Philippine News Roundup −27 May 2008

It is said that at $130/barrel, the local pump price of gas actually translates to P63/liter. If that is the case, the people should start seriously preparing for bad times since at the world market, oil continues its rampage and its price is currently at $133/barrel. Looking back, it can be observed that the oil price 6 months ago was just about half of that. This is worsened by other consequences such as the continued rise in the value of precious American dollars. Yesterday, the foreign exchange rate 43.63 but closed at 43.58, a decline of 15 centavos from Friday’s closing price. And since the country is yet to decrease its consumption of expensive oil, purchased using US dollars, the value of the American currency can be expected to increase further.

Government intervention can only do so much. When prices go haywire, the best thing for it to do is let the prices reach its optimal level and simply make sure that no artificial manipulation is being done. No amount of tax cuts and subsidies will stabilize prices when it's running like a runaway train.

On a positive note, the runaway prices brought in additional tax revenue to the government, thus enabling it to reduce some taxes, increase subsidies and spend more on farm to market roads, irrigation/post harvest facilities and other public infrastructures. Let's hope that the additional revenue is not eaten by corruption. Going to that topic, the government threatens Devenecia with its own revelations. The former top official should know how it is to fight against city hall.

Having read what is written above, you know what to do. Work harder, spend less.

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