What Surprise is in Store for the 2025 Year of the Wooden Snake?

 

Mundus vult decipi, ergo decipiatur (The world wants to be deceived, so let it be deceived) —Sebastian Brant (also Brandt) 

In this issue

What Surprise is in Store for the 2025 Year of the Wooden Snake?

I. 2025: The Year of the Wooden Snake, Zodiac Cycles and Sociology

II. Trump 2.0 and Current Geopolitical Developments

III. Geopolitical Milestones in the Year of the Snake

IV. The Influence of the Year of the Snake on the Global Economy and Financial Markets

V. The Impact of the Year of the Snake on Philippine Politics and Economy

VI. A Comparative Analysis of the Year of the Snake's Impact on the Philippines

VII. Conclusion

What Surprise is in Store for the 2025 Year of the Wooden Snake?

How will the 2025 Year of the Snake impact geopolitics, the global economy, and financial markets? Will it be a year of upheaval or opportunity for the Philippines?

I. 2025: The Year of the Wooden Snake, Zodiac Cycles and Sociology

2025 is the Year of the Wooden Snake. To gain insight into what this might signify, a quote from the article offers a succinct summary. 

Chinese new year 2025 is an especially fortuitous one as it is ruled over by the wood snake, a sign associated with wisdom, intuition, and renewal. It’s a combination of an animal (the snake) and an element (wood) that occurs once every 60 years. It promises to be a period full of unique energy with some distinct characteristics…The combination of snake and wood creates a special synergy in which the introspective and transformative energy of the snake is paired with wood’s expansive and balanced nature. (Mendoza, 2025)

Optimism consistently pervades the annual forecasts for the Chinese zodiac calendar. The zodiac embodies a 12-year cycle, each year symbolized by an animal and its associated attributes.

While we remain agnostic about this tradition (and its geomantic counterpart, feng shui), significant events occurring within the year might appear as circumstantial coincidences or could indeed signal potential cyclical patterns within the political economy. 

In other words, certain aspects of astrology might intersect with sociological phenomena. 

For instance, our analysis of geopolitical developments through the lens of the Chinese zodiac cycles fortuitously resulted in our accurate prediction of the outbreak of the Russia-Ukraine War in February 2022. 

Aside from the eroding concerns over the pandemic, potential geopolitical flashpoints for a hot war may occur.  

For instance, the US-Russian impasse over Ukraine (Russia’s vehement objection over the slippery slope of NATO’s expansion into her borders) (Prudent Investor, January 2022) 

Thus, an examination of global and local developments over 12-year cycles may provide valuable clues for 2025. 

II. Trump 2.0 and Current Geopolitical Developments

Donald Trump’s inauguration as the 47th President of the United States will be held on January 20th, just 9 days ahead of the Chinese New Year on January 29th. This timing suggests that at the start of his term, he will busily sign numerous Executive Orders (EOs) that could significantly influence the geopolitical landscape this year. 

Even before taking office, geopolitical developments have already moved in anticipation of his potential actions.

Israel and Hamas have agreed to a ceasefire, which takes effect on Sunday, January 19th—469 days after the conflict began on October 7, 2023. President-elect Trump reportedly had significant influence over this deal. 

Still, Israeli Prime Minister Netanyahu has publicly stated that the ceasefire with Hamas, as discussed with Trump, is intended to be "temporary." 

The incoming president is also reportedly considering easing sanctions on Russian oil exports in exchange for a peace deal with Ukraine, while simultaneously exerting pressure on Iran and Venezuela. 

While the incoming cabinet has reportedly been filled with pro-Israel lackeys and are hostile towards relations with China and Russia, Trump recently posted a video on his X account suggesting that the Syria and Iraq wars were orchestrated by Israel’s Netanyahu. 

Trump also had a phone call with China’s President Xi on January 17th, where both leaders declared on X.com they would “do everything possible to make the world more peaceful and safe.”

Following the sudden collapse of Assad-led Syria, Russian President Putin and Iranian President Raisi signed a “comprehensive partnership agreement” on January 17th, likely aimed at deterring any potential aggression from the U.S.-Israel alliance

Donald Trump has added complexity to geopolitics by exerting pressure on his allies. 

1. He has cited the need to pursue the acquisition of the Panama Canal.

2. Beyond securing access to critical mineral resources, Trump has proposed the acquisition of Greenland and the annexation of Canada, potentially to extend the U.S. sphere of influence in the Arctic Circle, competing with Russia. This strategy might also serve to divert attention from escalating war tensions with Russia and China.

