Panic time for the Philippines. What, me panic?

(First of three parts)

MANILA, Philippines — I am not a financial adviser and this is not financial advice.

However, I have a good track record at seeing the obvious. In 2019 I said US health care was broken (https://www.philstar.com/business/business-as-usual/2019/11/18/1969554/solving-us-health-care-fiasco) and now Robert Kennedy Jr. says so too.

On the morning of the US presidential election, when everyone expected a tight race, I predicted Trump would win big (https://www.philstar.com/opinion/2024/11/05/2397643/why-i-fear-trump-will-win). He did.

A year ago I said the peso could drop (https://www.philstar.com/opinion/2025/08/28/2468556/defending-peso-proven-losing-battlefield), and it did.

Our current national focus on Senate squabbles is pathetic, like Nero fiddling while Rome burned. As in past decades, we’re not seeing the obvious, and we’re distracting ourselves with petty rivalries.

The dollar will drop. The US wants it to drop, to repay its debt in devalued money. China wants it to drop so yuan/renminbi becomes the world’s reserve currency.

The peso will drop. All the fundamentals and market sentiment are aligned against us, and haven’t even begun to bite.

Oil supply will normalize. Someday. Asia would be wise to tap and lock in access to grey-market oil. The failure of Asian stock markets to panic implies that this is already happening. In theory, the UAE can avoid the Strait of Hormuz with the port of Fujairah, but Fujairah is within range of Iranian drones. Saudi and Iraqi oilfields are near the Persian Gulf (next to all the other oil in the Middle East) and their tankers thus pass the Strait.

Both have alternate routes to market: Iraq to Israel through Jordan; Saudi Arabia through itself to the Red Sea (if it makes up its mind to build a bigger pipeline beside the existing one. A new pipeline to Jeddah could be built in two years or less (no environmental issues as in Alaska), along an existing major road.

If oil prices remain high relative to US and European middle-class purchasing power, one casualty will be cruise lines, which consume more oil per customer than almost any other human activity and employ over 100,000 Filipinos.

China ascendant. Taiwan invasion? In the meantime, China is widening its lead on solar generation. The US is making a huge mistake trying to corner oil supply in the Western Hemisphere while “unwittingly” interrupting supplies in the Middle East (classic negative-sum thinking). Thanks to China, power from solar energy is now cheaper than all traditional sources. The remaining problem is energy storage. Fortunately, major advances are expected in large-scale energy storage. The technologies exist; it is only a matter of time before economically-feasible implementation.

China knows this is happening. China is good at playing the Long Game. It doesn’t need to invade Taiwan or even the West Philippine Sea. It can just wait, and sooner or later it will be the dominant supplier of power in Asia, if not the world. That would outweigh any breast-beating to be gained by annexing Taiwan. On any risk-reward calculation, China shouldn’t start a war over Taiwan.

However, there is no telling what any humans will do once they realize they have the power. For example, Cory Aquino devolved power and revenue to local communities, supposedly in the hope of grass-roots democracy. What really happened is that once LGU officials realized they could steal with impunity, they just went ahead and did it.

So Chinese hotheads might still risk a Taiwan takeover, despite the lessons of Iran and the Ukraine.

Eight decades of unremitting incompetence in national government and economic policy on all fronts have seen the Philippines slide from “highest GDP-per-capita country in Asia” in 1946 to “almost dead last” in 2026. At every economic fork in the road, we took the wrong turn, starting with prohibiting foreign ownership, then coddling inefficient local manufacturers with protectionist tariffs, then rushing badly-structured “land reform,” then cancelling the US Bases (losing what today would be $5-10 billion in annual rent and spillover economic activity).

We are not in good shape to weather world turmoil, and there is a real prospect of losing at least $40 billion annually, a third of our FX income, in five to 10 years.

The time to panic is Now.

(Tomorrow: First of two fairly-easy fixes. For Gonzalez’s background, please see plantationbay.com/cred)