Venezuela strike to have little impact on PH
The United States’ strike on Venezuela is expected to have limited effects on the Philippines, though economists say certain risks warrant close monitoring.
Ruben Carlo Asuncion, chief economist at Union Bank of the Philippines, said that while short-term risks on the Philippines are contained, there are upside pressures on inflation and trade balances that warrant vigilance.
“Venezuela currently accounts for less than 1 percent of global oil supply, and with markets in an oversupplied position, any price increase is likely modest,” Asuncion said. Even so, he noted that for net oil importers like the Philippines, even small price movements matter.
“Higher crude costs could slightly raise local fuel prices and add slightly to inflation,” he added.
John Paolo Rivera, a senior research fellow at the Philippine Institute for Development Studies, echoed the view, saying the impact would be limited “unless the situation materially disrupts global oil supply.”
“Venezuela’s role in global oil markets has diminished due to sanctions and production constraints, so any price spike would likely be short-lived and sentiment-driven rather than supply-driven,” Rivera said.
“If oil prices do rise briefly, the effect on inflation would be marginal and lagged, and the peso could see temporary pressure via higher import costs but sustained impacts would require broader escalation or spillovers to major producers,” he added.
Brent futures
Over the weekend, US President Donald Trump ordered an attack on Venezuela that led to the capture of Venezuelan President Nicolas Maduro. Brent crude futures declined by 0.7 percent in the aftermath of the upheaval, while the greenback advanced against the euro.
Zooming out, analysts at BMI Research, a unit of the Fitch Group, warned that the assault may inspire future geopolitical tensions, including in Asia, which can potentially rattle global markets.
“There is some risk that Trump’s brazenness in removing Maduro could be used as justification for a hypothetical future move by Mainland China against Taiwan, China’s leadership,” BMI said in a note to clients.
“Nonetheless, we still believe that China will avoid full-scale conflict with Taiwan for the foreseeable future, given the high risk of becoming embroiled in a long war that leads to huge casualties and discontent in Mainland China,” it added.
Looking ahead, Jonathan Ravelas, senior adviser at Reyes Tacandong & Co., said Philippine businesses should lock in energy contracts and hedge currency exposure early.
“With the US invasion of Venezuela, expect oil prices to spike—and that means higher fuel, transport, and food costs for Filipinos. Inflation could rise by half to one percentage wpoint,” Ravelas said.
“Beyond that, the peso may weaken, remittances could be at risk, and global market jitters might hit exports and investments,” he added.
