businesses with 15 employees and below is P573, while in Vietnam, it is the equivalent of P410. However, this is fitting, considering Vietnam’s generally lower food cost and living expenses. Unfortunately, unintentional overstaffing in my business added to my financial burden, underscoring the need for finance managers to control various facets of an agile business.

In the vast sea of social dynamics, understanding the pulse of the community became paramount. In Vietnam, where three or more coffee shops line the same street, the preference for coffee over alcohol aligns with shifting preferences at Taft, where the price-sensitive student population is enamored with coffee over hearty meals. The fierce competition demanded creative and cost-effective strategies for us to stay afloat.

As the business world continues to sail through the digital age, technological hurdles persist. Navigating online food platforms, compounded by stiff contracts and exorbitant commissions, proved tricky. Troubleshooting login issues was like venturing into uncharted waters, where the supposed lighthouses, the customer service function of online food platforms, were difficult to find, leaving me in the dark. From troubles in Taft’s digital seas to the slower pace of technology in Vietnam, the pulse of innovation beats differently in every corner of the world. I realized that resilience and adaptability are the lifebuoys for micropreneurs.

In the ever-changing landscape, environmental forces revealed underlying considerations not taught in schools. For example, maintaining harmony with nearby competitors that blocked driveways and left trash lying around became an art of its own, demanding resilience and a commitment to community coexistence.

Daunting taxation requirements and ever-changing policies and processes required agile compliance. The intricacies of legal compliance became a test of micropreneurial mettle because one wrong move could lead to tumultuous waters. In this challenging journey, the captain must champion compliance and steer the ship through deep and murky legal waters.

Furthermore, despite the challenges posed by poor partnerships in the business, aspiring entrepreneurs should cultivate assertiveness and strategic foresight. This involves fostering open communication, conducting thorough due diligence in choosing partners and adapting swiftly when challenges arise.

As we start the new year, let this reflection remind us that despite the silent struggles faced by entrepreneurs, positive change is within reach. Let us embrace new beginnings, adapt to ever-changing seas and let resilience guide us toward a prosperous 2024.

Charisse Ang is an entrepreneur, family business owner and part-time lecturer at De La Salle University.

charisse.ang@dlsu.edu.ph

It was quite a moderation.

From 2022’s 7.6% to 4.3% in the second quarter of 2023, the economy was humbled mostly by external headwinds, weak public spending, and dissipation of pent-up demand. Elevated inflation undermined private consumption even as the labor market showed some improvements. Weak imports mostly of fuel and capital goods motivated a more modest current account deficit.

Of course, we are wiser today because we know that the economy staged a 5.9% strong recovery in the 3^rd quarter. Perhaps, the Fund with this information could update its forecasts of 2023 to 2025 of 5.3%, 6%, and 6.1% to more optimistic levels. But upgrading its growth forecasts might prove daunting because consumption could remain relatively sluggish compared to its average 7.7% performance in 2022. The external sector challenged by war and more war could even be more ominous such that even a tentative risk assessment should point us to more realistic assumptions and projections.

Which makes us wonder why, with a three-quarter average gross domestic product (GDP) growth of 5.5%, the Development Budget Coordination Committee (DBCC) decided to maintain the growth target for 2023 at 6% to 7%. For 2024, some slight downgrading to 6.5% to 7.5% was done, with an upward tweak for 2025-2028 at 6.5% to 8%. We thought official forecasts that many times deviate from the actual outcome could also erode public trust in official pronouncements and undermine ownership of public policy.

During the consultation, the Philippine authorities highlighted the upside to economic growth from recent initiatives to encourage more foreign investment and digitalization of the economy. In principle, they concurred on the importance of improving connectivity and upskilling the labor force but how these are to be mainstreamed has to be worked out. Existing social protection programs were claimed as well targeted while sustainable finance was reported to have limited impact.

In the Fund, there is relatively less optimism about the Philippines.

It projects a growth of only 5.3% for this year, 6% next year, and 6.1% in 2025 — or lower than the lower end of the Government’s targets. Given its weight in total output, weaker consumption, both private and public, could drive the possible weak economic performance in the next two years. One can always argue, and we agree, that a 6% output growth is not something we can trivialize or belittle. At that rate, the Philippine economy could very well be one of the fastest growing economies in this part of the world.

The point is that we need to grow more to build more infrastructure and provide more social services, we need to grow more to address the issues of poverty and income inequality.

How public policy can help bring this about still has to be worked out to the last detail. Tax to GDP ratio is expected at only about 15% in the next two years. While World Bank metrics would say anything above 15% is desirable, other countries which experienced periods of high economic growth had much more than that. True, we have the Medium-Term Fiscal Framework which establishes more ambitious tax measures to create more fiscal space. However, the current fiscal challenge of reforming the military pension system, rationalizing public spending, and reducing contingent liabilities would certainly call for a much wider fiscal flexibility.

We can validate the reality of these challenges. For local business leaders, they could not be more optimistic than saying that the country’s economic growth in the coming year is faced with difficult issues. They include geopolitical conflict, ease of doing business, and overall global economic slowdown. This guarded sense comes from business leaders from the Philippine Chamber of Commerce and Industry, the International Chambers of Commerce in the Philippines, the Philippine Exporters Confederation, and the Employers Confederation of the Philippines.

In turn, we see this mirrored by the results of the 4^th quarter Business Expectations Survey (BES) of the Bangko Sentral ng Pilipinas (BSP). As we stressed in our report in the GlobalSource Partners for the Philippines this week, this is quite representative of business sentiment in the Philippines with 1,543 firms surveyed nationwide, with 583 firms in the National Capital Region, and 965 companies outside the National Capital Region covering 16 regions with a response rate of 65.1%. All firm sizes were represented quite well: 43.7% were small; 33.6% medium; and nearly 13% large.

The latest BES Survey showed that Philippine businesses remained modestly positive in their outlook for the current quarter compared to the previous quarter as measured by the BSP Confidence Index (CI). The CI was up by only 0.1 percentage point in Q4 2023 (35.9) compared to Q3 2023 (35.8).

This broadly steady sentiment, as cited by the business respondents themselves, was attributed to businesses’ expectations for: a.) some increase in demand for goods and services during the Christmas season, b.) sustained economic recovery to pre-pandemic levels, c.) business expansions in the utilities, trade, financial, and hotels and restaurant sub-sectors, d.) development and launch of new products and services, and, e.) brisker consumer spending on the back of higher remittances and inbound holiday travelers, including Overseas Filipino Workers (OFWs).

However, this optimism was tempered by concerns over: a.) the negative economic impact of the ongoing conflicts in Gaza and Ukraine, b.) elevated inflation, and, c.) higher interest rates, as similarly identified in the report.

This 4^th quarter results have limited relevance because the last quarter is almost over. But for the 1^st quarter 2024 and the next 12 months, the CI significantly plunged to 38.2 from 53.8 and from 59.7 to 54, respectively. Concerns about the: a.) negative effects of the Israel-Hamas and Ukraine-Russia conflicts on the economy, including higher oil prices, b.) lower demand for goods and services, c.) higher prices of basic goods, d.) increasing interest rates, and, e.) higher costs of production and raw materials motivated this less favorable outlook.

Our business respondents also pointed out such growth-negative macroeconomic outcomes as elevated inflation, higher market interest rates, peso depreciation, and limited job opportunities.

If there is anything that should be prioritized, it is raising productivity and harnessing the digital economy, both of which were discussed only in the latter part of the staff report under structural policies. It’s imperative to sustain the economic gains in the last 20 years and benefit from what the Fund already called a demographic dividend. However, this is possible only when the Philippines is able to attract foreign investments to help diversify exports, harness new skills, and strengthen connectivity across the country.

In particular, the Fund observed that given the country’s dominant services industry, it is crucial to raise labor productivity through digital skills and portability.

By all means, upskilling should be taken up while the use of artificial intelligence should be broadened. Industry should aspire to move up the global value chains as the country continues to improve on its digital infrastructure.

All these productivity-raising strategies can guarantee multiple gains in economic growth, make it more sustainable and self-sustaining, and create the right conditions for mitigating poverty and income inequality. As the recent edition of The Economist commended Greece as its country of the year, “it is possible to enact tough, sensible economic reforms, rebuild the social contract, exhibit restrained patriotism — and still win elections.”

As The Economist narrated, a decade ago Greece was literally crippled by heavy indebtedness with its people’s incomes eaten up by high inflation and chronic unemployment. Political extremism was tearing the country apart. Corruption eroded public governance and left its infrastructure in disrepair. Civil liberties of migrants were violated. Unpopular but appropriate economic restructuring ameliorated this state of affairs. The people caught up and realized the country is moving in the right direction. The reformers won popular support.

For its part, this Government should use its massive political capital during the 2022 election in getting all sensible public policies off the ground. The next electoral exercise will simply test whether the right economic reforms were put in place, and whether civil society has caught up with the reform program.

We have started right with what The Economist would refer to as our continuing determination to hold our nerve “in the face of Chinese aggression, often in collaboration with America. The Philippines defended its maritime boundaries, and the law of the sea, against much bigger Chinese ships.”

When then do we do a Greece?

Diwa C. Guinigundo is the former deputy governor for the Monetary and Economics Sector, the Bangko Sentral ng Pilipinas (BSP). He served the BSP for 41 years. In 2001-2003, he was alternate executive director at the International Monetary Fund in Washington, DC. He is the senior pastor of the Fullness of Christ International Ministries in Mandaluyong.

AFTER fueling the 20^th century automobile culture that reshaped cities and defined modern travel, gasoline was supposed to begin its long goodbye this year. It didn’t.

Sure, Tesla, Inc. and its rivals sold more electric vehicles (EVs) in 2023 than ever before, reducing fossil fuel demand. In the moneyed suburbs of London, New York, and Beijing, EV cars are a common sight. From that narrow perspective, it looks like the world has already started ”transitioning away from fossil fuels,” as agreed at the recent COP28 climate talks. But it’s a mirage.

Even as EV sales increased, the global oil industry sold more gasoline than ever this year, surpassing the previous 2019 peak that the International Energy Agency  (IEA) had expected would remain an unassailable all-time high. Outside wealthy neighborhoods, the internal combustion engine still reigns supreme; in middle- and working-class areas, the energy transition remains a distant prospect.

From the 1950s onward, when Henry Ford’s dream of a car in every middle-class American driveway became a reality, gas stations sprung up next to drive-in restaurants and strip malls, transforming the US landscape and economies across the globe. The gasoline used to power automobiles accounts for roughly one-in-four barrels of petroleum-refined products consumed worldwide.

