Weekly Brief
Weakening global trade will mean import- and export-dependent countries like the Philippines will need to re-learn how to live within their DOMESTIC means.
In review and in prospect
The Philippines is once again, as tradition dictates, reeling from the most recent visit of a powerful tropical cyclone. Flooding over vast tracts of land have been reported and it is likely that agricultural production has been badly hit when one considers planting seasons covering much of these last couple of months. A massive farm production failure means the Philippines is in for more reliance (on top of its current on-going reliance) on imports in the next six to eight months.
This is specially relevant in these times as global demand for much of the country’s export output is expected to dip. As export earnings suffer, additional pressure will be put on the Philippine peso as the strain of funding increased imports with earnings from reduced exports hit. The United States’ Federal Reserve continues to tighten money supply by raising interest rates in its efforts to rein in inflation. This means increasingly less dollars will be in circulation vis-à-vis demand for it as currency traders flock to it and as the US economy mops up global supply of a currency important to international trade.
The longer view suggests that this may be a lingering trend. As the US turns inward and as Europe increasingly becomes less stable due to its splintering collective resolve to keep military alliance commitments intact in the face of growing threats from Russia, it is likely that the old global economic order is fraying at the edges. With the Philippine economy propped up primarily by consumption its hollowed-out industrial and agricultural capacity comes to light. Long regarded as a beneficiary of “globalisation”, the costs of embracing a world order that rewarded wholesale interdependence on what is essentially — now even more evident — a brittle international supply chain is coming back to bite. Consumption will increasingly have to be pegged to domestic production. Filipinos, quite simply, will have to re-learn how to live — and take care of themselves when disasters strike — within their domestic means.
Last week’s blog posts
Avoid donating to communist front organisations in times of disaster! #PaengPH
October 30, 2022 by benign0
"It is counterproductive to be spreading much needed resources thin by patronising the virtue signalling clowns at the Kabataan Partylist and the rest of their communist camp."
Why Is There Less Concern About Vietnamese Illegal Fishing in the West Philippine Sea?
October 25, 2022 by Paul Farol
"Will we see a significant increase in the number of surveillance and patrol missions by our police, Coast Guard, and Navy in areas where illegal fishing by China or Vietnam is frequently reported?"