As historian Eric Margolis suggested, "Trump has started a scramble of imperial rebranding"

3. Additionally, Trump has urged NATO members to increase their defense spending to 5% of GDP.

4. Could the alleged snubbing of the Philippine leadership at Trump’s inauguration signal a potential shift in US-Philippines foreign relations?

Trump's presidency promises to be a period of intense geopolitical activities, where traditional alliances might be tested, and new power dynamics could emerge, all under the ambitious and often unpredictable deal-making leadership of the 47th President of the United States.

III. Geopolitical Milestones in the Year of the Snake

Based on historical analysis and considering the cyclical nature of the Chinese zodiac, here are significant geopolitical milestones that occurred in various Years of the Snake: 

1917: The United States joined the Allies and entered World War I in April 1917. This was a pivotal moment that contributed to the eventual end of the war.

1941: The Bombing of Pearl Harbor on December 7, 1941, prompted the U.S. entry into World War II, significantly altering the course of the conflict.

Operation Barbarossa: Launched on June 22, 1941, this was Nazi Germany's invasion of the Soviet Union, marking the beginning of a massive Eastern Front campaign in World War II. This operation was one of the largest military operations in history and had profound effects on the war's outcome.

The Battle of Moscow, marking a turning point on the Eastern Front for the Russians against the invading Germans in World War II, also took place in (October 2) 1941-42. This battle was crucial for halting the German advance into the Soviet Union.

1953: The Korean War concluded with an armistice agreement on July 27, 1953, ending three years of conflict and setting the stage for the division of Korea that persists today.

1965: The U.S. significantly escalated its involvement in the Vietnam War in 1965, marking a major expansion of American military presence in Southeast Asia.

1989: The Tiananmen Square Massacre in China, from April 15 to June 4, 1989, involved the violent suppression of pro-democracy protests, impacting China's international image and domestic politics.

The Fall of the Berlin Wall on November 9, 1989, marked the end of the Cold War and was a precursor to the reunification of Germany, signaling the decline of the Soviet sphere of influence in Eastern Europe. 

2001: The 9/11 Terrorist Attacks on September 11, 2001, devastated the U.S., leading to the initiation of the War on Terror. This event reshaped global security dynamics.

The War in Afghanistan began 1-month later that year as the U.S. response to the 9/11 attacks, marking the start of a long-term military engagement in the region.

2013: The Syrian Civil War saw increased international involvement in 2013, with discussions around chemical weapon use and subsequent military actions, further complicating the conflict.

The Snake is often linked with transformation, introspection, and unpredictability, suggesting that geopolitical tensions might rise or escalate. The Wood element, associated with growth and expansion, could also signify potential for new power struggles. On the other hand, the introspective nature of the Snake might promote diplomatic efforts and peace negotiations, leading to the conclusion of ongoing conflicts.

In sum, the impact of the Year of the Wood Snake will depend on a complex array of interdependent factors, including global political dynamics, the influence of vested interest groups such as the military-industrial complex, hegemonists, and political elites, as well as leadership decisions and international diplomacy. This year tends to bring significant changes, with the potential for new conflicts to emerge, existing wars to escalate, and the possibility of resolving ongoing disputes, reflecting the intricate interplay of forces during this zodiac cycle.

IV. The Influence of the Year of the Snake on the Global Economy and Financial Markets

The influence of the Year of the Snake on the global economy and financial markets have been significant

1929: The U.S. stock market crash of 1929 precipitated the Great Depression, causing global economic devastation, massive unemployment, and profound financial instability. 

1941: U.S. economic mobilization for World War II marked a shift toward a war economy. This also resulted in increased U.S. wartime financing through the issuance of war bonds, a growing national debt and the Fed’s financial repression policies.

World War II also led to the U.S. Lend-Lease Act, which strengthened economic ties between the U.S. and Allied nations. 

1965: Often cited as part of the Golden Age of capitalism, 1965 marked a peak in the post-WWII economic boom in Western nations, particularly the U.S. and Europe.

Figure 1

The Bretton Woods System started showing signs of strain mounting due to inflationary pressures and vastly increased spending related to the Vietnam War. (Figure 1, upper graph)

1977: Following the Nixon Shock in 1971, the post-Bretton Woods era led to U.S. dollar weakness and inflationary pressures.

1989: The fall of the Berlin Wall paved the way for Germany's economic reunification. 

Global market liberalization advanced, emphasizing free trade and deregulation.