As the climate crisis garners increased attention, the fuel is destined to play an outsized role in the energy transition — an early indicator of whether the shift away from fossil fuels is happening, and at what speed. The theory was that as EV cars became more popular, gasoline demand would be “disproportionally” impacted, the IEA predicted in its most recent five-year oil outlook, released in June. “This means that the fuel is likely to exhibit the earliest and most pronounced peak in demand” of all fractions of the oil barrel, it added.

While consumption would recover this year, it wouldn’t reach pre-pandemic levels; the outlook was for a gentle, but constant, downward trend.  In the middle of the year, the IEA predicted that gasoline usage would “never return to 2019 levels,” when demand reached 26.7 million barrels a day. Instead, consumption rose to about 26.9 million barrels a day this year, according to the latest IEA figures.* And 2024 is poised for another, even if small, increase, to just above 27 million barrels a day. As thing stand, the peak in gasoline demand has been delayed by five years, to 2024 from 2019. And I won’t be surprised if, once more data are available and forecasts are updated, the peak is pushed forward even further.

The surge past the 2019 peak is particularly significant because it came against three notable headwinds: gasoline prices have been high, particularly in local currencies outside the US dollar world; work-from-home remains far more prevalent than before the pandemic; and Chinese economic growth has slowed.

The trend of higher-for-longer demand has three important lessons for understanding the energy transition. First, the stylized forecasts showing sustained demand declines rarely survive the passage of time – not just years later, but often as soon as a few months after publication. Second, announcements of peak demand generate lots of headlines, but when consumption surges past those peaks, the public rarely hears about it, providing a misleading picture of the pace of the transition. Third, the shift away from fossil fuels will take longer than many had expected.

It’s not all bad. The world is embracing EV cars and, over time, their market share will continue to increase, particularly in China, North American, and Western Europe — boosted by generous subsidies in many nations. Even if gasoline demand continues to increase, the pace of growth is slowing. We may not have reached the peak, but probably there isn’t much growth ahead, either.

Still, gasoline demand benefits from a strong force: the world is becoming richer. In 2023, there were about 1.1 billion passenger cars in use, up from about 850 million a decade earlier. Even if a growing percentage of those cars is battery-powered, the absolute number of gasoline-fueled cars has increased. It’s a trend that will take decades, rather than years, to reverse.

Until then, gasoline remains king — whatever the forecasts say.

*Since the IEA released its five-year oil outlook in June, it had revised its 2019 gasoline demand estimate from 26.7 million barrels a day to 26.8 million barrels a day.

BLOOMBERG OPINION

I was raised in a conservative evangelical home. Like many who grew up in a similar environment, I learned a set of religious beliefs that framed how I understood myself and the world around me. I was taught that God is loving and powerful, and God’s faithful followers are protected. I was taught that the world is fair and that God is good. The world seemed simple and predictable — and most of all, safe.

These beliefs were shattered when my brother unexpectedly passed away when I was 27 years old. His death at 34 with three young children shocked our family and community. In addition to reeling with grief, some of my deepest assumptions were challenged. Was God not good or not powerful? Why didn’t God save my brother, who was a kind and loving father and husband? And how unfair, uncaring, and random is the universe?

This deep loss started a period where I questioned all of my beliefs in light of the evidence of my own experiences. Over a considerable amount of time, and thanks to an exemplary therapist, I was able to revise my worldview in a way that felt authentic. I changed my mind, about a lot things. The process sure wasn’t pleasant. It took more sleepless nights than I care to recall, but I was able to revise some of my core beliefs.

I didn’t realize it then, but this experience falls under what social science researchers call intellectual humility. And honestly, it is probably a large part of why, as a psychology professor, I am so interested in studying it. Intellectual humility has been gaining more attention, and it seems critically important for our cultural moment, when it’s more common to defend your position than change your mind.

Intellectual humility is a particular kind of humility that has to do with beliefs, ideas, or worldviews. This is not only about religious beliefs; it can show up in political views, various social attitudes, areas of knowledge or expertise or any other strong convictions. It has both internal- and external-facing dimensions.

Within yourself, intellectual humility involves awareness and ownership of the limitations and biases in what you know and how you know it. It requires a willingness to revise your views in light of strong evidence.

Interpersonally, it means keeping your ego in check so you can present your ideas in a modest and respectful manner. It calls for presenting your beliefs in ways that are not defensive and admitting when you’re wrong. It involves showing that you care more about learning and preserving relationships than about being “right” or demonstrating intellectual superiority.

Another way of thinking about humility, intellectual or otherwise, is being the right size in any given situation: not too big (which is arrogance), but also not too small (which is self-deprecation).

I know a fair amount about psychology, but not much about opera. When I’m in professional settings, I can embrace the expertise that I’ve earned over the years. But when visiting the opera house with more cultured friends, I should listen and ask more questions, rather than confidently assert my highly uninformed opinion.

Four main aspects of intellectual humility include being:

Open-minded, avoiding dogmatism and being willing to revise your beliefs.

Curious, seeking new ideas, ways to expand and grow, and changing your mind to align with strong evidence.

Realistic, owning and admitting your flaws and limitations, seeing the world as it is rather than as you wish it to be.

Teachable, responding nondefensively and changing your behavior to align with new knowledge.

Intellectual humility is often hard work, especially when the stakes are high.

Starting with the admission that you, like everyone else, have cognitive biases and flaws that limit how much you know, intellectual humility might look like taking genuine interest in learning about your relative’s beliefs during a conversation at a family get-together, rather than waiting for them to finish so you can prove them wrong by sharing your — superior — opinion.

It could look like considering the merits of an alternative viewpoint on a hot-button political issue and why respectable, intelligent people might disagree with you. When you approach these challenging discussions with curiosity and humility, they become opportunities to learn and grow.

Though I’ve been studying humility for years, I’ve not yet mastered it personally. It’s hard to swim against cultural norms that reward being right and punish mistakes. It takes constant work to develop, but psychological science has documented numerous benefits.

First, there are social, cultural, and technological advances to consider. Any significant breakthrough in medicine, technology, or culture has come from someone admitting they didn’t know something — and then passionately pursuing knowledge with curiosity and humility. Progress requires admitting what you don’t know and seeking to learn something new.

Relationships improve when people are intellectually humble. Research has found that intellectual humility is associated with greater tolerance toward people with whom you disagree.

For example, intellectually humble people are more accepting of people who hold differing religious and political views. A central part of it is an openness to new ideas, so folks are less defensive to potentially challenging perspectives. They’re more likely to forgive, which can help repair and maintain relationships.

Finally, humility helps facilitate personal growth. Being intellectually humble allows you to have a more accurate view of yourself.

When you can admit and take ownership of your limitations, you can seek help in areas where you have room to grow, and you’re more responsive to information. When you limit yourself to only doing things the way you’ve always done them, you miss out on countless opportunities for growth, expansion, and novelty — things that strike you with awe, fill you with wonder and make life worth living.

Humility can unlock authenticity and personal development.

Despite these benefits, sometimes humility gets a bad rap. People can have misconceptions about intellectual humility, so it’s important to dispel some myths.

Intellectual humility isn’t lacking conviction; you can believe something strongly until your mind is changed and you believe something else. It also isn’t being wishy-washy. You should have a high bar for what evidence you require to change your mind. It also doesn’t mean being self-deprecating or always agreeing with others. Remember, it’s being the right size, not too small.

Researchers are working hard to validate reliable ways to cultivate intellectual humility. I’m part of a team that is overseeing a set of projects designed to test different interventions to develop intellectual humility.

Some scholars are examining different ways to engage in discussions, and some are exploring the role of enhancing listening. Others are testing educational programs, and still others are looking at whether different kinds of feedback and exposure to diverse social networks might boost intellectual humility.

Prior work in this area suggests that humility can be cultivated, so we’re excited to see what emerges as the most promising avenues from this new endeavor.

There was one other thing that religion taught me that was slightly askew. I was told that too much learning could be ruinous; after all, you wouldn’t want to learn so much that you might lose your faith.

But in my experience, what I learned through loss may have salvaged a version of my faith that I can genuinely endorse and feels authentic to my experiences. The sooner we can open our minds and stop resisting change, the sooner we’ll find the freedom offered by humility.

Daryl Van Tongeren is an associate professor of Psychology at Hope College. Some of the work described in this piece has been supported by grants from The John Templeton Foundation to Daryl Van Tongeren and his colleagues. This article was produced with support from UC Berkeley’s Greater Good Science Center (GGSC) and the John Templeton Foundation as part of the GGSC’s initiative on Expanding Awareness of the Science of Intellectual Humility.

The pandemic is seen as the primary cause for many of the disruptions over the past four years. A halt to flights, factory shutdowns in China, and surges in demand for specific products broke supply chains. Yet the weaknesses were already there, hidden by an often-improvised interplay between manufacturers, shippers, logistics providers, and retailers.

What COVID taught us, though, is that just-in-time inventory strategies — keeping only what’s immediately needed — aren’t robust enough to handle deviations from the norm. Ironically, Toyota Motor Corp., an early pioneer of keeping low stockpiles, quietly ditched this lean approach around a decade ago. As a result, the Japanese carmaker sailed through the chip shortage relatively unscathed, while rivals General Motors Co. and Ford Motor Co. tweaked their products and halted factory lines to adjust to a lack of parts.

The tech sector went through a similar rethink. Apple, Inc. is the standard bearer, while Taiwan Semiconductor Manufacturing Co. (TSMC) and Foxconn Technology Group are prime examples of supply-chain providers that made adjustments long before they were needed. The process of making an iPhone starts upstream with TSMC providing chips, then Foxconn assembling the devices before Apple handles logistics and sales. Over the past decade, each of the upper, middle, and downstream links in the supply chain have almost doubled the proportion of inventory they hold.

This expansion of reserves across sectors from cars to cellphones has ameliorated the impact of one-time shocks such as COVID shutdowns, labor shortages, and war. Yet recent events have proven that stockpiles alone aren’t enough to shepherd us through crises.

The modern global economy relies on Adam Smith’s free-market belief that countries should focus on what they’re relatively better at, rather than erecting protectionist barriers and trying to make everything locally. Smith’s thesis was found within his revelatory opus An Inquiry Into the Nature and Causes of the Wealth of Nations — the late 20^th century’s embrace of trade liberalization did indeed bring wealth to many nations and lifted billions of people out of poverty.

