The price of oil forecast even lower than USD70 a barrel this year is seen providing some of the avenues of continued growth for the Philippines this year against a global background made even more challenging by reciprocal tariffs instigated by US president Donald Trump.
According to Bangko Sentral ng Pilipinas assistant governor Zeno Abenoja, global growth made more tentative by the reciprocal tariffs present a downside risk to the country’s own growth path this year. But even with this as downside, the Philippines is also fortunate in that commodities prices, particularly oil, have eased dramatically as a result of the tariff adjustments.
Abenoja noted that oil futures prices have dropped by USD4 a barrel thus far this year and that oil prices in 2026 and 2027 were likely to ease as well.
“This should provide some support for the domestic economy,” the assistant governor said of crude oil in general selling for USD61.37 per barrel in global markets at the moment. The Philippines imported 47.5 million barrels of the commodity in 2023, based on published estimates. Mineral fuels also accounted for 21 percent of total imports in the same year, second only to electronics that accounted for a fourth or 25 percent of total.
“For 2026 and 2027, oil prices are also (likely) lower, perhaps lower than the USD70 per barrel seen earlier this year,” Abenoja said.
What these all mean is that the projected easing of oil prices, in tandem with the most recent policy rate resetting efforts of the BSP could provide support for greater economic activities in the Philippines down the line.
“There are some downside risks but there is reason to continue to see firmness in economic activity moving forward,” Abenoja said.
The interagency Development and Budget Coordination Committee (DBCC) earlier plotted growth ranging from 6.5 percent to 7.5 percent this year, recalibrated to 6.5 percent to 8 percent by next year and on to 2028. But given more recent developments both domestic and overseas, the monetary policy planners at the BSP have made their own recalculations and projected growth approximating the forecast.
“We’re looking at growth near the low end of the DBCC target. This could be the scenario moving forward, depending on how the external environment progresses from now on,” Abenoja said.
That domestic inflation similarly eased and that even the labor sector significantly improved as well with lower unemployment and underemployment numbers, allows the monetary authorities to project continued economic expansion with greater confidence.
As a result, Abenoja’s boss, BSP governor Eli Remolona Jr. acknowledged having progressively fewer reasons to make any more adjustments as to the rates at which the central bank borrows from or lends to banks in the remaining months of the year.
“Right now we think we will have completed the easing cycle within 2025, when we’re seeing a soft landing,” Remolona said.
