A perfect storm

Last Saturday afternoon along a road in Pasig, I saw several jeepneys not only full inside but with three passengers hanging on to the rear while standing on the boarding step and side stirrups.

There were so few jeepneys along the busy road, which isn’t serviced by buses, so I guess the commuters and jeepney drivers alike decided they had no choice but to risk being apprehended for overloading.

On my way home last Sunday night, I again noticed the acute lack of public utility vehicles (PUVs), this time along a major road in southern Metro Manila. Near a mall there was an unusually large crowd of commuters waiting for rides, similar to the situation during transport strikes.

As interviews with transport groups are showing, however, the PUV drivers and operators aren’t going on strike. Instead, they say they are suspending their trips for a prolonged period or stopping operations altogether, since their livelihood is no longer viable due to soaring fuel prices.

Along certain routes, free rides provided by the government have also meant fewer passengers on jeepneys even during rush hour. After a day’s toil, some drivers say their average net earning comes down to just P150.

Even jeepney operators are throwing in the towel. News reports show that several have sold their jeepneys and are shifting to other sources of livelihood.

Russia’s continuing madness in Ukraine has not only caused the fuel price surge but also disrupted global supply chains and created a shortage in critical inputs in food production, notably fertilizer and wheat.

This is bad news for a country like ours, which is wholly dependent on imports for chemical fertilizer and wheat, the principal component for the flour used in our pan de sal and cheap instant noodles.

Prices of these two staples in low-income households are going up, by an additional P4 for each loaf of the affordable “tasty” and a 10-piece pack of regular pan de sal. So are the prices of sardines and other canned goods as well as detergents.

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Even if you have money to spend, the supply chain problem is affecting product availability. Large French fries, for example, are now unavailable even in the top fast-food chains.

Last week the price of my favorite four-cheese junior burger went up from P99 to P109.

A top wholesale dealer of food packaging told me they are raising prices of many products soon by nearly 20 percent because of higher costs of logistics and production inputs.

The Department of Agriculture is projecting prices of regular milled rice to be about P6 higher per kilo by yearend. On the other hand, the Department of Agrarian Reform maintains that the campaign promise of P20 per kilo rice is attainable by early 2023, through the development of small contiguous farms into a single “mega farm” operation.

Good luck on this; it sounds like the effort to get agrarian reform beneficiaries to form cooperatives for economies of scale, which has failed to get off the ground.

The cheapest variety in the major wholesaler where I buy my rice was priced at P34 per kilo as of last week. Because of the supply chain disruptions in fertilizer and other farm inputs, the Philippines’ major sources of imported rice – used to stabilize our domestic supply and prices – have bared plans to suspend their exports.

Rice production is also going to be slowed down by the return of farmers to using beasts of burden instead of mechanized implements. Several farmers have explained in interviews that they could no longer bear the high cost of fuel.

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The Russian invasion of Ukraine and the COVID lockdowns in China are beyond our control. What can be done in our country to ease the pain?

Wages have been raised in nearly all regions except two. We’re waiting for the report on wage compliance by pandemic-battered micro and small enterprises, which account for the bulk of businesses.

Organized workers, meanwhile, are lamenting that inflation and the surging fuel prices are negating whatever gains could be had from the wage hikes.

They sigh that even the ayuda, while appreciated, is good only for a few weeks. The cash dole-out is also financed partly by the excise and value-added taxes on fuel, adding to the eye-watering prices at the pumps.

The Duterte economic team insists that higher fuel costs have minimal impact on inflation. I’m no economist, but having been a regular consumer ever since I began earning a living, I have noticed commodity prices go up all around after a hefty fuel price hike.

Still, the Duterte administration – with its tax base drastically shrunk by the pandemic-induced economic tsunami – won’t consider even suspending either the VAT (12 percent of petroleum cost) or excise tax on fuel (P10 per liter for gasoline, P6 for diesel, P5 for kerosene and P3 for LPG). These taxes are automatically collected, unlike the billions in estate and other taxes owed by those in power and the well-connected.

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Jeepney drivers and operators aren’t the only ones packing up, either for a prolonged holiday or permanent livelihood change. Several small-scale fishers have also stopped operations; some said in interviews that they have sold their boats because of high fuel costs.

So expect seafood prices to go up further as well. That should give the DA reason to issue more import permits for seafood including galunggong.

Yesterday, the Philippine Statistics Authority reported that inflation soared to 5.4 percent last month – the highest in three-and-a-half years.

The inflation spike was attributed to higher fuel prices pushing up transport costs, which spilled over into both food and non-food commodities.

You don’t need to be an economist to understand this spillover effect. Anyone who regularly does the marketing for the household knows this.

Last month Agriculture Secretary William Dar warned of a “perfect storm” from the COVID pandemic, high fuel prices and the Ukraine war that could lead to a food crisis.

He has been accused of crisis mongering to allow for more food imports. But it looks like he’s right about the perfect storm.

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“WANG-WANG” CULTURE IS BACK: Along Roxas Boulevard at 3 p.m. yesterday, a black Grandia without license plates and the conduction sticker torn off (part of it read IK89) went through a red light and made a U-turn at the Airport Road junction in Baclaran, with a guy on the front passenger seat gesturing to motorists to stay away. The heavily tinted van was backing up an equally heavily tinted black Mercedes Benz sedan also with no license plates going northbound.