A slew of news exploded one after the other the previous week.

It was a field day for journalists. First, there was the Senate blue ribbon committee final report recommending that the Revered Resident of the Palace by the River be charged before the Ombudsman after her term next year for her alleged participation in the multi-million dollar telecommunications fiasco; second, the release of French priest Fr. Michael Sinnott which came on the day of the visit of US Secretary of State Hillary Clinton to Manila. There’s good news there but I also smell something else. Hmmm, could it be “Pogi points?”

Then, there’s the Asia Pacific Economic Conference now under wraps in Singapore. As international economists predicted, the worst of the economic downturn is over. The leaders of the 20 economies representing more than half of the world trade and commerce agreed to work closely to pump adrenaline into the world economy with the end in view of pulling it out from the financial quagmire.

But the single most important news that concerns almost all of us is the much maligned price ceiling on oil and other petroleum products. The freezing of fuel prices in typhoon-ravaged provinces in Luzon at their October 15 levels through Executive Order No. 839 has generated an assortment of consequences.

Brinkmanship

The most bizarre effect, to my mind, is the brinkmanship game between the major oil players and government authorities, which impacted us consumers in terms of adequate supply of the commodity.  

It is of course but logical that nobody wants to sell at a loss. Business has to “maintain a margin” or it loses the business altogether. The result now is this: The government and the oil players are at loggerheads and we, consumers are caught in between.

I’ve been closely monitoring this issue. As a student of business and economics, I do understand that the price of oil is one key component in inflation calculation. Any shortage, be it artificial (as in withholding the commodity) or due to supply bottlenecks (as in difficulty in the delivery due to, among others, lack of infrastructure especially in some parts of Luzon wherein typhoons, Ondoy and Pepeng flattened bridges and destroyed critical farm-to-market roads) implies an upward adjustment in the cost of what is known as the black gold.

The repercussion is daunting. The cost of services will go up, prices of basic commodities naturally will follow suit, and there will be clamor for a new round of fare hike. And to absorb all these price changes, the demand for salary adjustments is the ultimate scenario. And this is just on the micro level.

Bleak Picture

The macro aspect is not as well rosy.

Though the price of crude oil per barrel in the international market has slid a bit the week past by an average of between 27 cents and 38 cents, this is a temporary aberration. The forecast is for black gold to go up because of seasonal demand. It is now the start of fall abroad. As the cold weather or winter sets in, oil requirement increases. Ergo, oil price will climb. For us, it will mean another hike. There goes inflation again. Argh! But this is the reality.

By itself, inflation or the movement of prices of basic goods is actually on the upswing. Even without the controversial E.O., the prediction of the Bangko Sentral ng Pilipinas is inflation acceleration. It has been magnified by the price cap which some sectors described as “full of drama” while others believed it’s a “pro-poor” action of the Revered Resident of the Palace by the River.

If inflation goes up, interest rate or the cost of borrowed money which has been on a relatively low level will likewise go up. And to tame inflation, the value of the peso versus the almighty dollar could depreciate. This is good news for the overseas Filipino workers and their beneficiaries since their hard earned greens will go a long way in an ideal situation. But, will the increase in the value of the green be more than enough to compensate for the rate of price acceleration?

And the more crucial question is: What’s in store for us this holiday season with the expected uptick in the cost of pork, chicken, rice, sugar? For Noel, my favorite market dealer, inflation is not a stumbling block for us to still have a decent Christmas.

‘Til our next filibustering.

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