January 30, 2020

Confirmed Cases of Coronavirus outside China

Virus by qimono.

(7th update) The appearance of coronavirus, which was first detected in central China in December 2019, is giving every country around the world the greatest challenge of preventing the virus from spreading. Confirmed reports have shown that the virus has already spread around the globe. As of this writing (Feb 12) there are 395 confirmed cases of coronavirus in 24 countries outside China (1 death reported). Here are the lists (based on WHO Novel Coronavirus (2019-nCoV) situation report):

1. Japan - 26 cases
2. Republic of Korea - 28 cases
3. Viet Nam - 15 cases
4. Singapore - 45 cases
5. Australia - 15 cases
6. Malaysia - 18 cases
7. Cambodia - 1 case
8. Philippines - 3 cases - 1 death (non-local)
9. Thailand - 33 cases
10. Nepal - 1 case
11. Sri Lanka - 1 case
12. India - 3 cases
13. United States of America - 13 cases
14. Canada - 7 cases
15. France - 11 cases
16. Finland - 1 case
17. Germany - 14 cases
18. Italy - 3 cases
19. Russian Federation - 2 cases
20. Spain - 2 cases
21. Sweden - 1 case
22. The United Kingdom - 8 cases
23. Belgium - 1 case
24. United Arab Emirates - 8 cases
25. International conveyance (Japan) - 135 cases (cases identified on a cruise ship currently in Japanese territorial waters)

Total confirmed case of coronavirus from China alone hit 42,708 with 1,017 recorded deaths (as of Feb 12).

WHO nCoV Risk Assessment

*China: Very High
*Regional Level: High
*Global Level: High


[updates Jan 30]

Based on reports, US and Japan have already started the evacuation of their nationals from Wuhan China; Hong Kong has also closed some of its borders to China and has stopped issuing travel permits to mainland tourist.

According to Manila health minister, Japanese expert will help Philippines screen potential cases coronavirus. Philippines Health Secretary said that a government research institute in Muntinlupa can only check the presence of coronavirus, but cannot identify if the strain is the same strain from China.

Japan will give Philippines a “primer” that can detect if a strain has the same genetic code as that strain from China; this will eliminate the need to send the specimen to Australia, which will lessen the time spent for waiting for test results.

[updates Jan 31]

President Duterte has imposed a ban on travelers from Wuhan City and Hubei province, China.  Philippines Presidential Spokes Person said today, January 31, that “upon the recommendation of DOH [Department of Health] Secretary Francisco Duque, the President has issued a travel ban to Chinese nationals coming from the Hubei province of China where the nCoV originated, as well as in other places in China where there is a spread of the disease”.

A study conducted by the University of the Philippines Mindanao shows that a betacoronavirus is present in a bat species in the region. According to Murao, the lead researcher of the study, "Coronaviruses have been living with these bats for a very long time already. Interestingly, we also found out that these coronaviruses belong to a different group compared to the SARS and the MERS coronaviruses".

The researcher advises to avoid the disrupting the habitats of bats. She added that "as long as we keep the habitats of the bat intact, we do not disturb their habitats, there is a less chance of exposure of the humans to the bats".   

[updates Feb 3]

President Duterte has further expanded the ban on travelers which now cover any person coming directly from China, Hong Kong and Macau. The following information were reflected on the order issued by Civil Aeronautics Board (CAB):

1. Temporary ban on entry into the Philippines of any person regardless of nationality, except Filipino citizens and holders of permanent resident visas (PRV) issued by the Philippine government, directly coming from China or its special administrative regions (SAR);

2. Temporary ban on entry into the Philippines of any person regardless of nationality, except Filipino citizens and PRV holders, who within 14 days immediately before arrival in the Philippines, has been to China or any SAR;

3. Temporary ban on Filipinos from travel to China or any SAR.

The second case of coronavirus in the Philippines was recorded last Saturday, Feb 1; the first death case of coronavirus outside China. The man was a 44-year-old who traveled to the Philippines from Wuhan, China. He was the companion of the 38-year-old woman who was the first to test positive in nCoV in the Philippines. According to government health officials, the patient developed a severe pneumonia. The two patient were known to travel from Wuhan, China via Hong Kong; they then traveled to Cebu and Dumaguete before being admitted to San Lazaro Hospital, Manila.

[updates Feb 6]

Philippines confirms 3rd case of coronavirus. A 60-year-old woman from Wuhan, China, tested positive for nCoV. She was known to travel to Philippines from Wuhan via Hong Kong; she arrived in Cebu City on January 20, then headed to province of Bohol. 

As of Feb 5, Department of Health is testing 133 people who might be infected by the novel coronavirus.  

