USA's good news could be RP's bad news?

The Christendom's observation of the Lenten season is finally over. Capped by a weeklong vacation or family reunions of urban dwellers in their provincial residences or preferred holiday destinations, it ended yesterday, Easter Sunday. It culminated with a rush back home amidst throngs of faithful and vacationers who tried to compete for every available public transport space just to get a night rest before plunging into the usual regular day routines.  

On the other hand, apart from the crowded beaches, those who preferred to remain in the metropolis enjoyed roads totally devoid of traffic jams and illegally parked vehicles. However, though few, the scarcity of public transport presented a little concern for the faithful who wished to pay homage to the Great One. 

While everyone was setting aside their normal hectic schedule and heaps of paper works, the one-week respite offered situations and facts that may be useful by our country's economic planners. Just like in last year's observance, where the Americans sensed that the US economy was no longer in a free-fall, two significant economic indicators showed very promising prospects. 

In this year's observance, there are two very encouraging statistics that brought about positive outlook. These are two correlating statistics that could mean that the US economy is on its way up the pit. First and foremost, in a recently released report, the U.S. economy gained more jobs in March than any other month in the last three years. The U.S. Labor Department said, that "the economy gained 162,000 jobs in the month, compared to a revised reading of a 14,000 job loss in February". Though unemployment rate remained 9.7% high, notably, however, this is the third increase in jobs in the past five months. Such encouraging development could mean that the labor market has begun to stabilize.

Relative to this encouraging statistics is the report that the gains were spread across various sectors of the economy. Reportedly, 60% of ailing industries have added jobs after a four-year hiatus. The long-battered industries like construction (which was in crisis since June 2007) added 15,000 jobs. On the other hand, the manufacturing sector added 17,000. Notably, 2,500 of these new hires came from auto plants and their parts suppliers. Likewise, retailers added almost 15,000 jobs and leisure and hospitality industry accounted for 22,000 more jobs.

Corroborating this rosy development are the current gains in car sales in the month of March. Compared to March of last year, double digit increases were reported by car manufacturers. Toyota, General Motors and Ford recorded increases of 27%, 21% and 43%, respectively.

These increases are more than just "a flash in the pan", respected industry analysts declared. They firmly believe that (with this and other encouraging economic indicators considered) the road to a steady recovery is well-paved.   Indeed, knowing fully well that consumer confidence and spending account for more than two-thirds of the US economy, then this bit of positive news is totally refreshing for the rest of the world. Logically, with new jobs coming, more and more Americans will have money to spend.

Likewise, economic managers of the USA agree that they've gone through the most difficult part of the recession. They further agreed that there are signs of leveling off and that the world's biggest economy will steadily grow from now on. However, while they are one in predicting that their economy will start rebounding gradually, they can't reasonably predict how high it shall be.

While the favorable developments in a country where the rest of the world's economy largely depend are very encouraging, these are not worth rejoicing at all. While it is true that exports to the USA may soon pick up, the downside could pose a problem to countries, like the Philippines, that are largely dependent on oil imports.

It can be recalled that 2008 saw the rise of oil prices to US$147.00 per barrel in July and witnessed its plummeting to US$37.00 per barrel towards the end of the year. Its price decline was never difficult to comprehend. It was primarily due to a sizeable drop in the demand for oil in the USA. Undeniably, the world's biggest consumer is the USA. They consume more than 20 million barrels a day or more than 1/4 of the world's output. Therefore, demand for oil is largely influenced by USA's industrial and personal consumers' behavior. 

Precariously, the USA was in dire economic crunch since the middle of 2008 until end of 2009. In fact, then, all indicators point not just on recession but deflation as well. With its sheer size, its economic turmoil traversed all over the globe. Manufacturing and financial companies were closing down. Foreclosures of mortgages remained unabated. Consequently, economic activities like manufacturing had largely slowed down. As these manufacturing outfits used to consume sizable quantities of oil, its demand therefore had substantially dropped.

On the other hand, as 88% of the US workforce travels by car, a sizeable chunk of the country's consumption was eaten by this sector. As more of them were losing jobs and were opting to use public transport instead, their oil purchases had considerably dropped as well. 

Obviously, therefore, as jobs and other economic indicators turn brighter day by day, consumer spending will again shoot up. Consequently, the US economy leaps and the demand for oil will certainly increase. Logically, oil prices will again shoot up, and we, as an oil importing country will again be in the receiving end of the bargain. Coupled with higher consumption in diesel fuel to power second hand generator sets (to cover energy supply deficit), the problems could be worst.

In the US (as an oil importing country), in preparing for the consequences, President Obama, despite his strong opposition of oil drilling in his 2008 campaign trail, has emphatically announced his plans to "reverse a decades-old U.S. ban on new drilling for oil and natural gas off some parts of the country's shores".   The reversal would permit new drilling in the Atlantic Ocean off the southern United States, in the eastern Gulf of Mexico, and near part of Alaska.

Such is a gesture of genuine care for his (Obama) people. Simply put, in order to sustain the modest growth his country so far attained, he made sure that whatever necessities the economy needs he was ready to provide even it means swallowing his own pride.

Fortunately, just like in the USA, we can also cushion the impact because we also have our own oil deposits to explore. Sadly, however, unlike Pres. Obama, our leaders shiver in the thought that their decisions might be so unpopular. They tremble in the idea that they might loss their elective seats (a.k.a. livelihood) if they go against the will of the noisy, but not necessarily big, organized entities.

With these developments, we can only pray that they'll start opening their hearts and feel the groaning of the silent majority.

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