Hundreds own land titles under free patent scheme in Region 12

Hundreds own land titles under free patent scheme in Region 12

Mindanao News (June 22, 2011)

KORONADAL CITY (MindaNews/17 June) – Hundreds of beneficiaries have received ownership certificates in the largest distribution of land titles in Southwestern Mindanao this year under a government program spearheaded by the Department of Environment and Natural Resources (DENR).

Alfredo Pascual, regional DENR director, said that 650 land titles were issued to beneficiaries under Republic Act 10023 or the New Residential Free Patent.

Residential beneficiaries early this week received the titles to lands ranging from 166 to 750 square meters, and from to two five hectares for farm beneficiaries, the regional DENR office reported.

“Lands are essential to living and a valuable asset too, being one of the factors of production. Let us make our lands productive in order to uplift not only our living condition but also our economy,“ Pascual said in a statement.

He said the distributed land titles were located in Tantangan in South Cotabato, Matalam in North Cotabato, Esperanza and Palimbang in Sultan Kudarat, and Kiamba and Malungon in Sarangani.

There were also beneficiaries from the cities of Koronadal and General Santos, he added.

The distribution of land titles was in line with the Aquino government’s thrust to institute and hasten reforms in the land sector including the judicial processes in land titling, Pascual said.

South Cotabato Gov. Arthur Pingoy Jr. said the program makes dreams come true for beneficiaries to own residential and farm lands.

Under RA 10023, residential land owners can apply for a free patent with the DENR through the Community Environment and Natural Resources Office (CENRO)
which has jurisdiction over the residential lots.

In order to qualify, any Filipino who is an actual occupant of a residential land for 10 years may apply for a free patent title in all municipalities and cities provided that the land should not exceed 200 square meters in highly urbanized cities, 500 sq. m. in other cities, 750 sq. m. in first-class and second-class municipalities, and 1,000 sq. m. in third-class and other municipalities.

Former President Gloria Macapagal-Arroyo signed RA 10023 on March 9, 2010.

Prior to RA 10023, free patents are only issued to agricultural lands. (Bong
S. Sarmiento / MindaNews)

BusinessWorld Online Edition |Rent seeking

BusinessWorld Online Edition |Rent seeking

Posted on June 19, 2011 09:51:01 PM

BUSINESS WORLD

Introspective -- By Calixto V. Chikiamco

Rent seeking

What’s wrong with Philippine society is that its economic system is primarily characterized by rent seeking. So, what’s rent seeking? It’s the non-market extraction of surplus or profit. It means the profit is generated from licenses, quotas, monopolies, protection, and other government granted privileges.

It differs from true capitalism where the profit or surplus is extracted from the market, usually through innovations in product or marketing and distribution. True capitalism is dynamic because it results in innovations and increases in consumer welfare. Society benefits as a result. In rent seeking, there’s no innovation, nor additional value to the consumer. Instead, there’s unearned extraction from the consumer. Welfare is diminished.

Rent seeking in the Philippines hasn’t stopped. It just takes new forms.

A vivid example of this is the Feed-in-Tariff (FIT) rate to be given to Renewable Energy Developers under the Renewable Energy Act. Under the proposal of the National Renewable Energy Board, all electricity consumers must pay an additional 12 centavos per kilowatt hour, amounting to 8 billion pesos per year, to subsidize Renewable Energy developers.

Why the need for a subsidy? Because the cost to produce energy by RE developers is much higher than conventional sources. The price for conventional sources (coal, natural gas, geothermal, big hydro) averages about P5 per kilowatt hour while the price to be paid for run of the river hydro is P6.15, biomass at P7.0, wind at P10.37 and solar at P17.95.

The difference between the price of conventional sources and the price to be paid for Renewable Energy must be made up by the FIT Rate, which is really a surcharge on consumers.

Some may ask: shouldn’t the Philippines do its share to halt carbon-induced global warming?

No, because the country’s contribution to carbon emissions is only less than 1% (.48%s). Hence, unlike the rich, developed countries, it has no moral or legal obligation to slow down global warming. Furthermore, the share of renewables in its energy mix is already 32%, much more than the 10% in the US and other countries.

