Palace closely monitoring markets

On instructions of President Arroyo, the National Economic Development Authority (NEDA) has started to closely monitor the effects of the terrorist attack in the US on global financial markets, including movements in crude oil.

NEDA chief and Economic Planning Secretary Dante Canlas briefed the Cabinet Oversight Committee on Internal Security yesterday on the possible scenarios from an uncertain US economy as well as concerns of oil supply disruptions that initially triggered price upticks in the forward market.

"It remains to be seen whether the attacks have the potential to delay the recovery of the US economy, and therefore the rebound in Philippine export growth," Canlas said.

However, he said they are confident that the resiliency of American consumers will prevail and that the governmnet’s continuing effort to strengthen the domestic economy will minimize any adverse impact on external development.

NEDA had cited recent reports from Bloomberg that crude oil delivery in February rose by as much as 3.9 percent to about $24.74 per barrel on the Tokyo Commodity Exchange. In London, Brent crude oil for settlement in October rose $1.61, or 5.9 percent, to $29.06 per barrel on the International Petroleum Exchange, the highest closing price for a contract closest to expiration since June 14.

Canlas said the Organization of Petroleum Exporting Countries (OPEC) has already issued a statement that members will ensure a stable oil market and are prepared to use their spare capacity to ensure the goal.

"This assurance will arrest the initial price surges," he added.– With Efren Danao, Aurea Calica