MANILA, Philippines — Falling global oil prices due to fears over the novel coronavirus should translate to lower local pump prices in the Philippines and put downward pressure on the country’s inflation, the Department of Finance said Thursday.
“The downtrend in crude oil prices starting January could slow down inflation going forward,” DOF chief economist Gil Beltran said in an economic bulletin sent to reporters. The Philippines is a net oil importer.
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“Lower global economic growth due to the coronavirus outbreak will also reduce petroleum demand and thus, dampen inflationary pressures,” Beltran added.
Inflation in January stood at 2.9%, faster than December’s 2.5% but softer than 4.4% recorded in January 2019. A spike in food prices — which was due to crop damage from the twin storms in December and the recent Taal volcano eruption — pushed up inflation last month.
Fears of an economic slowdown, fuelled by the coronavirus slashing output in China, has shone the spotlight on OPEC, whose oil is heavily bought by the world's second-biggest economy.
Despite world oil prices rebounding strongly on Wednesday, they have fallen heavily overall during the past couple of weeks on fears of a China-fuelled global economic slowdown.
The price falls have raised eyebrows at OPEC, whose 13 member nations pump out around one-third of global crude and are anxious to safeguard revenues, faced with weaker Chinese demand. — Ian Nicolas Cigaral with AFP