2013

“It is difficult to make predictions, especially about the future” – Niels Bohr

                                                     -0-

It is said the future is made up of “known unknowns” and ‘unknown unknowns”. The former refers to things we know will occur but whose outcome is uncertain e.g. the results of a scheduled basketball game or whether a Presidential date will lead to anything. “Unknown unknowns” are unpredictable events like the 2011 Japan earthquake or the 2008 financial crisis. “Unknown unknowns” are sometimes also called Black Swans.

There are a number of “known unknowns” in 2013, the principal one being the May elections. Many positions are up for grabs but the bellwether is the 12 Senate seats being contested by the Liberal Party and UNA. Based on the polls the UNA candidates are ahead which is counter-intuitive given the popularity of the President. Possible reasons for the poor showing of the LP line-up are (a) the UNA has the more recognized names (b) UNA collectively has in Binay, Erap and Enrile the heavier sponsors (c) the LP machinery, despite its pre-eminence, is not minding the store (d) the masses are not sharing in the country’s prosperity (e) the electorate has fallen asleep and (f) all of the above.

If the polls are right, the UNA will control the Senate and be the Opposition Party of record. The UNA is smart enough not to mess with P-Noy but it will increasingly rattle the cage making it more difficult for the President to implement -and keep- his reform agenda. Its Senate beachhead will also enable UNA to put its people and machinery in place for 2016.

Another “known unknown” is Jojo Binay will come out of the closet in 2013. So far he has been happy to draft behind the President in hope of a future endorsement. However, whether because he has not been asked to double-date or the Kris/Jun-Jun thing is not happening or something else, he now realizes he will not be on the short list –nor even the long list- for the Presidential nod in 2016.  He has therefore decided to decouple, nicely, from his boss and personally take care of business. He has said UNA will be “supportive but constructive” which in political parlance means nothing like what you and I think.

The President and his party have three short years to present their line of succession. If the unremarkable showing of the LP Senate slate is any indication the prospects do not look promising.

Elsewhere, 2013 should be mixed. The Philippine economy should continue to improve statistically, what this means for the ordinary man is another matter. The peso should remain strong but this will be mitigated by BSP efforts to support our exports and OFW remittances.

Internationally, the dollar should firm up as the U.S. economy turns the corner. As we predicted the U.S. “fiscal cliff” ended with a whimper. The goal posts have been moved to February when the country debt ceiling is up for review but, with some political brinksmanship, this can, too, will be kicked down the road.

In Europe, authorities are officially proclaiming the end of the economic crisis but try telling this to the Greeks, Spaniards and Italians. The attacks on the Euro have subsided (the currency has actually appreciated in the last two weeks) but this could simply mean the hedge funds are reloading.

Geo-politically, we can expect China to ramp up its economic and political saber rattling. The Middle East will witness the end of the Assad regime but Iran will not go away nor will Israel’s paranoia. The Arab Spring is wilting to an Arab Summer.

Investment-wise, barring a Black Swan, markets worldwide should hold on to last year’s gains. For the last 62 years, the U.S. Dow Jones has ended in the black every time the index has been up in the first 5 trading days of the year. The DJ rose over 2% in the first week of January.

The “unknown unknowns” which will blind-side us in 2013 will be an act of nature like a massive drought, typhoon, flooding or earthquake in a major population center. The unprecedented heat wave and fires in Australia could be a precursor of this. Other “unknown unknowns’ would be the death by accident, natural causes or assassination of a major public figure or a terrorist attack with a twist.

2013 is the Year of the Water Snake. People born in this time are said to be acute, aware, cunning, proud, vain and vicious. In other words 2013 is the Year of the Politician. This alone should give us cause for concern.

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About Leo Alejandrino

The blog is principally a commentary on Philippine politics and economics.
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3 Responses to 2013

  1. The Lotus says:

    My Prediction is 10 LP and 2 UNA for the senatorial elections this May 2013.
    VP Binay will eventually be a goner due to the Gwen Garcia Cebu fiasco. PNoy won Cebu by a mile in 2010.
    2013 is the year of the politician, however PNoy is the Good Politician. Hence it is his year.
    Let’s go for good politics. It is the only way…

  2. Erwin Ternida says:

    tama yung sinasabi ng article pag naging majority ang UNA baka mahirapan na yung administrasyon ni P-noy magpasa ng batas na tutulong sa pag abante ng Pinas lalo na papasukan ng pulitika, nag aantay lang yan si VP ng tyempo para kontrahin ang administrasyon

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