'WORLD OIL PRICES POSE RISK TO LOCAL INFLATION'

ALTHOUGH the Philippines is geographically far from geopolitical tensions abroad, rising global oil prices are emerging as a key upside risk to domestic inflation.

- JUSTINE XYRAH GARCIA

National Statistician Dennis Claire S. Mapa said the sustained increase in pump prices over the past two months poses the biggest risk to inflation in February.

"One possible risk for February is the price of oil because every week, oil prices are increasing.

Those are the risks... But since we measure it year on year, we will look at whether those increases are higher than during the same period last year," Mapa told reporters in a chance interview.

Earlier this week, the Department of Energy (DOE) said global developments are driving the uptick in oil prices.

Among the key factors are escalating tensions between the United States and Iran, including naval drills conducted by Iran in the Strait of Hormuz-one of the world's most critical oil transit chokepoint alongside joint exercises with Russia and China.

The ongoing Russia-Ukraine conflict also continues to weigh on global energy markets, as sanctions and supply uncertainties affect oil flows.

These global pressures have pushed local pump prices higher year to date, with diesel increasing by P8.20 per liter, kerosene by P6.20, and gasoline by P4.90. Diesel and kerosene prices have risen for nine consecutive weeks, while gasoline has posted seven straight weeks of increases.

Ateneo de Manila University (ADMU) economist Luis F. Dumlao agreed with Mapa's observation, saying these developments could push inflation higher in February.

"Inflation will pick up from January to February. The increase in price of oil $62 to $68 [per barrel] in February will contribute to that," Dumlao told the BusinessMirror.