The Unlawyer

I went to the gas station last week to fill up my car with gas and after taking note of the price I paid per liter, this is what I found out: Philippine fuel prices went up by about PHP 5.50 per liter from January to May 2008, with the exception of diesel which increased by PHP 4.60 per liter. The highest increase was recorded for 93 octane gasoline [Petron XCS Unleaded in this case - Ed.] which went up 12.37 percent during the period in review.

Last Friday, the minimum wage in the National Capital Region was officially raised to help workers cope with rising prices: P20 wage hike in Metro, as well as as elsewhere: P20 wage hike approved in Calabarzon [Cavite-Laguna-Batangas-Rizal-Quezon - Ed.]. Not everyone is happy with this development, like organized labor, who think the increase is too small, and economists as well, who say it will only add to inflation.

How certain Philippine businesses will be able to cope with this latest wage increase is anybody’s guess, like industries that depend on exports for the bulk of their revenue: Global slowdown batters Philippine exports.

“We continue to expect a deceleration in exports due to worsening conditions in the US economy, already seen to be in, or near, a recession by various indicators,” said Margarita Gonzales, economist at New York-based think tank GlobalSource.

““Hopes that other markets will continue to compensate for US weakness have lately dimmed,” she added. “Growth projections for the euro area, which buys roughly the same proportion of Philippine products as the US, now indicate a sharp slowdown.”

“The fall in March export earnings was largely due to a 17.4-percent year-on-year drop in the shipment of electronics products, which make up the bulk of Philippine exports.”

What else is going up? Jeepney, bus fares to go up on Wednesday. Even Jollibee hamburgers too: Fast-food giant plans new round of price hikes.

Speaking of Philippine inflation, rocky times are seen ahead: Inflation risk seen highest in 3rd qtr. There is, however, a silver lining behind this particular cloud:

“Even with higher-than-forecast inflation, other macroeconomic indicators such as the exchange rate remain in the country’s favor, allowing exports to remain competitive with the rest of the region.”

As early as January, Philippine solons have been clamoring for the exemption of fuel and electricity from the 12 percent value-added tax (VAT). Administration officials then put paid to the idea but are apparently reconsidering this stance, in so far as electricity is concerned. The finance secretary, however, reminded all and sundry of the tax income that government will forego if this measure is approved.

In crime news, the Philippines was shocked at a report that ten people were shot execution-style by robbers Friday morning at a Cabuyao, Laguna bank as they took off with its money. Nine were killed at once while one died in hospital Sunday, dashing hopes of an early solution to this brutal crime, already dubbed the bloodiest of its kind in Philippine history. Police say that some of the dead bank employees may have known of the identities of the perpetrators, and were killed because of this. While the bank’s surveillance cameras were apparently disabled by the malefactors, police have a witness who may be able to describe at least one of the suspects.

Supply and demand: a Wall Street Journal survey of economists reveals what they believe to be the underlying causes of the never-ending price hikes in food and fuel:

“Fifty-one percent of the respondents said demand from China and India was the prime factor in soaring energy prices, and 41% said the demand was the chief contributor to rising food costs. Constraint in supply was cited second most often; 20% blamed supply problems for higher food prices, and 15% for increasing energy prices.”

Should we take comfort in this prediction?

“The survey, conducted May 2-6, showed that the 53 respondents, on average, expect the price of crude to fall to about $105 by the end of next month and to about $93 by the end of the year. (Crude settled at $123.69 Thursday on the New York Mercantile Exchange.)”

I’ll believe it when I see it.

At least one Philippine business group remains bullish over the prospects of the Philippines’ economy: Franchising industry unfazed by rising prices–trade group:

“[Philippine Franchising Association] chairman Alegria S. Limjoco said in a statement the domestic franchise industry was “safely nestled in a consumption-driven economy powered by the remittances of overseas Filipinos and the booming tourism and property sectors.”

“”On the demand side, we have a large young consumer population and a high-end global tourism market driving consumption to sustained growth levels,” Limjoco said.

“”On the supply side, we have a booming property sector that provides the franchising industry the commercial spaces and new urban growth centers to expand to,” she added.”