But here’s the cake: Not only are we poor consumers being coerced to pay three times as much for solar energy and two times as much for wind, but in addition the developers are guaranteed a generous rate of return for the next 20 years! No risk on their part, even of technological obsolescence, because that risk has been passed on to us poor consumers who must pay the same FIT Rate for the next 20 years even if the cost to produce solar energy drops by 50%.

The guaranteed rate of return is not the only form of rent seeking. Under the proposal of the NREB, there will be no auction, whether among the different technologies (run-of-the-river hydro, biomass, wind, and solar) or among suppliers within a specific technology. Everything will be negotiated (wink, wink). No competition either on price or on time period (i.e., for a time frame less than 20 years) will be allowed.

Aside from that guaranteed rate of return and the no-sweat, no-competition policy, the developers will be enjoying a seven-year income tax holiday, duty-free importation, special realty tax rate, zero VAT on sales and purchases, cash incentives, 10% tax rate after income tax holiday, and so on.

The high-costing wind and solar energy producers are resisting a dispatch policy of cheapest first because they say that the country must have a "portfolio strategy." It’s a conceit to think that the government can ever place bets on a particular technology. Should the government have subsidized the pager industry? Or the typewriter industry? The only valid criterion is value for money or efficiency. The market, not NREB, must determine the winners.

Besides, solar and wind are unstable and unreliable sources of energy, dependent as they are on weather and other climatic conditions. They would be poor choices for a diversification strategy. They can never be energy sources for industrialization.

Also, why the rush? A policy of waiting when solar prices are expected to come down to grid parity in five years would better serve the power consumers, but the NERB wants to hand out contracts and lock in the profits of developers for the next 20 years now. We can only speculate why.

Rent seekers usually cloak themselves with noble aspirations to mask their predation. Since the 1950s, rent seekers have raised the lofty banner of nationalism in order to keep out competition and to mask their government granted monopolistic privileges.

Today, the new cloak is not nationalism but "environmentalism." But it’s the same old predation. Different color perhaps (green), but the same old predation.

What’s disturbing is that the manufacturing sector, already suffering from the highest power cost in Asia, will have to bear this burden in addition to the lifeline rate and other impositions. This is the road to perdition because societies collapse when the productive sectors of society are "taxed" to subsidize the inefficient, non-productive sectors.

The scourge of Philippine society is not corruption per se, but rent seeking. What the NREB proposal shows is that the scourge has not been eliminated. It’s just taking new forms. Pity us poor consumers. We can only say, "Please, moderate the greed."

Solar + Wind = Hot Air

Solar + Wind = Hot Air DEMAND AND SUPPLY By Boo Chanco The Philippine Star / June 01, 2011

Back in the old days when government really thought out our energy options, we also looked at renewable energy with a lot of interest. But we always had our feet on the ground. We knew just what we can reasonably expect from such RE as solar and wind. The RE resources we really focused on were geothermal and hydro.

Lately however, it became fashionable to tout solar and wind as if these so called alternative energy sources can be anything more than “nice to have.” While it is true that we have so much sun in our tropical country, the available technology to capture energy from all that sunshine and transform it to usable electricity is still rather inefficient. In other words, even as producing a watt of electricity from solar has gone down through the years, it is still way above the cost of producing that same watt from oil, coal or geothermal.

Indeed, solar is still a technology undergoing development. Eventually, it should be commercially viable or competitive with conventional energy. Right now, the only way to make it viable is to subsidize it. It is the same thing with wind. They call that subsidy feed-in-tariff (FiT), a fancy term for the amount they want to add to our electricity bills supposedly to encourage more use of this type of renewable energy.

Some local economists have raised an alarm about going overboard on this FiT in our mindless haste to be seen as fashionably earth loving. The manufacturers of solar and wind energy equipment have successfully lobbied Congress into passing a law that mandates the granting of this subsidy. It also mandates the inclusion of RE into our electricity mix.

Because our legislators were only after PR mileage to be seen as being ecologically correct, the law gave no regard to cost implications for our consumers and our industries.

