What’s ahead in the world, the nation and money
FIRST, the world. With summer hardening Ukraine’s terrain enough for heavy tanks to drive through, Russia is set to crush what’s left of Ukrainian forces. But the real news is not Moscow’s widely expected battlefield triumph, but the threat of direct conflict between Russia and the United States-led North Atlantic Treaty Organization (NATO).
The US has allowed Ukraine to use weapons provided by America for attacks within Russia. In one volley to Sevastopol in Russianannexed Crimea, a US-supplied battlefield ballistic missile apparently went off course and hit a beach, killing at least four civilians, including very young children, and wounding 151 others.
The Russian foreign ministry has blamed Washington and pointedly told the American ambassador retaliation for the “barbaric” attack would “definitely follow.” That threatens to escalate the war and bring America and NATO into direct conflict with Russia.
Adding to escalation fears is Russian President Vladimir Putin’s order to begin producing short- and intermediate-range nuclear projectiles, noting that Washington has introduced such missiles in military exercises in Denmark and the Philippines. Will that happen?
This column has long argued that US elections and Washington’s fear of fighting major conflicts in Europe, the Middle East and Asia have made it take pains to avoid war. That is probably even more so now not only because of Russia’s threat to hit back for the Crimean beach blast but also after US President Joseph Biden’s poor showing in his first presidential debate with top rival and former president Donald Trump last week.
These events may well have influenced our Department of Foreign Affairs (DFA) to agree with China on the need to ease frictions in the West Philippine Sea (WPS), the waters west of our country covered by our exclusive economic zone (EEZ).
Plainly, Uncle Sam is not keen to militarily confront Beijing over a possible attack on our vessels. So, we have to step back from recent confrontations with the Chinese. Those intensifying encounters helped not only to portray Beijing as aggressive. They also served to scare and anger Filipinos and make us willing to accept the US use of nine bases of the Armed Forces of the Philippines (AFP) despite the immense risk of devastating attack if there is a war between America and China.
What may hold back Uncle Sam from confronting Beijing is a possible Trump victory, especially with Democrats themselves fretting over Biden showing the impact of age. Trump is not so keen on American military deployment abroad and favors working out differences with rival powers instead of confronting them militarily — unlike the current Biden administration seeking to weaponize our country against China.
Meanwhile, back home … This brings us to the nation, and what almost surely will heat up as the big headline makers in the months ahead up to the May 2025 midterm elections is the political jockeying among parties and candidates for senatorial, congressional and local government positions up for grabs.
The election speculation revved up with the resignation as education secretary of Vice President Sara Duterte, prompting many to wonder if she will lead the opposition. No, she maintains, but her father, former president Rodrigo Duterte, and brothers Sebastian and Paolo, Davao City mayor and congressman, respectively, will run for the Senate.
It takes little imagination to foresee an opposition force forming around the Dutertes, which would probably be far more formidable than the administration’s current Liberal Party rivals. The three-Duterte senatorial bid also serves to ease attacks against the VP since last year.
This column rightly predicted in March 2023 that the US and pro-US Filipino politicians would move to stop Sara from succeeding President Ferdinand Marcos Jr. in 2028. Their aim: to preserve American access to AFP bases needed for possible Taiwan hostilities (“The hand of America: When warnings come true,” https://tinyurl.com/379ptmyp). Washington won’t forget how then-President Rodrigo Duterte nearly scrapped the Visiting Forces Agreement, allowing US forces to rotate in our country.
With the looming election maneuvering, certain Marcos camp chieftains reportedly angered politicians in the Bangsamoro Autonomous Region in Muslim Mindanao (BARMM) by threatening to get the Commission on Audit to clamp down on leaders refusing to support the party of BARMM Chief Minister Ibrahim Murad.
How different things would have been if the Marcos camp had not backed America’s agenda to block another Duterte presidency. What about money?
The peso’s repeated drop to nearrecord weakness against the US dollar looks set to continue, forcing the Bangko Sentral to expend reserves to counter speculators. The weakness stems not only from delays in US interest rate cuts but also from escalating imports due to high oil prices and now, the expected surge in rice importations after President Marcos slashed tariffs to 15 percent in a bid to reduce prices and boost supplies hit by El Niño drought.
Though leading much of Southeast Asia with 5 percent growth, the Philippine economy is performing below potential. After disappointing domestic demand in the first quarter of 2024, S&P Global trimmed its forecast for this year and next, with 2024 projections falling below the government target of between 6 and 7 percent.
Manufacturing output slowed to a three-month low in June, reports S&P economist Maryamm Baluch, who added: “Moreover, while growth in output fed through to higher purchasing activity, it failed to translate into job creation. The second consecutive month of job shedding reflected the lack of pressure on operating capacity within the sector, as backlogs were depleted sharply.”
Those less-than-sanguine prospects don’t augur well for the Marcos administration, especially going into an election year. And that’s even without any major conflict roiling the global economy.
Fasten your seatbelts.