Apocalyse Now: Regime of High Oil and Food Prices

[jpdm]

....Record high oil and food prices are hurting the economies of alot of nations including the Philippines...the spike in oil prices has dampened our stock market, consumption and manufacturing...our trade deficit has increased and businesses are scaling back their expansion...

....The spectacular rise of oil and food prices are also now triggering mass actions around the world...

....The world is bracing itself for an impending socio-economic slowdown..

Manila Standard
May 28, 2008
AFP with Othel V. Campos
RP firms start scaling back expansion plans

PHILIPPINE companies are shelving expansion plans, cutting capacity and easing up on hiring new workers as the US economic slowdown and record-high oil prices take their toll, the central bank said yesterday.
A poll of 1,258 firms among the country’s top 7,000 companies showed fierce competition and weak demand as “key risks to business activity” in the three months to June, the bank said in a statement.
While there were more respondents with a positive outlook than negative, the “overall confidence index” was down, “consistent with the broadly more cautious sentiment of businesses and consumers in many developed economies.”
Separately, the United Nations Food and Agriculture Organization said the Philippines’ import bill would kick up by up to 40 percent this year as a result of more expensive rice, wheat and dairy products.
That would translate into $3.45 billion this year from $2.5 billion last year.
“Surging prices of wheat, rice and vegetable oils will take their toll on import costs,” the UN agency said.
“Soaring international quotations are mostly responsible but also freight costs, which have nearly doubled for many routes.”
Last week, Economic Planning Secretary Augusto Santos said food and energy inflation likely capped economic growth to between 5.2 and 6.2 percent in the three months to March.

Manila Times
May 28,2008
G7, G20 Nations Urged To seek boost in Oil Output
AFP

PARIS: France called on the G7 on Tuesday to press oil-producing nations to boost their output in a bid to bring down prices that have reached record highs and thrown a spanner in oil-fired economies. Finance Minister Christine Lagarde said she would put the request to her counterparts of the Group of Seven club of rich countries to seek a common front with Britain, Canada, Germany, Italy, Japan and the United States.
“We cannot forever be in a market system in which the price is permanently on the rise, to the benefit of producers, who are building up major oil revenues,” Lagarde told France 2 television.
“I have decided to alert all of my G7 colleagues to discuss this issue, among consumer nations, and that we present it to producing nations,” she said.
Lagarde said she would ask the G20 group of emerging economies to join in the drive to bring down the price of the barrel, that hit a record high of $135 last week.
France has been rocked by nearly three weeks of protests by fishermen who have blocked ports, fuel depots and marinas to press demands for government aid to help cushion soaring fuel coasts.
While the protest movement appeared to be dying off in France after the government released aid, fishing fleets in Spain, Portugal, Italy and Greece launched action to press for assistance.

President Nicolas Sarkozy said in a radio interview that French consumers should brace for higher oil prices and that France was committed to developing alternative energy sources.

“The demand for oil products is getting stronger and stronger and supply is not increasing or very little,” said Sarkozy.