BSP on watch for global oil price shock’s impact on inflation, economy

The Bangko Sentral ng Pilipinas (BSP) is on the watch for potential economic implications of the global oil price shock on the country.

In a statement on Wednesday, the BSP said it is closely monitoring the impact of the Middle East conflict on Philippine inflation and the economy ahead of the upcoming monetary policy meeting on April 23, 2026.

“Price stability is the BSP’s main mandate. As such, the BSP is assessing the potential impact of higher oil prices on the price of fertilizer, transport fares, and inflation in general,” it said.

“The BSP is also monitoring effects on the country’s current account – including remittances and trade – and financial markets,” the BSP said.

Earlier, Department of Economy, Planning and Development (DEPDev) Secretary Arsenio Balisacan said inflation could go as fast as 6.3% to 7.5% in March and accelerate further to 6.4% to 7.5% in April.

It may clock in at 4.5% to 4.8% for the entire 2026 before it cools down to 3.6% to 3.7% next year.

This is if crude oil hits $140 per barrel this month and stays above $80 a barrel until September.

Regarding remittances, Balisacan projected a contraction of P231.777 billion compared to 2025 levels, assuming a total deployment ban in conflict-affected Middle Eastern countries and the extension of repatriation to adjacent countries like Egypt, Lebanon, Palestine, Syria, and Yemen.

He added that lower purchasing power resulting from higher inflation and lower remittances could slow economic growth in 2026 by 0.20 to 0.30 percentage points.

“On the peso, the BSP stresses that it operates in the foreign exchange market to smooth excess volatility and maintain orderly conditions,” the BSP said.

“This is consistent with a flexible exchange rate policy, with intervention limited to tempering large swings that could affect inflation rather than defending any specific level. As always, policy will be driven by data,” it added.

The Philippine peso sank to its all-time low of P59.87:$1 on Monday, which was tempered by interventions done by the BSP as confirmed by Governor Eli Remolona Jr.

 “As the conflict in the Middle East continues, the Bangko Sentral ng Pilipinas hopes for the safety of overseas Filipino workers and other civilians,” the BSP said. — JMA, GMA Integrated News