The Lions at the Gate

(Click on the links for more details)

Until what point in the future can the world sustain a regime of"
1.)  A strong population increase;
2.)  Steady price escalations, and;
3.)  Declining incomes?

In eastern philosophy, Lions represent nobleness and dignity.  They are thought to protect the truth and keep off evils.  For the Chinese, the lion has become a symbol of bravery, power and good luck.  Thus, stone sculptures of a male and a female lion are mounted at the gates of family homes of Chinese, business establishments and government buildings.

Lions on four feet run faster than humans with two.  When the lion slows down and man's pace picks up, the symbolism is that there is a net accumulation of good things.  If man stops running, the distance between him and the lion widens.  In order for man to get back to where he was with the lion, he has to run double time.

Inflation:  Fewer, Smaller, Leaner, Lower, Weaker, Slower and Shorter

Inflation has stretched the distance between the lion and majority of the population.  Even if the ordinary man today runs double time, catching up is an uphill battle.

The first Filipino who fought against foreign domination was Lapu-Lapu in 1521 and rightfully, he was on the one centavo coin until inflation effectively placed the coin out of circulation.

Economists cite the excessive growth of the money supply as the main cause of inflation.  In times of war, governments print more money to finance it, fueling inflation.  In times of calamities, fear and supply problems inflate prices.

In layman’s terms, inflation is the tendency by a sector or sectors in the supply chain to take advantage of a high demand to increase profits.

The price increase in flowers in Dangwa in Dimasalang, Manila on All Soul's Day is the simplest analogy.  If we put together Valentines, Graduation, Mother’s Day and All Soul’s Day a day apart, we can expect a sustained period of high prices of flowers.

The immediate result of inflation is a loss in the purchasing power of money.  In every year that there is inflation, the number of things that can be purchased with P100 gets fewer, smaller, leaner, lower, weaker, slower and shorter.

Inflation is better explained if we tell the story of human population growth.

The Wordwide Human Spike

The steep spike in human population growth is the single biggest contributing factor to inflation.

From the time Adam and Eve first appeared on earth about 200,000 years ago, until the 19th century A.D., population growth of their descendants, if plotted on a graph, will be on a slope that is almost flat.

YEAR - POPULATION

200,000 years ago - 2
1 AD - 250 million (Around the time of Jesus)
1800 - 1 billion
1900 - 1.6  billion
1962 - 3 billion
1985 - 5 billion
1999 - 6 billion
2011 - 7 billion.
2015 - 7.2 billion
2025 - 7.9 billion (That is only fourteen years from now.  Easily within our lifetimes.)
2050 - 9.3 billion (If you are forty years old now, you will be 79 years old by then.)
2083 - 10 billion (All those reading this will be gone, somewhere 6 feet below.)

After the 19th century, the graph, if continued, plots a course that is almost vertical.

It took almost 200,000 years until 1900 for the population to reach 1.6 billion.  It will take only 183 years for the population to reach 10 billion.

By 2050, the Philippines will have 128 million people, becoming 12th most populous nation.

Population Growth Fuels Surging Demand

From the year 1900 to the present, demand for food, clothing, shelter and other goods has more than quadrupled.  High demand increases prices.

Household consumption is the biggest driver of demand.

The runaway population in some countries are sweet music to western countries as their goods are consumed by the masses of these countries.  Procter and Gamble, Johnsons and Johnsons, Unilever, Coca-Cola, Colgate-Palmolive, Bayer and Nestle are some of the multi-nationals operating in the Philippines for more than 50 years now.

With higher costs, these companies have become creative and have packaged their products to make them affordable to the poorest of the poor.  For example, a 3ml sachet of deodorant costing P6 is really 39% more expensive than the 25ml bottle costing P36.00 and yet it sells because that is only what the poor can afford.

Inflation diminishes the amount of goods we can buy but multinationals are quick to capitalize on a growing population with a lesser amount of disposable income.

Less income used to drive prices down but this is now counter-balanced by a strong growth in population sustaining demand.

Lately, Vaseline shampoo introduced its P2.50 sachet.  Once the most common of products become retailed at P1.00, we will know we have arrived in the future.

Inflation is also better understood if we tell the story oil.

The Price of Oil Mirrors Population

The prices of most economic goods today are hinge on the price of oil.  Everything that uses oil - transportation, factories, power barges, from agriculture, to manufacturing and marketing factor the cost of fuel in their cost.  When the price of oil moves up, most of everything else follows.

However, when the price of oil goes down, prices of goods do not go down proportionately because other factors remain - salaries, rent and lease, cost of land and the opportunity of businesses to increase profits.

There is a strong relationship between population and the price of oil as illustrated in the following graphs.

On a percentage basis, the price increase of oil from 1900 to 2010 surpasses the increase of population during the same period.

1972 to 1980 (Oil increased from $3 to $35)

Oil prices quadrupled from $3 in 1972 to $12 in 1974 because of the Yom Kippur War when Israel was attacked by Egypt and Syria and supply became short.  The Iranian revolution in 1979 and the Iraq invasion in 1980 lowered global oil production by 10% and oil prices almost tripled from $12 to $35 per barrel (one barrel is equivalent to 159 liters).

1980 to 1986 (Oil decreased from $35 to $10)

With high prices of oil and supply problems, many companies across the world, particularly in the US, scaled down production or closed altogether.  The steep drop in demand caused the price of oil to retreat to $10.

