Malacañag has warned traders and business sectors not to increase the prices of their products, with global oil prices falling after top producer Saudi Arabia signaled a likely boost in supply as soon as the third quarter.
At the same time, Malacañang ordered the Department of Trade and Industry to strictly monitor the prices of basic commodities and to penalize those who would take advantage of the rise in oil products.
World oil prices fell Friday after Saudi Arabia signaled a likely boost in supply as soon as the third quarter, and world stock markets were mixed over the sudden US move to cancel the summit with North Korea.
Saudi oil minister Khaled al-Faleh told an economic conference in Russia that a gradual output increase could happen in the second half of the year to prevent any supply shocks, according to the RIA Novosti agency.
In a related development:
• Militant lawmakers on Saturday vowed to intensify mass protests against the Tax Reform for Acceleration and Inclusion or the TRAIN Law blamed for spiraling prices of fuel and other prime commodities
Reps. Antonio Tinio and France Castro of ACT Teachers Party-list vowed to continue the protests until Republic Act 10963 was repealed.
“President Duterte has drained the already empty pockets of the Filipino people with the regressive TRAIN 1 which imposes excise tax on sensitive products like oil and petroleum gas which will have a domino effect on the prices of other products,” Tinio said.
“Inflation rates are at a record high with the first P2.50 of the P6 excise tax on fuel. Without the repeal of the TRAIN 1, we would expect an even higher inflation rate in the coming years,” Castro said.
Benchmark crude prices tumbled almost $3 per barrel in London and fell more than $2 in New York. Oil stocks were also hammered as a result, with US supermajor Chevron falling 3.5 percent.
The weakened energy stocks weighed on Wall Street’s performance, with the Dow Jones Industrial Average and S&P 500 each lost 0.2 percent for the day.
Russia’s oil tsar Alexander Novak said ministers from Opec and other members of the production pact would discuss how much to increase production next month.
“If we come to a common opinion that it is necessary” to increase supply it “should probably take place from the third quarter,” Novak said, according to RIA Novosti.
The lackluster finish in New York came amid light trading volume ahead of a three-day holiday weekend, the traditional start of the US summer when many market players are on vacation.
Quincy Krosby, the chief market strategist at Prudential Financial, said that more than simply reacting to oil prices, traders were seeking to reduce their exposure to global uncertainties ahead of the holiday.
“You don’t want to stay in the market for a long weekend with the uncertainties surrounding North Korea as well as the situation in the middle-east with Iran,” he told AFP.
London and Frankfurt stock indices finished the week slightly higher, while Paris was essentially flat at the close as investors hesitated amid the confusing series of reports on geopolitics.
President Donald Trump on Friday (Saturday in Manila) raised the possibility of pressing ahead after all with a June summit with North Korea, barely 24 hours after abruptly calling the meeting off.
That news followed the Trump administration’s announcement it was considering imposing duties on auto imports, which threatens to disrupt a crucial North American industry and anger major US trading partners who are already in fraught trade talks with Washington.
US markets will be closed on Monday in observance of Memorial Day.
Asian markets mostly fell Friday after the news of Trump’s cancellation of the summit.
“It looks like we are back to fire and fury as the modus operandi for the White House again after President Trump [threatened] a new 25 percent car import tariff and canceled the summit with North Korea,” said Greg McKenna, chief market strategist at AxiTrader.
In Malacañang, Presidential Spokesperson Harry Roque estimated that at least 70 percent of traders were taking advantage of the rising oil products and the Tax Reform for Acceleration and Inclusion Act.
“Many in the business sectors are taking advantage of the situation, thus, prices of commodities are high. However, there are penalties for those who would be caught,” Roque said over a radio interview.
The Palace official assured the consumers that the government was doing all efforts to control and maintain the prices of goods in the market.
“The DTI will prosecute individuals who will take advantage of price hikes,” he said.
Roque said Labor Secretary Silvestre Bello III had ordered the regional wage board to convene and conduct summary proceedings on the necessity of wage hikes.
Labor groups earlier asked the DoLE to raise the minimum wage of workers due to the supervening event from the sharp inflationary impact of the TRAIN Law.
In a statement, the Alliance of Labor Unions-Trade Union Congress of the Philippines claimed there was enough reason for the regional wage boards to conduct summary proceedings on the necessity of wage hikes even in the absence of wage petitions within their respective regions.
Duterte’s spokesperson also said the Department of Energy was looking into the possibility to buy cheaper oil products from Russia and non-Opec members.
“We will do everything to import cheaper oil because not all oil producers are members of Opec. We are looking into the possibility that we can import diesel from Russia,” Roque added.
Castro said as the school opening for the academic year 2018-2019 years, parents, teachers, and students who have been preparing for the supplies and other expenses for schooling were not exempt from the burden of higher prices of school supplies.
“The Duterte administration has done nothing but to increase prices of basic needs for school supplies, food, transportation and other basic needs and services while also keeping mum on the demands of the people for a salary increase, job security and depriving the people from their benefits,” Tinio added.
Duterte’s economic managers stand firm against the repeal of the TRAIN 1 despite the loud clamor of the people especially the poor who are most affected, including those sending their children to school, Tinio said.
At the same time, they are pushing for the swift passage of TRAIN 2 which will give away billions of savings to giant local corporations with the lowering of corporate income taxes, Tinio added.