The Market Monitor Minding the Nation's Business
By DIEGO C. CAGAHASTIAN
The reprieve currently in effect the West Asia hostilities due to the two-week ceasefire forged by Iran and the United States and Israel has little effect on Philippine business, as evidenced by the latest projections from local and international economic authorities.
The Asian Development Bank (ADB) has pruned its growth forecast for the country, as this multilateral lender factored in the effects of the war that killed and maimed thousands and destroyed property worth billions of dollars.
The ADB sees growth to hit just 4.4 percent this year, instead of the 5.5-percent recovery seen last December.
Kristalina Georgieva, managing director of the International Monetary Fund (IMF), meanwhile warned of the WA conflict’s “scarring effects” despite the fragile ceasefire. She told the Agence France Presse that “even in a best case, there will be no neat and clean return to the status quo ante.”
The high prices of fuels — diesel, gasoline, kerosene and LPG or cooking gas — has contributed to the increase in the Philippines’ inflation rate. Data released last week showed that inflation surged to 4.1 percent in March from just 2.4 percent in February. This is a direct result of the oil squeeze caused by the Ramadan war in West Asia, particularly the closure of the vital Strait of Hormuz.
Even more devastating is the news that the Bangko Sentral ng Pilipinas (BSP) has raised its inflation forecast for this year to 5.1 percent during last month’s off-cycle meeting, above the 2.0 to 4.0 percent target.
BSP Governor Eli Remolona Jr. said the Bank has adopted a “wait and see” approach given the level of uncertainty caused by the war in the Middle East. The BSP has decided to keep interest rates unchanged, saying it was a “tough decision” because they were seeing weak growth and did not want to make it even worse.
As this developed, the Manila Electric Co. (Meralco) has announced an increase in electricity rates for April, with an upward adjustment of PHP 0.5335 for households. This increase is driven by higher generation charges resulting from the peso’s depreciation against the US dollar and increased costs from the Wholesale Electricity Spot Market (WESM).
Marcos eyes oil exploration
Against this bleak backdrop, President Ferdinand Marcos Jr. has announced he is eyeing to revive the oil and gas exploration talks with China in the Reed Bank, which was abruptly ended by then Foreign Secretary Teddyboy Locsin in the waning days of the Duterte Administration, probably even without the knowledge or approval of Digong.
This practical idea for the Philippine government to engage with China in oil exploration and thus alleviate the country’s suffering was at once shot down by the usual anti-China cabal whose lives and careers they had earlier devoted to pushing the American line on the South China Sea.
The group composed of Akbayan Rep. Jose “Chel” Diokno and Perci Cendaña, retired Supreme Court Senior Associate Justice Antonio Carpio and “Atin Ito” co-convenor Rafaela “Paeng” David, and the fisherfolk group Pambansang Lakas ng Kilusang Mamamalakaya ng Pilipinas (Pamalakaya).
The group raised mock oil barrels and placards opposing proposed joint oil and gas exploration with China during a press conference in Manila on Araw ng Kagitingan, April 9.
At the event, they raised concerns over the country’s renewed push to explore joint oil and gas development with China, warning that any deal must not come at the expense of sovereignty, transparency and long-term national interest.
The Akbayan Party-list, along with Jay Tarriela, Antonio Carpio and the Startbase Institute warned that entering into a joint exploration agreement with China under current conditions may send the wrong signal.
“Transparency should be a governing principle in our foreign and energy policies. Any agreement involving our natural resources is a public matter. The Filipino people have the right to know the terms, conditions and concessions being negotiated with China,” Akbayan Rep. Jose “Chel” Diokno said.
Perci Cendaña said opening the negotiations could embolden aggressive actions in disputed waters.
“We are sending the wrong message and encouraging more powerful countries to escalate disputes to extract concessions. Over time, this erodes the rules-based order in the region,” Cendaña said.
“Instead of demanding compliance with international law, we are adjusting to China’s violations. Real cooperation must be based on respect for the law, not submission to aggression. We should pursue energy security in ways that do not validate coercion and undermine our sovereignty. We cannot reward bad behavior and expect good outcomes. What we tolerate today, we will surely invite tomorrow,” he said.
Carpio laid out the legal framework governing joint exploration, emphasizing that any agreement must comply with the Constitution, which requires full Philippine control over natural resources. Foreign entities, he said, may participate only as service contractors — an arrangement that has been central to past negotiations but also a source of friction.
Doubters repudiated
In its repudiation of the critics of the joint oil exploration with China, the Chinese Embassy in Manila, speaking through deputy spokesperson Guo Wei, castigated Stratbase Institute in a blistering media comment.
Guo Wei said: “President Ferdinand Marcos Jr. said he is open to resuming discussions with China on a joint oil and gas project. But the Stratbase Institute said it “firmly rejects” proposals for joint energy exploration with China. So here come the questions:
“Who is mandated to make foreign policies in the Philippines? Who benefits from the rejection of joint energy exploration? Who bears the brunt of soaring fuel prices? Keep up the good job, Stratbase!”
It may be recalled that for the last several years, the Stratbase Institute (SI) has taken the rigid stance that the country’s relationship with our bigger neighbor China must be defined solely on the basis of what PNoy Aquino called the West Philippine Sea (WPS).
It is as if the other facets of this relationship such as trade (China plus Hongkong our leading trade account, higher than the United States), tourism, cultural exchanges, people-to-people cooperation especially in professional fields such as marine biology, artificial intelligence, agriculture, physics and computer science, renewable energy and other modern technologies.
It is high time that these deniers of Philippine economic growth, the real obstacles in the nation’s journey toward progress, should rethink their selfish positions and be made aware of the national situation where Filipinos are wallowing in poverty and life is saddled with problems all emanating from our lack of energy.