1986 to 2010 (Oil increased from $10 to $87)

From 1986, the prices of oil shot through the roof.  Prices even reached an all-time high of $147 in July 2008.

Clearly, the price of oil falls back when demand goes down but it quickly catches up where it left of when things normalize.

Friends and Foe and Friends

The history of the business of oil is very interesting.  It has become the single most important commodity in the world.  Oil moves the world both in peacetime and in war.  

Oil is evolving new adversaries and new alliances.  The Russia and America were allies during WWII but when the USSR consolidated the Baltic states after WWII, it became a threat for oil, thus the start of the "Cold War" and the proliferation of nuclear arms.  When the USSR's economy crumpled, eventually disbanding in 1990, Russia and America signed nuclear reduction treaties.  Now, tensions are again up.

Islam was historically at odds with Christianity through the Crusades which lasted for more than 700 years, but now the face of the enemy for some in Islam particularly in the Middle East are the progressive countries.

This Oil is Mine

The search for oil and its protection guarantees that future prices of oil will not come cheap.

The world oil reserves are estimated to last another 40 years or until 2051.  Nations are now scrambling to secure existing oil deposits and find new ones.

The invasion of Iraq on Kuwait gave the US and its western allies the golden opportunity to seize Iraq's oil.  The pretext was to stop the Weapons of Mass Destruction (WMD) of Saddam Hussein.  No WMDs were found.  If the Navy Seals can enter Pakistan at will and surgically take-out Osama Bin Laden, there was no reason that the US would not know that Saddam Hussein had no WMDs. 

"Do not press an enemy at bay." - Sun Tzu

After Iraq and Libya, the West is now imposing a series of sanctions against Iran for its nuclear activities.  The existing trade sanctions and additional ones will make it hard for Iran to sell oil which will drive the government to bankruptcy and this thought is giving the leaders of Iran severe paranoia.  Should a full-blown crisis ensue, the West will have another window to place under their wings Iran’s oil fields but maybe at a greater price.

All eyes are now on the South China Sea.  It is also believed to hold at least 80% of the oil reserves of Saudi Arabia.  Currently, Malaysia is the largest oil producer based in the South China Sea.

The Chinese government is steadily building up its military to protect its claim in the South China Sea.  China acquired a Soviet aircraft carrier hull named Varyag, completed it and it is now undergoing sea trials.  Among the other countries in Asia, only Thailand and India have aircraft carriers.   China has developed its own stealth fighters and is developing advanced carrier-based jet fighters and "carrier-killer" ballistic missiles.  Recently, Chinese President Hu Jintao urged the navy to be prepared for war.  This will be another "cold war" in the making.

Like in basketball, the US is starting to box out China in the South China Sea.  The former US ambassador to the Philippines was cozying up with the rebel MILF in southern Philippines to the point of favoring its dismemberment from the Republic of the Philippines through the MOA-AD which the Philippine Supreme Court voted as unconstitutional.  It already has 50,000 soldiers permanently stationed in Japan.  Recently, inspite severe budgetary constraints at home, Pres. Obama announced that he plans to deploy 2,500 soldiers in Australia.

When the Philippines and China had a war with words over the South China Sea in the middle of this year, America was quick to flex its muscle and the aircraft carrier, the USS Carl Vinson raced halfway across the globe to the area right after it figured in the sea burial of Osama Bin Laden in the North Arabian Sea.

For the Philippine's claim in the South China Sea, the US sold a decommissioned patrol frigate to the Philippines for P450 million.  Originally commissioned in 1967 by the US Coast Guard and retired in March 2011, the storied frigate is now renamed BRP Gregorio Del Pilar.  Operational costs run up to P60 million a year.

The world is safer because of US presence in various parts of the globe but other countries are seeing it as a threat particularly when the underlying theme is oil. Of its almost 1.6 million soldiers, 20%, or more than 300,000 troops are stationed outside US soil.

The "Shock and Awe" of the Gulf War was a battle for oil but it was also the single reason why America is now under mountains of debts.  When Pres. Bill Clinton left office, there was a budget surplus, meaning the US Federal government was earning more than it was spending.

Costs of producing oil now does not only include investments in infrastructure but they entail massive resources from governments which has to be recovered somehow.  The armed conflicts in the Middle East are related to oil.  There are various estimates and some say there are 40,000 American soldiers stationed in the region with 23,000 troops in Kuwait alone.  In Asia, it has thousands of troops permanently stationed in Japan and South Korea.  In the Philippines, a number of Americans soldiers are stationed in Zamboanga City.

The South China Sea and Iran are the latest flash points in the world’s hunger for oil.  Armed confrontations are not a far-fetched reality.

This set-up makes oil more expensive looking forward.  Inflation is not far behind.

The Clock is Ticking

Independent of oil is another major reason that foster a continued regime of high prices on food and other agricultural products.  The increase in population reduces the area of arable land (the figure for world population is off).  Lesser food supply results to higher food prices.

More people require more dwelling spaces and more leisure spaces.  Real estate developments present higher returns than agriculture.

A recent example here in the Philippines is the bidding out of the 103-hectare Food Terminal Inc. complex in Taguig where Ayala Land Incorporated (ALI) is a front-runner for a joint venture.  ALI is known more for real estate development than agricultural production.  Should all-systems go, we will soon find out in a decade its effect on our food security.