The result was a hub-and-spoke structure for global production, with China at the center. That model gained momentum after the Soviet Union fell and the world enjoyed relative peace — but it was only possible because of a rapidly expanding network of global aviation and marine transport. Huge aircraft and even bigger ships meant it was quicker and cheaper to make everything in one place, then transport it across the globe rather than attempt local production closer to the end market. Smith was right, it seemed.

An almost total cessation of passenger flights from the start of the pandemic in 2020 was the first sign that this model is too brittle. The closure of the Suez Canal, caused by poor piloting in the waterway, in 2021 was a stark reminder of how unstable one single stretch of marine traffic can be. The blockage also highlighted how much we rely on just a few supply lines to connect major consumption economies to a handful of production bases. On the other side of the world, climate change is creating drought and slowing traffic through the Panama Canal that joins Asia to eastern America.

Growing suspicion between the US and China may be the saving grace.

International buyers have long known that it was risky to put all their production eggs in one basket. But heightened tensions, including a Tech Cold War, have forced clients and suppliers to shift away from China to India, Vietnam, and Mexico. None will replace the former, but over the coming years, we should expect a shrinking proportion of products to be sourced from the world’s second-largest economy.

India, now the most populous nation, will take some of that business, but the days of mega factories — as seen in China’s Shenzhen and Zhengzhou cities — is over.

Logistics providers will need to adjust, too. Journeys from ports such as Shanghai to US destinations like Los Angeles were once the busiest routes in maritime transport. That allowed shipping companies to pile over 20,000 containers onto a single vessel, bringing unprecedented economies of scale. This benefit has faded over the past few years because China is no longer a source of cheap labor — indeed, it is often in shortage.

Now intra-Asian routes, which connect nations such as Cambodia, the Philippines, and Vietnam, are the busiest. A lot of this traffic is simply shifting half-finished goods to the next factory in the manufacturing chain, while some of it is recognition that Asian countries are now major consumers of global output.

This diversification of transport to smaller ports in the region will force lighter cargoes to be carried on lesser ships. As a result, the global industry must contend with a supply chain that consists of more docks connecting a larger number of factories, each processing fewer goods.

The crises that have brought supply chains to their breaking point have highlighted an urgent need for change. This will result in a far more robust and balanced framework for global trade and manufacturing.

BLOOMBERG OPINION

From innovative technologies to community-driven initiatives, the world is witnessing a remarkable surge in sustainable trends that echo a collective commitment to addressing climate change and environmental degradation.

Globally, there is a growing acceptance of the so-called climate fintech that blends technology with the principles of sustainability — paving the way for a steadier stream of funds to help enterprises transition to a greener value chain. For instance, we are seeing these climate fintech firms introduce eco-friendly investment opportunities such as green bonds, responsible investment funds, and financial backing for projects that cut down carbon emissions.

Another major development in global sustainability practices is the acceleration of disclosure preparation regarding the Corporate Sustainability Reporting Directive (CSRD) in the EU and the Securities and Exchange Commission (SEC) in the US. The CSRD has expanded the range of companies that are required to disclose what sustainability measures they have adopted and implemented. It is said that thousands of additional companies in Europe are now being obliged to disclose detailed information on how their operations affect the environment, social matters, and how they manage related risks and opportunities, thus influencing them to rethink their sustainable strategies. On the other hand, the US SEC had advanced proposals on rules on climate-related disclosures that are expected to increase accountability and encourage more sustainable business practices. These regulations signal a paradigm shift where sustainability reporting moves from being a voluntary, often inconsistent effort, to a standardized and enforceable requirement.

Another global trend is the application of artificial intelligence (AI) for sustainability, which sustainability specialists project will be further amplified in 2024. Because of AI’s potential to optimize resource use, and improve energy efficiency, the call for its use in sustainability practices has expanded with the belief that it can contribute to significant reductions in environmental impact. For one, AI’s predictive capabilities are now being utilized in biodiversity conservation, where machine learning models help in predicting poaching threats and management of protected areas. It is also believed that AI can help analyze big data for environmental science, thereby enhancing our understanding of ecological systems and the impacts of climate change.

As it stands, AI will be most useful in significantly simplifying the processes involved in ESG data management, especially in the light of mandatory sustainability disclosures.

As business faces the daunting task of managing, collecting, and analyzing  huge volumes of ESG data, AI-powered ESG data management software can support efforts to streamline the mapping process which can in turn ensure accuracy, efficiency, and compliance.

In the Philippines, there are also observable trends that we expect for 2024 and the years ahead. As a fitting year ender, I am focusing on select major sustainability trends that are expected to confront Philippine companies next year and in the future.

1. Circular Economy: Redefining Progress. At the forefront of sustainability trends in 2024 is the ascent of the circular economy, a departure from the linear “take-make-dispose” model. This revolutionary shift emphasizes resource efficiency and waste reduction, urging businesses and industries to adopt closed-loop systems. These systems are designed to facilitate easy disassembly, repair, and recycling, fostering not only environmental stewardship but also innovation in product design and manufacturing processes.

In the Philippines, a growing momentum toward circular economy principles is evident, especially in industries like textiles, electronics, and packaging. Collaborative initiatives involving government bodies, businesses, and non-governmental organizations (NGOs) are propelling the adoption of circular practices, aligning with the nation’s commitment to sustainable development and responsible resource management.

2. Renewable Energy: Powering Sustainable Progress. The global transition away from fossil fuels will be a defining theme in 2024, with the adoption of renewable energy sources taking center stage. Solar, wind, hydro, and geothermal energy are increasingly becoming mainstream, providing cleaner alternatives to conventional power generation methods. Endowed with abundant natural resources, the Philippines is strategically positioned to harness these energies for sustainable development.

Across the archipelagic expanse of the Philippines, solar farms, wind turbines, and geothermal power plants are becoming ubiquitous, contributing to the reduction of greenhouse gas emissions, and fostering energy independence. The government’s active promotion of clean energy aligns with the country’s commitment to mitigating climate change impacts.

3. Tech-Driven Sustainability Solutions: Nurturing Innovation. In 2024, technology will emerge as a linchpin in driving sustainability initiatives. AI, data analytics, and the Internet of Things (IoT) will be instrumental in optimizing resource use, enhancing energy efficiency, and monitoring environmental impacts. Smart cities and sustainable urban planning are emerging as innovative solutions to address the challenges posed by rapid urbanization.

Cities like Makati, Taguig, Manila, Pasig, Cebu, and Davao are at the forefront of adopting smart technologies to improve public services, reduce energy consumption, and enhance overall quality of life. From intelligent transportation systems to waste management solutions, technology is playing a pivotal role in transforming Filipino communities into sustainable and resilient hubs.

4. Regenerative Agriculture Practices: Cultivating Sustainability. Acknowledging agriculture’s significant role in environmental degradation, regenerative agriculture practices will be gaining prominence in 2024. Farmers and agricultural businesses are embracing techniques like agroforestry, cover cropping, and rotational grazing to restore soil health, sequester carbon, and promote biodiversity.

In the Philippines, where agriculture is a cornerstone of the economy, a growing interest in regenerative practices is observable. Both small-scale farmers and large agribusinesses are exploring methods that prioritize soil health and environmental conservation. This shift ensures not only long-term food security but also contributes to the country’s overall ecological equilibrium.

5. Green Building and Sustainable Infrastructure: Constructing Tomorrow. The construction industry will undergo a paradigm shift toward sustainability in 2024. Green building practices, incorporating eco-friendly materials, energy-efficient design, and waste reduction, are becoming the norm in new construction projects. Sustainable infrastructure development aims to minimize the environmental impact of buildings, roads, and other structures.

In the Philippines, sustainable building practices are gaining prominence, particularly in urban areas undergoing rapid development. Green architecture, adherence to energy-efficient building codes, and integration of renewable energy sources into construction projects are becoming increasingly prevalent. This trend not only addresses the immediate environmental impact of construction but also ensures the long-term resilience of infrastructure in the face of climate change.

6. Plastic Alternatives and Zero-Waste Initiatives: Breaking Free from Plastic. The global plastic pollution crisis has intensified the search for alternatives to single-use plastics and will spur the promotion of zero-waste initiatives in 2024. Individuals, businesses, and governments are actively seeking sustainable alternatives and innovative solutions to curtail plastic consumption and waste.

In the Philippines, a country grappling with the challenges of plastic pollution, a movement towards zero-waste living and the adoption of plastic alternatives is gaining momentum. Local businesses are exploring packaging options that are biodegradable or easily recyclable, and community-driven initiatives are raising awareness about the environmental impact of plastic. Government policies regulating single-use plastics and promoting responsible waste management practices further contribute to this sustainable shift.

7. Biodiversity Conservation and Ecotourism: Preserving Nature’s Beauty. Preserving biodiversity and promoting sustainable tourism are crucial components of the sustainability agenda in 2024. Ecosystems globally face threats from climate change, deforestation, and pollution, prompting efforts to protect and restore natural habitats. Simultaneously, the tourism industry is evolving to prioritize responsible and eco-friendly practices.

In the Philippines, renowned for its rich biodiversity and stunning landscapes, there is a growing focus on biodiversity conservation and ecotourism. The establishment of protected areas, marine reserves, and wildlife sanctuaries aims to safeguard the country’s unique flora and fauna. Sustainable tourism initiatives seek to strike a balance between economic development and environmental preservation, ensuring that future generations can revel in the beauty of the archipelago.

As the world grapples with the challenges of climate change and resource depletion, the adoption of sustainable practices emerges not only as an option but a necessity in 2024. The trends highlighted in this article demonstrate a collective global commitment to creating a more environmentally conscious and resilient future.

In the Philippines, these trends intersect with the nation’s unique socio-economic and environmental context, weaving a narrative of progress that balances economic growth with environmental responsibility.

By embracing circular economy principles, transitioning to renewable energy sources, leveraging technology for environmental solutions, promoting regenerative agriculture, adopting green building practices, reducing plastic usage, and prioritizing biodiversity conservation, the global community, including the Philippines, is laying the foundation for a sustainable and harmonious future. This collective effort, rooted in innovation and responsibility, paints a hopeful picture of a world where sustainability is not just a trend but an integral part of our shared legacy.