[updates Feb 8]

First case of Filipino who tested positive on nCoV was recorded in a cruise ship in Japan. The Filipino was a crew member of Diamond Princess; 537 Filipino crew members of this ship are under quarantine. The second case of Filipino who tested positive on nCoV was confirmed in UAE by official Emirates News Agency.

Photo credits to Department of Health (DOH).

As of Feb 8 there are 215 patients under investigation (PUI) in the Philippines for nCoV. There are 3 confirmed cases, 57 cases tested negative, and 155 cases pending test results.  

[updates Feb 11]

nCoV 910 death report (1 from the Philippines and the rest are all from China) surpasses SARS death toll of 774. According to reputable news source, a team of experts from World Health Organization (WHO) had arrived on Beijing, China yesterday (Feb 10),  led by SARS expert Dr. Bruce Aylward, to help assess the current condition of the nCoV outbreak in the country. A study published by University of Basel in Switzerland on Feb 7, said that the true number of people in Wuhan exposed to the virus "may be vastly underestimated" (source: Japan Times: Coronavirus cases in Wuhan may be nearing peak, study finds).

Department of Foreign Affairs (DFA) confirms additional 4 cases of Filipino nCoV positive from Diamond Princess cruise ship (currently in Japan) bringing the total to 5. As of this writing, there are 6 Filipinos who tested positive on nCoV; 5 in Japan,1 in UAE.

Yesterday (Feb 10), Department of Health (DOH) clarified the inclusion of Taiwan in the temporary travel ban imposed in the Philippines. Health spokes person said that WHO classifies Taiwan as part of China. The travel ban for Taiwan was implemented last week and not part of the temporary travel ban order, issued by the President last Feb 2.

In Hong Kong, report says that dozens of residents were quarantined and evacuated from apartment building after 2 people living in a different floor were found to be positive on nCoV. According to Hong Kong's Health Secretary, 4 other people living in three different units are showing signs and symptoms of coronavirus. Decision was made to evacuate residents after the discovery of unsealed bathroom pipe in the apartment of a 62 year old woman who tested positive on nCoV; a person living 10 floors below her apartment tested positive also on nCoV. The recent situation resulted to comparison of an event which happened in year 2003, where 329 residents of a housing estate in Hong Kong became infected by SARS, which was later discovered that the virus spread through defective pipes; it was known that 42 of the infected residents died. (source: Coronavirus Updates: Virus Is Said to Spread Through Apartment Building’s Pipes)

30 Filipinos who were repatriated from Hubei, China are now quarantined in New Clark City, Tarlac for 14 days.

Photo credits to Department of Health (DOH).

Based on DOH nCoV tracker, there are 3 confirmed cases of coronavirus in the Philippines with 1 death report (non-local); 196 cases tested negative while 183 cases are waiting for test results. Out of 311 patients under investigation (PUI), 84% are currently admitted in the hospital, while 15% have been discharged, less than 1% have been recorded as non-nCoV related death.

[new updates Feb 12]

World Health Organization (WHO) renames novel coronavirus (nCoV) as COVID-19 short for "coronavirus disease 2019".

Based on DOH COVID-19 case tracker, there are 408 patients under investigation in the Philippines; 238 patients are currently admitted while 167 have been discharged. Confirmed case of coronavirus in the Philippines remains at 3 with 208 cases tested negative and 197 cases waiting for test results.

Photo credits to Department of Health (DOH).

Updated: January 30, 2020 5:52PM; January 31, 2020 1:31PM; Feb 3, 2020 2:25PM; Feb 6, 2020 10:22AM; Feb 8, 2020 8:23PM; Feb 11, 2020 7:18PM; Feb 12, 2020 4:35PM

Information in this page is subject to changes based on daily updates regarding coronavirus.

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January 27, 2020

PH Economy in 2020: Inclusivity vs. Exclusivity

Makati City Philippines.

Inclusivity is a big word for 2020 which is the opposite of exclusivity. Inclusive growth has always been highlighted by many economists every year when economic projections are being made. This year inclusive growth must again be highlighted; because what is the purpose of progress if only few will benefit? If we want at achieve the ultimate economic development, we must be reminded that we are one as a nation and that no one must be left behind – we are in one ship. 

Last year highlights: 2019 Gross Domestic Product (GDP) hit 5.90%, according to experts Q1 and Q2 GDP growth could have reached more than 6% level if national budget was released earlier; on one side, 5% GDP level is still a significant growth for the economy; it is still a good indication that we have a vibrant economy in totality (but some experts remain skeptical about the distribution of growth). 

Average 2019 inflation drop to 2.5% from 5.13% in 2018; the significant decline in inflation rate can be attributed to elastic reaction of the public to price increase and the efforts of the government to curb inflation thru the use of government and monetary policies. While price increase of the market basket has slow down, inflation is still an inflation, since 2018 the public has felt that prices have gone up, efforts must be made not only to slow down price increases but also to lower prices by increasing the supply of basic life sustaining goods and by increasing the efforts against price manipulation (such as hording of supply). The basic logic behind curbing prices is that, if you cannot increase the income of the people then you must lower the price of goods so you can give the public more purchasing power; the government must do this if it wants to maintain the stability and order in the society. 


