The drop in oil prices in the world market is a welcome news to consumers as it is expected to translate into lower fuel costs and subsequently, reduced pressure on inflation, a chief economist said on Saturday.

In a news forum in Quezon City, Rizal Commercial and Banking Corp. (RCBC) chief economist Michael Ricafort said oil prices have taken a significant dip in the past two days, falling to around US$82 to US$83 per barrel from a recent high of US$95 on September 28.

“At least that’s isa sa mga problema na puwedeng mababawasan dahil magkakaroon ng mga rollback ‘no. Kaya…at least iyong pressure sa inflation medyo mababawasan din po,” Ricafort said.

Ricafort also noted that substantial rollbacks in fuel prices are expected in the coming days.

“Iyon po ‘yung magandang balita, medyo expect po natin malakilaking mga rollback po iyan as early as this weekend pati po sa mga darating na araw lalo na kung ma-sustain po ito,” he said.

Ricafort said there is a softening demand for oil globally which is partly attributed to the proactive raising of interest rates by the US Central Bank to maintain price stability.

While the cooling of demand may raise concerns about the potential for an economic slowdown, Ricafort said it is an unintended consequence of curbing inflationary pressure.

“Maaring unintended consequence naman po noon, kung may economic slowdown o recession,” Ricafort said.

“Kasi kung hindi po nirenda iyang inflation, mag-i-spiral po iyan, aakyat po iyan nang aakyat. Learning from the lessons in the past economic cycles lalo na kung may politics of oil,” he added. |PND

Photo Courtesy by Politiko