Sixty-dollar oil, sixty-peso dollar

The curse of the sixties is upon us. A barrel of oil is fast approaching the sixty dollar mark. The peso, on the other hand, seems determined to march on to a new record of sixty to the dollar. The only good thing I can associate with sixty this past week is the sixtieth wedding anniversary of the parents of a good long time family friend of ours, Lety Veneracion Lopez.

Otherwise for the rest of us, a new way of life begins at sixty. And it isn’t all that bad, if it forces us to be more efficient, to be leaner and meaner. We are upon a new era where only the extremely rich can afford the luxury of waste. For the rest of us, there is little or no margin for waste. We also have to simplify our wants, our needs.

Pinoys are unfortunate to face a possible double whammy in a sixty-dollar oil barrel and a sixty-peso dollar rate. Everything will be simply expensive for everyone other than General Garcia and Jose Pidal. The leftists can incite the drivers and the masses as hard as they want but there is nothing this government, or any government can do about gasoline and diesel pump prices computed against a sixty-dollar barrel and a sixty-peso dollar rate.

The curse of the sixties will force us to be efficient. In fact, I recall a recent news item reporting an increase in our oil import bill even as the quantity we imported has declined. Either we have improved our efficiency of energy use or the economy has so declined that demand has gone down. Either way, we have proof that we are adjusting to the situation.

If our energy officials know what they are doing, they should be actively teaching our people energy conservation techniques, instead of looking so helpless with each news report of a price increase. I caught an energy undersecretary on television some days ago and he was again talking of ethanol as an answer to high gasoline prices. Like his boss, he does not know what he is talking about, as I had explained in this column countless times. That usec had been in energy longer than his boss. Looks like he has a longer learning curve about his job than his boss.

The sixty-dollar barrel is shocking. But even though it is nominally record setting, it probably just approximates the price of oil during the crisis of the seventies, once adjustments are made for inflation. While it is bad news for our wallets now, it may yet do the world a favor. Nothing like the price signal in a free market economy to make people act more rationally in using a natural resource that obviously depletes over time. Fuel efficient cars will replace those gas-guzzling SUVs. Maybe, even fuel alternatives like hydrogen will become economic. It may also make economic sense to develop pocket reserves of oil at sixty dollars a barrel.

But on the negative side, oil at sixty dollars a barrel is bad news for the world economy. The take-off of the American economy that is eagerly awaited by everyone may be stalled. Even China’s red hot economy may be cooled significantly by expensive energy. Our struggling economy will find the going tougher under such an environment.

As if that’s not bad enough, we have our own problems too. A sixty-peso dollar, will make servicing our foreign debt even more oppressive. The business climate will sour significantly, as the locals with capital rush to the safety of dollar assets. Because we are quite dependent on imported goods and services, a weaker peso will tend to push prices up. In the end, life will be more challenging...Just think you are in a reality show and must try to emerge as, well... a Survivor!

It will be an interesting year ahead of us. Sixty-dollar oil. Sixty-peso dollar. But as I said, sixty isn‚t all bad. Happy 60th Anniversary to Atty. and Mrs. Geronimo Veneracion!

Labor Shortage

Here’s a bit of good news for us. According to the most recent issue of The Economist, they are now experiencing a bit of a labor shortage in China, particularly in Guangdong province, the epicenter of labor-intensive, foreign invested factories that has been one of the main engines of China’s export boom. Seems like what comes around goes around.

Maybe the Chinese have become victims of their own success. Low cost labor was one of their main attractions. But as more foreign investors flocked to the same places, the demand for labor started to outstrip supply. It didn’t help that Guangdong was hit badly by SARS last year, there had been increasing incidents of industrial accidents and its laborers were not adequately covered by affordable health care. Soon, many went back to the rural areas.

It so happened life was getting better in the rural areas with a boom in demand for farm products. As demand for factory workers exceeded supply, there was upward pressure on labor costs. There was even a reported street rally of 3,000 workers in Shenzhen demanding higher wages.

These developments should make some of our foreign investors who are thinking of moving some or all of their Philippine operations to China, to think again. Also, this should strengthen our hand in attracting investors to locate here instead, provided the hotheads among our leftist labor leaders don’t scare them away.

Scaring Investors

Then again, we have a way of scaring investors. Some weeks ago, a team of NBI agents raided a call center, Cyber City Telecommunications in Clark because they received a report from a disgruntled employee that they where pirating software. The NBI agents shut the company down at gunpoint for at least four hours, leaving phone calls unanswered. Nothing illegal was found, the company lost millions in revenue and must now repair their lost reputation to their clients.

Then, last Sept. 22, heavily armed elements belonging to the Philippine Air Force (PAF) took up positions along what they call the "Humay-Humay" gate of the Acoland Development... a joint venture with the Mactan Cebu International Airport Authority (MCIAA). The order was to stop the on-going construction work done by an Italian company... a Foreign Direct Investor (FDI).

Do we really want foreign investors or what? Why didn’t the Air Force officials discuss their problem with the proper government officials rather than use force? I don’t hear DTI protesting stupid incidents like these two.

Military SOBs

A reader, Captain Art, an airline pilot, sent us this e-mail.

Please keep up the interest on the issue of military corruption. This is a golden opportunity to weed out all of those bastards that have been utilizing their positions to endanger the foot soldiers by consistently shortchanging them.

I work with the airline and a lot of my fellow pilots were members of the Armed Forces. They consistently tell of these stories that make me puke. As I said, keep the heat up. People like you, Jarius Bondoc, and Max Soliven are our hope to remind these bastards that what they are doing is criminal! They are just too callous, they don’t give a damn. Well, We do!

Be Kind

Here’s Dr. Ernie E.

A man and his granddaughter were watching the evening news. A newscaster interrupted scheduled programming to announce the outcome of a political election. "More on candidates at 10 p.m.," he said.

The 10-year-old granddaughter Ashley looked at her grandpa in disbelief.

"I didn’t know they could call politicians ‘morons’ on national television!"

Boo Chanco’s e-mail address is [email protected]