Truly a fire horse year

The Year of the Fire Horse is truly burning its way through 2026, with February ushering in the now three-month long Middle East war, the eruption of Mayon Volcano just this month and Tuesday’s Senate coup which is igniting political instability — even as the Philippine economy tries to navigate the global economic turmoil.

The global economic upheaval was  unleashed by US President Trump last year through his “Liberation Day” tariffs which have since been ruled illegal by the US Supreme Court, and in February this year, was aggravated by the energy crisis resulting from the US and Israel’s bombing of Iran, and Iran’s subsequent attack of oil and tourism facilities of its Gulf State neighbors, and closure of the vital Strait of Hormuz that is effectively paralyzing the flow of vital energy such as crude oil and liquified natural gas supplies, as well as vital fertilizer inputs from the region.

In my previous column, I warned that the worst is yet to come. However, I expected the continuing Middle East conflict to be the main cause for the deterioration of the global economy, and hence of our local economy.

I, like most Filipinos, was blindsided by the sudden reappearance of Sen. Ronald “Bato” dela Rosa at the Senate yesterday afternoon, where he helped trigger the rumored coup that Rep. Leila de Lima had earlier told the Monday Circle breakfast meeting was unlikely to materialize, based on her initial count of just 10 diehard Duterte supporters.

In fact, Monday morning, De Lima was enlightening the Monday Circle about the impeachment process and the process of presenting the documentary evidence that would come from the local banking sector to bolster allegations of unexplained wealth.

I had already been planning to write a column on bank secrecy and how the government could likewise ensure access to tax records from the Bureau of Internal Revenues as well as promote transparency in the release of the Statements of Assets and Liabilities of all government officials.

Rep. De Lima did not even remotely consider that Sen. Bato would risk the possibility of his arrest by appearing at the Senate for that crucial voting to effect a leadership change in the Upper Chamber, with Sen. Allan Peter Cayetano as the new Senate President, that would serve as the impeachment court for the expected impeachment vote against Vice President Sara Duterte by the  Lower House.

Not one in our  group of journalists, stock brokers, researchers and private industry members speculated about a surprise by Senator Dela Rosa.

Even with the successful Senate coup, the House of Representatives, by a vote of 257-25, approved the second impeachment attempt against the Vice President.

What is alarming about the Senate coup is that the Marcos-led government had apparently neither anticipated nor prepared for such an audacious move by the Duterte camp and its supporters to once again thwart the second impeachment attempt against VP Sara. Instead, the Duterte faction launched the attack and exposed what now appears to be the Marcos administration’s lack of political intelligence.

This political flare-up, unfortunately, will only aggravate the country’s economic problems, which the current government is inadequately addressing. It is a distraction and hocus-pocus that draws attention away from the energy crisis, inflation and looming food production shortages stemming from the lack of fertilizer inputs for the new cropping season.

At the same time, this political intrigue hanging over our government well into 2028 will definitely keep potential foreign investors on the fence before committing to the ambitious Luzon Economic Corridor and the Pax Silica initiative.

Based on data from  the Bangko Sentral ng Pilipinas, net foreign direct investment inflows in the Philippines declined by 31 percent year-on-year to $590 million in February this year, due mainly to a 39.1-percent fall in debt instruments, offsetting increases in equity and investment fund shares and reinvestment of earnings. The US was the leading source of FDIs, while corporations engaged in financial and insurance activities received the largest share of inflows during the month.

For the January-February period, net FDI inflows totaled $1 billion, down by 34.8 percent  from $1.6 billion recorded in the same period a year earlier. During the two-month period, equity capital placements mainly came from Japan, the US and Singapore, and were largely channeled into the manufacturing, financial and insurance and real estate sectors.

However, while the Marcos administration works well with the US and its allies such as Japan, it remains uncertain how a new administration will deal with the US.

In the past, former president Rodrigo Duterte had a better relationship with China, and it is still unclear if Sara Duterte will be as welcoming to the current US government, or prefer to revive a warm relationship with China.

The change in the Senate leadership at the moment could also hamper President Marcos’ economic programs for his last two years.

As it is, the current administration is focusing on future investment plans, while still trying to find its way on how to deal with the continuing consequences of the Middle East conflict.

And even as I write this column, we are also awaiting what US President Trump and China’s Xi Jinping will surprise the world with. Will they agree to work together to  resolve the current Middle East conflict and end the double blockade of the Strait of Hormuz? Will the issue of Taiwan spark another dispute?

Unfortunately, Filipinos don’t really care much about the bigger global picture. For now, the focus is on Sara and how vindictive she will get if and when she is elected president in 2028 and if the Marcos Family is putting in place its exit strategy before the next crucial presidential election.

Bahala na ulit si Batman sa economy...kanya, kanya muna ng diskarte.