US-Iran tensions unlikely to raise inflation

Published January 5, 2020, 12:00 AM

by manilabulletin_admin

By Chino S. Leyco

The Bangko Sentral ng Pilipinas (BSP) is seeing low probability that inflation may breach this year’s target on threat that the escalating US-Iran tensions would keep global oil prices at elevated levels.

BSP Governor Benjamin E. Diokno said that inflation rate would remain within the government’s target band of 2.0 percent of 4.0 percent this year as long as the price of Dubai crude would not average $90 per barrel.

According to Diokno, it is “too early to say” that the mounting tensions between Washington and Iran following a US airstrike that killed a prominent Iranian general would immediately affect Filipino consumers.

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