Ron F. Jabal, DBA, APR, is the chairman and CEO of the PAGEONE Group (www.pageonegroup.ph) and founder of Advocacy Partners Asia (www.advocacy.ph).

ron.jabal@pageone.ph

rfjabal@gmail.com

For the purposes of brevity, we are covering only three important indicators — GDP growth, the unemployment rate, and the inflation rate. Countries covered in this analysis are those that the IMF projects as having GDP size at purchasing power parity (PPP) values for 2023 of at least $700 billion. These are also the top 40 largest economies in the world. Two countries among the top 40, Pakistan and Bangladesh, have no quarterly GDP growth data, so are not included.

These are the top 10 economic stories and trends based on these indicators and data.

1. India, Iran, the Philippines, China, and Indonesia (all Asian countries) are the top five fastest growing major economies in the world in 2023. Their growth ranged between 5.1% to 7.2% in the first three quarters (Q1-Q3) of the year. India and the Philippines are interesting because their growth has been high this year on an already high base last year.

2. Vietnam, Malaysia, Japan, and Thailand have had modest growth of 2% to 4.3% this year. The slowest growing Asian nations are South Korea, Singapore, and Taiwan with growth of only 0.1% to 1.1%.

3. Turkey, Russia, and Spain are the fastest growing major economies of Europe, with 2.6% to 4.6% this year. But Russia’s growth is due to having contracted in 2022, thus is coming from a low base. Other Europeans are either crawling at 0.3% to 0.9% growth (France, Italy, the Netherlands, Switzerland, and the UK) or are outright contracting (Germany, Sweden, Poland, and Ireland).

4. In the Americas, Mexico, Brazil, Colombia, the US, and Canada have had modest growth of 1% to 3.5%. Argentina is the worst performing major economy of South America.

5. Of the five fastest major economies in the world, the Philippines has the lowest unemployment rate. It was only 4.2% in October 2023, versus 7.1% and 7.9% for India and Iran. So, the Philippines has the real job-creating fast growth, followed by China and Indonesia. Vietnam and Malaysia have low unemployment but modest growth.

6. Turkey, Spain, France, Italy and Sweden have high unemployment rates of 7% and up. The only Europeans with unemployment rates below 4% are Switzerland and the Netherlands.

7. Inflation in the Philippines was at a “medium” level of 6.2% in the first 11 months of 2023, similar to the inflation rates in Italy and Germany. Most Asian nations have had inflation below 6%, with China bordering at deflation with 0.3%.

8. Other countries have had horribly high inflation rates of 24% to 52% (Nigeria, Egypt, Iran, and Turkey), and Argentina is a real outlier with 120% inflation. If the Philippines had this level of inflation, there could be military coups or other serious political instability.

9. Looking at the experience of Europe, degrowth and deindustrialization walk hand in hand with “decarbonization” in energy and economic policies. Meanwhile, the modest to high growth in Asia are consistent with their continued “carbonization” and high-level consumption of fossil fuels.

10. From the above three indicators, the Philippines seems to have been the best performing major economy in the world in 2023. It has had high growth, low unemployment, and modest inflation.

I give my congratulations to the Philippines’ entrepreneurs and workers, and the government economic team for securing economic and business stability in the country. In particular, Budget Secretary Amenah F. Pangandaman noted that “fiscal responsibility and procurement reforms have helped in raising overall economic productivity of our people.” And with the signing by the President of the General Appropriations Act (GAA) on Dec. 20, she said that the GAA is “our battleplan in fighting poverty, in protecting our homes and securing our border, in keeping our people healthy, creating jobs, and funding livelihoods.”

The Philippine economy has taken the good path. We are hoping for continued and even stronger growth and more job creation in 2024 and beyond. A happy and prosperous new year to us all.

Bienvenido S. Oplas, Jr. is the president of Bienvenido S. Oplas, Jr. Research Consultancy Services, and Minimal Government Thinkers. He is an international fellow of the Tholos Foundation.

minimalgovernment@gmail.com

STOCKHOLDERS’ meetings for corporations as well as village associations and civic clubs allow voting for the incoming directors of the board to be assigned to a designated person “by proxy.” This allows members to vote even when absent from the meeting.

The use of an alter ego too has become a social necessity for busy and in-demand personalities. The supply of high-profile subjects is not only limited and changes with the political tide. Rumors of replacements can become reality once a once-distant event takes place. Why does the highly desired celebrity (or “has been”) need to show up if someone else can take his place to read his message?

Action movies employ doubles or stunt men to fall off moving trains or jump off tall buildings and get set on fire as a substitute for the main star. The use of stand-ins is intended to protect the lead actor who has the less physical job of looking suave and delivering lines to seduce leading ladies.

The proxy (from the Latin word, procurare — to attend to) makes an appearance on behalf of someone more important, usually a boss he cannot turn down. Organizers of events are too polite to show overt displeasure at the absence of their original guest. (Has he been abducted by Martians?)

A substitute, however inadequate, must still approximate the level expected by the host. If the important man cannot attend, he just doesn’t send his driver in a suit to take his place. His substitute must still be of high enough standing, preferably considered important in his own right in another area (say, art critic), and properly attired.

The proxy is introduced as a “worthy representative,” even when he is unknown. He is even seated at the head table, with nobody talking to him, except the waiter. (Sir, cold or hot water?) When delivering his assigned speech, the proxy prefaces with an excuse for the intended speaker’s absence. The proxy assures the audience of the invited guest’s ardent desire to be present at this convention. He fell into a severe depression when the doctors informed him that he could not attend. (So, here I am, whether you like it or not.)

The flimsy excuses can detract from the message of the speech if anybody still cares to listen. Anyway, the representative proceeds bravely on with the speech, speaking confidently in the first person as if he were himself the absent one. He inserts his own warm-up jokes at the start. (I see you expected to see someone more recognizable addressing you. Anyway, I wrote this speech.) The quicker the stand-in gets off the podium, the better — are there any questions?

A proxy feels uneasy with his assigned role. The reception line expecting a VIP to arrive is surprised by a grinning substitute. (Sir, please register at the front.) When the organizers release a photo of the event to media, the stand-in is identified generically as a representative of the one “not in photo.”

A spokesman is a different kind of alter ego. He speaks for his principal. The opinions he expresses and the responses to questions from the floor reflect those of the person or company he represents. This process is meticulously rehearsed beforehand to come up with an agreed narrative. What a spokesperson publicly espouses may be at odds with the opinions he privately holds. He may even be asked to comment on an issue he has not discussed with his principal. (Until all the facts are in, we cannot comment on this issue.)

Substitutes of any kind are viewed with some discomfort. Should you ask them what happened to the original designated speaker?

Sending a substitute only calls attention to an obvious absence. It sends the message that this event is not worth the original invitee’s time. Even the proxy is uncomfortable ending up as a consolation prize, a gate crasher who must dine behind somebody else’s place card, a living disappointment to the host who does not bother to hide his displeasure. (When did you join the company?)

Maybe the alter ego can himself send a regrets message and simply not show up. Of course, this will displease his boss… but probably not the ones who invited him in the first place.

Tony Samson is chairman and CEO of TOUCH xda

ar.samson@yahoo.com

From the experiences during the 10 years preceding the coronavirus pandemic and the two years after, there is a very high probability that a 6-7% gross domestic product (GDP) growth year can be maintained annually during the remaining years of the BBM administration, mainly because of what the multilateral lenders called “the structural drivers that are very favorable,” which make them optimistic about the Philippine economy. As I have described in my own forecasts, over the last thirty years, during which the best and the brightest of our professional economists and financial experts have always been appointed to head key economic departments and agencies in government, there have been enough institutional building and economic policy reforms (the last being the amendment of the Public Services Act, allowing foreigners to own 100% of vital infrastructures and renewable energy) so that private consumption, government spending, and to a lesser extent, private investment, can be the engines of growth of the economy.

As mentioned in the first article of this series, even if a GDP growth of 6-7% may be among the highest in the Indo-Pacific region, there is no reason for us to be complacent because we still have the highest poverty incidence in East Asia. In fact, if we have to bring down this rate to single digits by 2028, we may have to accelerate our GDP growth rate to 6-8% to generate enough resources to combat mass poverty through increased investments in food security, education and health. Here again, we in the private sector cannot just expect the state to do the job alone in eradicating poverty in our country.

To quote from the message of Pope Francis for the 2023 World Day of the Poor, he wrote: “Let us thank the Lord that so many men and women are devoted to caring for the poor and the excluded; they are persons of every age and social status who show understanding and readiness to assist the marginalized and those who suffer. They are not superheroes but ‘next door neighbors’, ordinary people who quietly make themselves poor among the poor. They do more than give alms: they listen, they engage, they try to understand and deal with difficult situations and their causes. They consider not only material but also spiritual needs; and they work for the integral promotion of individuals. The Kingdom of God becomes present and visible in their generous and selfless service; like the seed that falls on good soil, it takes root in their lives and bears rich fruit. Our gratitude to these many volunteers needs to find expression in prayer that their testimony will increasingly prove fruitful.”

Let us try to “deal with difficult situations and their causes.” Why is it so hard to redeem the people in the rural areas from poverty? Let us listen to the experts. Someone who devoted practically all of his professional life to researching on Philippine poverty was the late Dr. Rolando Dy, a leading light in the field of agribusiness. In the last book he wrote before he passed away in October 2023, he said: “Poverty is dominant in the agriculture sector in the Philippines. Rural poverty is 30%. About three-quarters of the poor are rural. Obviously, poverty in the country is an agricultural phenomenon. Poverty in the cities is only 10%.” He then puts the blame on the very small sizes of Philippine farms that militate against increased incomes of the farmers, especially the poorest of the poor, the coconut farmers.

Clearly, one of these “difficult situations” was created by a failed agrarian reform program. As Dr. Dy wrote, “Agrarian reform has not promoted investments. If it did, farm productivity should have increased since 1986. The five-hectare retention limit is too small for private investors. Too small for mechanization. The gross profits barely return the investments if overhead such as manager’s salaries are considered. Small farms can be consolidated but there is a crying need for management and resources. It is time to raise retention limits to a viable size.”

