The International Monetary Fund on Tuesday warned the ongoing war between Israel and Palestinian militant group Hamas could affect energy prices and remittance flow in the Philippines.
"If it were to escalate to the region, it could have severe consequences for energy prices in the country being an oil importer," IMF resident representative to the Philippines Ragnar Gudmundsson told CNN Philippines' The Final Word. "The Philippines is very strongly reliant on remittances from foreign workers," he added."If those remittances were to be dried, this could have an impact on the balance of payments on the current account, and also on providing support to households here in the Philippines."
Gudmundsson said this could affect consumption and demand in the Philippines as remittances represent about 7-8% of the country's gross domestic product.The IMF official also said the war's impact could further complicate efforts to reduce inflation.of the Philippine Statistics Authority, commodity prices were on the rise again as the inflation rate increased to 6.1% in September -- hotter than the 5.3% posted in August.
Gudmundsson stressed that all countries must be prepared for a potential impact of the Middle East crisis on commodity prices.