Sometimes it doesn't make sense.  Some countries are hot on real estate development in their own backyards but are scrambling to lease arable land in other countries .  China wanted to lease a large portion of our land for that purpose.  Somewhere in the news, a middle east country has reportedly succeeded in leasing land in the Philippines for their food production but until the Freedom of Information Bill is approved by the Philippine Congress, we may never know how much of our country is now enjoyed by other countries.

Overpopulation, Floods and Climate Change

The increase in population also increases our carbon footprint.  Overpopulation has a direct hand in global warming and the reduction of our forest cover.  Floods in Philippines, Thailand and Ireland were the latest examples.  The unprogrammed damage of a single typhoon in the Philippines results to additional loans from IMF and the World Bank .  In the US East Coast recently, a snowstorm so severe cost them millions of dollars.

Aside from abnormal rainfall, floods are also caused by fast run-off water from barren landscapes overwhelming natural aqueducts like rivers and existing drainage systems in metropolitan areas.  If the velocity of water from mountains and other high land forms are slowed down by a forest cover, water accumulated in cities will have time to subside.  A forest cover also increases the level of the water table underneath the soil.

The Food and Agricultural Organization said that the Philippines became the first Asian country to wipe out its forest wealth after World War II.  The reduction was fastest during the time of the late Dictator Marcos which saw the forest cover being reduced from 78% to 27% in 20 years.

Big-time illegal loggers under the blanket of corrupt government officials plundered our forest cover in less than half a century.  No big fish has been jailed in the Philippines and yet the pillage have cost thousands of lives lost and billions of pesos in damage.

Barren mountains of Bukidnon.  Pulangi River in Bukidnon is a major Tributary of the Rio Grande River in Cotabato
(Source: Bukidnon - Where Time Stalls)

We are bearing the brunt of the effects.  Floods in Cotabato City are traced from tributaries of the Rio Grande, like the Pulangi river, from barren landscapes in Bukidnon.

Some parts of the Sierra Madre Mountain Ranges are already barren.
(Source: Just Hangin')

Floods in Metro Manila can be traced to water from the Sierra Madre Mountain Ranges emptying into the Marikina River and subsequently into the Pasig River.

Diminishing food supplies are not only inflationary but also catastrophic to the environment.

Economists Always Push for Growth

At home, the family expects the breadwinner to have a salary increase every year, more so if a baby is expected.

It also holds true for governments.  The Philippines targets a growth of almost 5% this year.

In the middle are business entities.  Every company in the world has revenue growth targets.  Corporate CEO's are gauge by their ability to grow the profit of their companies for investors.

Dr. Bernardo Villegas, a noted economists sees the Philippine economy to grow by 6% this year.  The National Competitive Council headed by Guillermo Luz said that the Philippines is moving forward in terms of business competitiveness but that it is not moving fast enough to keep pace wth the other countries with which it is competing against.  Alan B. Krueger, chairman of the US Council of Economic Advisers  also said, "What I take from this (US jobs for October 2011) report is that the economy is moving in the right direction, but its not moving there fast enough..." 

Business growth is always in the mindsets of the economists of the world, nevermind that many people get left behind as is the situation of most economies today.

Economic growth always increases fuel demand.  Increased fuel demand equals increase in fuel costs.  This tows the prices of many economic goods leading more people grappling on how to make both ends meet.

A Regime of Inflation is Here to Stay

America is currently the biggest economy in the world.  A 5% economic growth in America will dramatically increase demand for oil than a 5% economic growth in the Philippines.

Many nations are deep in debt.  America is the biggest debtor in the world in absolute terms.  Take note that at the bottom of the linked site, the capital of small businesses are going down.  This is alarming as small businesses represent the middle class and they are being pushed to the fringes.  Once this happens, widespread discontent will set-in.

America's recent problem with its debt ceiling has made loans a little bit expensive in terms of interest cost.  It needs to make lots of money to:  1.) pay off its debt, 2.) pay off the interest costs, and, 3.) maintain its government operations.

To do this, America is pushing for free trade agreements with some countries so that it can sell more of its goods at a faster rate, stimulate its economy and increase its tax base.

Cash-rich China is the top-nation creditor of the US.  Together, China and Japan are deep into financing the day-to-day operation of America.  The downgrade in America's credit rating has China alarmed.

Prior to 1993, China was exporting oil but in 1993, domestic demand exceeded production.  Last year, China surpassed the oil consumption of America.  China needs to have a firm handle on oil supplies as its demand continues to grow.  One of its umbilical cord is a 4,700 km oil pipeline from Siberia in Russia to Daquing in China delivering 300,00 barrels a day.  Venezuela is shipping 410,000 barrels per day to China.  As its economy gets bigger, it is now seen a a major threat in the thirst for oil.

China is the major supplier of goods worldwide.   The West is primarily responsible for the acceleration of the Chinese economy.  Should there be inflation in China, prices all over the world will rise.  The continued investments of American companies in China will make the Chinese economy stronger.  

It used to be that when America sneezes, the world catches cold.  Now, if ever China sneezes, the rest of the world catches fever.

The big appetite for oil by these two economies are making it hard for the price of oil to drop in the future.

A Regime of Debt

SMALL
Financial institutions in the Philippines, from the lending investor, to pawnshops, to commercial banks derive income mostly from lending activities.  They would want to maintain a healthy amount of receivables to sustain their income.