Those who can help in farm consolidation are among those who can respond to Pope Francis in dealing with the difficult situations that have led to mass poverty among the small farmers. What are the various means of attaining more economic sizes of farms in the Philippines? The first is through farmers’ cooperatives that can organize clustering of farms to reach economies of scale. It is true that numerous cooperatives have failed in the Philippines. There are, however, exceptions that can be singled out as role models for success in the organization and operation of cooperatives in the Philippines. There are the Soro-soro Cooperative in Batangas and CARD in Laguna. There is also a cooperative for land consolidation that was organized in Rizal, Palawan by Lionheart Farm. Any effort to consolidate farms for more productive farming is a real contribution to addressing poverty. If Malaysia has reached zero poverty incidence, a major reason was the ability of the government to consolidate hundreds of thousands of hectares through the so-called “nucleus estate” system under which individual small farmers lease their small farms to a large public or private corporation. Large corporate groups like the First Pacific group, the Benguet Corp. and the DMCI group that are investing heavily in corporate farming in sectors such as coconut, palm oil and dairy are to be complimented for applying one of the solutions to rural poverty. As Dr. Dy also reported in his book, a local government unit that has helped in farm consolidation is Piddig, Ilocos Norte, which has succeeded in rice farm consolidation, coffee estates and processing small farm reservoirs and farm tourism, thus reducing poverty incidence significantly. Ilocos Norte has an admirable poverty incidence of only four percent.

In the area of food security, even private citizens can make small contributions to “feeding the hungry.” One of the positive trends during the two years of lockdown made necessary by the COVID-19 pandemic was the appearance of “plantitos” and “plantitas” among numerous middle-income households who had enough resources to go into small-scale gardening of vegetables and other high-value food crops in their backyards or small garden plots. With seeds and technology made available by companies like East West Seed or Harbest, these garden hobbyists started producing cabbage, lettuce, papaya, pepper and other food crops. Part of the produce went to home consumption, but a good number of these “master gardeners” donated their products to low-income households in their respective neighborhoods. These should be continued even after the pandemic is over. In some of the gated subdivisions within the National Capital Region, a committee should be organized to take charge of the collection and distribution of the products of these urban gardens to needy households in nearby depressed areas or institutions like orphanages, feeding clinics in public schools, government hospitals and prisons.

Another initiative that should be replicated in many municipalities is that of the Philippine Food Bank Foundation established in 2014 to collect from food manufacturing enterprises like Alaska, Century Pacific, and Monde Nissin, Arla Milk, Anchor Milk, Del Monte Philippines and URC, as well as restaurants as Starbucks, Krispy Kreme, Dunkin Donuts, Jollibee, Gardenia Bakeries, Coffee Project, and Mary Grace, their soon-to-expire or surplus food and distribute them as quickly as possible to beneficiaries like orphanages, feeding clinics, public schools and prisons. It only takes convincing these sources of donated food items that one’s group has the necessary logistical resources to make the delivery as soon as possible to the beneficiaries, without danger of spoilage, to be able to start a food bank operation. Individuals or small groups who want to start a similar operation in localities outside Metro Manila or Metro Cebu can get in touch with Mr. Danny Navarro at ndanilo91@gmail.com to get advice on what legal and business steps are needed to start such an operation. These food donations are especially crucial if they are made to children in orphanages and schools since the ability of children to learn is often directly correlated to how they are obtaining sufficient nutrients needed to develop their brains. It is scientifically proven that children who were undernourished in their early years of existence have their brains permanently damaged which makes it difficult for them to learn as they grow older. The very low scores Filipino pupils obtain in international achievement tests can be partially attributed to their low learning capacity because of brain damage due to undernourishment or malnutrition. In this regard, provinces like Quezon and Bataan are well known for what is called the 1,000 days program for pregnant mothers and their children. This involves providing sufficient nutrition to pregnant mothers and the children to whom they give birth during the 1,000 days from the womb to the age of two.

(To be continued.)

Bernardo M. Villegas has a Ph.D. in Economics from Harvard, is professor emeritus at the University of Asia and the Pacific, and a visiting professor at the IESE Business School in Barcelona, Spain. He was a member of the 1986 Constitutional Commission.

bernardo.villegas@uap.asia

On Dec. 15, President Ferdinand Marcos, Jr. issued Executive Order 49 that created the Office of the Special Assistant to the President for Investment and Economic Affairs (OSAPIEA).

The new office will advise the President on economic concerns based on the most recent economic data, market trends and economic developments as well as help identify priority programs, activities, and projects in coordination with the economic development group.

The OSAPIEA will supervise and monitor, on behalf of the President, the economic agencies of the government including the Department of Finance, the National Economic and Development Authority (NEDA), the Department of Budget and Management, the Department of Trade and Industry, as well as their respective agencies.

The secretary of the OSAPIEA will head the economic team, in effect functioning at a higher post than the secretaries of Finance and of NEDA.

Needless to say, the choice of who becomes the head of the OSAPIEA is at once prominent and crucial, imbued with crafting policy and setting a strategic direction for the Philippine economy.

The first secretary of the office, Robinsons Land President and CEO Frederick D. Go, is an excellent choice. His talent and impeccable record as an industry leader is a valuable infusion to what was once dubbed as the economic “dream team” of the administration.

Under Mr. Go’s leadership, Robinsons Land significantly grew in asset size and expanded its portfolio such that it now includes a mix of shopping malls, office buildings, hotels and resorts, industrial facilities, and mixed-use developments.

Mr. Go in fact has been serving since the start of this year, the personal choice of President Marcos as the Presidential Adviser on Investment and Economic Affairs. In this advisory capacity, he vigorously worked on boost the country’s economy and create more job opportunities by pushing for investments in a diverse range of industries, including agriculture, renewable energy, infrastructure, manufacturing, digitalization, tourism, mining and the electronics sector. He also emphasized the importance of positioning the electronics sector to capture the growing exodus of foreign manufacturers out of China.

As the new czar of the economic team, Mr. Go faces a daunting task ahead. We wish to convey our support for and confidence in him.

***

The Philippines has been a consumer-driven economy for a long time. This has its merits, but as we have seen over the years, it also has its adverse consequences. It has exposed our vulnerability to external developments, specifically to geopolitical tensions and unforeseen risks. Disruptions of the global supply chain could paralyze the mobility of goods and drive prices higher.

And while the volume of our trade with the rest of the world has been robust, we have been incurring a trade deficit for years, and the countries from where we import derive more economic benefits from our importation. Meanwhile, local industries suffer from the deluge of cheap consumer goods from other countries.

The Stratbase ADR Institute has been advocating a pivot to investment-led growth for quite some time now. Investments have a great multiplier effect — think infrastructure, jobs, income — and allow the economy to grow resiliently and sustainably. Specifically, the manufacturing sector has a lot of room to grow, and it can potentially usher in the kind of growth that the Philippines needs in order to take its rightful place in the world market.

The challenge, then, is to encourage and keep investments. Good governance is the central thrust. Our rules have to be consistent, their application fair and even, the regulatory environment predictable. Transparency and advocacy must be the norm, with red tape, graft and corruption eliminated. Technology must be employed as an ally to achieve efficiency and minimize human discretion that could open opportunities for irregularity.

There have been some initiatives to this end. For example, the Philippines has implemented “green lanes” for strategic investments, expediting the permit and license acquisition process. There is also Executive Order 32, which streamlines the permitting process for the establishment of telecommunication infrastructure.

Secretary Go, having spent at least three decades in the private sector, is aware of the realities and struggles of the private sector on the ground, especially in how they deal with the national and local government to see their projects through. He knows firsthand how important multisectoral collaboration and partnerships are — and how to effectively navigate the dynamics of competing interests to achieve the strategic objective.

We laud the President’s decision to appoint Mr. Go at the OSAPIEA. He is no stranger to the mutually reinforcing relationship between the government and the private sector, which is recognized by Filipinos to have a pivotal role in national development, serving as a dynamic engine for economic growth, innovation, and employment generation.

The times ahead are challenging, but also exciting. We already know the destination: to have a resilient, sustainable economy powered by investments, toward a prosperity that is felt by all. With a wise appointment and a policy strategy backed by actual experience, we are a little more hopeful that our economic team would be in a better position to steer us in that direction.

Let make a Philippine economic boom happen in 2024.

Victor Andres “Dindo” C. Manhit is the president of the Stratbase ADR Institute.

In 2020, when offices shuttered and many knowledge workers began routinely clocking in from home, many skeptics decried the arrangement’s loneliness and isolation. This, I argued, was shortsighted — because although remote workers might be alone much of the day, it’s perfectly possible (in normal, non-pandemic times) to have a social life outside of work.

But after nearly three full years of remote and hybrid arrangements, the evidence is in: Most people working from home are seeing less of their friends than before COVID.

This surprised me. I thought that when pandemic-era isolation ended, remote employees would use the time saved on commuting to reinvest in their non-work relationships. Without a long commute, it would be easier to invite friends over for a home-cooked meal. Increased flexibility would allow for more midday walk-and-talks and coffee dates.

To borrow an economic metaphor, I didn’t think remote work would shrink the pie of camaraderie; personal friendships would just steal some market share from professional connections.

This hasn’t come to pass. Multiple studies have looked at how remote workers have reallocated their commute time. For the most part, they just start work earlier and finish later. They also spend more time sleeping, cooking, doing chores and exercising. Parents spend more time caring for children.

And although remote workers do gain more leisure time, only workers younger than 30 actually use it to get out of the house and hang out with friends. Those of us older than 30? We’re spending more time relaxing at home — either alone or with our families.

It’s alarming that mid- and late-career remote workers are spending markedly less time socializing. Adults weren’t exactly getting in a lot of quality time before the pandemic. Political scientist Robert Putnam chronicled the decline in civic and social connections in his 2001 book Bowling Alone. US Surgeon General Vivek Murthy has been warning of a “loneliness epidemic” since at least 2017, when he wrote that “loneliness and weak social connections are associated with a reduction in lifespan similar to that caused by smoking 15 cigarettes a day.”

In The Good Life: Lessons from the World’s Longest Scientific Study of Happiness, by psychiatrist Robert Waldinger and psychologist Marc Schulz, the authors share results from the decades-long Harvard Study of Adult Development. The overwhelming finding: The biggest factor in life satisfaction is our relationships with other people.

Friendships are a basic human need, up there with sleep, food and exercise. And when I interviewed Schulz earlier this year, he emphasized that for a lot of people, work can be a pretty good source of friends. That’s one reason retirees often report more feelings of loneliness. In-person work provides forced social interaction.

Of course, that’s exactly why so many people prefer to work remotely; hard pass on the awkward office small talk! But even though many of us think we dread meaningless prattle, there have been a number of studies showing that short conversations with total strangers boost mood. Even introverts feel better after chatting with a barista, a bus driver or a receptionist. A natter with colleagues improves collaboration. Remote workers miss out on those conversations.

That’s not to say that the answer is to return to HQ for 40 hours each week. For one thing, the nature of work has shifted, such that even if you’re sitting near some co-workers, you’re more likely to be communicating electronically than in person.