Technology has proven to be a benefit for the mass. Ride sharing apps have help promote transportation efficiency in the metro. Online stores have provided goods, mostly made in China, at a lower price. The cheap labour and surplus (or excess) goods of China have enabled us to gain access to some conveniences of life at a lower price. With the help of technology, businesses from China are directly selling products to Filipino consumers, slashing the cost of middle man and storage facility. 

While imported consumer products and electronics have remained cheap, domestic products which are usually basic goods have seen price hike. I think this is where we have to be careful, if the price of basic goods continues to increase, these might hurt the public. We have to make sure that the fundamentals are intact. It’s like asking: what is the use of your new imported shoes, phones, and gadgets if you can’t afford to buy food, drink water, pay electricity, rent a house, and access transportation? 

While smart-phone ownership and access to technology has been a symbol of equality; almost all Filipino have mobile phone and access to internet data, there are still things here that are difficult to obtain. Acquiring a private car and owning a house is expensive (especially in the metro). Putting your feet in the shoes of the common people, convenient ride sharing transportation (Grab) is still seen to be expensive compared to jeepney transportation, and the price of renting a decent house (with at least two bedrooms and a safe location) is also high. In this regard, development in public transportation must be sought, through development of mass transportation such as train (MRT, LRT, PNR, Subway), which can be a convenient alternative to expensive transportation; access to low cost decent housing must be further develop as well. 

In line to ease traffic in Metro Manila, some projects are already seeing the light. Between April and June this year, Sky Way Stage 3 project will be open, which is seen to shorten the travel time from Makati to Quezon City (and vice versa) to 20 minutes which usually takes 2 hours because of traffic. According to government authorities, before 2020 ends, NLEX North Harbour Link is seen to operate, which is projected to reduce 70% of trucks passing the main roads of Metro Manila. By 2021, NLEX-SLEX connector will operate which will connect NLEX North Harbour Link and Skyway Stage 3. 

There are also new train line projects expected to operate between 2021 and 2025: 

*LRT-1 Cavite Extension 

*New PNR Trains 

*PNR Station from Tutuban Manila to Malolos Bulacan 

*MRT-4 from Quezon City to Tatay Rizal 

*The first Metro Manila Subway (biggest rail road project in the Philippines) 

Efforts where made last year to push further the modernization of jeepney transportation, which is seen to bring safety and comfort to daily commuters of metropolis; but there are operators who are hesitant; individual owners who see the transformation as additional own pocket expense. The modernization attempt is not yet complete, but the goal is finish it this year. To give way to those who cannot modernize their jeeps by July 2020, authorities have decided not to automatically phased out non-modernize jeeps as long as they passed the Motor Vehicle Inspection System (MVIS). Since the start of Public Utility Vehicle Modernization Program (PUVMP) in 2017, 2,595 units have been modernized and put into operation out of 220,000 jeepney units operating in the country; equivalent to 1.18% of total jeepneys in the Philippines (based on November 2019 data). 


Tourism is a big part of Philippines economic growth which comprises 12.7% of GDP or equivalent PHP 2.2 trillion (based on 2018 government data). From January to August 2019, international tourist arrival hit 5.55 million, 14.08% higher compared to same period in 2018. Efforts to enhance tourism where made last year, such as Boracay rehabilitation. On the development side, there are still a lot of untapped destinations in the Philippines that are waiting to be discovered; and, there are many amusement developments in other countries that can still be adopted here. But more than anything else, the relaxing white beaches in the countryside, natural geography of different provinces, and hospitality of the Filipinos continue to be the main reason why tourists choose to return. 

The recent Taal volcano eruption that caused hundreds of thousands of people to flee their town (in 14km danger zone) has also caused serious damage not only in agriculture, but also in tourism business. According to government officials, 90% of tourism establishment in Tagaytay (a town near Taal volcano) have been affected by the ash fall; the town alone attracts 5.5 million (local and international) tourist visitors, on average, each year. 

The spread of corona virus, which is reported to kill 80 people out 2,744 confirmed cases in mainland China (as of this writing, Jan 27, 2020), has a possibility to negatively affect tourism. Based on the data, China is the second largest source of foreign tourism of the Philippines (following South Korea). In the first quarter of 2019, Chinese tourist arrival hit 463,804; 24.87% higher compared same period in 2018. 


