Saying April Fools to our wallets
The world shares a common conflict. (Photo: Flickr)
It’s been a rough start to 2022 for everyone and it doesn’t seem like it’s getting better any time soon.
The initial Omicron surge was already bad enough to dispel whatever momentum the Philippines had in terms of economic recovery; we're now dealing with the effects of the still ongoing conflict between Russia and Ukraine.
“As a net oil importer, the Philippines is highly exposed to the surge in commodity prices directly through higher fuel prices and subsequently higher electricity prices,” said Makoto Tsuchiya, an economist at Oxford Economics.
Investors have cautiously been waiting for the Philippine Statistics Authority (PSA) to release March 2022’s consumer price index (CPI) after yet another month of price surges.
18 analysts from a BusinessWorld poll estimated March’s CPI to reach 4% after the past few weeks of volatile crude oil prices affected not only transportation, but other consumer goods distribution.
Turns out, they were right. In a report released by the PSA on April 5, it showed that the inflation rose to 4% in March 2022, higher than the average 3% that was recorded for the first two months of the year.
Despite the bad news, the Department of Finance (DOF) said in an economic bulletin last Saturday that combined exports and imports grew 20.1% year-on-year to $16.8 billion.
The DOF’s chief economist and former undersecretary Gil Beltran emphasizes the need for a more robust vaccination process and gradual reopening of the economy for a faster economic recovery.
Unity through lack of money
In a not so ideal way of saying the Philippines is in solidarity with other countries, the Deutsche Bank themselves has stated that they are struggling to keep up with all the mess the world is in right now.
COVID-19, energy price surges, supply chain problems, and labor shortages are just some of the factors to thank for that. Nolting also mentioned that the United States had breached the 7% threshold for consumer price inflation.
Sanctions and businesses halting operations in Russia have also possibly done more harm than good as Nolting mentions it could make supply chain problems even worse and drive up oil prices higher than our dreams of getting a full tank at the gas station.
Global south farmers have also conveyed their frustrations as fertilizer shortages hinders a constant stream of food supply. International prices of key soil nutrients from Russia and Belarus (which contributes to a combined 40% of the global exports of potash) have been higher than usual as the global conflict enters its second month.
Right now, it’s looking like the next few weeks will be another daily question of whether or not we can afford it. The global economic implications of the Russia and Ukraine war will be felt for a long time. Here’s to hoping we don’t have to break open our piggy banks.
