Philippines Roundup: High inflation rate, oil price hike, peso weakens

Philippine peso seen to weaken to fresh record-low

The Philippine peso is predicted to decline to an unprecedented low this year, with estimates suggesting it may sink beyond P59:$1. This anticipated depreciation is largely attributed to a strengthening US dollar alongside expected protectionist measures under the incoming US administration. According to GMA News, HSBC economist Aris Dacanay forecasts that this significant drop to materialise in the second quarter of 2025. However, he notes that the peso is likely to exhibit resilience when compared to other Asian currencies, largely due to the Philippines' protection against tariff risks, its robust dollar reserves standing at $106.837 billion as of December 2024, and consistent economic growth reported at 5.2% in the third quarter of 2024. For 2025, the Philippines is projected to achieve an average economic growth rate of 6.3%, falling within government benchmarks but slightly lagging behind initial aspirations.

Importation of birds from New Zealand banned amid bird flu outbreak

The Philippine Department of Agriculture has implemented a ban on the importation of both domestic and wild birds from New Zealand, in response to a recent outbreak of avian influenza, specifically the H7N6 strain. This ban encompasses eggs, day-old chicks, and poultry meat. Notably, GMA News reports that shipments that were already in transit prior to the ban will still be permitted as long as they were produced before November 9, 2024. This initiative is aimed at safeguarding the local poultry sector, a critical component for both food security and job creation, by preventing the high pathogenic avian influenza from infiltrating the Philippines.

Inflation speeds up to 2.9% in December 2024

In December 2024, inflation within the Philippines escalated to 2.9%, up from 2.5% in November, primarily driven by rising housing and energy costs. This inflationary increase surpassed analyst projections yet remained within the Bangko Sentral ng Pilipinas (BSP) forecast range of 2.3% to 3.1%. The overall average inflation rate for 2024 settled at 3.2%, marking a return to the BSP's target corridor of 2% to 4% for the first time in three years. The BSP now possesses the capacity to sustain its cycle of rate cuts to bolster economic growth, with Governor Eli Remolona suggesting possible further reductions in early 2025. Nevertheless, he cautioned against ongoing supply-side risks, underlining the importance of vigilance and readiness, ANN reports.

Philippine activists fear US’ anti-ICC bill may impede probe into Duterte’s drug war

A newly introduced US bill, which seeks to protect American and allied leaders from the scrutiny of International Criminal Court (ICC) investigations, has raised alarms among Filipino activists. Concerns centre around the potential impact this legislation may have on the ICC's inquiry into former President Rodrigo Duterte's controversial drug war, with fears that it could obstruct justice for victims of this campaign, as highlighted by My News. Known as the Illegitimate Court Counteraction Act, this bill, backed by bipartisan support from Republican lawmakers, threatens to impose sanctions on individuals aiding ICC investigations involving US citizens or affiliated officials, including those hailing from the Philippines. Detractors of the bill argue that it could significantly undermine legal cooperation and bolster initiatives to delegitimise the ICC's authority in the Philippines.

Hefty oil price hike to greet consumers

Beginning on January 7, 2025, consumers can expect an increase in fuel prices, with gasoline and kerosene experiencing a rise of PHP1 per litre, and diesel seeing a hike of PHP1.40 per litre, according to announcements from oil companies such as Caltex, Cleanfuel, Petro Gazz, Seaoil, and Shell. Following a price rollback on New Year’s Eve, this imminent increase has been linked to expected shifts in US policy as well as colder weather impacting supply chains, PNA reports. Currently, petrol prices in Metro Manila fluctuate between PHP50.85 and PHP74.62 per litre, with diesel priced between PHP48.77 and PHP71.30, and kerosene ranging from PHP69.94 to PHP81.20.