Squabbling while the nation sinks

DIE HARD III
Herman Tiu Laurel
1/16/2012



A Nov. 10 to 23, 2011 survey by Pulse Asia reported last week by Jocelyn Montemayor found that 97 percent of Filipinos say “their lives were affected by worsening economic conditions.” The same survey reported that the number of people who “felt,” which I take to mean palpably sensed, the economic deterioration jumped from 16 percent in Oct. 2010 to 38 percent a year later, in what can be described as a dramatic doubling.

This makes me wonder how the same survey outfit can still find that BS Aquino III’s approval ratings are staying at a high 70-percent rate. This also makes me wonder if the people surveyed are disjointed in their brains of if the controlled mass media have really done a terrific job of obfuscating issues so as to stunt the public’s capacity for perception.

What is clear is that Filipinos are facing a deepening crisis and, contrary to many columnists’ sanguine projections, 2012 holds even grimmer prospects.

Last Wednesday, Jan. 11, InterAksyon.com reported that the Department of Energy (DoE) is “gear(ing) up for fuel rationing, transport subsidies” in case “tensions in the Middle East trigger a fuel shortage.” As we have been tracking the events there, we have consistently asked what the leadership of this country is doing in case a war affecting the Strait of Hormuz and, consequently, global oil supply triggers a worldwide shortage and price spike from $150 to $200/bbl.

The current Philippine oil stockpile ranges only from 30 to 60 days, and more frequently it is at the minimum. These are indeed ridiculous levels, considering that it takes about that long for shipments to arrive from the sources.

Curiously, an August 2011 newspaper report discussed the call (such as from our many columns) for government to stockpile oil requirements for as much as six months to one year. But, in that same report, a certain Jorge Montepeque, global director for pricing at Platts (a US oil trading company), was also interviewed. He said that such a proposal would only do harm as stockpiling would cause oil prices to rise. Of course, that pronouncement from the said executive, no matter how inane it was, must have been taken as a diktat to government and political authorities to shut up on the matter as the economic managers who earlier raised the idea never did so again.

That advice was inane for the simple reason that the Philippines’ whole year demand won’t even cause a blip in the oil markets, where prices are manipulated by speculators on a daily basis — prices which we, in turn, are compelled to always accept at their highest levels since we buy only what can be delivered because of the short lead time, and never at a cheaper price than the last offer. So, in order to get us out of this quagmire, the next logical question is where to get the money for a stockpile that will last us a good six months to one year.

Ah, but only a few like us would say that money is the least of our problems since we already have that P1.7-trillion Special Deposit Account (SDA) kept in the Bangko Sentral ng Pilipinas (BSP) that yields four percent in interest earnings for banks when it can be used to earn multiples of that in our stockpiling of oil.

Then, we also have the surplus in our gross international reserves (GIR), which, in our discussion on how to properly release without appreciating the peso and harming the exchange rate that overseas Filipino workers (OFW) families rely on, finance forensics expert Hiro Vaswani of the Kilusan para sa Makabansang Ekonomiya (KME) suggested for the BSP to stop lending $25 billion to the US in buying its Treasury Bills, and instead to use that for our domestic needs — one of which is the country’s stockpiling of oil.

As our annual oil imports amount to around $14 billion, we have more than enough money to afford such a stockpile. Yet, while any sane person would never doubt the economic security and benefit we would get out of it, our economic managers remain inutile, all because they are useless slaves of Western financial interests.

Oil prices jumped to $101/bbl when Iran warned off a US aircraft carrier during a naval exercise of the Iranian Navy two weeks ago. For sure, we can expect more of such tensions in the Strait of Hormuz — through which 80 percent of oil for our country passes and a major part of which is legally considered under Iran’s jurisdiction.

The Iranian parliament is now considering legislation either to limit passage through that strait or to charge fees for it and to ban warships from passing, which are a response to US saber-rattling.

But even without these tensions, the global trend of oil prices is on the upswing due to the higher cost of extraction. As such, oil stockpiling is always a safe bet even on a purely commercial basis. Still, we need to underscore the economic stability that can be derived from having a large oil stockpile, especially since an oil shock that will lead to a complete economic standstill for an unprepared nation like the Philippines would be devastating.

Thus, one must realize how irresponsible and brainless this BS Aquino III government is today, creating imagined terror threats and picking fights left and right to create an atmosphere ripe for authoritarianism while real economic terror stalks the land.

The crisis the nation will face in 2012 will require all the people and political sectors to rally around the flag in order to survive. And as the growing internecine fighting is only going to doom the nation, a New Third Force that is neither Aquino nor Arroyo; neither Yellow nor Red; and neither Right nor Left must arise to offer the leadership that the present government cannot give as it winds down its self-destructive path.

(Tune in to Sulo ng Pilipino/Radyo OpinYon, Monday to Friday, 5 to 6 p.m. on 1098AM; Talk News TV with HTL, Saturday, 8:15 to 9 p.m., with replay at 11 p.m., on GNN, Destiny Cable Channel 8, with this week’s topic, “QC Real Estate Tax Scam in 2012;” visit http://newkatipunero.blogspot.com for our articles plus TV and radio archives)