With all the significant events happening to our country and to other parts of the globe, it is unusual not to worry about future of our economy. But be reminded that these events (like the Taal eruption and corona virus) are small parts of economic activity; there are still huge parts in our daily economic life that are seeing progress (like the PHP 4.1 trillion budget of the Philippine government, which is, if utilize properly could spore development). This year, Philippine Economist maintains an optimistic projection for Philippines economic growth; Philippine Economist projects a 6.3% GDP growth for Philippines economy in year 2020. 

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January 14, 2020

Taal Volcano Explosion


N95 Respiratory Dust Mask at Lazada website.

Over Pricing N95

Recent eruption of Taal Volcano prompted some businesses to capitalize on the ongoing tragedy. From previous price of PHP30, N95 mask is being sold in the market for PHP170-PHP200 (price source Lazada). Some clever business owners would readily defend the price and would say that it was due to supply and demand; but this is misleading. When you bought the supply (from China or other countries) and it cost less than PHP30 and that you can readily import anytime without price increase from your supplier, then it is very clear that there is no shortage in supply. What was happening in the market is that some businesses are trying to control the price (fixing the price) by controlling the supply; this is not the work of natural law of supply and demand but rather a price manipulation. It’s like a practice of bad monopoly - when you know that you have control over the supply and people have no choice but buy, because there is no other cheap alternative (and because it’s a need), and then you jack-up the price (85% increase) in just a single day – then there is something wrong, that is greediness. It is very disappointing how some businesses react in times of calamity; it is not that you are prohibiting them from profiting, but when there is too much greed that is just not acceptable.

Agriculture Damage

According to government officials, damage in agriculture sector caused by Taal Volcano eruption hit PHP3 billion (and the figure is still increasing). Majority of the damage hit coffee plantation while the rest came from corn and livestock. There is also huge un-calculated damage in fisheries covering 6000 fish cages near Taal, with an estimated 15,033 metric tons of fish, which is seen to negatively affect the supply of Telapia fish in the market.

Declaration of State of Calamity

Yesterday, January 13, the provincial government of Batangas declared State of Calamity for the entire province of Batangas. According to Vice Governor Leviste, the declaration will enable the local government of Batangas to utilize funds faster for relief operation, rehabilitation, reconstruction, recovery and other works; the PDRRMC has PHP200 million in budget and the provincial government has PHP 100 million. 

Current Condition

PHIVOLCS has raised alert level 4 over Taal Volcano (level 5 is the highest); according to government officials more than 100,000 people have been evacuated (as of Jan 15) out of 459,000 populations from the 14km danger zone (17km danger zone comprise 930,000 population). 10km radius high risk zone, under mandatory evacuation include (with respective population): Agoncillo (38,059 pop.), Alitagtag (25,300 pop.), Balete (22,661 pop.), Cuenca (32,783 pop.), Laurel (39,444 pop.), Lemery (93,157 pop.), Malvar (56,270 pop.), Mataas na Kahoy (29,187 pop.), San Nicolas (22,623 pop.), Sta Teresita (21,127 pop.), Talisay (48,797 pop.), parts of Taal, Lipa City and Tanauan City.

Article updated: Jan 15, 2020; Jan 19, 2020

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December 7, 2019

Why do people take drugs?

Shallow Focus Photography of Cannabis Plant by Michael Fischer.

The term “drugs” is well known worldwide, it is associated with two words, the “bad” and the “good”. Bad drugs can harm you, while good drugs can cure health problems. One can say that the reason for taking drugs is due to physical and mental pain. For example, if you feel burning hot in your body, you might take a Paracetamol, or if your cough disturbs your daily activity you might take a cough medicine. In other words, good drugs act as a good medicine; it solves the pain making the person healthy again. On one hand, bad drugs acts as a short term solution to the user giving him the feeling of relief and calmness but once the effect is gone, the user feels again the pain and anxiety he wished to escape. 

The difference between the good and the bad drug is that, the latter offers a short term relief but does not cure the problem, leaving the user at the mercy and dependence of the drug. Like any type of addiction, drug addiction gives a person a short term relief (a relaxing feeling) but does not really help the person solve the real cause of his problems and anxieties. 

Take the case of a poor man who has been a victim of drug addiction. A poor man living in a slum area takes a bad drug because he feels unhappy about his life; he lacks financial security as well as food security. He wakes-up everyday seeing the poverty of his family. His insecurity is being fueled further by reality distorted videos and filtered photos he is seeing on social media and television. He feels helpless knowing that he has been enduring his poor circumstance for more than a decade. His neighbor, also a poor guy, tries to offer help and friendship by giving him shot of bad drug. Suddenly, the poor guys felt relieved; calmness and happiness are the words of the moment. But after the effect of drug is gone, reality seeps-in, what was heaven for a while is back to normal they want to escape. Because the poor guy wants to feel again the easiness of being high on drug, he plans to buy another shot. But he doesn’t have a regular job; because of this, he thinks of easy ways to produce money, what comes out of his mind is dangerous: violating the law and committing crimes, he thinks, is the surest way to easy money; he executes the plan with confidence and feels no fear that he will be caught by the law enforcers. 