For another, returning to HQ may not actually put us closer to our colleagues: 31% of people now report to a boss in a different city, about a 10-percentage-point jump since before the pandemic. These are called “distributed teams,” but such teams generally aren’t evenly dispersed; some people are clumped together in one office, with the rest elsewhere. The share of employees who work “elsewhere” has been rising.

Those are among the reasons that even if remote work entails some trade-offs, many of us are likely to keep doing it — plus, of course, factors like long commutes and the inflexible realities of school and day-care schedules.

To be sure, remote work need not be lonely. A recent study published in the Journal of Research in Personality found that we can spend long stretches in solitude — up to 75% of waking hours, which is more than a standard workday — before feelings of loneliness start to rise. And today’s remote work norms are impossible to fully tease apart from COVID; the pandemic itself got a lot of us over-30 folks out of the habit of socializing regardless of our work arrangements. But the data make clear that those who work from home must begin to be much more intentional about spending time with other humans.

Simply put, remote workers over 30 need to spend more time with their friends. If you’re thinking of resolutions for 2024, that’s not a bad place to start.

BLOOMBERG OPINION

Substantive due process is met when there exists a just or an authorized cause provided under Articles 297 and 298 of the Labor Code, respectively. With respect to termination under just causes, procedural due process is hurdled when the employer complies with the twin-notice requirement, and after granting the said employee an ample opportunity to be heard.

Notably, “ample opportunity to be heard” has been the phrase used under the Labor Code, particularly Article 292 thereof, which states that “the employer shall furnish the worker whose employment is sought to be terminated a written notice containing a statement the causes for termination and shall afford the latter ample opportunity to be heard x x x.”

Interestingly, however, under Section 2(d), Rule I, Book VI of the Implementing Rules of the Labor Code, a “hearing or conference” shall be observed by the employer, if only to comply with the procedural due process in termination cases. The provision reads:

“Section 2. Security of Tenure. — x x x

(d) In all cases of termination of employment, the following standards of due process shall be substantially observed:

For termination of employment based on just causes as defined in Article 282 of the Labor Code:

x x x

(ii) A hearing or conference during which the employee concerned, with the assistance of counsel if he so desires, is given opportunity to respond to the charge, present his evidence or rebut the evidence presented against him.”

With the apparent conflict between the text of the Labor Code vis-a-vis its Implementing Rules, an employer may be confused on whether to merely grant the erring employee an ample opportunity to be heard, or to mandatorily conduct a hearing or conference to hear the employee’s possible defenses.

THE GENERAL LAW PREVAILS
In 2009, the Supreme Court had the occasion to discuss this apparent conflict in the case of Perez v. Philippine Telegraph and Telephone Co., et al. (G.R. No. 152048, 7 April 2009), where it ruled that in case of conflict between a general law and its implementing rules, the former prevails.

According to the Supreme Court, an implementing rule cannot expand nor amend the scope of the law it implements, considering that the authority to promulgate implementing rules proceeds from the law itself.

Therefore, with respect to procedural due process in termination based on just causes, granting the erring employee an “ample opportunity to be heard” satisfies the requirement of the law.

AMPLE OPPORTUNITY
What then is the yardstick of this ample opportunity to be heard given to erring employees?

According to the Supreme Court in the Perez case, the fact that it is couched in general language reveals the legislative intent to give some degree of flexibility or adaptability to meet the peculiarities of a given situation. To require a single rigid proceeding such as a formal hearing will defeat the intent of the law.

Admittedly, an ample opportunity to be heard is broad enough to substantially include a formal hearing or conference. However, this is also satisfied when the employee is given a meaningful opportunity to controvert the charges and allegations hurled against him or her, and to submit evidence in support thereof. “To be heard” does not mean verbal argumentation alone inasmuch as the employee may just as effectively be heard through written explanations, or whatever submissions where the employee may substantiate his or her defenses.

In Autobus Workers’ Union v. NLRC (G.R. No. 117453, 26 June 1998), the Supreme Court ruled that “there is no violation of due process even if no hearing was conducted, where the party was given a chance to explain his side of the controversy. What is frowned upon is the denial of the opportunity to be heard.”

Clearly, in cases of termination for just causes, it is already enough that the employee is given the chance to air his or her side, and that a formal hearing or conference, while maybe preferred and ideal, is not required.

INSTANCES WHERE A HEARING OR CONFERENCE IS MANDATORY
While the Perez case laid down the general rule that a formal hearing or conference is not required in termination cases, it also enunciated several exceptions to this rule, to wit: (i) when requested by the employee in writing, (ii) when substantial evidentiary disputes exist, (iii) when a company rule or practice requires it, or (iv) when similar circumstances justify it.

Meaning to say, if the employee himself or herself requests the management in writing that a formal hearing be conducted, if only to properly ventilate his or her possible defenses, then the employer must ensure to afford the employee a formal hearing or conference. The same can be said when substantial evidentiary disputes exist, such as when material and relevant proofs to support the allegations and defenses lie contrary to each other.

Moreover, a formal hearing is mandatory when it is provided in the company rules, or it has evolved into a company practice. It is said that for a benefit to become a company practice, such as granting the employees an opportunity to attend a formal hearing during termination cases, it must be done for a long period of time, and that it has been made consistently and deliberately. As a catch-all exception, a hearing is likewise mandatory when circumstances, similar to the recognized exceptions, are in play.

In the final analysis, both employers and employees must note that a formal hearing is not mandatory, so long as the employee is given a fair and reasonable opportunity to explain his or her defenses and controverting evidence. Unless and until the aforementioned exceptions exist, “ample opportunity to be heard” does not equate to the conduct of a formal hearing or conference.

The views and opinions expressed in this article are those of the author. This article is for general informational and educational purposes only and not offered as and does not constitute legal advice or opinion.

Khen C. Aquino is an associate of the Cebu Branch of the Angara Abello Concepcion Regala & Cruz Law Offices (ACCRALAW).

kcaquino@accralaw.com

If there’s any big conglomerate that has been quite forthright with its cautious assessment of growth prospects in 2024, it must be the SM Group, represented by the vice-chair of the shopping mall and SM Investment Corp. (SMIC) Teresita Sy-Coson. Despite their phenomenal profitability courtesy of both BDO and SMIC, Ms. Coson opted for guarded optimism due to what she called spiking tension in the West Philippine Sea which all started in April 2012.

“Left to ourselves, we are going to do well but there are geopolitical tensions and climate change… I think our group assessment is we are going to be okay but we just have to be watchful.”

Of course, the SM Group’s concern over the West Philippine Sea row is focused on it being just another manifestation of the US-China geopolitical rivalry. This assessment is quite close to what we hear from Beijing. But already, China has been busy initiating what amounts to actual incursions into the Philippines. We read this from the academe, the broadsheets and social media, and these are all based on the Philippine Government’s official account of what is unfolding in the West Philippine Sea without very much calling it invasion.

If it’s a simple word war between these two remaining superpowers, it could be a protracted but perhaps less serious global concern. In all likelihood, we believe both parties do realize that it’s less costly that way while exacting their own pound of flesh from those directly or indirectly involved in the fray. Incremental incursions are less obvious but effective in territorial expansion. It’s more cost-effective to make noise than fire those missiles. But quietly, China has been defying the international court ruling on the West Philippine Sea by building their own infrastructure in Philippine territories and preventing, by using water cannons, the Philippines from securing its own legal territories.

And literally, China has been able to possess and keep those Philippine Islands and maritime zones regardless of world opinion by sheer military assertion. Under this scenario, the situation could be riskier because the impact could be more real than a simple word war. We don’t know if China is aware of its own constitution which stipulates in Article 5 that it “shall practice law-based governance and build a socialist state under the rule of law.”

AMRO REGIONAL ECONOMIC OUTLOOK
In the recent presentation of the AMRO Regional Economic Outlook (AREO) in Japan this month, it looks like everything seems to be normalizing. But in the concluding portions on the regional risk map, we notice that US-China geopolitical tension was cited as one of the risks. However, this is classified under medium-term imminence, something that should concern us not now but in the next two to five years, with a low level of likelihood.

Short-term risks include a spike in global commodity prices with a medium level of likelihood which may be concerning, as well as financial spillovers from tighter US monetary policy, slower economic recovery in China, and recession in US and Europe —all with a low level of likelihood.

In short, what is happening in the West Philippine Sea may be unique to the Philippines because it is our own territories that are being claimed and virtually annexed to China. If we contextualize the risks to the Philippines, are we not justified to consider it an immediate concern with a higher level of likelihood it would happen, and instead of a general euphemistic “US-China geopolitical tension” the risk could be one of aggression? If our small islands and our exclusive economic zone in the West Philippine Sea are considered part of the Middle Kingdom, what prevents anyone from including Luzon, Visayas, and Mindanao?

In fact, AMRO’s assessment of risks for the Philippines simply reflects its own risk assessment for the region. Heightened geopolitical risks are listed as medium-term concern with low level of probability.

As for the rest of the ASEAN+3, the latest available data shows that, given those risks, the prognosis seems to have improved. The advanced economies continue to grow based on manufacturing and services. It is also encouraging to see both headline and core inflation in the US and Europe sustaining their downtrends. While China receives some boost from its fixed investment, industrial profits, and real consumer spending, its recovery is rather slow compared to expectations, particularly if the global economy remains more fragmented.

AMRO pins its hopes on the strength of domestic demand to sustain economic growth in the region. For instance, household spending has been holding due to strong employment conditions and rising household income. On the part of business, retail sales are improving as travel and tourism continue to recover.

AMRO cites S&P data and staff calculations to point out that the recovery in manufacturing in ASEAN+3 shows some softening in recent months. In Asia, the sectoral Purchasing Managers’ Index (PMI), especially in automobiles and auto parts as well as in industrial machinery, indicates a similar trend. Manufacturing activities are not getting more entrenched.

Exports appear to be looking up, with the rate of contraction slowing down. Some benefits may be forthcoming from the expected turnaround in the technology cycle and tourist business. This should be positive for the Philippines because exports of goods which account for nearly 18% of GDP had been declining in the first 10 months of the year.

Finally, if the US continues its monetary policy on a “higher for longer” path, and commodity prices spike again, exchange rate weakening in the region could only frustrate the moderating inflation trend. This is sobering, and this should make us more cautious in assessing economic prospects.

AMRO FINANCIAL STABILITY REPORT
The AMRO Financial Stability Report (AFSR) runs along the same track.

