Philippines says inflation target at risk if oil reaches US$90

MANILA: Bangko Sentral ng Pilipinas estimates oil prices will have to surge and persist at US$90 a barrel for it to impact the central bank’s inflation forecast, Governor Benjamin Diokno said.

It’s “too early to say,” Diokno said in a text message when asked if the latest geopolitical development between the US and Iran could threaten inflation targets and impact the central bank’s monetary easing campaign.

“BSP estimates that Dubai oil prices have to reach US$90 per barrel sustainably (not sporadically) to make a difference in our inflation forecast,” he said. “I assign low probability that such an event will happen.”

The Philippines, a net oil importer, targets inflation at 2% – 4% this year through 2022.

Oil prices surged on Friday as attention turned to Iran’s threatened retaliation for a US airstrike that killed the Islamic Republic’s top general.

Brent crude for March settlement rose to US$68.60, while West Texas Intermediate for February delivery was at US$63.05 a barrel.