Despite the Bank of Japan's monetary tightening, the Nikkei 225 reached an all-time high of 38,957.44 on December 29, 1989, amidst a Tokyo land price crash. 

2001: The bursting of the Dot-Com Bubble led to a recession, with considerable stock market losses, particularly in tech stocks, and an eight-month U.S. economic contraction.

The 9/11 attacks further destabilized global markets.

China's accession to the WTO significantly expanded its global trade presence.

2013: The "Taper Tantrum" occurred when Federal Reserve Chairman Bernanke announced a potential reduction in bond purchases, causing U.S. bond yields to rise and leading to instability in emerging markets.

The U.S. Dollar Index (DXY), which tracks the value of the U.S. dollar against a basket of six major trading partners' currencies, began its nearly 12-year uptrend in 2013. (Figure 1, lower image) 

Meanwhile, the Eurozone crisis persisted, with Greece and other nations continuing to face financial instability.

The Year of the Snake has historically been associated with heightened volatility in both geopolitics and domestic politics, and its interconnectedness with economics reveals similar underlying dynamics.

Historically, periods marked by surging asset bubbles, financial system pressures, recessions, and rapid economic expansion have all been part of this recurring cycle.

Looking ahead to 2025, uncertainties abound. However, the growing deep-seated economic imbalances—characterized by unprecedented debt levels, record deficits, and central bank policies favoring easy money—along with rising protectionism, the weaponization of finance, and speculative asset bubbles, all point to an increased risk of significant downside volatility.

V. The Impact of the Year of the Snake on Philippine Politics and Economy

How has the year of the Snake affected the Philippines.

1929: The Great Depression severely impacted the Philippine economy, which was still a U.S. colony, due to its dependence on U.S. markets.

1941: Imperial Japan launched a surprise attack on Clark Field and Iba Field on the opening day of hostilities in the Philippines, a day after the attack on Pearl Harbor. This paved the way for the Japanese occupation, causing massive socio-economic devastation.

1953: Former Defense Secretary Ramon Magsaysay was elected as the seventh President of the Philippines. The post-World War II economic recovery was still underway, with the country grappling with the repercussions of the war, including ongoing rebuilding efforts.

1965: Ferdinand Marcos Sr. was elected the tenth President of the Philippines. His victory marked the beginning of a long tenure in power, eventually leading to the declaration of martial law in 1972.

1977: Since the establishment of Martial Law in 1972, the administration of Ferdinand Marcos Sr. had suppressed political dissent and controlled growing unrest, which resulted in widespread human rights violations.

During this period, the Philippine economy was characterized by massive government spending on infrastructure projects, largely funded through loans. This led to rising external debt, which became a significant issue in the later years of Marcos' rule. In 1977, Marcos issued Presidential Decree 1177, which mandated automatic appropriations for debt servicing. 

The imposition of Martial Law coincided with economic instability, partly exacerbated by the global oil crisis, high inflation, and escalating debt levels.

1989: The late 1980s were marked by political turmoil and growing opposition to the regime of Corazon Aquino, who had assumed power after the 1986 People Power Revolution (People Power I).

In 1989, the Reform Armed Forces of the Philippines (RAFP) launched the most serious coup attempt against the Aquino government, among many previous attempts, highlighting dissatisfaction with her leadership and resistance to her reforms.

Despite Aquino's efforts to stabilize the economy, the country continued to face persistent challenges, including high levels of foreign debt and inflation. However, Aquino’s administration made significant strides in implementing market-oriented reforms and privatizing state-run enterprises, though the country still struggled due to global economic conditions and internal political instability.

2001: In January 2001, President Joseph Estrada was ousted in a second People Power Revolution, also known as People Power II, after being accused of corruption. Estrada’s impeachment and subsequent removal from office, amid widespread public protests, marked a significant political transition. Vice President Gloria Macapagal Arroyo was sworn in as the new president, though the transition was accompanied by significant political unrest and instability.

At the time, the Philippines was grappling with substantial economic challenges, including the aftermath of the 1997 Asian Financial Crisis and declining investor confidence during Estrada's administration.

Figure 2

2013: The Philippine economy showed robust growth, reaching a significant milestone with an upgrade to an investment-grade credit rating by major rating agencies.  (Figure 2, topmost chart)

The economy grew at an impressive rate of 6.8% for the year.

Simultaneously, Philippine assets reached key milestones, reflecting strong investor confidence in the market during this period.