It was correct for its inaugural issue this month to have pointed out that the global financial conditions “oscillated between tightening and easing, underpinned by shifting monetary policy stances by global central banks amid COVID-19 pandemic, higher inflation, and geopolitical events.” Liquidity stress continued to mount, especially in the US which was hit by some banking crisis.

It was unavoidable that the favorable conditions of low inflation and low interest rates should yield to the challenges of high inflation and high interest rates. As this regime got entrenched through 2023, the world’s economic regions have to grapple with the spillover effects. It is good that we are starting to see inflationary pressures ease, external buffers improve, and monetary policy and non-monetary measures deliver gradual price stability. The AFSR called this aspect of financial stability under multiple trials.

But the Report also likened us to drivers navigating in low visibility. More favorable inflation conditions may be forthcoming, but this is riddled by the uncertainties in the labor market, the lagged impact of previous inflationary situation, and the potential commodity price surges. It would be a tough act managing inflation, promoting economic growth, and safeguarding financial stability.

For many countries in the region, their next monetary policy stance could be largely anchored on what the US Fed might do in the near future. Decoupling is not feasible at this time because the world remains interlinked and connected. Therein lies another instance of low visibility.

A good analytical transition, this AFSR discussion of higher debt following an era of ample liquidity and pandemic funding needs. The pandemic made it imperative for governments across the region, and elsewhere, to extend monetary and fiscal stimulus measures. With practically zero growth, the official capacity to sustain public spending could only be achieved by higher borrowings.

And the numbers are very sobering.

The region’s total debt-to-GDP ratio, inclusive of corporate, household and public debt, peaked at 325% during the pandemic before declining to 299% at the end of 2022. As we wrote last week, it is true that AMRO’s stress tests show that fiscal sustainability and financial stability “may not exactly be in clear and present danger,” it is important for the authorities to realize that “if allowed to accumulate more, and at more rapid pace, the debt issue could graduate to the front and center of public policy concern.”

POLICY OPTIONS
We can be parsimonious in citing the policy recommendations of AMRO: ASEAN+3 central banks should prioritize the fight against inflation; regular liquidity facilities should be made available for banks; a wide range of macroprudential tools should be deployed to address various sources of risks from household and corporate debts including from property development; a medium-term fiscal consolidation plan embracing a possible fiscal rule and public debt management strategy to mitigate public debt; keeping banks’ leverage ratios to ensure stable financial intermediation and economic growth.

Yes, unique local factors may be more dominant in driving economic growth and financial stability, but in some instances, global and regional drivers could be more binding. Since these are mostly outside our control, there is always a room for us to keep watch and pray.

A blessed Christmas to all!

Diwa C. Guinigundo is the former deputy governor for the Monetary and Economics Sector, the Bangko Sentral ng Pilipinas (BSP). He served the BSP for 41 years. In 2001-2003, he was alternate executive director at the International Monetary Fund in Washington, DC. He is the senior pastor of the Fullness of Christ International Ministries in Mandaluyong.

From its commencement in November 1869, the artificial waterway through Egypt has been at the center of drama. French mail ship Péluse had the ignominious honor of being the first to block the Suez Canal on the opening night of operations due to pilot error. Unlike its younger, and shorter, counterpart in Panama, this maritime highway has suffered almost exclusively from man-made troubles.

The first Suez Crisis kicked off in 1956 when Cairo decided to nationalize the canal and kick out foreign investors. Israel invaded, with the backing of France and Britain, and the waterway was shut for around six months. A decade later, the Six-Day War put it out of operation for eight years until a pause in hostilities between Israel and Egypt.

During that time, Asia-Europe trade returned to its 19^th century pattern of taking the long path around southern Africa, or overland through India, Central Asia, and the Middle East. Britain’s control of both routes was the primary reason it opposed construction of the Suez Canal in the first place, although the superpower finally relented when it became clear the project was going ahead anyway.

While the canal proper is 193 kilometers, the 2,500-kilometer passage from the northern entrance at Port Said to the southeastern Bab-el-Mandeb Strait at the Gulf of Aden, should be considered a single entity from a logistical and strategic perspective. That’s because the narrow Gulf of Suez opens out into the Red Sea before a 20-kilometer-wide pinch point at The Gate of Tears, as the Bab-el-Mandeb is also known. Once a vessel is at “the gate,” or in the Red Sea, there’s no escape, making it vulnerable to attack from anyone with a speedboat and machine guns, or missiles and drones.

That’s what’s happening now, with Houthis operating along the Red Sea’s eastern coast. Two decades ago, Somali pirates to the southeast terrorized mariners and held crews hostage to extract cash.

Maritime operators are now acting to protect crews and limit risks. BP Plc, A.P. Moller-Maersk A/S, Hapag-Lloyd AG, and Euronav NV have paused sailing through the Red Sea or rerouted past Cape Horn on Africa’s southern tip. Evergreen Line canceled its service to Israel because of the war. Although the Suez Canal is not shut, and the main hostilities are 2,000 kilometers away, the cessation of traffic puts the current troubles on par with what happened in the previous two crises. And just as back then, we don’t know how long the interruptions will last.

The blockage of the waterway when container carrier Ever Given got stuck in 2021 caused acute pain, while the current drought that’s choked shipping in Panama is more like a chronic annoyance. This Red Sea crisis is somewhere in between, and such uncertainty is precisely what shipping companies are adapting to.

Thankfully, they’re far better equipped to cope than they were five decades ago.

For a start, the balance of global trade has shifted toward Asia, with China, India, and Southeast Asia all being important consumption economies in addition to their long-standing role in production. While the ratio of global goods loaded in Asia climbed from 31.9% in 1969 to 38.5% in 2019, the proportion of cargo dropped off in the region expanded from 7.9% to 54.7% over the same period, according to the United Nations Conference on Trade and Development. In other words, intra-regional trade is bigger than ever, reducing the relative importance of long-distance journeys.

Moving a single container from Shanghai to Rotterdam may take longer as a result of the detour away from Suez. But the development of larger ships, along with ports that can efficiently load and unload vessels, expands the capacity to get more cargo across the world quicker, on aggregate, than was possible 50 years ago. More importantly, technology including satellite communications, GPS systems, and cloud computing allows clients and freight operators to plan, track, and reroute in real time.

These advances, coupled with a growing understanding that the entire Red Sea region is an unstable maritime route, will force shippers to plan accordingly. The Suez should still be used, when it’s safe, as the time and cost savings are of great benefit. But knowing there’s a 19^th century backup plan is enough assurance that the global economy won’t crash at the next sign of mayhem.

BLOOMBERG OPINION

Tricked by the Magi, the wise men whom Herod had sent to determine where the infant was, a raging Herod decreed that all children ages two and under who live near Bethlehem are to be killed. The Gospel of Matthew contains the famous account of this “slaughter of the innocents,” and of Mary, Joseph, and Jesus’ flight to Egypt.

Interestingly, King Herod’s storyline is not found in any other biblical texts nor in Roman records. Yet it is pivotal in Matthew’s Gospel, which contrasts Herod’s mission, death, to that of the baby Jesus, life.

So, who was the real King Herod — and why would Matthew’s Gospel include him?

I am a scholar who studies the interpretation of Matthew’s Gospel, as well as the Jewish roots of Christianity. Historians in the field know a fair amount about Herod’s life, and the actual facts are somewhat surprising.

‘KING OF THE JEWS’
Writers such as the Jewish historian Josephus, who fought against Roman rule in the first century C.E. before eventually allying himself with Rome, have provided detailed accounts regarding Herod’s deeds. In addition, modern archaeologists have excavated many sites associated with him, including the possible location of Herod’s tomb.

According to historical accounts, Herod the Great was the regional king of Judea, which contained the cities of Bethlehem and Jerusalem. He ruled from about 37 B.C.E. until his death in 4 B.C.E., at a time when Judea was still under Roman influence. Most scholars estimate that Jesus was born between 6 and 4 B.C.E. — during Herod’s reign, as Matthew’s Gospel indicates.

Since Herod was appointed by Rome to rule over Judea, a mostly Jewish region, he was literally “king of the Jews.” However, Herod may not have actually been Jewish at all, at least by birth.

He was likely from the region known as Idumea, to the south. Herod’s father had likely been forced to convert to Judaism, as scholars believe many Idumeans were, while his mother was an Arabian princess. However, as Josephus points out, the two groups intermingled quite extensively, with some Idumeans, perhaps including his father, willingly adopting Jewish customs.

Josephus even declares that Herod was basically a Judean, though it is likely that many of the native Jews in Judea would have been skeptical of their king’s claims to be truly Jewish and viewed him as an outsider, especially if he did come from Idumea. However, Josephus does indicate that Herod would ally himself with Roman leadership whenever he deemed it prudent.

‘GREAT’ BUT SEVERE
Herod the Great proved himself a skillful builder, responsible for the planning and construction of projects such as the city of Herodium; the extravagant harbor at Caesarea Maritima, on the Mediterranean Coast; and the mountain fortress of Masada, which was located in the middle of the unforgiving desert near the Dead Sea.

Most famously, perhaps, was Herod’s rebuilding and expansion of the Jewish temple complex in Jerusalem. This project alone took decades to complete. Herod’s remodeled temple was a much more grandiose structure than Solomon’s original temple, built about a thousand years earlier. Josephus noted how it resembled a white, snow-covered mountain — that is, the parts of it that were not covered in gold.

Regardless of whether Herod was actually Jewish, he contributed to the preservation of Judaism. He succeeded in exempting Jews from serving in the Roman military and having to engage in emperor worship, preserving their ability to practice Judaism in relative peace.

Herod also proved himself a brilliant economic strategist who greatly increased the wealth of Judea by engaging in ventures such as international trade, which included the sale of balsam wood and copper. He contributed funds to national and international endeavors, including the Olympic Games, and it is said that he even averted a regional famine.

Yet Herod’s sinister reputation as a tyrant was probably well deserved.

Because he constantly feared a rebellion, he would execute anyone he deemed a threat to his reign, including his own first wife and three of his sons. In addition, he was reported to have excessively taxed his constituents to help support his economic programs.

SIMILAR STORIES?
There is no historical record of any “massacre of the innocents” — even the tyrannical Herod most likely never condoned such an action.

If that was the case, why does Matthew’s Gospel mention King Herod so prominently in Jesus’ birth narrative?

Matthew’s version is considered the most Jewish of the Gospels, the four biblical accounts of Jesus’ life in the New Testament — for example, it advocates for upholding Jewish laws. In other words, Matthew’s Gospel was likely written by Jews for a mostly Jewish audience late in the first century C.E., when the Christian movement was still in its infancy.