Public school teachers in the Philippines earn roughly P18,000 ($418) per month.  However, a growing number of teachers have take home pays of only $70 or the equivalent of P3,000 every month because of loans from banks.  This is already equivalent to the take home pays of tinderas in Colon in Cebu who only finish high school.  With the yearly increase of teachers pay at only 1.7% and the yearly inflation rate at almost 5%, it won't be long in the future before the net take home pays of public school will turn to eggs.  That is, nada, zero, zilch!

MEDIUM

Financial Institutions also bankroll investments in oil from the upstream (exploration, rigs, storage facilities and refineries) to the downstream (distribution facilities, depots and gasoline stations).  Banks who finance these investments don't want a decrease in oil prices as repayments might be impaired.

With a prognosis for inflation, companies are locking in loans to take advantage.  A review of other Philippine conglomerates indicate increases in debts annually due to expansion programs.

Overseas, Royal Dutch Shell grew its debt from $15.8 billion in 2006 to $44.3 billion in 2010.  In the same period, the world's most valuable company, Exxon Mobil increased its own debt from $8.3 billion to $15 billion.  For BP, from $24 billion in 2006, it ballooned to $45.3 billion at the end of 2010.

LARGE

The World Bank and IMF have large debt exposures in many countries around the world, they would prefer that countries achieve economic growth, otherwise, they will be left with empty bags.  Being financial institutions, they need to maintain a healthy amount of receivables at any given time to maintain their profitability.

Every year, more countries increase their debt piles.  The Philippines is paying approximately P1.6 million per minute.  As debts grow bigger, pressure mounts for countries to increase their economic growth.  Again, we are back to the inflationary chain.

Higher debts equals higher costs equals higher selling price equals inflation.  The Philippine public school teachers and many Philippine corporations mirror the economies of most nations mired in debt.

As reported by the Wall Street Journal, most governments, particularly in Asia are on a debt binge.

Government Stimulus

When business growth is down, governments prop up the economy by giving money to its citizens to maintain the sales of businesses and so that demand for consumer goods will continue and prices will not drop.

Here in the Philippines, we have the CCT or the Conditional Cash Transfer which have released billions of pesos to the poorest of the poor.  P500 for each household per month and P300 for each child, maximum of 3, who has at least an 85% attendance in public schools.  A family with three children is expected to receive P1,400 ($33) per month.

Tracing the money flow, a family may opt to use its monthly dole-out for a sack of rice costing P1,700.  That is as far as the poor people will benefit.  After that, the billions released to the Filipino poor will be siphoned off by businesses and the government gets to collect the taxes to pay for the loan which financed the CCT.

During the subprime mortgage crisis after the collapse of Lehman Brothers, the US government pumped in a staggering, mind-boggling, eye-popping $787 billion into the US economic system, bailing out distressed companies by giving them loans and sending checks to its citizens to sustain the velocity of consumer goods.

Circa 2011.  US unemployment rate is still high at more than 8% (the financial sector is now taking a hit), the number of US poor has increased, America reached its federal debt limit but the US companies bailed-out are now reporting huge profits, their CEOs salaries back in their heydays.  And yet, the US is still left with the burden of $787 billion which it borrowed and the overall economy limping after a downgrade.  If Filipinos have Marcos (Marcos 2) (Marcos 3), they are also now cracking down on their own.

Economic stimulus is a high stakes gamble.  The stimulus in the Philippines is having some positive effects but for how long, economists can only guess.  Oftentimes, it is just a window-dressing for the next loan availment.

How Self-Interest Becomes National Policy

In most countries,  big businesses help decide national policies.  America is an example.

Here in the Philippines, the Reproductive Healthcare Bill (RH Bill) is facing a tough battle in congress.  The bill seeks to give mothers informed choices regarding childbirth with the aim of slowing our population growth rate.  The Catholic Church is lobbying against it.  The Church sees no problem with the current population of the country which is around 94 million and growing.

Simply Duanting:  No End in Sight

Gawad Kalinga and Habitat for Humanity are already pitching in providing free shelters for squatters but the task is overwhelming.  Many non-government institutions are helping squatter colonies, but how many have they lifted out of poverty versus the new ones born into poverty in these communities.

Media have their own: GMA-7’s Sanib Puwersa and ABS-CBN’s Halad Kapamilya.

Somewhere in the news, a priest formed a group called Sea Knights and scuba dives to clean the ocean floor of garbage.  Can this really match against the total amount of garbage being thrown to sea daily?

The Pasig River Clean-up Program has been launched, relaunched and relaunched a thousand times but has it significantly cleaned up the whole stretch of this once majestic river?  We've also lost count of the programs launched attempting to clean the Manila Bay of garbage.

If the story of poverty is a book, these efforts may hardly fill a page.

The efforts are good but it cannot put an end to poverty unless population continues to grow and inflation continues to increase. 

Testing For A Critical Mass

At what point in our future history will the Philippine Catholic Church admit that it was wrong - when our population will reach 100 million?  120 million?  150 million?  Or, when anarchy will already reign in the streets?

A rapidly growing population and inflation increases inequality.

Mass actions start from a critical mass and triggered by a catalyst.  Think of EDSA, Egypt and recently, Libya.

At EDSA, the assasination of Ninoy Aquino was the catalyst.  The critical mass was 20 years in the making.

The Occupy Wall Street movement is test for a critical mass.  It is already a symptom, reminiscent of the 1st Quarter Storm under the Marcos Dictatorship.  The American government cannot underestimate this movement, or, one day, it may wake up to see that its greatest enemy is internal. 

