‘No need for alarm over Mideast tensions’ impact’

Credit to Author: Mayvelin U. Caraballo, TMT| Date: Tue, 07 Jan 2020 16:28:26 +0000

BANGKO Sentral ng Pilipinas (BSP) Governor Benjamin Diokno downplayed on Tuesday the impact of escalating tensions between the United States and Iran on oil prices and remittances.

Governor Benjamin Diokno Photo by Bangko Sentral ng Pilipinas

“Let’s not be alarmist. They were pointing out a huge surge in the price of oil. They did surge for a few dollars, but you know, for oil prices to make a difference in our forecast, it has to hit $90 per barrel (ba),” Diokno told the Tuesday Club’s breakfast forum in Mandaluyong City.

The central bank chief said his view was based on the current relatively low Dubai crude oil prices.

Tensions flared between Washington and Tehran after top Iranian general Qassem Soleimani was assassinated on Friday in an American air strike near the Baghdad international airport — a move that US President Donald Trump had ordered in the wake of an attack by a pro-Iran mob on the US embassy in the Iraqi capital days before. The killing sent oil prices soaring.

“And as you know, what is relevant for us is the Dubai price of oil, which, at the moment, is still below 60 to 70 … So let’s not panic [over] this,” he added.

The government has a Dubai crude oil assumption of $55-$70/ba this year.

Also, Diokno said most of the remittances sent home by overseas Filipino workers (OFWs) in the Middle East originated in Saudi Arabia and not from those countries that has conflict with Washington.

Latest BSP data showed that cash remittances sent from Saudi Arabia were the second-highest in the first 10 months of 2019, after the US.

Other countries of origin with the highest remittances were Singapore, Japan, United Arab Emirates, the United Kingdom, Canada, Germany, Hong Kong and Kuwait.

Cash remittances, which only count money coursed through banks, grew by 4.6 percent to $24.85 billion in the January-to-October period from $23.76 billion last year.

WITH A REPORT FROM AFP

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