The Bangko Sentral ng Pilipinas (BSP) is bracing for renewed inflationary pressures as global oil prices edge closer to the $100 per barrel mark.
BSP Governor Eli M. Remolona Jr. warned that such a surge could force the central bank to abandon its easing stance and raise interest rates to keep price growth under control.
“When the price of oil begins to have effects on the prices of many commodities, that tends to be something we have to worry about when it comes to inflation,” Remolona said in an interview with Bloomberg TV.
He noted that oil at $100 could push Philippine inflation to about 4%, breaching the BSP’s tolerance range.
The central bank targets inflation within a 2%–4% band, but rising energy costs threaten to spill over into transport, electricity, and food prices.
Inflation quickened to 2.4% in February, while growth slowed to 3% in the fourth quarter, well below the economy’s 5.5%-6% potential.
We’re hoping we don’t have to tighten in the face of higher inflation,” Remolona said,