The Philippine Stock Exchange’s PSEi 30 had a record-breaking year, hitting new highs in May 2013. (Figure 2, middle diagram)

The Philippine peso rallied to a five-year high, or the US dollar-to-Philippine peso exchange rate fell to a five-year low. (Figure 2, middle chart)

In April 2013, Philippine 10-year bond yields hit all-time lows or Philippine bonds rallied to historic highs. (Figure 2, lowest graph)

In my humble opinion, 2013 signified the genuine bull market peak of the PSEi 30, which has been affirmed by both the USD-PHP exchange rate and the bond markets.

Once again, like its global counterparts, the Year of the Snake in the Philippines has historically coincided with moments of political upheaval, such as the rise and fall of leaders, coup attempts, and the People Power Revolution, as well as economic challenges and heightened volatility like inflation, debt, instability, and periods of market euphoria.

VI. A Comparative Analysis of the Year of the Snake's Impact on the Philippines

Finally, let us provide a concise analysis of the comparative performances during the Year of the Snake.

Nota Bene: The underlying dynamics behind each economic statistic differ from period to period.

Figure 3

The headline GDP experienced its best performance post-independence from the U.S. and post-bellum or post-war recovery in the Water Snake year of 1953, which saw an 8.9% GDP growth. (Figure 3, upper window)

With the exception of 2001, the headline GDP has been rising since then, with 2013 representing its highest level.

However, the Water Snake year of 1953 was followed by a sharp decline in the Wooden Snake year of 1965. If history follows its pattern, could we witness a sharp drop in GDP? Or will the uptrend since 1965 continue?

The average headline GDP during the Year of the Snake since 1953 stands at 5.4%.

Could the Year of the Snake also reflect trends in the Consumer Price Index (CPI) cycle?

The CPI surged from its trough in the Wooden Snake year of 1965 to its peak of 10.7% in 1989, before descending to 2.6% in the Water Snake year of 2013.

Does this suggest a cyclical pattern of three Snake years (or every 24 years)? Or could the CPI rise sharply in the upcoming Wooden Snake year? (Figure 3, lower chart)

The average CPI during the Year of the Snake since 1965 is 6%.

Figure 4

The USD-PHP exchange rate seems inclined to appreciate during the Year of the Snake. It gained in three of the last four Snake years, averaging 4.6%, particularly due to the 2001 return, which coincided with the weakest GDP performance among Snake years. (Figure 4, upper pane)

Moving to the PSE. Since its largest return of 31.24% in 1989, the Philippine’s major equity benchmark, the PSEi 30 has struggled. However, despite its mixed performance, the five Year of the Snake episodes since 1965 have yielded an average return of 4.1%, thanks in large part to the notable gains in 1989. (Figure 4, lower graph)

The Snake years reveal that the USD-PHP's largest returns, the weakest GDP, and the most significant decline in the PSEi 30 share a common denominator: the Metal Snake year of 2001.

Key global events—such as the bursting of the dot-com bubble, the dot-com recession in the U.S., the 9/11 attacks, and local political upheaval in the Philippines marked by People Power 2, alongside the country's post-Asian Crisis economic challenges in 2001—contributed to this outcome. 

VII. Conclusion

In examining the economic patterns associated with the Year of the Snake in the Philippines, we observe a tapestry of significant historical events and economic indicators. From the peak GDP growth in 1953 to the financial turbulence of 2001 and to the financial euphoria of 2013, these years have often been marked by notable shifts in political power, economic policy, market cycles and external shocks with each year adding a unique chapter to the country's economic and political story.

As we look towards 2025, while historical trends provide valuable insights, the future remains uncertain. Given the current global and domestic economic imbalances, the Year of the Snake may again usher in another period of heightened risk and potential volatility. As always, the interplay of external events, governmental actions, and market responses will determine whether the Snake’s legacy of upheaval or opportunity will prevail. 

____

References

Corina Mendoza Architectural Chinese new year 2025: Here's what to expect in the year of the Wood Snake January 1 2025 

Prudent Investor, What Surprise is in Store for the 2022 Year of the Water Tiger? January 23, 2022 

Other Zodiac series

What Surprise is in Store for the 2023 Year of the Water Rabbit? January 22, 2023

What Surprise is in Store for the 2024 Year of the Wooden Dragon? February 11, 2024

 

ECQ Policy: A Stunning Revelation by the DTI Chief! DoH’s Moving Goalposts, Oligarchy or Plutocracy?

