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LONDON—Crude oil rose to a record above $135 a barrel as
Opec ministers said they could do nothing to stop a
rally that may be heading to $200 a barrel.
Oil has
risen 19 percent this month as analysts increased their
price forecasts because of supply constraints and demand
growth. Opec has “no magic solution” to the surge,
Qatar’s
oil minister said. Prices are “out of the hands” of the
organization, according to Libya’s top oil official.
(Bloomberg)
Despite oil, robust growth ‘still
possible’
By Jun Vallecera
Reporter
THERE is
optimism that local output, measured as the gross
domestic product (GDP), will continue to grow at a
fairly robust rate this year no matter that oil, whose
nearly constant upsurge has affected almost everything,
recently topped $134 a barrel.
At a
briefing on business sentiment the Bangko Sentral ng
Pilipinas (BSP) conducted Thursday, the BSP said the
economy can absorb fairly expensive oil imports
averaging up to $125 a barrel this year and still post
growth averaging at least 6 percent.
“Even
with oil imports averaging $125 per barrel, there should
still be fairly robust economic growth this year,”
Deputy BSP Governor Diwa Guinigundo said.
According to him, BSP simulations show the economy
“should still be seeing generally stable economic
conditions” in which local output averages around 6
percent during the year.
By
stable, he meant “still robust, positive economic
growth.”
The
latest BSP growth forecast highlights the significance
of anticipated growth that the policymaking Monetary
Board previously urged for adoption by the Development
Budget Coordination Committee (DBCC) for 2008.
The DBCC
plots out the country’s macroeconomic future and uses
various forecasting models to help it project the likely
trajectory, matching these developments with appropriate
policy decisions at the ground level.
The DBCC
had earlier projected growth to range from a low of 6.1
percent to a high of 6.7 percent this year, also on the
assumption that the strength of the peso will range from
P42 up to P43 per dollar.
This
“old” model incorporated the price of imported oil
costing a low of $95 up to $105 per barrel.
This, in
itself, was a recalculation from a prior assumption in
which the average imported price of oil was a high of
only $80 a barrel.
Guinigundo also shrugged off the impact of the weakened
peso which closed 21 centavos lower to P43.45 per dollar
on Thursday.
“Surely
there will be negative consequences in terms of
inflation management, but at the same time this will
provide some respite for exporters and overseas Filipino
workers who are sending money home,” he said.
He meant
the almost certain upsurge in foreign inflows,
particularly from OFWs, now that the peso has weakened
somewhat, and the need to sterilize the increased peso
liquidity to limit its inflationary impact.
Sterilization comes in many forms, one of which is the
conduct of open market operations in which the excess
liquidity is mopped off the system and taken to the
vaults of the central bank. |
