Standard and Poors rating upgrade

To everyone bristling over SP saying we need more taxes: Relax.

They said that not as a commandment but merely a statement of opinion. They have standards as to the economic characteristics of an investment grade borrower. They think one way we could meet the standard is to raise taxes and increase the tax base.

We definitely need to improve our tax effort. We know why but the political will is not there. I think it would be more productive to focus on this aspect despite the difficulty. The poor collection performance is a disorder in the system. I'd rather have order there than have new taxes. It's like putting more gas into an engine that needs a tune up. It would be better if the engine were maintained than to keep wasting gas.

CC: Economy Update 1

I started checking on point one: the economy grew over 10 years. Apparently, the figures being referenced were GDP figures. I started to dig and wrote down GDP for Erap, P-noy and GMA. There definitely was a big improvement during GMA's term.

The main question is, where did the economic growth come from? At first I suspected OFW Remittances and Business Process Outsourcing. In pursuit of more data I visited the NSCB site. This is what greeted me:

I almost fell of my chair. P-noy's economic performance is being hampered because he's not spending as much as the previous administration. I'll dispense with the economic debate over pump priming, Keynesian vs monetarist and what not. Here's the point. Government services is recorded when the funds are spent. P-noy is spending less than Gloria. Gloria disbursed more funds out of the national coffers.

Now, how effective was that spending?

Right. I don't know either.

What I do know is that P-noy is cutting cots by using a zero budgeting program. Redundant and ineffective projects are being denied funds. We can suspect there's politics involved, that P-noy is punishing his political adversaries, but that just makes the follow-up question all the more pointed. Does it mean he is spending less on his political allies than Gloria?

So even if GDP did grow, so long as it came from government spending we will always ask if the money was used wisely. The next step would be a check on all the projects done during GMA's term. Did those projects push through and were there any snags? I think I have to leave that path for now maybe until I get my broad answers for the rest of the points.

note: I'm using the acronym CC: Economy for this challenge. Here's my first post for the Citizen's Challenge: Economy

Water Hyacinth and Floods

The rains provided the water, the Water Hyacinths provided the flooding. Some waterways in Cotabato were clogged with the aquatic  plant preventing proper flow. The waterways swelled and flooded the city. Amidst televised stories of woe and political recriminations was a backdrop of people laboriously dragging plants out of the rivers.

Like past flooding, quite a bit of this disaster seems to be man made. Although water hyacinth is a prolific invasive species, it grows better when fed. Sources say waste from human activity provides ample fertilizer for their growth. Also, they don't grow overnight, which means this problem had been building up over some time.

Citizen's Challenge: Economy

He said, She said
The camps of President Aquino and Gloria Arroyo have been trading barbs these past days. The most recent exchange focused on claims of a decline in economic strength. The Gloria camp point to these economic data:

• 10 years of uninterrupted growth despite a global recession. 7.9% growth rate at peak. 
• Low inflation
• a recent rise in self rated poverty in opinion surveys
• foreign investments down by half according to NEDA

(For now, I will ignore the claims about automated elections because it's not directly connected to economics.Perhaps another time we should check on the claims automation drastically helps the elections)

Here's the Challenge

Can an average person actually verify this using only publicly accessible information especially information over the internet? Can we actually get enough data to form the basis for analyzing the economic strength of the country then and now? This means no exemplary effort to gather the data. No calling up buddies in NEDA. No hiring researchers. Definitely no playing golf with BSP personnel!

The point is to see how much access to crucial information is available to the common pinoy. Freedom of information is an important element of democracy. It empowers citizens, allowing them to bring anomalies and errors to light.

The analysis and conclusions may not be as important as going through the process of research.

Batanes Pine Wine

The Batanes Pine or Batanes Tree is an ubiquitous sight in that province. It grows anywhere and people there are fond of it. What we did not know was that the fruits of the Batanes Pine or Arius can be made into wine. Dr. Roger G. Baltazar of the Batanes State College and his research team have been developing products such as wine, jam, jellies and pastilles from the fruit. Prior to this discovery the fruits were left to drop and litter the ground.

I certainly hope the research yields considerable returns to the people involved. I've long suspected that we have a wealth of untapped resources that remain ignored or underutilized. The reason is that we simply don't know what they can be used for.

