Bearish

The sky is falling.

Before this week is done, trillions of dollars in market capital will vanish across the world’s markets. Entire economies will be thrown into disarray. All these because of Trump’s folly.

Over the weekend, Trump imposed huge tariffs on products coming into the US from her major trading partners and closest allies. Tariffs amounting to 25 percent were imposed on Canada and Mexico – technically members, along with the US, of the North American Free Trade area.

Both countries are not taking this assault sitting down. They announced retaliatory measures against American products entering their market. A full-scale trade war is now in progress. Where this will all take us is anybody’s guess.

On the eve of Trump’s trade war breaking out, the Philippine Stock Exchange Index collapsed. Last Friday, the PSEI plunged 4.01 percent to land at 5,862.59 points. This is the lowest closing value in 27 months.

Our stock exchange is in bear territory. Those invested in stocks are better off hugging them because they can only sell at a loss.

Our stock exchange will likely sink lower. Early yesterday, stock markets across Asia were uniformly in the red – reacting to the outbreak of a global trade war. In this environment, there is nothing that might spark a rally in Philippine shares.

I read analysts last week arguing the Philippine economy will be least affected by Trump’s tariffs because we export very little. They are wrong. We are most vulnerable because we are among the weakest. In a war or an epidemic, the weakest perish first.

The fallout from the massive retreat of the region’s capital markets affects all stocks, even as they take an early and dramatic toll on companies exporting to the US. When markets shed value, everybody loses. Inequalities are magnified. The poor lose the most.

When our leaders assure us that everything is fine, take their words with a large grain of salt. They whistle in the dark.

Last week, our statistics authority broke the bad news. Economic growth for 2024 fell below government targets. More than that, it fell even below market expectations.

Our 2024 GDP grew by only 5.6 percent against the government target of 6.5 percent. Market expectation was for growth of 5.8 percent.

Our leaders are now telling us we will grow faster this year. With the global trade war in progress, this is hard to imagine.

As usual, those charged with managing our economy repeat the tired, old excuses for not meeting expectation – to evade scrutiny of their mismanagement. They blame the weather: the same weather we have had for millions of years.

The fact is: all our systems are failing.

Our agriculture shrunk by 2.2 percent last year, continuing years of decline. Counterpose that with population growth of over two percent. The math is clear: we have an economy increasingly unable to feed its own people.

Unable to feed our people, we tried exporting them. That was not enough. Now we import more and more of the food we need. With the global economy now thrown into chaos, even food importation might not work for us. We face the real possibility of food shortages.

Unable and unwilling to undertake the hard structural reforms needed to save our agriculture, our leaders are frantically trying to subsidize rice prices to impress the poor. This is unreal economics. This is deceit. The whole subsidized rice cavalcade is an extension of the “ayuda” economy the dynasts inflict on us.

Our educational system is failing badly. The learning deficit widens. Our young are now calculated to be as much as four years behind our neighbors. The greed of our politicians deepens underfunding of our education.

Our health system is failing just as badly. Only 25 percent of young Filipinos are properly nourished. Child stunting is rising alarmingly. All the polls show that hunger incidence is rising. These are the unsurprising consequences of an economy unable to properly feed its people.

We are supposed to have a universal health insurance system in place. The experts in the field warn what is left of it could collapse very quickly. A group of doctors are petitioning the Supreme Court to stop the defunding of PhilHealth by politicians more interested in their electoral war chests.

Even the “impressive” growth rate our leaders boast about is a mirage. We are the only Southeast Asian country still failing to return to the pre-pandemic track of growth. The growth rate of the past two years is the result of the base effect of an economy that fell through the floor when Covid-19 struck the world.

Even our diplomacy is failing us. Last heard, President BBM was asking China to reverse its enlargement strategy in exchange for the country giving up a single medium-range missile battery. To begin with, that US missile battery is not ours to decide upon. Beijing must be rolling in laughter.

Our political system, finally, has failed us long before. Political power is held by a dynastic class uninterested in saving the nation.

While all our vital systems are failing us, political players continue with their little selfish games. Last Friday, several groups – including the usual communist fronts allied with those who stole the national budget – held funny rallies demanding the Vice President be impeached.

With them, we fail faster.