Category: economy

Why are oil prices rising, and what we can we do about it?

Overpriced gasoline and diesel, for instance, gave oil firms an estimated P38.47 billion (US$757.13 million) in additional income, of which P4.62 billion ($90.93 million) went to the government as value-added tax (VAT).

By ARNOLD PADILLA
Bulatlat.com

MANILA – Since the start of the year, local pump prices have increased significantly. The government, as always, explains this as the operation of global market forces. Remember that the government deregulated the oil industry, and the country imports almost all its petroleum needs. As such, local price adjustments merely reflect the movement of international oil prices and fluctuations in the peso-dollar exchange rates. At least, that is what government and the oil firms want us to believe.

P4-5 overpricing at the pump this year

But this explanation is not as straightforward as it appears to be. Pump price adjustments do not reflect global price movements. As of the first week of October, the price of gasoline in the Mean of Platts Singapore (MOPS) has gone up by about P11.49 ($0.23) per liter. Meanwhile, the pump price of gasoline as of Oct. 5 has jumped by P16.55 $(0.33) per liter – P5.06 ($0.10) higher than MOPS. The same thing is true with diesel. MOPS diesel increased by around ?10.86 per liter while the pump price of diesel surged by P15.00 ($0.30)– a difference of P4.14 ($0.087) per liter.

MOPS is the benchmark that the country uses for local petroleum products, according to the Department of Energy (DOE). It is “the daily average of all trading transactions of diesel and gasoline as assessed and summarized by Standard and Poor’s Platts, a Singapore-based market wire service.”

The difference between the adjustments in MOPS and actual price changes at the pump is a form of overpricing that has thrived under the Oil Deregulation Law. This 25-year-old law allows oil companies to implement automatic price adjustments based on global price movements.

By implementing higher price hikes or lower rollbacks than international price adjustments, oil firms and the government can collect billions of pesos in extra profits and taxes. Overpriced gasoline and diesel, for instance, gave them an estimated P38.47 billion (US$757.13 million) in additional income, of which P4.62 billion ($90.93 million) went to the government as value-added tax (VAT). This exploitation of the consumers by the oil companies and government becomes even more reprehensible amid the pandemic that has massively wiped away jobs and incomes.

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Politics, economics, rice

ORLANDO RONCESVALLES

The production, consumption, and importation of food (rice or grains) have posed contentious as well as analytically difficult issues even when economics was still in its infancy. In the early 1800s, David Ricardo came up with the idea of comparative advantage to explain why countries trade. On its face, it presented a paradox because comparative advantage suggested that a poor country (one endowed with limited technology) should export a good such as rice even if it didn’t have an absolute advantage in its production (it just needed to have a comparative advantage). Ricardo was also not one to advocate self-sufficiency as he was pretty much a proponent of free international trade. Today’s debate on the merits of rice tariffication presents conundrums and even unanswered questions, though the latter have perhaps more to do with politics than economics.

But even earlier, when economics was not yet a social science, kings and despots already knew that to survive insurrections, they made sure that the price of bread or grain (or any food staple) was affordable to the masses. The Roman poet (Juvenal) considered on or around 100 AD that political stability required whoever was in power to provide bread, as well as circuses! Forget the Romans. The Bible has its share of stories where kings had the burden of protecting their subjects from suffering in times of famine. Closer to home here in the Philippines, when the price of rice spiked in 2018 and became part of an inflation scare, there was a fair amount of wrangling on what to do.

The conventional wisdom today in economics, particularly in the textbooks on international economics, hasn’t changed much in the last two hundred years. Free trade, because it is voluntary and anchored on the concept of comparative advantage, was (and still is) a good thing. And yet, here we are in today’s age of wondrous innovations dubbed as the “fourth” industrial revolution, fulminating at the specter of rice prices remaining high for the consumer but falling to penury-inducing levels for rice farmers. What has gone wrong?

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Shooting Stars and the Falling Peso

O. Roncesvalles

I remember a time in 2012 when many big-bank economists predicted that the Philippine peso would remain a shooting star at around P42/$ by year-end. The peso then was a ‘darling’ currency, having nicely recovered from a low of about P49/$ in the wake of the Financial Crisis of 2008. Little did the bank economists know that there would soon be a literal u-turn; the peso shortly began its doldrums to where it is today at P53/$. It hasn’t been a pretty sight for the responsible authorities at the central bank.

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100 years of ferdinand marcos

BATAC CITY—Opening a forum here on the legacies of Marcos, whose 100th birthday on Sept. 11 had been declared by Malacañang as public holiday in Ilocos Norte province, Imee referred to her late father’s comment when they landed at the Hickam Air Force Base in Honolulu after their ouster following the 1986 Edsa People Power Revolution.

