How to reduce impact of global oil supply shocks? Build local economy, Artlets profs say

Art by Janssen Judd Romero/ THE FLAME

THE PHILIPPINES must boost its local economy to minimize the risks posed by global complications, including the recent conflict between Israel and Iran, Artlets professors said.

Political Science Asst. Prof. Ronald Castillo said the country should not set its sights on labor migration if it wants to mitigate the impact of external developments.

“Focus on building the local economy rather than building a society of workers abroad. Developed countries hire workers. We send our people there. So, what are we?” Castillo told The Flame.

History Assoc. Prof. Tyrone Jan Nepomuceno called for the development of home-grown industries in the country as the repatriation of Filipinos in conflict zones remains “logistically challenging.”

“The government must push for a people-centered development, measured not by mere technocratic standards and statistics but by the people’s feeling of assurance, stability, and security in our country,” Nepomuceno, who also teaches courses in Asian Studies, said.

“Enough with band-aid solutions, long-term ones are needed.”

A conflict between Israel and Iran escalated on June 12 after the Jewish state launched airstrikes against Iranian nuclear and military facilities that killed several commanders of the Islamic republic.

Iran responded with missile attacks on Israeli cities and bases that left about 40 persons dead.

A ceasefire was brokered by US President Donald Trump on June 24, but concerns over the possible re-escalation of the conflict persist.

Nepomuceno noted that underlying tensions such as Iran’s opposition to Israel’s actions in Gaza are yet to be resolved, making the ceasefire “fragile.”

“By principle, Iran is still very much agitated with Israel’s actions in places like Gaza where their fellow Muslims are suffering,” Nepomuceno said.

Whether the ceasefire holds or fails, the Philippines should expand livelihood opportunities for its migrant workers and explore countermeasures that would allow production to continue despite global tensions, according to Economics Prof. Carlos Manapat.

Political Science instructor Anthony Andrew Divinagracia said building the Philippines’ ability to be self-sufficient would shield its people from the effects of future conflicts.

“[In the] long-term, we will win if we are self-sustaining; we have our own source of oil, our economy is good, and our countrymen no longer need to go abroad,” he said.

Oil reliance

Fuel prices in the Philippines rose because of the Middle East conflict last month, further highlighting the country’s vulnerability to external shocks.

Department of Economics instructor Augusto Laforga said the Philippines, as an oil-dependent country, could increase its oil reserves and look for alternative energy sources to reduce its reliance on imported fossil fuels.

“The manufacturers will be greatly affected also if the supply of oil in itself is the main problem and not just the high price of oil, because they cannot produce that much or they will fail to deliver enough quantity,” Laforga said.

“It may be relatively more expensive, but [it is] safer,” he added.

Crude petroleum is the Philippines’ fifth most imported product, with 40% of its oil imported from the Middle East.

Logistical challenge

The conflict prompted the Marcos administration to offer repatriation to Filipinos in Israel and Iran, but some migrant workers opted to stay for fear of not finding a job in the Philippines.

The assistance offered by the government to returning Filipinos include P150,000 cash aid, medical check-ups, temporary shelter and counseling.

Most overseas Filipino workers may prefer to take risks and exhaust all possible remedies to remain financially secured abroad, according to Laforga.

“Unless the government promises to pay all their expenses and provide them with a livelihood program enough to provide their family with a decent living, maybe, but for many, they will stay abroad and wait to see what the government in that country can do for them,” the Economics instructor said.

Divinagracia said the workers’ personal ties may also complicate their decisions, as some overseas Filipino workers (OFW) have foreign spouses and children who may not qualify for repatriation. Some domestic workers are also not ready to leave their sick employees behind, he added.

According to data from the Department of Foreign Affairs (DFA), around 30,000 Filipinos work in Israel while 1,180are employed in Iran. They form part of the over two million OFWs in the Middle East.

The DFA has eased travel restrictions in Israel and Iran for returning workers after the announcement of the ceasefire, downgrading the Alert Level from 3 (voluntary repatriation) to 2 (restricted phase).

More than 300 OFWs in Israel have requested to come home while about 130 have already been processed for repatriation.

As of July 10, more than 100 Filipinos from Israel and Iran have returned through the government’s repatriation program.

Nearly 900 OFWs have also received financial aid as of July 14.

The DFA has called for continued dialogue between the parties involved in the conflict, emphasizing diplomacy as a path to lasting peace.

“We strongly urge concerned parties to take the path of diplomacy and avoid further escalation of this conflict that could threaten regional and international peace and security,” the DFA said in a statement released June 25. F

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