MANILA - Taming inflation may have just become more difficult as the war between Israel and Hamas could put pressure on world crude oil prices, said economist and former National Economic and Development Authority (NEDA) Director General Cielito Habito.

Speaking to ABS-CBN News at the sidelines of a Management Association of the Philippines event on Wednesday, Habito pointed out that oil prices were already driving domestic inflation even before the conflict erupted.

“The Middle East conflict really puts pressure again on, among other things, oil prices. And this has been one of the important drivers of our inflation,” he said.

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“We saw (the inflation rate) tick up again last August and September so to expect inflation to be easing down for the rest of the year seems to be a bit of a challenge especially because of the possible increase in oil prices,” he added.

An economist from Moody's Analytics also earlier warned that the Israel-Hamas war could send oil prices surging above $90 per barrel level for a sustained period, which could in turn send the global economy into another recession.

Aside from oil prices, rising food costs also caused inflation in the Philippines to quicken to 6.1 percent in September.

Philippine economic managers currently expect inflation to fall within the 2 to 4 percent target in the fourth quarter of 2023.

But Finance Secretary Benjamin Diokno earlier said that they are open to revisiting forecasts, including the government's 6 to 7 percent growth target for the year, during the next Development Budget Coordination Committee meeting this month.

Habito meanwhile said that while it is good to aim for good growth numbers, both the government and the private sector need to work hard to achieve this due to the ongoing global headwinds

“Obviously, it’s good to keep targeting for a good growth this year but the challenges seem to be mounting. That means our government and our business sector have to be running double time to be able to get that kind of growth that we were hoping to get this year,” Habito said.

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