The world price of oil jacked up to its record high $147 per barrel last week, slowing down the entire world’s economy. As expected, this sparked waves of price increases of other commodities and services not only in the archipelago but in the rest of world. In the Philippines, the skyrocketing increase of the country’s inflation rate—which spiraled to 11.4 percent in June this year, the highest in 14 years—is attributed mainly to the unprecedented increase in world oil price.
Record-high oil prices and affects the entire Filipino populace. If before the Filipino poor were the only singled-out victims who endure the daily challenge of subsisting by means of continually dwindling resources, this time they are joined by the middle class and even the rich. Many motorists are forced to join the commuting public in muscling their way into the crowded LRT and MRT and many shopaholics moderate their addiction by buying less.
Authorities are mulling on ways to soften the impact of the country’s worsening economic landscape. One of the most popular, and the most debated, measures is to suspend value-added tax (VAT) on petroleum products. Led by Sen. Francis Escudero and other government officials wanted the VAT on oil scrapped, saying that it would make the price of oil cheaper. Without VAT, fuel prices will become cheaper that would translate to lower prices of other commodities.
President Gloria Macapagal-Arroyo, Sen. Edgardo Angara and other authorities, on the other hand, stood in defense of the implementation of VAT on oil, explaining that the amount collected from this tax are used to subsidize the poor’s rice and electricity.
With or without VAT oil prices will continue to increase as long as speculation and increased demand from emerging economies thrive. China and India’s mammoth economic growth obviously requires more oil than before. Yet oil price increase spree stems out not mostly from the actual demand for the “black gold” but from the obsession of a few people called speculators. Twenty years ago, 21 percent of oil contracts were purchased by them who trade oil on paper with no intention of ever taking delivery. Today, oil speculators purchase 66 percent of all oil futures contracts, and that reflects just the transactions that are known. Speculators buy up large amounts of oil and then sell it to each other again and again. A barrel of oil may trade 20-plus times before it is delivered and used; the price goes up with each trade and consumers pick up the final tab. Some market experts even estimate that current prices reflect as much as $30 to $60 per barrel in unnecessary speculative costs.
Accepting the mentioned fact may be a bitter pill to swallow but it’s a reality any person needs to accept. Every established economic and political system in the world always has ugly, despicable loopholes. In a global capitalist economy speculation is one of those. Not even the richest and the most powerful countries such as the United States and other G8 member countries can use their power to arrest the damage done by the game global avaricious profiteers play. More so for the Philippines—a hapless and helpless impoverished nation managed by the most corrupt government in Asia.
Now is the perfect time Filipinos need to further harness the coping skills that we have acquired over the years, our attributes admired and prized by foreigners worldwide—our uncanny ability to rise from the ashes. Our resilience motivates us to use our innovative and resourceful spirit to solve problems by means of unorthodox methods with fewer than expected resources. This has made poor Filipinos subsist despite the most harrowing economic conditions.
By resilience joined with inventiveness and resourcefulness our elders were able to convert used US military jeeps left by Americans during World War II into mass transportation vehicle known as jeepneys. They transformed a two wheeled tractor similar to a rotary tiller into a mass transportation vehicle named kuliglig. These are are just tangible proofs on how we Pinoys can overcome our daily trials and problems in life. We may not be the most creative, hardworking, intelligent, or resourceful race. We are even far from being the richest and the most productive economy. But one apparent thing Pinoys can contribute in coping with the world’s present ordeal is to use our uncanny ability to rise from the ashes. Resilience is a trait that can only be discovered and honed from further subsisting amidst diverse and sundry trials in life. Fortunately for us resilience is our daily bread that has kept us alive and growing despite living in a corruption infested country and in a maddening world.
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