The decision of the Organization of the Petroleum Exporting Countries to keep producing oil at current high levels is definitely good news for the Philippines, the LPG Marketers’ Association said Sunday.
“It basically means that the Philippines, an oil importer, will continue to benefit from low-priced oil in the months ahead,” said House Deputy Minority Leader and LPG-MA Rep. Arnel Ty.
Ty said Filipino households, businesses and even the government, which is a huge consumer, would gain in a big way from a prolonged low-cost oil environment.
Oil prices plunged below $40 per barrel immediately after Opec decided on Friday to maintain current production levels at around 31.5 million barrels of oil per day, despite a growing surplus in world markets.
The decision implies that a global oversupply of between 700,000 to 1.8 million BOPD would keep a steady downward pressure on oil prices, Ty pointed out.
“Filipino consumers can keep on using their savings from reduced fuel, electricity, and transport costs to buy other goods and services,” Ty, a senior member of the House economic affairs committee, said.
The lawmaker also said the deflationary impact of cheap oil prices is expected to help keep lending rates low, thus helping families that want to buy new homes and cars as well as businesses that wish to expand.
After examining 45 countries, the global forecasting firm Oxford Economics Ltd. previously projected that the Philippines would be the biggest winner and its economy would grow the fastest in a depressed oil price setting.
Meanwhile, Ty urged the national government to step up spending for infrastructure projects.
“Government should now take advantage of inexpensive oil to quickly perform at a lower cost major construction projects that tend to require a lot of spending for fuel and power,” he said.
He also said government should stay ahead of the 45-day ban on public works spending before the May 9, 2016 presidential election.