PHLs tops 19 countries whose economy will win the oil barrel at USD 40 each

January 12, 2015 7:59 am 

By Juzel L. Danganan

MANILA, Jan. 11 (PNA) — The Philippines has topped 19 countries whose economies will win with the oil barrel, if it drops to record levels of USD 40 each, according to a Fortune article.

Fortune, citing an Oxford Economics study called Oil-ipedia, said the Philippines’ Gross Domestic Product (GDP) can increase by about 1.8 percent, in sync with the oil price drop at USD 40 per barrel.

However, the Fortune report mentioned an economist from the Oxford study itself could not explain why the Philippines will have the biggest benefit from the decrease of oil prices.

The economist said that they're quite clueless since the Philippines does not produce much oil and it’s an island nation that has to rely on importation for its fuel needs.

Fortune added the economist also compared the situation to — similar island nation — Japan, which is not even included in the 19 countries who will benefit from the drop.

Fortune attributes the Philippines will be impacted by the plunging oil prices with the monetary policy of the country, also decreasing the interest rate by 4 percent.

It added the country has a greater demand for oil due to the booming population of its citizens.

Last year, the rapid oil decrease was triggered by a number of factors initially by North America increasing its shale oil output – obtained through fracking – which cornered the Organization of Petroleum Exporting Countries (OPEC) to defend its colossal market share and not cut production.

National Economic Development Authority (NEDA) Secretary Arsenio Balisacan had been reached for comment, but has not responded on the matter.

Meanwhile, the USD 40 per oil barrel level is rapidly headed by benchmarks, with Crude oil West Texas Intermediate (WTI) closed at USD 48.36 per barrel for February delivery, while Europe benchmark crude oil closed for February delivery on Friday at USD 50.11 per barrel.

A Canadian firm has formerly stressed oil levels can reach up to USD 30 per barrel, before it stabilizes at USD 70-75 per barrel, according to an article from the Financial Post. (PNA)

CTB/JLD/RSM

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