Overpopulation and inflation are driving many middle class families to the fringes of poverty.  A huge under-privilege population is a dangerous critical mass.

Honey and Peanuts

Why pay honey when there are many scrambling in line for peanuts?  Population growth drives wages down.  Countries with high population vis-a-vis their economic size tend to have lower wages.

Jobs will never return to America as lower wages elsewhere have huge advantages in the bottomlines of American companies.

Businesses have managed to squeeze the paychecks primarily by contractualization and business outsourcing.  Western companies have transferred production to China where labor is cheap, very cheap.  Foxconn Technology Group, the Taiwanese  manufacturer operating in China makes more than 50% of the world's electronic service parts for Apple's Ipad and Iphone, Dell, Nokia and Samsung and other brands, hire underage workers as young as 12 years old in 14-hour shifts.  Dirt-cheap salaries in this factory make suicide rates high such that nets were installed around buildings to catch would-be victims.

BPO's like call centers have been outsourced to the Philippines, India and other countries where labor is also cheap.  Our call center agents here in the Philippines earn around $400 per month or about P18,000.  However, their counterparts in western countries can easily earn twice that much.  The savings for US BPO companies are big!

Here in the Philippines starting October 1, 2011, PAL outsourced majority of its ground personnel.  Employees now receive 40% less in salaries.

Major retail and supermarket stores and fastfood chains and factories in the Philippines already outsource their cashiers, waiters, factory workers and other personnel.  You name a major supermarket or a department store and most likely, their personnel are sourced through a manpower agency.

Manpower services is now a sunrise industry.  The current population growth in the Philippines assures companies of a steady stream of applicants willing to work on a 5-month contract.

Digging One’s Grave:  Spend More, Borrow More

This year, most of the economic growth forecasts of other countries, even China (from 9.8% to 9%), have been downgraded.  Many countries are deep in debt.

If the Philippine says that it's projected budget deficit this year is P300 billion, that means our total debts will grow by P300 billion this year.  If the projected deficit next year is P250 billion, total new debts in only 2 years is P550 billion.  The Philippines have been on a deficit spending for the past several years, spending more than it earns and availing of loans to fill the gap.  Right now, total Philippine debt stands at P5.144 trillion, or, US$ 111.51 billion.

It may be deliberate mismanagement as many individuals get to enrich themselves in the process.

At a time when Athens and Rome have to apply severe austerity measures in order to avoid default on their public debt, our economists, like Solita Monsod, and lawmakers, like Edsel Lagman, are going in the opposite direction.  International lenders of Greece and Italy are demanding more tax increases, more wage cuts and massive lay-offs in government before they will grant additional bail-out money.  America, the world’s largest economy have problems with their debts.  Must the Philippines reach that point, too?

Surely, our economists know that severe austerity measures are worse than a slow growth.

Have our economists and lawmakers plotted the time in the future when we will finally contain our deficit.  We cannot borrow and borrow and not think of the time when we can start repaying our debt.  Isn't it that a simple borrower of a bank is time-bound to pay his debt?  Shouldn't that be also the mindset of nations?

If it Ain't Broke, Don't Fix It

Even with the calamities that flooded Metro Manila and parts of Luzon, judge for yourself:

Listed Company	Net Income for 2011
San Miguel Global	1st Half: P7.7 billion;  up by 72%
Metrobank	1st Half: P6.1 billion;  up by 45%
Ayala Corp.	1st Half: P4.9 billion;  up by 12%
San Miguel  Corp.	1st Half: P10.8 billion;  up by 72%
Ayala Land	1st Half: P3.38 billion;  up by 35%
Globe Telecom	1st Half: P2.51 billion;  up by 19%
Eton Properties	1st Half: P417.9 million up by 10%
Citiseconline	1st Half: P182.3 million up by 66%
Petron Corp.	1st Half: P6 billion;  up by 105%
Total Phil. Banks	1st Half: P51.9 billion; up 28%
SM Prime (SM Malls)	3 Quarters: P6.41 billion; up 14%
PLDT	3 Quarters: P30.6 billion; down 4%
BDO	3 Quarters; P7.6 billion; up 19%
Bank of the Phil. Islands	3 Quarters: P9.6 billion; up 6%
Philex Mining	3 Quarters: P4.35 billion; up 106%
PNOC-EC	3 Quarters; P2.46 billion; up 55%
Phoenix Petroleum	3 Quarters; P417 million; up 61%
Security Bank	3 Quarters; P4 billion; up 21%
SM Dev't. Corp. (Real Est.)	3 Quarters; P3.1 billion; up 51%
Metro Pacific Investment	3 Quarters; P3.44 billion; up 33%
Atlas Consolidated Mining	3 Quarters; P2.64 billion; from P47M
Unionbank	3 Quarters: P5.4 billion; up 28.5%
Meralco	FY Forecast: P14.5 billion; up 19%

The figures above are quite impressive considering that elsewhere, other news are negative.  In the 1st three quarters (January to September), total exports fell by 3.1 % from $38.362 billion in 2010.  Foreign Direct Investments (FDI's) went down 19.2% to $810 million from 2010 figures.  10-months car sales are also down 2.4%.

The surge in our economy is fueled by consumer spending partly attributable to the Conditional Cash Transfer implemented by the Aquino government.

The President has demonstrated that the Philippines can survive by belt-tightening and still become a model for economic management in a short span of time.

The financial results of companies reinforce the idea that the economy is only 20% government and 80% private.

