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Friday, February 10, 2006
Espinoza: Optimism
By Fred C. Espinoza
MOST people I’ve talked to recently appear to be more concerned about price surges of imported oil products than the political uncertainties in the country, although we have yet to see any sign that these will be over soon.
This may be a major improvement in the outlook of our people in a sense that they would rather keep their cool and wait until better times start to roll in.
I’m reminded of a line from the ‘‘Voice of Prophecy Speaks”: “Accept what God plans for your life in the future and look forward to a better tomorrow.”
Could this be a sign that our countrymen are beginning to realize what it takes to become a responsible citizenry in a free democratic society, and prefer to place domestic political issues in the right perspective for the sake of internal peace, political harmony and, above all, the economic well-being of the nation and the people?
Speaking of looking forward to a better tomorrow, it appears that the optimistic feeling seems to be thriving in every nook and cranny in the Asian region as what analysts are trying to portray in their observations.
A report from Hong Kong says bright prospects for Asia over the next 12 months have raised hopes that regional economies will cope should oil prices again reach $70 a barrel.
What the report also tried to emphasize was that analysts widely see that level of optimism as probable within the next two months. At present, the price of oil is a few dollars shy of the record high of $78.85 reached in August last year following hurricane Katrina in the United States.
The figure was once thought of as a potential breaking point for regional economies with heavy reliance on oil imports. Even among Cebu businessmen, the common perception then was, at this price level of oil imports, many companies will surely fold up.
Although there was this perception then, David Cohen, a regional economist with Singapore-based Action Economics, believe global growth appears likely
“The data from across the region show that Asian economies finished 2005 on a solid note supported by strength in the global export demand. That looks likely to continue into the first half of 2006,” he said.
With respect to Middle East tensions, consumer demand and institutions, which increasingly see oil as an investment risk, are pushing the cost of crude oil beyond $90 a barrel, the report said citing forecast by some analysts.
Meanwhile, other analysts are having second thoughts about the heavy influx of pension funds into the market.
Tetsu Emori, chief commodities strategist with Mitsui Bussan Futures in Tokyo, had said oil prices would be pushed up with that kind of money, as BT Pension Scheme plans to invest £3 billion in the commodities market.
However, even at $90 to $100 a barrel, Cohen is optimistic the region would weather the economic fallout — if spiraling oil prices are driven more by demand than political risk factors.
“The increase last year reflected a strength in global demand rather than a supply shock—if that continues to hold through this year, then the highest prices should not derail the growth of the region,” he said.
The report, however, was silent about how the consumer would be able to roll with the punch, so to speak.
It may be presumed that the business community and the government would be enterprising enough to strengthen efforts to provide the people with more job opportunities and better salaries for the workers to spur demand in the region.
For Bisaya stories from Cebu. Click here. (February 10, 2006 issue)
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