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Monday, June 24, 2024


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While the President was away in Israel, the creeping economic malaise in the country pulled off a couple of unpleasant surprises.

Over at the Bangko Sentral, their overall confidence index (CI) of public sentiment went negative for the first time in eight straight quarters, to -7.1 percent from a positive 3.8 percent the previous quarter. This means that the number of pessimists overtook the number of optimists about their personal economic outlook.

The main cause was unexpectedly high inflation in August, which surged above the psychological break-point of 6 percent for the first time in over a decade. Some critics complained that the BSP had delayed too long before raising interest rates, or at least had not “talked down” inflation as vigorously as they should have.

But senior monetary officials point out that much of current inflation is actually supply side-driven, principally by a hefty hike in global oil prices and the one-off effect of higher excise taxes on oil and sweetened beverages under TRAIN-1. Under this scenario, monetary tightening—which in any case takes a while to take effect—would have only limited impact on prices.

Because of inflation, the benchmark risk-free real rate of interest is still negative, despite recent rate hikes. This can only encourage all sorts of speculation—from currency to property to stock market—as investors chase elusive real positive returns.

In addition to higher prices, the drop in BSP’s confidence index was also the result of concerns over low salaries and income. This surprised me, because it was only last July, two months ago, that unemployment dropped to 5.4 percent, the lowest ever recorded for July unemployment in a decade.

Evidently, confidence is more affected by prices you encounter every day than by job numbers you only hear or read about. And in any case, behind the positive aggregate employment stats, unemployment among the young was still running high at 14.6 percent. Clearly, a lot remains to be done in terms of matching up educational and vocational training with what employers really want from their new hires.

As for the peso, it fell to nearly 54:1 to the dollar last Friday, its lowest level in almost 13 years. This had the effect of magnifying the local impact of global oil price increases. With the peso weakening, the people in charge of Build Build Build should be reevaluating the wisdom of borrowing abroad to finance those projects, or at least triage the pipeline so that projects closest to completion get first dibs on foreign loan funds.

The last fly in the ointment is the increasingly notorious rice crisis we’re going through, with rice supply and quality going down while rice prices go up. The public is already quite familiar with the details and the names of those government officials responsible. What they’re still waiting to see is what the President will do about those names.

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On the brighter side of things, while Duterte was away, his people unveiled a presidential proclamation revoking the amnesty granted years ago by PNoy to Senator Antonio Trillanes, together with a Justice Department request to the courts to issue an “alias warrant of arrest” and hold departure order (HDO) against the surly senator.

This latest development had Trillanes jumping up and down screaming about “political persecution.” He’s been saying he won’t flee or resist arrest, although to date he’s taken care not to vacate the Senate where he thinks he’s arrest-proof.

Let’s look at the salient facts of this issue:

Senator Francis Pangilinan claims Duterte can’t revoke Trillanes’ amnesty without the concurrence of both houses of Congress. The Supreme Court under its new chief justice may have to decide if PNoy’s decision to seek Congress’ approval of his amnesty grant—if such approval was only optional—operates to make it a mandatory requirement before Duterte can revoke that amnesty.

Trillanes is incapable of producing his original amnesty application or any other document where he clearly pleaded guilty to the offenses charged. Obviously, one can’t be amnestied if one was never guilty in the first place.

Evidence is now turning up that PNoy and/or his Defense Secretary Voltaire Gazmin took some shortcuts with legal procedures in granting Trillanes amnesty.

Former AFP chief of staff and current national security adviser Jun Esperon agrees with Trillanes that he did leave active service before the amnesty. Nonetheless, Esperon agrees with the Defense Department that Trillanes is still liable for a military court-martial, since he committed his violations of the Articles of War while still in service.

Trillanes has been threatening that the AFP—or some faction of it—will rise up in revolt if his “persecution” continues. As usual, the senator, even if unintentionally, again insults his former comrades in arms–by suggesting that they would condone his repeated mutinies, violations of code of conduct, and defiance of the chain of command all the way up to the commander in chief, not just once but three times–2003 in Oakwood, 2006, and 2007 in the Manila Peninsula.

The target of his mutinies now leads the House after five years in a PNoy jail, while Trillanes now finds himself looking in the opposite direction that she is. Once again, karma’s a bitch.

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Whenever we can, we like to take note of an anniversary of the attack on the World Trade Center in New York on 9/11, 2001. Today is the 17th such commemoration. With ISIS now on the run from the Middle East and Central Asia and increasingly turning their covetous eyes to the Southeast Asian coastline countries—including ours—it’s a good time to remember how this fight started in the first place, and what still needs to be done in order to finish it.

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