Critics are urging the government to exhaust the P300 billion programmed overspending for the year.  Who stands to gain?  Juan de la Cruz or big-time business conglomerates?

If we release so much money in the system all at the same time, demand will go up contributing to inflation and we already know who is at the losing end.

Mentality of G-R-E-E-D

Our Honoroble Senator Edgardo Angara mirrors the thinking of big-time business when he welcomes the increase of the world population as it reaches 7 billion.  He said it is a source of opportunity!  For whom?

In a recent speech at a UNESCO gathering in Paris, France on September 28, 2011, he said the Philippines should find ways to tap opportunities a large population offers.  He said, "What these figures underscore is the imminent opportunity for dozens of developing nations to ascend the economic ladder and realize a better quality of life for their peoples."

The Philippine population is expected to reach 103 million within 4 years or as early as 2015.  

Having been in power for a long time, our politicians have had all the chances to tap opportunities but they seem to miss the boat each time.  When the population will reach 8 billion, we will hear again the same kind of speeches from the same politicians if they will still be around by that time.

Must government programs always start from scratch?  Isn't good governance a perpetual process.  Our lawmakers said before that the EPIRA and WESM will lower our electricity rates... (huh!).  Meralco is now boasting of a full-year net income of P14 billion.

Known more for being a perennial debt-laden company than a competent one, the National Power Corporation is again planning to raise P3 billion in new debts.  Many exporters are now planning to transfer to Vietnam and China because we have high electricity rates.  It's not just a hook, line and sinker thing anymore.  It's a hook, line, sinker and the fishing rod.

Sen. Angara should instead direct his attention at Philippine's backlog on the following:  good governance, rice production, fish supply, teachers, classrooms, books, teacher's chalk allowance, classroom benches and tables, mass housing, prisons, cemeteries, good roads, airports, energy (and how to bring down the cost), justice system reforms, law enforcement, public health benefits, public hospitals, mass transport systems, traffic solutions, reforestation, flood control, transparency measures, anti-corruption measures, salary standardization, anti-trust laws, business competitiveness reforms and pension funds.

Our government officials become exempted from inflation when they reward themselves with overflowing remuneration for doing what an average man can do.  They are callous-face when they think about the welfare of their constituents once every three years during elections.

The shout of their empathy rings hollow to the squatter whose stomach is numb by ulcer.

Arroyo's government borrowed P10.7 billion on October 16, 2001 through the controversial 10-year PEACe bonds to fund poverty alleviation efforts.  On maturity date which was last October 16, 2011, the government paid investors P35 billion.

On maturity date, Poverty has gotten worse than in 2001.  Investors, most of them financial institutions, are now fighting tooth and nail, even paying for full page ads in major newspapers costing at least P200,000, for them not to pay the withholding tax amounting to a total of P5 billion which they said was promised then.  Who won?  Who lost?  You judge.

Outpacing the Lion

Man is the only living thing capable of accumulating personal wealth a million fold versus what he can actually personally consume in his remaining lifetime.

The irony is, he cannot bring with him even the shadow of a single cent or centavo when he is finally inserted into his crypt.  The Egyptian pharoahs tried it but their wealth were only looted in succeeding centuries and worse, they became mummies!!!

Christmas used to be felt at the start of the "ber" months which is September as Filipinos are noted for having the longest Christmas season in the world.  Not anymore.  December is starting yet many houses and business establishments have not been decorated yet.  The last time the season started promptly in September was during the administration of Fidel Ramos.

Costs are increasing but the income of the majority are diminishing.

The Occupy Wall Street movement is a very worthy cause.  They represent the sentiments of majority of human beings on Earth.  That and the recent protests in Athens, Greece may foreshadow the the tipping point of capitalism.

Policies of nations may not change but people over the centuries have demonstrated that they can effect meaningful change.  This has been demonstrated recently in Israel when the prices of cheese skyrocketed.  Their citizens with the help of Facebook threatened to boycott cheese.  This has been called The Cottage Cheese Protest.  This forced the three major dairy companies to reduce cheese prices by 25%.  They played by the rules of business:  Supply and Demand.

However, the single most effective way we can outpace the lion is actually within our control.

Birthrate should be at replacement levels.  A couple must not have more than 2 children.  Think of Lou Salvador, Sr. (70+ children), Ramon Revilla, Sr. (70+ children) and Dolphy (20+  children).  Colonies of informal settlers (i.e. Squatters) should be flooded with condoms and other legal forms of contraceptives.

Minimize your consumption of oil.  If you plan to to buy an SUV, consider buying a car wth an engine displacement of 1.8.0L or less.  This will half your consumption of fuel immediately!  In Europe, they are cutting their dependence on oil by having car-less streets.

Buy less!  Buy only what you can consume.  Many citizens, particularly in 1st world countries, throw away good food.

Re-use, Reduce and Recycle should be in the top of mind of everyone on the planet.

Avoid impulse buying.  Program your expenses weekly, every two weeks or monthly.

All of these activities will lessen the demand for goods which will have effect on prices, but these measures will not drastically cut the economy where all will suffer.

Dingle and Aviso

Filipino inventors, Daniel Dingle and Ismael Aviso, are two of the pioneers in alternative energy.  Dingle has already claimed suppression by the IMF and the World Bank and he was involved in an investment scam but nevertheless, his idea is still worth pursuing.

