The denial of drama
In the same manner that those of you who remember the wartime generation will also recall that they were compulsive hoarders, I think those who reached adulthood in the late ’70s and ’80s developed a deep-seated wariness about unleashing public emotions, including panic. The late President Benigno Aquino III had an absolute horror of anything that, to his mind, might trigger public panic—something reporters from a younger generation simply couldn’t comprehend; in his own way, I’m convinced that President Marcos is also allergic to anything that might foster public panic or escalate political passions.
Business strategist Jonathan Ravelas seems to get it. “The Marcos administration is being precautionary in preparing for potential shocks, downplaying the idea that the national government has gone into panic mode … This is about preparedness—and the practical message for Filipinos and businesses is to brace for higher costs, manage cash carefully, and not assume oil risks will fade quickly,” he recently said. It certainly explains why Mr. Marcos declared a state of energy emergency and why the public is either unimpressed with, or uncomprehending of, the move.
On the day he ordered a state of energy emergency (on top of the state of national calamity since November last year), the President said we had 45 days of fuel supply, that the government was sourcing 1 million barrels (more recently upped to 2 million) to build its buffer stock, while talking to the United States about obtaining waivers to source oil from sanctioned nations, aside from ongoing negotiations to source oil from Asean neighbors and regional allies, such as Japan (a few days ago, even Bangsamoro officials reportedly asked Malacañang for permission to allow local traders to import petroleum products from Brunei and Malaysia).
In the early days of the crisis, statistician Jose Ramon Albert took exception to a Bulatlat infographic comparing oil prices in the region (which shows Filipino motorists pay the most) by pointing out what the infographic didn’t mention: that Indonesia and Malaysia subsidize low pump prices, with serious fiscal implications in times of crisis. Thailand, for its part, had to end diesel subsidies last March 16 (it was spending 1 billion baht, or P1.8 billion a day on the subsidy). He concluded, “A fairer version would actually sharpen the case for targeted transport subsidies, and emergency procurement from non-Middle Eastern sources.”
The government did announce targeted subsidies, while Congress proved it could move relatively quickly to address proposals to legislate presidential flexibility in collecting the oil excise tax during times of emergency. Finance Undersecretary Karlo Adriano recently told the Senate the earliest a suspension of the fuel excise tax could kick in would be mid-April, which is when the law would become operative.
Stephen CuUnjieng, the investment banker who, in retirement, has gained a second life as the man who likes to debunk domestic conventional wisdom, bluntly states the local debate is, as usual, a rehash of old battles with little new to offer: it’s not about full-on, unlimited deregulation or a return to heavy-handed subsidies, he says. “Other countries regulate not to set prices but to ensure supply, have in-country refining capacity, and avoid profiteering during crises.” This is possible for our neighbors, he points out, because they retained a government presence in the oil industry while adopting policies that provide “safety valves to act as a needed buffer at difficult times and prevent predatory behavior in normal times.”
The President, for his part, weighed in against nationalizing the oil industry. He exasperated people hoping for something–anything—dramatic by undramatically calling for energy conservation, limiting the government workweek, issuing that executive order that bored and confused people, and systematically procuring oil for the future. It took less than two weeks for Russian oil imports to be considered, American waivers secured, and actual deliveries to begin.
Looking ahead, with disruption the name of the game for years to come, the President even seemed to pivot back to China, announcing the Philippines would be open to talks with Beijing on gas exploration in disputed areas. This triggered criticism, with some pointing out constitutional limits on ownership that torpedoed previous attempts, while others pointed out that the Supreme Court has, through its decisions, provided a certain elasticity in definitions the government could find useful.
Veteran journo Marites Vitug pointed out that China “has long stopped the Philippines from exploring for oil and gas in Reed Bank, which is in our country’s EEZ. China insists it should partner with the Philippines and not with any other country.” The question is, she asks, will the President give in to China or let Filipino firms partner with other countries? Responding to Vitug, one reader suggested, “This could be an opportunity for China and neighboring countries to realize that one can be a regional partner-claimant on equal footing, rather than a vassal state; and that this would be a win-win.”
Winston Churchill famously said it’s better to jaw-jaw than to war-war.
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Email: mlquezon3@gmail.com; Twitter: @mlq3
