After finance, it’s food, fuel and foreign affairs

An attendant pumps gasoline into the tank of a car at a gas station on TM Kalaw street in Ermita, Manila on Saturday, June 4, 2022. PHOTO BY JOHN RYAN BALDEMOR

The announced economic team of President-elect Ferdinand “Bongbong” Marcos Jr., led by new Secretary of the Ministry of Finance (DoF) and current Governor of Bangko Sentral ng Pilipinas (BSP), Benjamin Diokno, has been rightly applauded by businesses, think tanks and the media. and even pillars of the opposition.

Highly respected technocrats also include named chiefs Arsenio Balisacan of the National Economic Development Authority (NEDA), Felipe Medalla of BSP, Alfredo Pascual of the Department of Trade and Industry (DTI), Amenah Pangandaman of the Department of Budget and of Management (DBM) and Manuel Bonoan of the Department of Public Works and Roads (DPWH).

Following his father’s penchant for exploiting the best technocrats for key Cabinet portfolios, Marcos has gone some way to allay the warnings and fears voiced by naysayers, critics, local and foreign analysts and certain business groups. if he won the election.

Of course, what is far more important is to let the economic czars steer things expertly, even as the political leaders continue to voice their concerns and directions. Investors, creditors, analysts and the media will be watching to see if there is undue interference undermining policies and programs.

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Of the Cabinet and agency posts yet to be named as of Saturday afternoon June 4, the most closely watched are the incoming Secretaries of Foreign Affairs (DFA), National Defense (DND), Transportation ( DoTr), Agriculture (DA), Agrarian Reform (DAR) and Energy (DoE). Plus: the National Security Advisor (NSA) and the Commissioners of the Bureau of Internal Revenue (BIR) and the Bureau of Customs (BoC).

Of these remaining key appointments, the most crucial not just for this year and next, but well beyond, are the secretaries of the DA, DoE, DFA and DND and the NSA, as these portfolios cover three threats to which the nation is already facing and could worsen in the years and decades to come. : soaring costs and tight food and energy supplies as well as territorial frictions and even war.

We cover food and fuel today, and foreign affairs and security on Thursday.

According to the Food and Agriculture Organization of the United Nations (FAO), food prices around the world are at their highest level in a decade. The FAO Food Price Index is at or slightly below 160, 60% above the 100 index level for the period 2014 to 2016, propelled by disruptions in grain and other commodity exports food due to the war between Ukraine and Russia, two of the world’s largest grain exporters.

With the food supply tight, major food producers halted exports, such as Indonesia’s ban on palm oil shipments, Malaysia’s chicken export halt and ban on India on wheat shipments. Plus: Major rice exporters Thailand and Vietnam are talking about jointly raising staple food prices. Add to that soaring fertilizer prices that drive food prices even higher.

All of this has driven up our own food costs, with huge imports of rice, pork, chicken, fish and vegetables since last year due to shortfalls in local production. And that’s on top of soaring oil prices as Western sanctions on Russia have prompted a rush to other sources of fuel, driving up prices.

Crude approached $147 a barrel in February, the month Russia invaded Ukraine, and is still around $120, despite increased production from Saudi Arabia and some other producers to compensate the fall of Russian expeditions to Europe. Meanwhile, Russian oil is headed mainly to Asia, often transferred between tankers on the high seas at enormous cost and risk.

There may be no respite this year, as the West and Ukraine have opted to continue the war to degrade the Russian military. Now, the European Union is set to stop almost all Russian oil imports by December.

And even if prices and supplies of food and fuel stabilize next year, it won’t stay that way. Reason: climate change.

Global efforts to reduce the use of fossil fuels have reduced investment in oil production and refining, thereby reducing supplies. If the rebound in travel lifts jet fuel consumption to pre-pandemic levels, that alone would add 2.5 million barrels a day to oil demand, which the global oil sector would struggle to supply.

Then there’s the push to switch from coal-fired power plants to renewables, including phasing out existing facilities. New green power generators and the closure of coal-fired power plants would increase capital expenditures on top of the actual cost of generating electricity.

If it’s not yet clear, these complex food and energy challenges require the same level of technocratic expertise and experience found among Marcos’ economic managers. Therefore, placing political appointees in charge of the DA and DoE may not attract the players and investments needed to develop the power and energy sectors the nation needs. need in the difficult years and decades to come.

green guys

For agriculture, more than a dozen development roadmaps written under his leadership give DA Secretary William Dar unique credentials for President-elect Marcos to consider when selecting his Tsar of farming. Dar also formulated a 10-year plan for transforming food systems. Renaming Dar would ensure that these programs move forward instead of being sidelined.

The other “green guy” Marcos might consider is Arroyo-era DoE chief Vincent Perez. He can bring to the energy portfolio not just international investment banking stature as a former managing director of Lazard. He has also set up Renewable Energy (RE) businesses and knows what policies would attract global investors to embark on RE in the Philippines.

A leading figure in the Global Fund’s green movement, Perez would also strengthen ties with global environmental entities, including the World Bank and other green finance giants, and gain their support and funding for our green efforts. durable energy.

What about the representative of the party list Rodante Marcoleta, currently considered for the post of energy? With his strong advocacy for the interests of the people, he might be equally or even better suited for the position of leader of the National Poverty Alleviation Commission (NAPC), the supreme advocate in Cabinet for marginalized sectors.

There are many other highly qualified technocrats for agriculture and energy. Whoever gets the jobs must bring the same skill, professionalism and development vision as the next economic team. Filipinos can then be better assured of affordable food and sustainable electricity for years to come.

About Emilie Brandow

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