The case above is not new, a person takes a shot of bad drug in hopes that he will feel better and everything around him will get better automatically; bad drugs can really make a person feel good and happy but it is temporary and it will not solve the root of the problem. If only he can think of good solutions to his financial problem, and there is someone who can provide a helping hand, he might recover. He can then start to build a new life; he will start to feel that he can now change his circumstances; he will start to dream of good things about his family. Once his reality is now his happiness; because he now wakes-up in abundance of food in the table and the sound of laughter of his wife and kids, then maybe and most likely, he will no longer seek the life of a drug addict. 

The use of bad drugs is not only due to financial problems, what is sure is that its use is related to problems in life that causes anxiety. These problems can range from family problems to personal problems. Theoretically, optimistic and happy people are less likely to engage in drug addiction; why, because these people can think of solutions to their problem while maintaining a positive emotion. If a person is happy and optimistic, he is less likely to be anxious. When you are not anxious and you feel good about yourself (about your life) then there is a less chance that you will engage in bad drugs. 

The government, private sector, society, and each and every family has a big part to play in making the reality a better place – this is the only way, and the safest way to solve drug addiction; because no one needs an escape to a daily dose of beautiful reality.

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October 27, 2019

The Origin of Money

Top View Photography of People by Johannes Rapprich.

At some point in time, have you ever thought about why money exists? Have you asked, why use money, why not use leaves, rocks, or other things as medium of exchange – why did we choose money? Where is the value of money coming from? It’s just a paper bill and metal coin, why does it have a value (it’s also digital today; you can’t even hold it, just like air)? Why do we believe that it has value? These are some of the questions I hope to answer in this article.

According to Adam Smith (father of economics), the first wealth of the world was purchased by labour (not by gold, by money or etc.). If you want a house, you have to build it by yourself, you have to labour (work) on your own; you have to source the materials by yourself, plan by yourself, dig and build by yourself. During those days you have to work on your own to build your wealth. Today, if you have money, you can pay labourers (carpenter, mason, engineer, architect, and the likes) to build your house, you can also buy the materials of your house using money.

Barter became a common way of exchange in the past, it’s like you can exchange something you own so that you can get something you need or want in return. If you are a carpenter, you can exchange your carpentry skill for rice grains that was harvested by the farmer. You can barter with the farmer saying that you will do the carpentry of his house in exchange for 10kg of rice grain per days of labour. If you are a hog raiser, you can exchange a kilo of pork meat to a kilo of bread baked by the baker. Thus, you would see that barter involves no currency; barter is an exchange of goods to goods, service to goods, and service to service (goods means products, items, or possessions).

But what if you have one live cow in your possession and you just want to have 1 gram of salt? It would be irrational to slaughter the cow and portion it just for a one gram of salt, or to trade the whole cow for kilos of salt. Monetary (money) system was introduced to solve this problem. There were plenty of monetary measures that were introduced in the past, but the most popular was the use of metals: gold and silver. The reason why metals were used during those times is because these metals are not easy to produce and replicate; a lot of physical labour is required to extract these metals underground. In short, these metals are not easy to get or to counterfeit during that time, which is why they were used as measurement of value (but today there are machines that can be use to ease the extraction of these metals; there are also machines, today, for counterfeiting these metals). 

Simulating the past, green leaves are easy to obtain, I will not trade my harvested fruits for leaves. Rocks are easy to obtain, I will not provide my carpentry skills in exchange for a rock. You see, people will only trade their possession (services and goods) to something that has been laboured. Obtaining rock and leaf requires very little labour at all, while digging gold and silver requires huge amount of labour. In passing, money became light weight for convenience of exchange and ease of carrying; number system was introduced to ease valuation; paper and coin money was created with security marks to prevent counterfeiting. Small metal coins and light weight paper bills became the new money which replaced gold and silver to ease the monetary transactions and exchange.

You might asked, why did we trade the precious metals to small coins and paper bills? Is it not evident that the production of precious metals is more labour intensive than the automated production of small coins and paper bills? We trade the possession of precious metals to coins and paper bills because the government guaranteed that these coins and bills have value. Thus, our trust to the words of the government is the main reason why coins and paper bills have value. The government is saying to the public that we must trust that the money that they produced or manufactured (the currency) has value, and therefore there is always someone willing to labour in exchange for the said currency. Counter intuitively, if you don’t trust the government you will not trade your possession in exchange of the currency (the money). If an ordinary man guaranteed the value of the paper bills, I will not be surprised if no one will use that currency, since trust is difficult to give to a person who has no credibility. At some point in time, the government has proven its credibility by building infrastructure, fostering independence, providing protection and security, imposing laws to maintain peace and order, and facilitating government services. That is why the people have put its trust in the government by using the currency in exchange of precious metals. It is also noteworthy to mention that the value of money is not only base on trust, but also on the quantity of labour it can command. If no one is willing to provide labour in exchange of the money, then money will no longer be valuable. The trust in the government and the existence of labour force is the main reason why money has value. 

