PHP: BSP flags possible hikes on Oil shock – MUFG

FXStreet Insights Team FXStreet

According to MUFG’s Senior Currency Analyst Michael Wan, Philippine authorities signalled that rate hikes may be considered if Oil price increases and disruptions linked to the Iran war persist. Finance Secretary Frederick Go expects a limited GDP impact if the conflict is short, but warns of stronger effects if it lasts beyond six months, while downplaying concerns over gradual PHP weakness versus the Dollar.

BSP watching Oil and growth impact

"Separately, the Philippines central bank and Finance Secretary said that rate hikes may be considered if oil price increases and disruptions persist, with the BSP monitoring the severity and persistence due to the Iran war."

"Finance Secretary Frederick Go said that if the Iran war will be short term, the effect on Philippine GDP growth could be less than 10bps, but the impact will be more pronounced if war lasts more than six months."

"Meanwhile, he also said that as long as currency movements are smooth and not abrupt, he is not too concerned about PHP’s weakness against the dollar, and that he is also asking agencies to delay non-essential capital outlay."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)

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