It's ironic that unemployment and malnutrition are a problem when we can alleviate both by doing agricultural research and then commercializing the discoveries. It's also equally important that such information be available. As an aside, maybe we should enhance the research skills of our populace so they know how to look for said information. Get all the ingredients together and you can make a dish, otherwise it's just odds and ends on the kitchen table.

Encouraging Farming: Microbusiness Perspective

Conventional wisdom says the Filipino is allergic to farming. One article claims that only 3 out of 100 agriculture graduates return to the farm. Others prefer a white collar job as researcher, consultant, teacher or government bureaucrat.

I think there is some degree of romanticizing involved whenever we think of the situation. I'd imagine people decrying the loss of a tradition. People often use the farmer as the epitome of hard work and perhaps some people think other forms of work are not as noble as manual labor. Perhaps people complain of the softening of the Filipino for favoring more cerebral work.

The Bus Rapid Transit System as a Traffic Solution

I think a lot of columnists bought a copy of Newsweek's Royal Wedding Commemorative. At the back of that issue is a mention of the bus-based rapid transit system. The BRT is similar in concept to train based systems in that both are mass transport systems with their own dedicated route and space.

GSIS goes local

GSIS has PHP32 B in offshore investments. They have recently announced plans to move those funds to local vehicles paying special attention to companies in priority sectors. The setors mentioned included energy, power, telecoms, retail. I'm not exactly sure what they mean by the consumer sector but that's included as well. If they mean consumer goods like food, beverages and clothing it means the GISIS is looking at nearly everything.

I'd like to assume that the GSIS will choose investments prudently instead of engaging in a misguided show of nationalism.

Fight vs Malnutrition

I find it apalling that the incidence of malnutrition in this country should be so high. We have several local plants containing numerous nutrients that it should be easy to gain access to them.

Take the malunggay. This plant grows well in the country, tolerating most local soil and weather conditions. It propagates quickly. It packs a lot of vitamins and minerals in its leaves and fruits. A whole tree can grow from one branch. Cut branches quickly regenerate. We had a few trees in our garden and we tried to incorporate it into our diet. Despite the frequent cuttings, the tree still grew too fast. Eventually we had to cut them down to size or the top branches would be too high to reach. Within a few days, new shoots emerged from the cut trunk.

Politicians without Pork

This is a list of Politicians who did not avail of their discretionary funds aka the pork barrel. I am writing this down for posterity. The article came from the Phiilippine Star 7 May 2010. Just in case it becomes an issue in the future we can have a reference as to how some people behaved when they were in power.

In total these people gave up P1.6Bn

Live Sharks Are Worth More

Palau declared its terrotorial waters as a shark sanctuary and for good reason. The Australian Institute of Marine Science and the Uniiversity of Western Australia estimates that one thrasher shark is worth $2m throughout its lifetime. That's tourist revenue  for the country of Palau. (National Geographic Article)

That's a huge tourist draw. Plus the shark is a self generating resource so long as we let them breed. It's like people visiting a tree in your back yard and generating two million dollars over 20 or so years. And they make more of themselves!

I want to spread the word because we have similar resources, the most well known being the Donsol Whale Sharks. That resource needs to be protected from ignorance and greed:

Budget Deficit down 80%

This is significant. Past performance had us believing that the deficit was an unkillable beast. We rejoiced at improvements of 10% to 20%. While some PHP10.0 billion is substantial it's a far cry from 80 billion pesos. Lets check that again: 80 is greater than 10.

Considering the performance, I wonder how the P-Noy team managed when other administrations did not. Some point to the increase in revenues from the BIR, but that's about 1 billion in improvement leaving 79 billion to account for. Customs seems to account for a similar amount. Could it have been the zero based budget policy?

Simply put, zero based budgeting means all budget items get reviewed not just incremental increases. Programs that did not deliver had their funding cut. Check the Wikipedia definition of zero based budgeting. It may seem minor but I suspect it has a psychological impact. Program proponents must show results thus encouraging them to become efficient or at least effective. Corruption has a diminished impact. Even the corrupt have a  reason to serve well - if they don't they lose their kickbacks. 

It would be useful if we could see where the deficit improvements came from. Then we can concentrate on these targets. Citing another efficiency theory, the Pareto Principle, most results come from only a fraction of our activities. This is sometimes called the 80/20 Principle. Studying the recent results could be a gold mine of efficiency information. It may be one of the few chances we'll get in a long while.