If public opinion is ultimately responsible for the structure of government, it is also the agency that determines whether there is freedom or bondage. There is virtually only one factor that has the power to make people unfree—tyrannical public opinion. The struggle for freedom is ultimately not resistance to autocrats or oligarchs but resistance to the despotism of public opinion. It is not the struggle of the many against the few but of minorities—sometimes of a minority of but one man—against the majority. The worst and most dangerous form of absolutist rule is that of an intolerant majority. Such is the conclusion arrived at by Tocqueville and John Stuart Mill—Ludwig von Mises

In this issue

ECQ Policy: A Stunning Revelation by the DTI Chief! DoH’s Moving Goalposts, Oligarchy or Plutocracy?

I. A Stunning Revelation on the ECQ Policy from the DTI Chief!

II. Statistics and Politics: The Moving Goalposts of the DoH’s Policy Objectives

III. We Consistently Warned About COVID-19 Risks and its Economic Consequences

IV. Oligarchy or Plutocracy? It’s about the Leviathan State

V. The Agency Problem: The Fitch Warnings on the Non-Renewal of the ABS-CBN Franchise

ECQ Policy: A Stunning Revelation by the DTI Chief! DoH’s Moving Goalposts, Oligarchy or Plutocracy?

The DTI chief was a critical force behind the recent decision by the political leadership to keep the NCR at GCQ.

It’s not just economics, the DoH has also been using selective statistics to move goalposts.

I Told You So Moment: From January to March, we consistently warned of the COVID-19 outbreak and the economic consequences.

The difference between the oligarchy and plutocracy explained.

Credit rating agencies are not just about rating economic performance.

I. A Stunning Revelation on the ECQ Policy from the DTI Chief!

Continuing from last week’s discussion on the lockdown policy…

From GMA News (July 15): The Philippine economy cannot afford another lockdown, Trade Secretary Ramon Lopez said Wednesday. “‘Pag nagkaroon tayo ng phase na talagang mahigpit na pagsasara.... the economy will collapse talaga ‘pag tinuloy pa ‘yung masyadong mahigpit na lockdown,” Lopez said in a virtual press conference after the televised Pre-SONA forum. “Therefore, ang direksyon natin is finding the balance on economy, health and safety of citizens,” he said.

The DTI chief’s warning came before the leadership announced the extension of the General Community Quarantine until the end of July in Metro Manila and most localities in the Philippines.

Did the DTI chief just confess? Did he admit that the ECQ pushed the Philippine economy to the brink of collapse, thereby have been vehemently resisting an extension of the strict lockdown policy?

Absolutely stunning!!

What was the likely basis for this conclusion?

From the ABS-CBN (July 16): Some 30 percent of businesses in the Philippines have closed since the COVID-19 pandemic hit, the Department of Trade and Industry said Thursday. Trade Secretary Ramon Lopez said the agency has yet to determine if the establishments were fully or temporarily closed due to the virus that shuttered businesses in Metro Manila for 11 weeks, leading to the first contraction of the Philippine economy in 22 years. Around 20 percent are fully operating while 50 percent have partially reopened, Lopez said. Of those who have partially resumed operations, the income of 90 percent were down, he added.

For simplicity's sake, let us assume a proportional distribution of the workforce with firms, regardless of the industry. Given the over 40 million labor force, how much would be permanently unemployed if only half of the 30% of enterprises closed for good?

And even for the firms that have been fully operating, given the lack of mobility, and the mountains of regulatory barriers erected, aside from the widespread economic disruption, how much productivity has been lost and will have to suffer?

This staggering statistics on closures, if anywhere true, would represent a historic dislocation of supply and demand (Say’s Law).  Huge credit issues will also undermine or plague the financial system because of this.

And the DTI’s data signifies the initial impact.

Because the market economy represents a complex and dynamic process, yet to be manifested are the second and third-order effects from the action-reaction feedback loops.

And bailouts through massive monetary inflation and leveraging up of the balance sheet and other interventions that would spur more misallocation of resources will solve this imbroglio?

If the small business loans from the US Paycheck Protections Program (PPP) as part of the USD 2 trillion CARES act bailout package serves an example, its distribution has been slanted towards the undeserving, to billionaires, political protégés, and even to some (state-owned) Chinese companies!

And these events are supposedly bullish for the economy?

Even the DTI chief seems to be in a panic!

Good luck to the faithful.