Current methods to split water into its component hydrogen and oxygen are not economical.  Dingle's technology has demonstrated that it can break down water in a cost efficient way and converts the hydrogen in water into safe fuel.  You can see the video here.

The common infrared remote control of your TV transmit electrical energy to control your TV.  The US National Science Foundation awarded the Colorado State University research team $1.2 million to research on the use of electricity from brain waves to remote control the ordinary TV.

Aviso's invention is based on this concept and more.  It captures the electrical energy of radiowaves from cellphones, satellites, TV and radio signals and harness these to charge the fuel cell of an electric car.  You can see the links to his videos here. Electric Car ; Repelling Force

America and the rest of the western have been pioneers in many fields including the invention of the light bulb, the automobile, the telephone, the airplane, nuclear energy, space travel and millons of others including Facebook and Twitter!

The time for the Philippines to make also a lasting distinction for humanity may be at hand but sadly, we are forced to pass it up.

The Philippine government cannot openly support these technologies because its umbilical cord is still attached to the IMF and World Bank.  America and China cannot also support these technologies now because it would be wreak havoc for the oil and financial industries.   What they will support are hybrids or part electric cars because these machines will still be dependent on electricity produced from oil.

The oil industry and the current world order will fight tooth and nail, by hook and by crook to stop development along these lines.  But even then, once big businesses grab hold of these technologies, they will not be made available until oil is exhausted or becomes very expensive to extract.  Aviso for example has partnered with Ethos and it has kept his invention out of the horizon.  Money works in mysterious ways.

By 2020, world demand for oil will be 40 million barrels per day.  That is 4 times more than what Saudi Arabia is producing daily.  Nine (9) years from now, fuel will be very, very expensive.  If you have a child now in grade 1, he will still be in high school by that time.  This will move a lot of people from the middle class to move to the poor sector.

Nobuo Tanaka of the Institute of Energy Economics in Japan said, "All forms of energy must be developed  to meet demand."   Peter Voser of Royal Dutch Shell echoes his call.  He noted that securing global energy would require the concerted efforts of governments to develop all available energy resources in order to meet increasing demand.

Inspite these pronouncements, one can only wonder why no support have been extended to Dingle and Aviso.

Only time will  tell if the technologiesof Dingle and Aviso will ever find the light of day in our lifetime.  The lure of money always play a significant role.

"Pssst!" "Hoy!"" Who, me?"  "Yes, You!"

If you think inflation doesn't affect you, think of the time jeepney fares were only P5.  A bigger Pan de Sal was 3 for P2.  Think of the time when gasoline was only P25 liter.  Think of the time an 8oz Pepsi cost only P 2.00 per bottle.  Think of  one-way boat fares from Cebu City to Dumaguete City at only P95.  Those were not more than 20 years ago.  This is our story.

Our parents and great-grandparents have better stories to tell.

If you are happy with your salary increase, think of what you can afford now and how much effort you put into it with how much you can buy then?  Your parents probably earned less than you do now but it seemed your family was better off then.

Think 39 years from now - year 2050 and the 7 billion people will become 9.3 billion.  How old will you be then?

If you are more than 40 years old now as most CEOs and world leaders are, you may actually in fact don't give a damn.  You'd be gone or too old by the year 2050, or, simply busy with your soul at pre-departure preparing for your earthly exit.  Your only main concern now would be the “now.”

But if you are still under 40 years old now, do you think the increase in your income will be sufficient?  Do you think your pension will be sufficient?

If you are now holding a a sleeping baby in your arms, maybe your child, or, perhaps your grandchild, can you look at this baby as he sleeps and whisper to him an assurance that the future ahead is good?

Right now, as you are reading this, efforts are being made to squeeze the wages of our Overseas Filipino Workers (OFWs) because of too many applicants from the Philippines and other countries.

Do you know why this Christmas just became bleaker for the poor in the Philippines?

Prices have been creeping up since the start of the year.  These price changes and adjustments of selected products were noted during the months of October and November 2011 only.  In America, inflation has also been creatively hidden.

Price increases when incomes are stagnating:  the poor bears the brunt of inflation.

Inflation has reduced the US Household Wealth.  The economic downturn is making China more paranoid with social media as it might cause more unrest.

Government's 13th month pays were released in November but there was no spike in spending because they were used to pay-off debts.  The National Government again has to give an unprogrammed P10,000 per government worker on December 15, 2011 to kick-off holiday spending.

The Blind Leading the Blind

Capitalism is good but excesses may make it fail.  In Industrialized countries as well as in 3rd world countries, the gap between the rich and poor is getting wider everyday and the poor are multiplying very fast.

UN leader Ban Ki-moon sees the problem of too much people but instead of addressing the root cause, he chooses to address the problem by looking at how to find jobs for the jobless, finding donors for famine victims, etc.   Other world leaders share this view.

After the world population reached 7 billion in October, NOBODY SAID THAT WE NEED TO MODERATE OUR POPULATION GROWTH.  Everybody is preparing instead to the point when it will reach 10  billion.

If we want to have a meaningful change, we have to start now with a simple man-made device: 

Condoms!

As the world count nears 10 billion people, band-aid solutions today will easily become deficient tomorrow.  Creating more jobs can only be done by expanding businesses, sustaining the vicious cycle, exacerbating inflation.  Each problem becomes bigger than the last.

The ideal sustainable economic growth should come from an increase in disposable income by each person and not by an increase in population.

