So far, so good.
The global market responded well to the signing of a memorandum of understanding between the US and Iran. Oil prices climbed down dramatically, promising relief the world needs after the supply shock dealt by the closure of the Strait of Hormuz.
Inflation remains an issue across all the world’s economies. It will remain to be so for months, given all the supply chain problems created by war. But inflation should remain manageable if the markdown on oil and its byproducts continue.
Elevated inflation rates forced most of the central banks, including our own, to raise policy rates. Higher interest rates create a drag on economic expansion. This is the price to pay for keeping inflation manageable.
ASEAN’s economies are expected to grow at an average of four percent this year. The Philippines is expected to fall below that average owing to serious governance issues. We were once among the region’s growth leaders. Today, we are laggards. The war merely amplified structural weaknesses already there for years.
Donald Trump and his Iranian counterpart signed a peculiar document this week. It was not a final settlement. This will be the outcome of tough technical negotiations yet to happen. It was not a ceasefire agreement. A ceasefire has been in place.
What was signed was merely a framework for anticipated negotiations. Those negotiations should begin in earnest. A tight timeline has been set in the document that was signed.
Trump was unusually candid in the face of criticism from his own base that what he signed was a surrender document. He admitted that the depleted strategic oil reserves was the major consideration influencing diplomatic tempo. Without an agreement that opens up the flow of deliveries from the Persian Gulf, the strategic reserves would be exhausted by mid-July.
The document that was signed barely meets the deadline for the industrial countries to replenish their reserves. Had it not been signed when it was, domestic oil prices in the US would rise sharply – with grave electoral consequences for Trump. If he loses control of the US Congress, he will likely face impeachment proceedings.
It needs to be emphasized that Israel is not a signatory to this document even as the cessation of Israeli bombing of Lebanon is a key Iranian condition. Israeli hawks are not happy with this agreement. They want nothing short of disarming Iran and forcing regime change. Israel intensified bombing of Lebanon even as negotiations were advancing.
Israel is now the wildcard in the Middle East peace process. Global condemnation of its destruction of Gaza, its land seizures in the West Bank and its occupation of southern Lebanon.
Tel Aviv has become Trump’s responsibility. He needs to reel in the Israeli hawks and their Greater Israel project. This might be a tougher challenge than dealing with Tehran.
Ruse
The ceasefire we thought was achieved among the warring Lopez cousins turns out to be illusory.
Recall that the “majority” of the Lopez shareholders led by Eugenio “Gabby” Lopez III moved the oust Federico “Piki” Lopez from the presidency of Lopez Inc. Piki sought judicial relief and the court granted him preliminary injunction. Last May 14, the board of Lopez Inc. – the sprawling holding company for all the assets owned by the heirs of Eugenio Lopez Sr. – issued a press release announcing the withdrawal of its Feb. 27, 2026 resolution ousting Piki.
For a moment, it seemed peace among the warring Lopez cousins was possible. Perhaps some productive collaboration – if not reconciliation – might be achieved. But hopes were quickly dashed.
Beginning May 18, just four days after the court issued a writ of preliminary injunction keeping Piki in his posts, the Lopez “majority” issued a series of letters seeking “to defer, withhold or prevent the approval, ratification and implementation of actions taken by First Gen and its management in connection with its transaction with Prime Infrastructure Capital Inc.”
Piki responded by asking the court to cite his cousins for indirect contempt. The letters from the “majority” of Lopez Inc., says Piki, “amounted to an attempt to accomplish indirectly what the court has prohibited the respondents from doing directly under the injunction.”
The letters were laced with personal attacks against Piki, described as a “king without accountability” supposedly presiding over an “opaque one-man rule.” The “majority” earlier described as a “poison pill” the provisions in the joint venture entered into between First Gen and Prime Infra that ensures management continuity. Most analysts describe those provisions as usual for large and complicated corporate mergers. The provisions were requested by Prime Infra and the financial backers of the deal to reduce risks involved in the transaction.
The “majority” questions the deal because First Gen puts in P61.8 billion for a 33 percent stake in the hydro projects to be completed by the joint venture. The Piki camp points out that the valuation reflects the substantial value Prima Infra put in through years of project development work, permitting, planning and risk reduction. The independent directors of First Gen agreed with this explanation.
Over the past week, the Piki camp tried to focus the discussion on the way ABS-CBN has been run. Piki proposes an independent management committee to assess the operations of this bleeding Lopez subsidiary.
But it is the hydro power projects that holds greater consequences for the country’s energy security.