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Economists: US-Iran tension to affect OFW remittances, increase inflation

Ongoing and escalating tensions between the US and Iran may impact inflation rates, thus affecting remittances of overseas Filipino workers worldwide, according to financial experts.
Socioeconomic Planning Secretary and National Economic and Development Authority chief Ernesto Pernia said that events including the recent killing of Iran’s top military leader during the US airstrike in Baghdad may trigger a surge in oil prices, increase inflation which will then have a domino effect on OFWs’ remittances and spending.
 
“Likely oil price hikes in the short run and OFWs cum remittances over the longer run if tensions escalate further and persist,” Pernia said.
 
Banking experts also expressed their concern about the rising tensions, saying that this may affect the OFW’s families who depend on their remittances.
 
“Oil prices may go up and nudge inflationary tendencies locally once it translates to pump prices. And having a huge deployment of workers in the Middle East, demobilized workers will have an impact on remittances,” Security Bank chief economist Robert Dan Roces told GMA News.
However, Roces also stated that at present, the Philippines’ Bangko Sentral ng Pilipinas (BSP) currently has high international reserves that would help to ease up rates for the country ‘to ride out some volatility in forex (foreign exchange).” 

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