Business World - - Opin­ion - BIENVENIDO S. OPLAS, JR. BIENVENIDO S. OPLAS, JR. is the pres­i­dent of Min­i­mal Gov­ern­ment Thinkers. min­i­mal­go­v­ern­ment

The Univer­sity of the Philip­pines (UP) Fight­ing Ma­roons reach­ing the Univer­sity Ath­letic As­so­ci­a­tion of the Philip­pines (UAAP) cham­pi­onship this year was so spec­tac­u­lar, the spec­ta­cle is eas­ily seen in two things: quick scarcity of game tick­ets and hyperinflation of avail­able ones.

UP be­came the UAAP cham­pion in men’s bas­ket­ball only twice, in 1940 when there were only four mem­ber-uni­ver­si­ties, and in 1986 with plen­tier teams. So after 32 years, 2018 could have been the rare chance for UP to be­come cham­pion again.

From al­ways cel­lar-dweller with of­ten win­less records, UP reached the top four, the semi­fi­nals this year, and it was big cel­e­bra­tion among UP stu­dents and alumni. High in­fla­tion of ticket prices started in their two knock­out games with Adam­son.

When UP de­feated Adam­son and reached the fi­nals after three decades and chal­lenged de­fend­ing cham­pion Ate­neo Blue Ea­gles, hy­per-in­fla­tion of ticket prices oc­curred. A P200 ticket in Up­per Box for in­stance was selling for P1,000, P1,500, even P3,000.

I watched Game 2 of the cham­pi­onship when Ate­neo of­fi­cially bagged the 2018 cham­pi­onship tro­phy. The en­ergy of both sides was elec­tri­fy­ing. Per­haps any­one pay­ing the hy­per-in­flated ticket with a seat from scalpers would not bother just to feel such elec­tri­fy­ing ex­pe­ri­ence.

There is no es­cape from the law of sup­ply and de­mand. When de­mand is very high while sup­ply of seats is lim­ited — Araneta Col­i­seum 16,500 seats, Mall of Asia (MOA) Arena 20,000 seats — then the tick­ets at orig­i­nal prices would quickly van­ish. To reap­pear at a much higher, hy­per-in­flated prices.

Both venues should have struck a deal with UAAP and mem­ber-uni­ver­si­ties to raise ticket prices to 3x or 5x their orig­i­nal prices and por­tions of the ex­tra rev­enues will go to UAAP mem­bers. This way, peo­ple with lower bud­get would opt them­selves out and watch the games free in their re­spec­tive cam­puses, malls, bars or in their houses. This

There is no es­cape from the law of sup­ply and de­mand. When de­mand is very high while sup­ply of seats is lim­ited, the tick­ets at orig­i­nal prices would quickly van­ish. To reap­pear at a much higher, hy­per-in­flated prices.

is a proven mea­sure to get rid of scalpers par­tially or fully.

The les­son — rely on mar­ket forces, let prices go up or down tem­po­rar­ily de­pend­ing on sup­ply-de­mand dy­nam­ics.

When gov­ern­ment comes in, this mar­ket dy­namism is re­stricted if not killed. Like when gov­ern­ment im­posed high oil taxes un­der the TRAIN law and this was im­ple­mented this year.

The Philip­pines’ in­fla­tion rate this year has mel­lowed from peak 6.7% in Septem­ber and Oc­to­ber to only 6% last Novem­ber. This is the good news.

The bad news is that such de­cline is not enough to counter the in­fla­tion mo­men­tum this year. The Philip­pines has the big­gest jump in in­fla­tion 2018 year to date (ytd, Jan­uary to Oc­to­ber or Novem­ber) ver­sus in­fla­tion 2017 (See Ta­ble 1).

A few weeks ago, the Duterte ad­min­is­tra­tion an­nounced that it will sus­pend part 2 of oil tax hikes this com­ing Jan­uary. That was good, and it was an im­plicit ad­mis­sion that oil tax hikes un­der TRAIN law are mainly re­spon­si­ble for our high in­fla­tion.

This week, the gov­ern­ment made a U-turn and an­nounced that part 2 of oil tax hikes will pro­ceed as sched­uled next month.

Cheap oil and en­ergy is good. It means lower cost of farm­ing (trac­tors, ir­ri­gation pumps, thresh­ers, har­vesters, trucks) and lower cost of fish­ing, which can help bring down food prices. Lower cost of man­u­fac­tur­ing and in all other sec­tors of the econ­omy.

But gov­ern­ment and its al­lies think this is wrong, so gov­ern­ment im­posed high taxes to make oil and en­ergy be­come ex­pen­sive. Lousy.

French Pres­i­dent Em­manuel Macron suf­fered heavy po­lit­i­cal beat­ing after his gov­ern­ment im­posed high diesel taxes this year, part two to be done next month. Pub­lic re­ac­tion was deep anger at such a pol­icy of ex­pen­sive oil, ex­pen­sive en­ergy, even if Macron said it was meant to help “fight (man-made) cli­mate change.”

After more than two weeks of vi­o­lent demon­stra­tions and ri­ot­ing, Macron re­versed pol­icy and will not im­ple­ment ad­di­tional oil tax hikes.

While play­ers, of­fi­cials and fans of UAAP bas­ket­ball and other sports can now rest, Philip­pine con­sumers have no rest from gov­ern­ment-im­posed ex­pen­sive en­ergy pol­icy.

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