II. Statistics and Politics: The Moving Goalposts of the DoH’s Policy Objectives

The following excerpt should serve as another prime example of a normative “what ought to be” claim. (All bold emphasis mine)

In defense of the administration’s policy, this report from the ABS-CBN news (July 15): The Philippines has "successfully flattened" the COVID-19 pandemic curve since April, the country's health chief said Wednesday, even as more cases of the disease have been recorded in recent days. Health Secretary Francisco Duque III said the conclusion was based on the longer COVID-19 case doubling rate and mortality doubling time. "We have successfully flattened the curve since April," he said during a virtual presser with reporters past noon.

Then, later, the retraction …

From the Inquirer (July 15):  Health Secretary Francisco Duque III was referring to the longer case doubling time for the coronavirus disease 2019 (COVID-19) or the period it takes for the number of confirmed cases to become two-fold, and the readiness of the Philippines’ health system when he said the country has flattened the curve since April. Health Undersecretary Maria Rosario Vergeire said this on Wednesday after Duque drew flak on social media for his statement on Tuesday on flattening the COVID-19 curve. Duque later retracted the statement. Vergeire explained that flattening the curve should be interpreted with two indicators, such as the case doubling time and the readiness of the health system in responding to the pandemic.

This marks the second reversal by the DoH chief following an earlier claim the Philippines was undergoing a second wave.

The Health Secretary had been technically right. Partly. In the context of the base effect, the doubling time of an outbreak, say from 10 to 20 cases compared to 10,000 to 20,000 cases, would naturally slow.

But this assertion would be misleading. By making selective use of statistics while ignoring the others, and more importantly, distorting its presentation, the intent had seemingly been to defend the effectiveness of their policies.

But since most of the data, including the doubling rate, disputed this claim, the public easily called the bluff and compelled a retraction.

The above chart shows that the doubling rate of deaths has indeed been slowing, but continues to rise. In recent days, however, instead of bending, it has begun to break this trend to the upside. And seen from the 7-day moving averages, confirmed infections and death cases have spiraled upwards, which translates to the absence of bending or flattening of the curve (for now).

The DOH also said that the readiness of the health system matters.

But…

From Philstar (July 15): Most hospitals in Metro Manila, Cebu City and Iloilo have almost reached their full bed capacity for coronavirus disease 2019 (COVID-19) cases, according to the Private Hospitals Association of the Philippines Inc. PHAPi president Rustico Jimenez said there is a need to decongest hospitals of patients who can be transferred to quarantine facilities, but do not want to. “These areas have the highest number of cases and are nearing their full capacity. Other areas are still manageable, unless the cases will continue to surge,” Jimenez told The STAR.

And the WHO has pressed the DoH to facilitate the release of testing results.

From the Inquirer (July 15) The World Health Organization (WHO) urged Philippine health officials to conduct verification of COVID-19 cases in a “much faster scale,” noting that quicker reporting of infections can help the public take precautionary measures more effectively. Dr. Rabindra Abeyasinghe, WHO’s representative to the Philippines, underscored on Tuesday the importance of expediting the verification process of COVID-19 cases.  “This is what we have been urging the DOH [Department of Health] to do and we are seeing an improvement in that information sharing but this is a process and we are hoping that this validation of information can be done on a much faster scale so that information can be shared readily with the public,” Abeyasinghe said during a Foreign Correspondents Association of the Philippines (FOCAP) online forum. “If this is done, the public can take measures to protect themselves more effectively…In this outbreak, we’ve seen that what is most important is speedy contract tracing. To get an initial speedy contract tracing and make quarantining and isolation possible, you need to be able to get testing results very early,” he added.

How much of the increases in cases and deaths were from the late release of testing results due to bureaucratic red tape?

Despite its significance, statistics won’t show us such unrecorded events.

After the aborted cherrypicking of statistics, moving the goalpost and the strawman fallacy comes next.

From the Inquirer (July 18): Presidential spokesperson Harry Roque said the government’s response was still “effective,” since millions have been spared from contracting the illness. Malacañang on Friday defended the government’s response to the COVID-19 pandemic, as cases breached an earlier projection of 60,000 by the end of July. Presidential spokesperson Harry Roque said the government’s response was still “effective,” since millions have been spared from contracting the illness. “It’s working. Because if we didn’t take steps, then millions would have fallen sick from COVID-19 like what UP (the University of the Philippines) initially predicted. It’s working, because only a small number died from the disease,” Roque said.

So the moving of goalposts applies not only to economic targets but also on health policy goals. Of course, such measures, we've been told, should be seen as a sign of success/effectiveness.

Whether in health or economics or other social activities, statistics has served as a convenient tool for the advancement of political agendum rather than explaining reality.

