‘Almost 50 years later, Ferdinand R. Marcos Jr. will have to grapple with the consequences of sky-high oil prices on the living conditions of the ordinary Filipino: commodity prices will rise as evidenced by inflation.’
I WILL never forget the worry. I was just in my first or maybe second year at Coca-Cola Export when gasoline prices were hiked. This was in 1998 or 1999 and the price per liter?
P16.00. It was a major markup from less than P10.00, if I remember correctly. And what I also cannot forget was the comment made by our senior adviser for external affairs, Rene Adad. “This could provoke a revolution,” he said.
That revolution did not come.
Twenty-three or so years later the price of diesel is now close to P100, and gasoline is not far behind. The main reason? The Russia-Ukraine war, which has thrown the global economy into a tizzy. Embargoes on Russian oil exports have made most of the world go to the Middle East for supply, which has converted the oil market into a seller’s market as prices per barrel hit the roof.
Buyers like the Philippines have no choice but to roll with the punches. Consumers in the Philippines have no choice but to pay up.
This is one of the biggest challenges facing the incoming Marcos administration. It is in a way history repeating itself: Ferdinand E. Marcos had to grapple with the effects of the founding of OPEC in 1974, which upended the global oil market and caused oil prices to skyrocket. It also helped scuttle the industrial projects that Marcos had envisioned for the Philippines, setting back the industrialization of the Philippine economy by at least a decade.
Almost 50 years later, Ferdinand R. Marcos Jr. will have to grapple with the consequences of sky-high oil prices on the living conditions of the ordinary Filipino: commodity prices will rise as evidenced by inflation. In turn, there will be demands for wage increases to make up for the gap, leading to a dangerous wage-price spiral.
It’s no wonder the incoming President has been meeting with his economic managers long in advance of his assumption of office.
If Mr. Adad were alive today, would he claim that these new pump prices create a revolutionary moment? Maybe he would. But as it was 50 years ago, we still need to see if in fact they spark such a moment; I am betting the Filipino will do as he has done so many times on the past: tighten his belt and control his spending.
But this time he can vent his ire on Twitter. And that may be the unpredictable ingredient in the mix.