Labour force today is no longer confined to human labour, machine can also provide labour. For example, washing machine can provide labour by washing your clothes powered by the electricity. Production machinery can provide labour by automated production of things such as cell phone, laptop, electric fan, bags, shirts, air conditioner, televisions, cars, and many others. Even your smart phone is labouring for you, it is keeping you connected to the world, to information, and to people you love; but this device requires electricity, and the use of electricity requires you to pay money. Your car will labour for you, it will bring you to different destinations, but it will require fuel energy, and obtaining fuel energy requires you to pay money. The use of money is to free us from labour, you pay for a car so that you will no longer need to engage in physical walk; you pay for a house so that you will no longer need to build it by yourself; you pay for a restaurant so that you will no longer need cook the food by yourself; you pay for food so that you would no longer need to hunt for food. People are labouring (working), to obtain money, so that they can free themselves from other forms of labour. As long as there are people and machineries that are labouring (working) and trust in the government remains high, money will continue to be valuable. 

Central Bank is the branch of government that deals with the manufacturing of money. You might ask again, since it is easy to create money by just printing it, why not print trillions of money? Then distribute the money to everyone so that the problem in poverty would be resolve, so that everyone could be wealthy? If you print trillions of money without basis, you will devaluate the money (money will lose its value). As mentioned in the previous paragraphs, the basis of the value of money is labour, thus, printed money that has no equivalent labour has no value. It means that each money in the circulation must have an equivalent labour; giving free manufactured money to someone will be unfair to people who are labouring to obtain hard earned money; giving free money will trigger mistrust to the government (people who are labouring will feel betrayed) and will result to loose of trust in the currency. 

To make the case of devaluation simple, imagine that your neighbour is labouring eight hours a day just to plant rice so that he can earn a good sum of money at the end of the month; while you, on one hand, have been authorized by the Central Bank to print money. You used your printed money to buy your neighbours’ harvested rice grains; your neighbour did not complain since the money he received as payment is authentic. Your neighbour heard the sound of your printing machine; as a result, he discovered that you are manufacturing paper bills. Do you think next time you buy rice grains to your neighbour; would he still exchange his goods for your money? 

Even if you try to convince your neighbour that the printing machine that you are using is the same as the Central Bank and that you are authorized by the Central Bank, your neighbour will start to lose trust in your printed money since he knows that you are just printing it, rather than labouring for it (Why would I trade my goods and services in a money that was just easily printed? I know that he is just sitting all day waiting for his money to be printed). You see, people are accepting money in good faith that it is being laboured. If you print free money and give it to everyone, people will soon discover that some of the money in the circulation has no equivalent labour and soon it will lose its value and confidence. This is the main reason why Central Bank cannot just print money and flood it to the circulation; Central Bank must balance the supply of money to protect the value of money. 

The value of money is just as good as to how much labour it can command; money will not resolve poverty if it has no value.

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October 17, 2019

Why increase the Price of Water?

Landscape Photography of Water Falls by Diana Dorčáková.

There is a reason why utility industry is regulated by the government; water for example is a life blood of the society. If you try to make this industry for profit and purely capitalistic (profit maximization oriented), private business interest might dominate the public interest. Private interest cannot mix with the public interest; private interest is for personal growth while public interest is for everyone’s good.

You see, if you are a leader of a private company, your goal is to make your company grow; the problem arises when you realize that your good is a public good. You realize that water is not owned by your company, it is a public wealth, and therefore you must not act as if you own this resource. You are the distributor of the water; you are not the owner of the water. If the private distributor of the water disregards the interest of the public, then the government must find a way to protect the public interest and the said public wealth (the water).

780% increase in the price of water is a public threat; a private entity exercising its power to the most valuable resource of the earth, saying to the public that I can increase the price of water whatever percentage because I will be fined by the Supreme Court (for almost 1 Billion Pesos) for not complying in the Clean Water Act, and therefore the public must shoulder the burden. Why are you so afraid of the income lost that will be brought by fine? Why can’t you own the responsibility of fixing the problem rather than throw it to the public? In the first place, why are you warning a water price increase in a country with so much supply of fresh water reserved(Philippines Renewable Internal Freshwater resources: 479 billion cubic meters; among top 20 worldwide. Source: 2014 World Bank Data)? Furthermore, you know that water is a public good, water is not for pure profit business; you must use economies of scale if you want to create right profit in this industry; you must expand your service and reach, increase efficiency by lowering the cost of distribution by investing in new technologies, rather than directly increasing the price to increase your profit. You are almost a monopoly, you have less competition; income should not be a problem to your company – then why would you result to price increase?