As an aside, given the spate of surging COVID-19 cases and deaths, will the political leadership submit to the recommendations of the health authorities to impose a second-round of lockdowns in the NCR against the entreaties of the economic managers?

III. We Consistently Warned About COVID-19 Risks and its Economic Consequences

Ever since the COVID-19 outbreak in China that impelled their government to lockdown almost half of their population in late January to early February, we have consistently been warning of the risks of an outbreak here, as well as the prospective policy from it, and the likely economic consequences.

Here are selected excerpts from previous outlooks. [bold and bold italics original]

The first few cases may have sown the seeds of the outbreak, and the impact of China’s lockdown. ….

The Philippines government reported not only its second nCoV case today, but this was the first death registered outside China.

Just a thought experiment: what could happen if just one of the nCoV finds its way to the high density, population packed, depressed area in the NCR? ...

Because the war on people translates to the disruption to the global division of labor, shocks to the demand and supply chains will occur.

The Coronavirus Pandemic: Who is Panicking? More From the Year of the Rat: Will History Rhyme? February 2, 2020

In response to the denial by local authorities on the spread of nCov…

If there is anything steady, change is it. But instead of small oscillations, the nCoV, with its present multiplicative process, may bring about fat-tailed risks or rare events that may produce large shocks…

Why then should we discount the risk of the escalation of this tailed risk event to the domestic economy?  Because we have been told so? …

The strange part is that who is to tell what defines or qualifies as fake news or misinformation from real events? Is it something really unlinked to the issue/pathology? Or is it something said that goes against the palate or interest of the establishment? Or is it the deliberate manufacturing of evidence?

The nCoV China Shocker: The Lockdown of 80 Cities and Provinces! BSP Drops Overnight Policy Rate as QE Supercharged in December February 9, 2020

The complexities of the viral outbreak…

Aside from complexity, issues related to government responses, transmission channels (e.g. airborne or not?), detectability, availability of applicable testing kits, medical supplies and workers, quarantine centers, the number and the quality of public health centers, the monitoring, surveillance and control measures, the accuracy of disclosed cases, transparency of information, public awareness and precautionary measures, as well as, compliance with medical treatments, and many more, have influenced the rate and scale of dispersion of the coronavirus.

Batten Down the Hatches! Global Recession Ahead: The New Coronavirus Pushes China’s Economy to a Freefall!  February 16, 2020

In reaction to the proposed festivities to revive tourism and shopping mall activities…

Is the DOH certain that the public will practice their prescribed precautionary measures? What if they don’t? Are they not sacrificing the public weal for temporary GDP and taxes? Have they considered the probability of an outbreak? If so, will this be GDP and tax revenue positive?

Are people just dollops of statistics to them?...

All it takes is ONE error, probably from an undetected super spreader, similar to the UK and the South Korean experience.

China’s 760 Million Lockdown Crashes February’s Car Sales, Duterte’s Travel Ban Backfires, COVID-19 Infection Free Not Guaranteed by Negative Test Results! February 24, 2020

In a rare episode, we used the combination of positive and normative economics to predict the use of testing and a coming lockdown.  …  

The most efficient way to contain the spread and mitigate the impact of the virus could be through aggressive testing….

It is easy to say that there have been no infections; that is because no testing produces no incidence of infections.

Has the DOH adopted a ‘DON’T test, DON’T tell’ policy? …

Instead of transparency, the next course of action may be about the DOH controlling the flow of information for political goals.   …

…

It’s not about cases, but about clusters now!

To paraphrase Ben Hunt of the Episilon Theory said, "case, case, case, cluster, cluster... then boom!"

The tendency for authoritarian regimes has been to cover-up COVID19 incidences. …

In any case, once a cluster or clusters appear, do the Philippines have sufficient public health facilities to accommodate an epidemic?

Or because of this, will the DOH adapt a Xi-style lockdown?

Local COVID19 Transmissions Have Arrived! Consumer Borrowing Skyrockets: Boom or Danger Sign? March 8, 2020

On March 8, the Philippine leadership placed the entire nation under public health emergency.

On March 12, the Philippine leadership announced the community quarantine of Metro Manila, which took effect on March 15th.

Effective March 17th, the entire Luzon was placed under the ECQ.

The rest, as they say, is history.

Oh, in fairness, the improved testing now said to reach over a million, seems like a step in the right direction.