Policy-makers always fear that a lower demand and economic slowdown will be devastating to the world.  The Lehman Brothers collapsed during the subprime financial meltdown bringing down several other companies with it but the world is still standing.  Life for most of the citizens of the world went on.  Some in 3rd world countries did not even know it happened.

There is enough wealth in the world for everybody.  If population will fall, business will always find ways to adapt.  Some will lose, some will win but the people will win big.

Limiting population can address a lot of problems - National Leadership Issues, Food Security, Peace and Order, Law Enforcement, Natonal Security, Climate Change, Environment Issues, Graft and Corruption, Education, Energy Sufficiency, Reducing the Costs of Calamities, Economic Uncertainty, Market Volatility, Mounting Inequality and Poverty.

Getting Everybody on Board

Locally, the initiative of GMA News TV (launched on January 28, 2011), which is on free TV, in educating and increasing the awareness of the masses on the problems the country and world are facing is very laudable.  Their documentaries on poverty, culture, history, science, the environment and other socially-relevant issues bring to top of mind the problems plaguing society.  By becoming the number one news channel in such a short time, it has demonstrated that these shows have a market and more people are now watching with the hope of finding solutions.  Lately, when I passed by a squatter colony in the morning, I could already hear the Kentucky Derby Barker-voice of Mike Enriquez.   However, if another channel can come up with the same format with less advertisement, it will easily replace GMA News TV at the top spot.

In America, government policies are publicly debated on TV.  If we aim to join the ranks of first world countries, everyone must be capable to engage in nation-building and not just a privilege few.  Social media has helped spread awareness.  Nobody must be left ignorant.

One thing is certain:  If problems are not exposed, solutions will never surface!  The poor should be made aware of the problems of having too much babies.  Free TV and radio are effective medium in transforming the world.

EPILOGUE

Capitalism must continue.  However, it must go hand in hand with human development that is equitable and sustainable.

Lessons From The Past

The Egyptian Empire, the Shri-Visayan Empire, the Angkor-Khmer Empire, the Mayan Empire, the Greco-Roman Empire, the Mongolian Empire, the Chinese Dynasties, the British Empire, the Spanish Empire and even the Russian Empire at different points in time were deemed too great and too big to fail yet all fell by the wayside because of over-confidence and greed.

Being a large consumer of oil in the world, America has not signed the Kyoto Protocol, an agreement to limit greenhouse gasses.  Being the largest producer of grains in the world, the US at one time reportedly destroyed tons of grains so that the price of grains will not fall.

Understanding The Present

Our Finance Secretary. Cesar Purisima, was more forthright.  In the October 29, 2011 issue of the Philippine Star (page 8), he summed up everything  when he was quoted as sayiing, "As the recent experience of more developed markets has shown, unfettered profit seeking and corporate greed coupled with weakened or co-opted regulators only results in financial disaster for all."

Fears For Future

Americans made the movies "Mad Max," "Waterworld" and "Escape from New York" and they paint a sorry future for society.  In this civilized and rational age, poverty and anger made the Libyans extremely barbaric in the final hours of Ghaddafy's life.  The mindset of Ghaddafy which is eat, drink and be merry for tomorrow you may die, is the same mindset for most people now.

The heart of every civilization is still the common people.  Public policies should always come from the heart.  Governments ultimately fall if the will of the majority is not addressed.

If the 4.5 billion year history of this planet we call our home were to be encapsulated in 24 hours, the human race appeared only at the last minute and we just might succeed in destroying everything on the face of the Earth in the last few seconds.

Unless we address squarely overpopulation, we will always miss the mountain for the molehill.

When we project that the world population to reach 9 billion by 2050, believe in it and exert extraordinary efforts to prepare for it, we are in fact really doing nothing.  We only succeed in compounding the problem.

With inflation and high population growth, there is no way that economic growth alone can offset inequality.

Inflation year-in and year-out steadily shrinks the basket of opportunities of the poor.

Oil is central in the equation.  Taming the population growth is the only way we can quench our thirst for oil.

Each citizen of the world, each person, each boy or girl, all must pitch in to reduce demand.  However, if we leave this task to others and continue to enjoy in this consumer-driven world, we are not different from those who are accused of corporate greed.  We are encouraging the continued rise in the price of oil.

2011.  7 billion people.  Inflation.  Climate change. Occupy Wall Street.  Eurozone Meltdown.  Protests in Russia and Greece.

2050.  9 billion people.  It may come sooner than we think.

2050.  By that time, old farts responsible for today's woes will be gone.  The teenagers of today, possibly your son or your daughter, raised in a consumer-driven world, will be the policy makers of nations.  Their demeanor will be hard to prejudge.

Imagine a 9 billion people world and everyone had good jobs!  Do you think the plunder of our environment will stop?  Do you think greenhouse gases will decrease?

Even if all 9 billion people will have money in their pockets, will there be enough food and water around to buy?  If current internal revolutions in some countries will not change the ways of nations, other options become apparent.

Progressive countries are now investing billions of dollars to search for habitable life beyond our planet.  Unless ways will be made for people to migrate to the moon or Mars in a sustainable way, a nuclear war to wipe out part of the world population, thus decreasing demand, suddenly becomes a distinct possibility.  A South China Sea conflict may just have the tendency to start just that.

Peace and individual contentment go hand in hand.  Human beings must not allow the lion to stretch the distance further.  Else, we might be the last generation to enjoy relative peace.

Buy less, Sire less...  It makes real urgent sense!