I hope that this private institution will not add-up to the economic problems of the society. Always remember, that you (water company) have a big part to play in ensuring the good welfare of the public. You are the distributor of one of the most valuable resource of our country; don’t betray your countrymen, just for your own good.

[In reaction to 780% water price increase warning]
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October 9, 2019

Value is different from Price

Close-up of Water Pouring in Glass by Coco Images.

When we think about value, many times we associate it with price (find the synonyms of “price” and you will find the term “value”). We put value to almost everything specially when the price is high - we value land, car, house, and jewelry not only because of its use (or utility), but because these things are considered prize possessions and can command high price. But, is there really a difference between price and value? 

In business field, it could be perceived as a waste of time to discuss the difference between price and value, since both terms are being used interchangeably in the said field. But I think there is a significant difference between the two terms, and I would argue that these terms should not be used interchangeably. Value is synonymous to the terms: "importance", "usage" and "utility"; while price is much influenced by "supply” and “demand". Value answers the questions like: what is the importance of the product? What is the usage of the product? Therefore, value is not easy to quantify compared to price. Price on the other hand is market driven and its numbers (quantity) are readily available in the market; that is, the price of a product might go up or down depending on the bid and offer price in the market.

Theoretically, price in the real world might not reflect the real value of a product. If price reflects value, then high value products must have high price. Hypothetically speaking, food has high value compared to jewelry (food is more important than jewelry); some families would readily trade any jewels to cash so that they could buy a food, yet 1 gram of gold is priced higher than 1 gram of rice. If truly price reflects the value of a product, a 1 gram of gold should not be priced higher than 1 gram of rice. Others might say that gold is more valuable than food that is why it is priced higher! In response, if truly gold is more valuable than food; if say we remove food from the economy (no any food to eat at all), then realistically speaking, miners and jewelry makers will not be able to work because there is no food to bring energy to their body, and as a result, jewelries (gold) will not exist in the market. In this case, I would not say that jewelries are more valuable than food, because the absence of food will result to absence of jewelries; but rather, I would state that jewelries can command high price compared to food. Then again, this example would prove that value is not equal to price in some cases. 

Price is market driven, whereas value is subjective or personal. A carpenter will give high value to a hammer compared to a writer; while a writer will give high value to a pen compared to a carpenter. A technologist will value personal computer compared to a mechanical watch, while a horologist will argue that the art of watch making is much valuable than automated production of computer. On the other hand, price is market driven in the sense that it can be influenced by supply and demand. Given that the supply of a product is in normal state, an increase in demand will push the price up; if consumer demand for a product is in normal state, and the supply of the said product declined – then price will go up as well. As expressed previously, it is evident that the Law of Supply and Demand is very applicable in determining prices.

Factors of production can also affect the price. Particularly, the cost of labor, land, and capital has direct effect on price; an increase in the cost of production will increase the price of the product. Factor of production is also the reason behind the Water-Diamond Paradox. Water-Diamond Paradox argues that water is more valuable than diamond and yet diamond commands higher price. The reason behind why diamond is priced higher than water is because a lot of labor and capital is required to extract diamond underneath the ground. On the contrary, water above the surface of the earth is so abundant that fewer labor and capital is required to extract the said resource. But again, I will reiterate that even though diamond commands higher price than water, it is unquestionable that water is more valuable than diamond; because non-existence of water will result to depletion of life and thus will result to in-ability to extract diamond. 

The value of our possessions should not be based on price, but rather, it should be based on how these things enhanced our life and well being.

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September 26, 2019

Everything is a Theory unless it’s a Law

Blue Jelly Fish by Public Domain Pictures.

When we talk about things, when we hear statements, we have the tendency to believe that the information is true specially when the information is coming from a reputable people and organization or the information is coming from a friend or a family. Little do we regard that in this world that we are living, there are only few universal truths (laws), and that most of the statements we encounter everyday are just theories. If you are a college (or high school) graduate you would probably know, that in science, there are only few “laws” that we can call. We classify a statement as a law if it is unquestionably true, which means that the statement has been proven scientifically many times using statistics, mathematics, and experiments; and no test or evidence can proved that that the statement is false. 

