After finance, it’s food, fuel and foreign affairs

THE announced economic team of President-elect Ferdinand “Bongbong” Marcos Jr., led by incoming Department of Finance (DoF) secretary and current Bangko Sentral ng Pilipinas (BSP) governor Benjamin Diokno, has been rightly applauded by business, think tanks, media and even opposition stalwarts.

The highly respected technocrats also include nominated heads Arsenio Balisacan of the National Economic and Development Authority (NEDA), Felipe Medalla of BSP, Alfredo Pascual of the Department of Trade and Industry (DTI), Amenah Pangandaman of the Department of Budget and Management (DBM), and Manuel Bonoan of the Department of Public Works and Highways (DPWH).

Following his father’s penchant for tapping top technocrats for key Cabinet portfolios, Marcos has gone some way toward allaying the warnings and fears expressed by opponents, critics, local and overseas analysts, and some business groups if he won the elections.

Of course, what’s far more important is letting the economic czars run things with expertise, even as political leaders still input their concerns and directions. Investors, creditors, analysts and media will be watching to see if there is undue interference undermining policies and programs.

Three threats today and tomorrow

Among Cabinet and agency posts yet to be named as of Saturday afternoon on June 4, most closely watched are the next secretaries of Foreign Affairs (DFA), National Defense (DND), Transportation (DoTr), Agriculture (DA), Agrarian Reform (DAR) and Energy (DoE). Plus: the National Security Adviser (NSA) and the commissioners of the Bureau of Internal Revenue (BIR) and the Bureau of Customs (BoC).

Of these remaining key appointments, most crucial not just for this year and next but well beyond are the DA, DoE, DFA and DND secretaries and the NSA, as these portfolios cover three threats already facing the nation and could escalate in coming years and decades: soaring costs and tightening supplies of food and energy as well as territorial frictions and even war.

We cover food and fuel today, and foreign affairs and security on Thursday.

Food prices worldwide are at the highest level in a decade, according to the United Nations Food and Agriculture Organization (FAO). The FAO food price index is at or slightly below 160, meaning 60 percent more than the 100 index level for 2014 to 2016, propelled by grain and other food export disruptions from the war between Ukraine and Russia, two of the world’s largest grain exporters.

With food supplies squeezed, major foodstuffs producers have stopped exports, like Indonesia’s ban on palm oil shipments, Malaysia’s chicken export stoppage and India’s prohibition on wheat shipments. Plus: top rice exporters Thailand and Vietnam are talking about jointly raising prices of the staple. Add to that leaping fertilizer prices jacking up food costs even more.

All that has boosted our own food costs, with huge rice, pork, chicken, fish and vegetable imports since last year because of local production shortfalls. And that’s on top of skyrocketing oil prices as Western sanctions on Russia prompted a scramble for other fuel sources, driving up prices.

Crude neared $147 a barrel in February, the month Russia invaded Ukraine, and is still around $120, despite Saudi Arabia and some other producers upping output to offset the plunge in Russian shipments to Europe. Meanwhile, Russian oil is going mostly to Asia, often transferred between tankers on the high seas at huge cost and risk.

There may be no respite this year, as the West and Ukraine have opted for continued war to degrade Russia’s military. Now, the European Union is set to cease nearly all imports of Russian oil by December.

And even if food and fuel prices and supplies stabilize next year, it won’t stay that way. Reason: climate change.

Global efforts to reduce fossil fuel use have depressed investment in oil production and refining, squeezing supplies. If rebounding travel lifts jet fuel use to pre-pandemic levels, that alone would add 2.5 million barrels per day to petroleum demand, which the world oil sector would have trouble supplying.

Then there’s the push to shift from coal plants to renewables, including the phaseout of existing facilities. Both new green power generators and the shutdown of coal-fueled plants would add to capital spending on top of the actual electricity generating cost.

If it’s not clear yet, these complex challenges in food and energy demand the same level of technocratic expertise and experience found in the Marcos economic managers. Hence, putting political appointees in charge of DA and DoE may not attract the players and investments needed to grow the food and energy sectors as the nation needs in the challenging years and decades ahead.

The green guys

For agriculture, more than a dozen development roadmaps drafted under his watch gives DA Secretary William Dar unique credentials for President-elect Marcos to consider in selecting his Agriculture czar. Dar also formulated a 10-year plan for food systems transformation. Reappointing Dar would ensure that these programs move forward instead of being set aside.

The other “green guy” Marcos may wish to consider is Arroyo-era DoE chief Vincent Perez. He can bring to the energy portfolio not only international investment banking stature as a former Lazard managing director. He has also set up renewable energy (RE) ventures and knows what policies would draw global investors to get into RE in the Philippines.

A leading figure in the Worldwide Fund ecology movement, Perez would also enhance links with the global environmental entities, including the World Bank and other green funding giants, and win their support and financing for our efforts toward sustainable energy.

What about party-list Rep. Rodante Marcoleta, now being considered for the Energy post? With his strong advocacy for people’s interests, he may be also or even better suited for the post of lead convenor of the National Anti-Poverty Commission (NAPC), the paramount advocate in the Cabinet for marginalized sectors.

There are many other highly qualified technocrats for agriculture and energy. Whoever gets the jobs, they must bring the same competence, professionalism and developmental vision as the next economic team offers. Then Filipinos can be better assured of affordable food and sustainable power for years to come.