MANILA - Finance Secretary Benjamin Diokno said it was too early to tell how the surprise OPEC production cuts will impact local inflation.
But he also said he isn’t bothered by the 1 million barrels per day cut in oil production.
“Kung 1 million lang, hindi masyado. Kasi ang threshold nga namin $90 per barrel. Eh nasa $70s na tayo ngayon ano?" Diokno said.
(If it’s just 1 million, not so much because our threshold is $90 per barrel. We are in the $70s now, right?)
Dubai Crude, the international benchmark the Philippines uses for guidance, jumped to $84 a barrel from its last close of $78 a barrel.
Diokno however said this was a “knee-jerk reaction” and that prices will soon adjust.
He said inflation has already peaked in the Philippines, based on the latest forecast of the Bangko Sentral ng Pilipinas.
The forecast range for March is 7.4 to 8.2 percent. If that holds true, it Philippine headline inflation will have eased for a second consecutive month.
February inflation slowed down slightly to 8.6 percent from January’s 14-year-high of 8.7 percent.
The Asian Development Bank meanwhile has a more cautious position. It expects Philippine inflation to peak soon. It has a full year inflation forecast of 6.2 percent for the Philippines this year, and 4 percent for 2024.
ADB Country Director for the Philippines Kelly Bird is also not too bothered by the OPEC production cuts. “So let’s observe those prices over the next months. But any increase in global commodity prices does filter into different countries’ inflation. So it may have a modest impact on inflation if those prices persist,” Bird said.