Matthew’s audience would have been familiar with the existing Hebrew scriptures, including the famous story of Moses’ childhood, when he escapes the pharaoh’s edict to kill all the newborn sons of his Hebrew slaves. Biblical scholars have made the case that Matthew’s Gospel intentionally compared Jesus with Moses, who saved the Hebrews from Egyptian bondage, to convince the intended audience that Jesus, too, was a long-awaited savior.

To strengthen the similarities between Jesus and Moses, this argument goes, the authors of Matthew had Herod threaten Jesus in the same manner that the pharaoh threatened the Hebrew children. The Jewish audience of Matthew would have connected the two narratives, in which good ultimately triumphs over evil. The Gospel story further villainizes Herod, whose son, also called King Herod, or Herod Antipas, was ruling at the time of Jesus’ crucifixion around 30 C.E.

Herod may have been a splendid builder and a savvy economist — and technically the “King of the Jews.” But in the eyes of the Gospel authors, it was Jesus who truly deserved that title.

Aaron Gale is an associate professor of Religious Studies at West Virginia University.

As I noted in a column in July, despite the government’s cancellation of the state of public health emergency, we should not completely abandon all COVID protocols. I had noted then that measures like distancing and masking should still be observed at the personal or individual level in specific settings. And, we should all be reminded that safety is everybody’s responsibility.

Obviously, distancing and masking are already optional and not mandatory. But it should already be second-nature to people by now to put on a mask when in crowded places, or when with cold or flu symptoms. People must also remember that while the state of emergency has ended, COVID and other illnesses continue to exist.

I can only assume that at this point, vaccine protection has waned for most people. In this line, perhaps people, particularly those with comorbidities, should consider availing themselves of available COVID-19 and flu and pneumonia vaccines. COVID-19 still exists, and there is no assurance that the number of cases would not surge again.

One report indicated that the seven-day COVID positivity rate in Metro Manila increased to 21% as of Dec. 17 from 13.4% on Dec. 10. This is based on data from the Department of Health (DoH). That is one positive case in every five people who underwent RT-PCR testing for COVID-19 in the National Capital Region. Of course, what this data did not capture were the number of people who tested positive using antigen tests at home.

For now, most COVID cases are said to be mild, and the number of hospital admissions related to COVID remains manageable. However, there is no doubt that the number of cases is on the rise at a relatively fast pace. Previously, for COVID pandemic management, the threshold set by the World Health Organization (WHO) was a positivity rate of 5% or below. At present, it is at 21% in Metro Manila.

With this, it was unsurprising that the Department of Labor and Employment (DoLE) is again encouraging companies not just in Metro Manila but nationwide to make use of work-from-home (WFH) schemes and other measures that can prevent the spread of COVID and other respiratory illnesses, noting that “safety is of utmost importance.”

DoLE also noted that WFH is nothing new, and that there are existing guidelines for employers on flexible work arrangements, including WFH. While WFH is a management prerogative, the exercise of that prerogative should not prejudice workers, DoLE noted. The number of COVID-19 cases was already expected to go up further, so preventive measures are necessary.

WFH may be a good idea from now until January as many employees have opted to go on leave, anyway. And Dec. 25, 26, 30 as well as Jan. 1 and 2 are all non-working days for most workers. Employers can spread a little more Christmas cheer by allowing their employees to spend more time at home with their families, while still doing the required work.

Confirmed COVID-19 infections nationwide have reportedly risen by 50% over the past week, with the seven-day average cases going up to 389 from 260. But the national average hospital bed occupancy for COVID-19 cases is still low, says Health Secretary Ted Herbosa. But this is not to say that things will not take a turn for the worse.

From experience, COVID can mutate very quickly and new strains can spread quite fast over a short period of time. The Christmas season is of particular concern as people tend to go out more, and colds and flu are more common during this time of year. A lot of travel also occurs during this period, allowing for the entry of viral strains from abroad.

At this point, surveillance is key. Families, workplaces, hospitals, and health officials all need to be more vigilant. There were many lessons learned from 2020 until 2022 with respect to dealing with the COVID pandemic, and one can only assume these lessons were not lost particularly on the health officials and the healthcare industry.

Lockdowns are a thing of the past. People will insist on going about with their lives, despite the risks to public health. However, people are not necessarily powerless as experience shows that interventions like masking, distancing, proper ventilation, proper washing of hands, and sanitizing hands with alcohol all help control the spread particularly of respiratory diseases.

With Christmas just around the corner, and holiday gatherings expected to last until next month, it is safe to assume that the number of COVID cases will continue to rise. While this scenario applies to respiratory illnesses in general, also given weather conditions, there is greater concern when it comes to COVID and pneumonia particularly for the elderly and those with comorbidities.

The least that people can do is to wear masks while in public, to limit their attendance in gatherings, and to prefer venues and occasions held in well-ventilated areas. More important, to always keep their hands clean. To the extent possible, people should also avoid crowded areas and major events previously referred to as “superspreaders.” Personal restraint and personal discipline are crucial factors now more than ever.

Marvin Tort is a former managing editor of BusinessWorld, and a former chairman of the Philippine Press Council

matort@yahoo.com

1. The revised fiscal program released by the Development Budget Coordination Committee (DBCC) last Friday, Dec. 15, showed that disbursements would rise from P5.3 trillion this year to P7.8 trillion in 2028. It should be noted that disbursements kept rising even when revenues significantly declined during the lockdown dictatorship of 2020-2021.

2. Revenues are rising from P3.8 trillion this year to P6.6 trillion in 2028 but they cannot cope with sustained high spending. So the budget deficit (revenues lower than spending) will remain elevated at P1.5 trillion this year to P1.2 trillion in 2028. The consolation is that the deficit as a percentage of GDP is projected to decline from 6.1% this year to 3% in 2028 (see Table 1).

Budget Secretary Amenah F. Pangandaman said “certain big spending are in various laws and we have to implement them but we are improving spending utilization and efficiency, make sure that every program, every action plan that we implement is a make-or-break for our people who are dreaming of better quality and decent lives for a better Philippines.”

3. Lower actual revenues than potential revenues are mainly due to leakages, corruption, and product substitution. One clear example is the excise tax on tobacco, the most taxed commodity in the country. As tax rates doubled from P25/pack in 2016 to P50/pack in 2021, tax revenues initially increased then started falling in 2022 and by Bureau of Internal Revenue (BIR) estimates, would further decline in 2023 by up to 20% of 2022’s level. This means tobacco tax revenues will go from P176.5 billion in 2021 to P160.4 billion in 2022, and further down to possibly only P142 billion in 2023. Collections until October were only about P120 billion. This is due to users’ substitution of legal tobacco with illegal or smuggled tobacco, plus a shift to e-cigarettes both legal and illegal.

4. Tobacco control measures and policies were generally successful across countries in reducing smoking prevalence among adults. In the Philippines for instance, from 35% of adults in 2000, tobacco users declined to only 23% in 2020. But this applies only to legal tobacco because consumption of illegal or smuggled tobacco continues to remain high as their prices are so low compared to legal, taxed tobacco. Plus, there is the shift to e-cigarettes.

5. Life expectancy continues to rise across countries including those with high smoking incidence. Consider for example France, where smoking prevalence remained flat at 33% of adults from 2000 to 2020 but where life expectancy has increased from 74 years in 1980 to 82 years in 2021 (see Table 2). One must note that there are many other factors to human mortality and tobacco is one of them but not necessarily the main factor.

6. An expanded anti-agricultural smuggling bill is now in Congress. It will replace the old “Anti-Agricultural Smuggling Act of 2016” (RA 10845) and will cover more agricultural products including tobacco, perhaps the most lucrative smuggled products at tens of billions of pesos yearly in foregone taxes from imported tobacco alone.

7. Key legislators that championed this bill include Representatives Sandro Marcos and Margarita “Migz” Nograles who included tobacco when they filed the bill in the House, and Representatives Mark Enverga and Mika Suansing who are pushing the general Anti-Agricultural Smuggling Amendments Bill in the House. In the upper chamber, Senator Lito Lapid filed the counterpart bill in the Senate, Senator Koko Pimentel ensured the constitutionality of anti-agri smuggling bill, and Senator Cynthia Villar championed it in the Senate, with JV Ejercito as co-author.

8. Illicit trade in e-cigarettes — the case of Flava and Denkat. In a House Committee on Ways and Means public hearing last week, Dec. 12, Committee Chairperson Joey Salceda said that “Vape sale is not yet particularly classified under PSIC (Philippine Standard Industrial Classification) … The brands found in the warehouse were all registered with the BIR (RMC 93-2023), with Flava Corporation registering as a ‘manufacturer’… Flava Corporation, however, is not registered as an importer… TopKing Logistics, which supposedly billed Flava, is also an importer, not a manufacturer.” Denkat Trading supposedly got its supply from China suppliers then sold them to Flava, and Denkat should pay the excise tax but did not. See also these reports in BusinessWorld: “E-cigarette listing, taxing sought” (Dec. 12), “British chamber backs law vs agri smuggling, 5-year EO 10 effectivity” (Dec. 14).

9. Estimated tax losses from illicit e-vapes, especially from Flava, are about P4.9 billion in 2022. Congressman Salceda said that the e-cigarettes market in the Philippines is about P13.24 billion in 2022, so the projected tax revenues should have been P5.56 billion, but the BIR collection was only P0.63 billion, or a difference of P4.9 billion.

10. The Laffer Curve — as tax rates increase, tax revenues increase initially then plateau and decrease later — is real and actually happening in the taxation of tobacco and other “sin” products. People simply shift to illegal products that are much cheaper.

The rule of law is still ignored on a large scale in the country. Manufacturers and traders are bringing in unregistered products from abroad and selling them openly here, health warnings are not displayed, and tax rates are not paid so government revenues decline.

We should have fast and sustained growth, the denominator (GDP size) should keep expanding so that when the numerators — budget deficit, public debt, etc. — rise slower than the rise in denominator, our deficit/GDP ratio or debt/GDP ratio will decline. Following the rule of law plus having more realistic lower tax rates will help plug revenue leakages and control corruption in the country.

Bienvenido S. Oplas, Jr. is the president of Bienvenido S. Oplas, Jr. Research Consultancy Services, and Minimal Government Thinkers. He is an international fellow of the Tholos Foundation.

minimalgovernment@gmail.com