THE war on Iran was launched because of one man’s folly, but it is ordinary Americans — not Donald Trump — who is stuck with the bill of around $2 billion a day. That did not come from me, but from the commentaries of American pundits and thought leaders who have been denouncing the recklessness of the decision-making process that led to the war. A war based on the dubious assumption that Iran’s barbarous mullahs would cave in after a massive bombing campaign, prostrate themselves before Trump, and allow regime change. Trump, of course, is not interested in history, thus ignoring the fact the battle-tested mullahs live and die for two things, and two things only: holding on to power and slaughtering every citizen who protests their grip on power.
Also, these mullahs have no respect for Trump, who they regard as a veteran of only one thing before he became president: stiffing his suppliers and contractors.
But here in lies the rub: while only two ill-intent actors — Israel and the United States on one side and Iran on the other — are directly involved in the war, the spillover effect of any war that has Gulf areas as the main battleground will place an enormous, almost unbearable strain, on countries like the Philippines. It’s a country that is overdependent on remittances from Filipino workers in the Middle East and on oil supplies from the same region, and partly dependent on fertilizers from there.
Oil, hard currency and fertilizers. Oil for mobility, all things transportation and power generation; hard currency from overseas workers there that has been the economic lifeline of millions of Filipino families for generations; and the fertilizers, plus pesticides, from Qatar and other major liquefied natural gas producers, the lack of which will paralyze Philippine farm production. And before I forget, diesel for irrigation.
After the first bombs rained on Iran on Feb. 28, and Iran launched retaliatory strikes that caused mayhem in the Gulf, the Philippine political setting that was engrossed with issues of dynastic politics and infrastructure-related corruption shifted to those more depressing and, tragically, beyond its control: surging oil prices, the safety of overseas Filipino workers (OFWs) in bombed-out areas, the spiraling prices of fertilizer and other farm inputs.
And the gut issue of “what happens to the families of Middle East-based OFWs in the case of mass repatriation and massive job loss?” What happens if the economic lifeline they provide is drastically cut off? For the hard truth is the promise of “remunerative jobs” for returning OFWs is just a verbal government scam. No such jobs for the repatriated workers exist. The total number of these OFWs is roughly 2.4 million, and that excludes the merchant marine seamen deployed aboard tankers moving oil and oil products from the now-troubled region.
Overnight, President Ferdinand Marcos Jr.’s administration was forced to deliberate on the fly on policies to contain the economic fallout caused by the war.
The immediate concern was the evacuation of Filipinos from the bombed-out areas via emergency flights, or possible deals with commercial carriers. But that is a long-running and agonizing effort because the government cannot just return OFWs and their family members home without some token assistance. And the issue of redeployment once the hostilities end is another government concern. And what would sustain the returning OFWs and their families between now and the return to normalcy.
Assistance to the land transport sector was immediately decided, but the promised “relief” was definitely underwhelming. The P5,000 assistance for each driver — which also means P5,000 per operating public utility vehicle (PUV) — can be aptly described as “better than nothing.” Bulk diesel orders from provincial bus companies before the war were immediately served and barely scaled P55 per liter. Now, bulk orders cost from P83 to P90/liter, depending on the supplier and payment terms. And some of the buses have routes from Cubao to Davao City. A one-time, small-time fuel subsidy of P5,000 a unit would help, but barely. As I filed this piece on Monday, a minimal fare increase for PUVs was announced.
The most urgent fiscal issue of the government right now is no longer the controversial unprogrammed appropriations in the national budget. It has shifted to suspending the collection of the fuel excise tax, which Marcos cannot do without congressional authority. A forgone excise tax collection means many government expenditure programs would have to be sacrificed. Choosing which program would be denied funding is like a Hobson’s choice, firing the father to employ the son.
Surging fertilizer prices will affect domestic farm production because farming is dependent on inorganic fertilizer; 40 percent of the global supply of urea and other fertilizer types come from the Gulf areas, Qatar being the biggest producer/supplier. Less fertilizer application will mean inefficient production. The woes of the farm sector are actually a double whammy. Because of a lack of irrigation, irrigation pumps fueled by diesel are used by rice farmers the whole year round. Think of a nightmarish scenario of surging fertilizer and diesel prices beating down on the country’s rice farms. This double whammy requires a separate column.
The seat of power right now — where all the major decisions to cushion the impact of the unexpected blows from war-related externalities will come from — is not a nice place to be. But wait, has not the fugitive Harry Roque proposed that Mr. Marcos should step down from the presidency so that Vice President Sara Duterte can preside over the major war-related decision-making process?
Good God. That would be like jumping from the frying pan into the fire.