Businessmirror September 21, 2019

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ROTARY CLUB OF MANILA JOURNALISM AWARDS

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A broader look at today’s business n

Saturday, September 21, 2019 Vol. 14 No. 346

2018 EJAP JOURNALISM AWARDS

BUSINESS NEWS SOURCE OF THE YEAR

DEPARTMENT OF SCIENCE AND TECHNOLOGY

2018 BANTOG MEDIA AWARDS PHILIPPINE STATISTICS AUTHORITY

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The largest open beach volleyball meet in the country, an annual event that attracts players from around the world, is the latest casualty on Boracay’s growing list of prohibited acts.

BORACAY beach, October 22, 2014. TANGDUCMINH | DREAMSTIME.COM

I

LAHAT BAWAL!

By Ma. Stella F. Arnaldo | Special to the BusinessMirror

S it a case of going too far for the Boracay Inter-Agency Task Force (BIATF)?

After banning lounge chairs and tables, drinking of alcohol, weddings, and sand castles on the main white beach of this popular resort island, even beach

volleyball is now being prohibited as well. In a stunning upset, the BIATF did not give a permit for the Boracay Beach Volleyball Open

(BBVO), which was supposed to be held from November 15 to 17. The tournament, which is the largest open beach volleyball meet in the country, is an annual event that attracts players from around the world. It would have spiked in about P1.5 million into the local economy in terms of food, hotel bookings and incidentals, BBVO organizers told the BusinessMirror. “A total of 170 rooms were booked [for the event],” they added. There were 16 nations who par-

ticipated in 2017, but due to the closure of Boracay in 2018, the event didn’t push through. The event has been held on the island since 2011. According to the organizers’ post on their Facebook page, “It is with deep regret we inform you that BBVO has not been given the permission to hold this year’s event in Boracay. The BIATF headed by GM Natividad [Belarmino] has communicated this news to us only by phone and we are still awaiting Continued on A2

BORACAY night life, February 12, 2016. MIRKO VITALI | DREAMSTIME.COM

Saudi attack makes electric vehicles even more important

O

By Noah Smith | Bloomberg Opinion

N Saturday (September 14, 2019), the Houthis, a Yemeni rebel group fighting against a coalition led by Saudi Arabia, took credit for a strike that knocked out two key Saudi oil-processing facilities.

At a single stroke, Saudi oil production was cut from 9.8 million barrels a day to 4.1 million, sending prices soaring. That means about 5 percent of the entire world’s oil production suddenly went offline. This is an unprecedented disruption—bigger in absolute terms than any of the famous oil shocks of previous decades. Naturally, the Saudis are scrambling to get production up and running again, and the country’s large stockpiles of oil should cushion the blow to customers. But even though the Saudis say they have restored

some of the lost production, world supplies may be limited because other nations simply don’t have much spare capacity to fill the gap. More fundamentally, if critical Saudi infrastructure can be taken out with a relatively cheap, lowtech drone strike, it doesn’t bode well. The war in Yemen will likely continue, and the Houthis, encouraged by this smashing success, probably will launch more such attacks. A wider war, especially if it pulled in Iran and the US, would be even more disruptive.

PESO EXCHANGE RATES n US 52.2800

A MODEL stands next to a Porsche Taycan electric car at the IAA Auto Show in Frankfurt, Germany, September 11, 2019. AP/MICHAEL PROBST

Thus, the world could be facing a substantial rise in oil prices. Conventional wisdom is that big oil price spikes lead to recessions in the US. Economist James Hamilton has shown that each oil shock since the end of WW II was followed by a US downturn. Most recently, oil more than doubled in the year before the 2008 financial crisis. Thus, the Houthi militia might end up sending the US into an economic tailspin right before an important presidential election. Such an outcome isn’t set in stone. Economists Lutz Kilian and Robert Vigfusson argue that Hamilton’s assumptions are flawed, and that oil prices play only a modest role in recessions. Meanwhile, the US’s situation has changed a lot in the past decade. Thanks to the rise of hydraulic fracturing, the US is close to being a net oil exporter: A rise in oil prices will make many fracking projects profitable that would otherwise sink into bankruptcy. That could cause a Continued on A2

n JAPAN 0.4841 n UK 65.4912 n HK 6.6758 n CHINA 7.3665 n SINGAPORE 37.9308 n AUSTRALIA 35.4929 n EU 57.7276 n SAUDI ARABIA 13.9387

Source: BSP (September 20, 2019 )


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