Romy Bernardo, a Ramos era undersecretary of finance, is critical of the P9 billion annual cost of FiT (times 20 years or P180 billion). Of this, 50 per- cent goes to solar and wind, even if they will only account for 20 percent of the RE generated power under the FiT program. “Let’s decide what the public can afford,” Bernardo urges. “It certainly cannot be the P7 to P9 billion PER YEAR over a contract period of 20 years, given the already high cost of power.”

Bernardo is correct. Even the RE developers acknowledge that today’s RE prices are expected to come down. One executive working on the solar initiatives of a local conglomerate told their stockholders meeting just this week that it will take three to five years to reach grid parity based on global studies.

The solar industry is growing so fast, he said, and economies of scale are kicking in. “In the Philippines, projection is by 2015 to 2017, we should reach grid parity.” So why not wait? And why give them subsidy for 20 years when the technology is at grid parity in five? The initial price setting should only be made applicable for the next three or five years. After that, we should review again. 

Even if we end up with less RE because we have been too cautious, it would be worse to err on the side of paying too much, locking in the mistake for 20 long years. We already have, in any case, at 34 percent, more RE capacity installed as a percentage of total electricity generated than the US and most European countries. We can afford to wait for the technologies to mature and come down in price.

The Foundation for Economic Freedom (FEF), a public advocacy group espousing market-oriented reform for good governance, has taken the position that “Renewable Energy subsidies must be transparent, limited and technology neutral.” The FEF believes the Feed-in-Tariffs to be issued by the Energy Regulatory Commission (ERC) must provide for an absolute peso cap on the total amount of subsidies that the public will be made to bear, capped both on an annual basis and for the life of the project.

The FEF also wants to make sure that the amount of public subsidy for RE projects should be explicitly disclosed and shown to be commensurate to the social benefit that the public is expected to derive from this program. The outlay should be transparently evaluated based on “value for money” to the public.

The FEF also urged the ERC to consider the ability of the public to shoulder additional levies on a per kWh cost of power. As FEF president Toti Chikiamco puts it, “it’s not only household consumers who will suffer but industry too. It will reduce the competitiveness of Philippine industry, already burdened with one of the highest power rates in the region and a strong peso.”

The FEF economists also think we should buy the cheapest RE available before we buy the more expensive technology. They point out that based on the numbers of the National Renewable Energy Board (NREB), it appears that we can subsidize 11 kwh of hydro for the same amount needed to subsidize 1 kwh of solar. The subsidy equivalent for biomass is 6 kwh for 1 kwh of solar.

Actually, even abroad, the economics of solar and wind are being questioned. In an article on MarketWatch, where I borrowed the headline for this column today, market trader Jim Chanos famed for shorting Enron, argues that wind and solar are “not capable” of real cost-effective ways of meeting energy demands. “Wind and solar are not efficient.”

This is not to say that technologies such as Solar Photo Voltaic have no place in our energy mix at this time. The FEF paper admits solar may be the best, or the only substitute, in some areas, for expensive diesel-fired plants serving off-grid customers.

When solar or wind are used to augment off-grid diesel installations, the avoided costs (or the cost of diesel fuel that would have been used) and the avoided emissions are higher, so the required incremental subsidy is less. And no additional reserves or transmission facilities that add to our power costs are needed. In fact, solar technology is already used in a significant number of rural electrification projects all over the country.

Instead of adopting the NREB recommendations, the FEF urges the ERC to set a universal FiT level only fractionally higher than current cost of power at for example, no more than 30 percent higher (vs. in excess of 300 percent premium for solar). ERB can then approve all projects meeting that hurdle, irrespective of technology.

FEF is calling upon the ERC to save our people tens of billions of pesos of needless higher electricity expense over the next 20 years. By doing this, it can also relieve pressure on electricity rates so that universal charges under the EPIRA can be promptly implemented, and thus provide our national treasury funding for needed social and infra spending – instead of giving our money away to foreign suppliers of immature and inefficient technologies.

Maria & Arnold

This came from Gilbert J.

Arnold Schwarzenegger had this little misunderstanding because English isn’t his native language. He told Maria that the housekeeper wants a raise. Maria said, “Screw her.”

Any simple-minded semi-literate Austrian could have made the same mistake.