“We were all in tears and everyone said, ‘The end is nigh, it is finished, we are dead and doomed,’” Imee narrated.

“My father said, ‘No, children. To my family and to everyone, history is not done with me yet.”

… Imee said some people had described the Marcos 100 Forum as “very disappointing because it is very simple.” But the family organized a “humble celebration for an extremely austere and simple almost monkish man like my father,” she said.

She said: “There will be no parade, like what my mother [former first lady and now Ilocos Norte Rep. Imelda Marcos] wants. No concert, like what [former Sen. Ferdinand “Bongbong” Marcos Jr.] wants, and there will be no shows and dancing, like what I want.”

Instead, the family and the Ilocos Norte government organized debates, storytelling sessions, and a lecture series “that will define Marcos 100 in this very reflective effort, the Marcos legacy,” she said.

hard naman to fault the wife and children, family and friends, for celebrating the centennial of ferdinand marcos in as big a way as possible.  ferdinand marcos, after all, was, truly, unlike any other president we have had. 

The forum, hosted at the Mariano Marcos State University (MMSU) Teatro Ilocandia from September 8-9, is an effort of the Marcos family to make this year’s commemoration of their patriarch’s birthday mirror his character: “very cerebral, reflective, and mindful.”

It contrasts previous celebrations of FEM’s birthday every September 11, which had involved parades, flash mobs, concerts, and other festivities. Governor Marcos explained, “Gawin natin ang gusto ng tanging ama ko: simple, diretsuhin, payak, intelektwal, at palaisipan.”

“The North remembers,” she said, “Ferdinand E. Marcos is, after all, every Ilocano. The story of every Filipino is embedded in that biography of being born of an arid and harsh landscape, struggling through life and every adversity, and finally coming out triumphant.”

Gracing the forum as lecturers are De La Salle University (DLSU) Professor Antonio P. Contreras; Former Cultural Center of the Philippines (CCP) President Dr. Raul M. Sunico; UP Prof. Clarita R. Carlos; lawyer Estelito P. Mendoza, solicitor-general during the FEM presidency; Marcos’ former Budget and Education Secretary Dr. Jaime C. Laya; and the former president’s namesake, Former Senator Ferdinand “Bong Bong” R. Marcos Jr.

Discussions revolve around Marcos’ sense and narrative of nationalism; the “Golden Era” of arts and culture during his administration; his foreign policy; FEM’s martial law; the Philippine economy during that time; and the barangay in institution-building.

“Why is it that this debate, this argument about who President Marcos is, continues to burn, unabated, a hundred years after his birth? What is his legacy? What do we bear today that bears his mark and will have changed the Filipino people forever and made the Ilocanos what they are today?”

the non-ilocanos remember, too.  i look forward to transcripts or videos posted online.  it could be enlightening to read / hear what some of our public intellectuals are saying about the marcos dictatorship these days, 28 years after his death, 31 years after his ouster.  palaisipan naman talaga.

“Ang problema kasi noon, ang dami-daming trabaho ng papa ko na lahat umaasa sa kanya. Sa bandang huli, noong nagkasakit, nagkaloko-loko na kasi. Either talagang nakikinabang, o nag-abuso, o hindi alam ang ginagawa yung mga nasa baba. Kasi everybody, for years and years, siya ang inaasahan (The problem then was that my father was loaded with work that everyone relied on him. Towards the end, when he was sick, things got crazy. People below him either gained, abused or didn’t know what they were doing because everyone relied on him for so long),” the governor pointed out.

it can’t be easy spinning marcos history, especially now that they’ve offered to return some of the wealth that imelda had always claimed to be rightfully all theirs. i wonder now if duterte wasn’t supposed to announce it until after the centennial fiesta, but he couldn’t wait, needed to distract us from all the killings?

marcos was right, history is not done with him yet.  or with imelda and kids.  heto nga’t magsosoli daw ng yaman na hindi daw nila sadyang natangay.  kaloka.

by the way, it is not the first time such an offer has been made.  back in ’89, said vp doy laurel, marcos’s dying wish was to come home and be buried beside his mother, and he was prepared to donate 90% of his wealth to the philippine government and the filipino people via some foundation, except that imelda was willing to donate only 75 to 80%, and anyway cory didn’t even want to hear of it.

so this is a take two.  90% sounds good to me, actually.  that is, 90% of ALL the wealth, found AND unfound.  time to come clean.  may the spirit of the “monkish” father so inspire.

and then maybe let’s put it all in a trust fund of sorts, waiting for a visionary kind of president who truly cares, and actually knows what to do, to make the economy, and the politics, work not just for the few rich but for the many, many, many more who are poor.