Laws are being developed with the help of data and empirical evidence using observation and experimentation, in this sense, a law is a discovery rather than a creation; laws are already existing waiting to be discovered. In general, every statement can be a law as long as you can prove that your statement is universally applicable to everything using legitimate evidences. In economics we have – Laws of Supply and Demand, Gresham’s Law, Say’s Lay, Law of Diminishing Marginal Utility, Ricardo’s Law, and Okun’s Law. In physics we have – Conservation Laws, Laws of Classical Mechanics, Laws of Gravitation and Relativity, Thermodynamics, Electromagnetism, Photonics, Laws of Quantum Mechanics, and Radiation Laws (to physics students: please correct me if I’m wrong or if I forgot to mention a law). If you observed, economics and physics school of thought have existed for many years and yet, the laws that each school holds are less than your fingers. So why do we in some cases, believe in people (or information) as if they were speaking of the universal truth? While the fact holds that universal truth is hard to achieve? I think rather classifying information as universally correct, we should be quite critical, and classify most information as “theories” (or hypothesis) subject for testing. It goes with the saying that what can be true to you might be false to others, or what might be helpful to you might not be helpful to others. Therefore, people who claim that their statement or idea is universally accurate should be ready to defend their claim using unquestionable empirical evidence. 

In this era of information technology, we are faced with abundant information which can harm or help us or can just drain our time and energy; hence, it essential for us to have a critical mind so that we can decide carefully which information is true or false, important or not-important. Knowing that discovering universal truth (law) is not easy (you will become a Nobel prize winner if you discover one), that it requires a lot of labor, evidence, and experimentation; makes us humble enough to recognize that some of the knowledge that we acquired, and opinions we hold, are just intelligent guess.

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September 20, 2019

The Minimal Economy

Person Taking Picture of Beige Building Using Black Smartphone by Vlad Bagacian.

The term “minimalism” is not new to people nowadays, which means living productive (having a decent life) using less stuff (things). In present time, the minimalist trend has crawled in our economy (developing and develop countries). In the past, you need books, papers and pens to study, now you only need a mobile phone or a tablet to do all the studying stuff. In the past, we use television, telephone, pager, newspaper & magazine, calendar, alarm clock, game console, stereo, MP3 player, CD/DVD player, FM radio, camera and video recorder separately; now, all of these stuffs are packed in your smart phone. You don’t need to buy a car to have a car, nowadays; you can use your phone to book a car ride. You don’t need kitchen equipment to eat a decent food; with just one press in your phone, someone is ready to cook and deliver a food for you. We are now in an era of “dematerialization” with the help of advance technology. And, who needs a wrist watch nowadays - it’s also in your phone.

From big vacuum tube TV, we are now using infinity display smart phone, which are using high definition screen technology and using less energy. As technology advanced, efficiency will increase, from producing a 20 km/h metal bicycle, new technology is enabling us to create a 50 km/h bicycle that is made from carbon. The bicycle materials are getting light, aerodynamic, durable, and less costly with the help of new technology and engineering. The future of cars will soon go to this direction, carbon frame engineering, powered by electricity and smart technology.

As cities progressed, walk-ability will be one of the standards of a modern city, soon, people will use less cars and more people will walk as the proximity of their homes get close to their work and walking paths get comfortable and safe. Houses can now be prefabricated using light materials; development in this segment will enable high quality low cost housing. Vertical farming is also revolutionary; space will no longer be a problem for agriculture development. Lighting systems is getting more efficient, the use of “led light” provides better lighting using less energy. Renewable energy development will also pave the way to abundant energy supply which will result to low cost clean energy. Even the use of paper bills and coins are getting less, we can now use our phone to pay bills and buy things. 

Tech evolution is people empowering, getting more productivity using less resources; and less stuff means less waste.

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September 11, 2019

Is Stock Market Gambling?

Ace of Spade Playing Card on Grey Surface by Pixabay.

I was listening to an economics podcast in US and a guest commented that stock market is gambling. I would argue that it’s not, why, because gambling is a “zero-sum game” where in a players loss income is equivalent to other players gain income. Stock market is the opposite; your winning income depends on the success of other stock players – prices of stocks would most likely go up if the stock market players perceive that their colleague player will not sell at a low price. Thus, for a stock player to win, it is one of the essentials that his colleague must also win. 

There is also a big difference in the length of playing in gambling and stock market. Gambling is like, you bet your money that the coin will be heads and in a flip of a second, it turn out that the coin is tails, and in a flip of a second you lose all the money you bet. Stock market is not like that, or investing should I say. In investing you bet your money in a company you think that will be profitable in the future - you make a research, analyze trends, the financials, the news, and when the prices go down – you don’t lose your money as long as you don’t sell your shares of stocks. You can cut-loss, but unlike gambling, you don’t lose all the money you bet. 

This simple fact reminds me that, traders and investors should not go to stock market as if they are gambling, because stock market was established so that everyone could win – it is even called a “security” and well regulated by the government. It is also good to mention again that stock market is not a “zero-sum game”, which means your win is not another’s loss, in the long run, if everyone wants to win in stock market, a win-win mindset must always be present – not a gambling mindset.

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