IV. Oligarchy or Plutocracy? It’s about the Leviathan State

Oligarchy, according to Merriam Webster, is a government by the few. The other definition is a government in which a small group exercises control especially for corrupt and selfish purposes.

According to the Dean of the Austrian School of Economics, Murray N. Rothbard*: 

But while, as in the lynch mob, the majority can become actively tyrannical and aggressive, the normal and continuing condition of the State is oligarchic rule: rule by a coercive elite which has managed to gain control of the State machinery. There are two basic reasons for this: one is the inequality and division of labor inherent in the nature of man, which gives rise to an “Iron Law of Oligarchy” in all of man’s activities; and second is the parasitic nature of the State enterprise itself.

*Murray N. Rothbard, FOR A NEW LIBERTY THE LIBERTARIAN MANIFESTO p.60-61

Oligarchy exists in all forms of modern government wrote Professor Robert Higgs**:

In the modern world, many people demand a voice in how they are ruled. In reality, however, every actual system of rule in a large society is and must be an oligarchy. Neither democracy in the simple sense nor autocracy in the sense of strict dictatorship or monarchy is workable. But oligarchy, a system in which a relatively small group of cooperating rulers (though it may have a nominal head ostensibly in charge) and their key financial supporters applies the nuts and bolts of rule is workable, indeed, indispensable. So, whether by design or by piecemeal pushing and pulling, this is the form that all modern governments take.

**Robert Higgs, On the “Participatory” Part of “Participatory Fascism”, Independent Institute, August 27, 2018

A rule by a coercive elite translates to the fact that there can be no dismantling of oligarchy, there can only be a transfer of political power.

Meanwhile, plutocracy is defined by Merriam Webster, a government of wealthy or a controlling class of the wealthy.  

Plutocracy is a political form in which the real controlling force is wealth, the great American classical liberal William Graham Sumner. 

Mr. Graham further explained***:

The principle of plutocracy is that money buys whatever the owner of money wants, and the class just described are made to be its instruments…Modern plutocrats buy their way through elections and legislatures, in the confidence of being able to get powers which will recoup them for all the outlay and yield an ample surplus besides.

Plutocrats use political machinery and legislation for personal and political gains.

More from Mr. Graham:

A plutocrat is a man who, having the possession of capital, and having the power of it at his disposal, uses it, not industrially, but politically; instead of employing laborers, he enlists lobbyists. Instead of applying capital to land, he operates upon the market by legislation, by artificial monopoly, by legislative privileges; he creates jobs, and erects combinations, which are half political and half industrial; he practises upon the industrial vices, makes an engine of venality, expends his ingenuity, not on processes of production, but on "knowledge of men," and on the tactics of the lobby. The modern industrial system gives him a magnificent field, one far more profitable, very often, than that of legitimate industry.

Plutocracy resonates with crony capitalism.

***William Graham Sumner, “Democracy and Plutocracy” (n.d.) The Ruling Class and the State: An Anthology from the OLL Collection, Online Library of Liberty

At the end of the day, the common denominator of oligarchy and plutocracy is the control of the state.

V. The Agency Problem: The Fitch Warnings on the Non-Renewal of the ABS-CBN Franchise

As previously discussed, the ratchet effect or the use of a crisis to expand political power and control of society by governments, is epitomized by the ratification of the Anti-Terror Law and the non-renewal of the ABS-CBN franchise.

The Ratchet Effect: Anti-Terrorism Bill, Bayanihan Law Extension; Reopening in Name Only: Regime Uncertainty June 8, 2020

This short note will not be about the ABS-CBN franchise but the political slant exhibited by a subsidiary of a foreign credit rating agency, Fitch Solutions.

From the Inquirer (July 8): London-based think tank Fitch Solutions has warned of heightened investment risks in the Philippine media and telecoms space, citing the “politicization” of this industry amid the government’s orders to shut down Sky Direct and ABS-CBN Corp. The National Telecommunication Commission (NTC)’s “apparent ability to be influenced by the government continues to be a key impediment to foreign investor sentiment, and has also made the telecoms landscape difficult for both new entrants and existing players,” Fitch Solutions said in a research note dated July 7. The research also cited the slow pace of structural reforms in this industry.

The ABS-CBN controversy has long been in place, yet this warning from Fitch Solutions was published two days before the House vote. Fitch, thus, attempted to influence the outcome.

Much of the public has been unaware of the principal-agent problem or conflict of interests in the shaping of credit ratings that are not only determined by economic conditions but also by political factors, which benefits these credit rating agencies.

In short, one can’t trust the output of credit rating agencies.