News Analysis: Cheap oil a boon for Philippines, other emerging Asian economies

The downtrend in the price of crude oil in the world market would boost the economies of oil-importing countries in Asia, including the Philippines, Thailand and China, according to economic analysts.

On Monday, the price of crude oil fell further to 48 U.S. dollars per barrel or more than 50 percent less than the 115 U.S. dollars per barrel in June last year.

The Philippines imports 93 percent of its oil needs from abroad, mostly from the Middle East.

The country's top suppliers of crude and petroleum products are Saudi Arabia, followed by Russia, the United Arab Emirates, Malaysia, Qatar and Brunei.

Analysts said that the big drop in oil prices would naturally have a negative impact on oil-exporting countries in Southeast Asia such as Malaysia, Indonesia, Myanmar and Brunei Darussalam.

Malaysia, Asia's biggest exporter of oil, could see oil-related revenue fall to 3.1 percent of GDP in 2015 from last year' s 5.9 percent, Chua Hak Bin, a Singapore-based economist at Bank of America Merrill Lynch, was quoted as saying in a report.

Some analysts said that lower oil prices would give China enough room to maneuver and maintain a GDP growth target of at least 7 percent this year, down from a targeted 7.5 percent in 2014.

South Korea and China's Taiwan would also benefit from falling oil prices, they added.

Mark Williams, chief economist at Capital Economics, said the consultancy has raised its GDP growth forecasts for China's Taiwan and South Korea by half a percentage point each amid the decline in oil prices.

For Thailand, whose economy has floundered for a year due to political turmoil and faltering exports, cheaper oil could mean faster growth. Its annual growth rate will rise 0.45 percentage points for every 10 percent fall in oil prices, according to Bank of America Merrill Lynch.

For Indonesia, Southeast Asia's largest economy, cheap oil means its new president could rid the country of crippling energy subsidies relatively painlessly.

In its Jan. 7 report, Bloomberg quoted Walter Zimmerman, chief technical strategist for United-ICAP in New Jersey, as saying that if the price of crude oil falls past 39 U.S. dollars a barrel,"we could see it go as low as 30 U.S. dollars a barrel."It was Zimmerman who projected the 2014 drop, Bloomberg said. "Where prices bottom will be based on an emotional decision," Zimmerman said."It won't be based on the supply-demand fundamentals, so it's guaranteed to be overdone to the downside."

In its December analysis of 45 economies worldwide, the Oxford Economics Ltd. said that the biggest winner in the oil price downfall would be the Philippines whose economic growth would accelerate to 7.6 percent on average over the next two years if oil fell to 40 U.S. dollars a barrel while Russia would contract 2. 5 percent over the same period.

Ironically, despite the big fall in the price of crude oil, the Philippines net imports -- the difference between the country's oil imports and exports -- in the first nine months of 2014 rose by 2.98 percent to 9.68 billion U.S. dollars in the period from 9. 4 billion U.S. dollars a year earlier.

Data from the Department of Energy (DoE) showed that the country's total imports from January to September climbed by 3.7 percent year-on-year to 10.63 billion U.S. dollars -- with finished petroleum products accounting for 55 percent and crude oil for the remaining 45 percent.

The cost of imported petroleum products grew by 4.49 percent year-on-year to 5.82 billion U.S. dollars while the cost of imported crude oil rose 2.34 percent to 4.81 billion U.S. dollars.

The DoE said that the increase reflected higher volumes for imported crude and petroleum products.

Export earnings from petroleum and its processed products rose 11.72 to 948.2 million U.S. dollars in the nine-month period. Volumes rose to 8.645 million barrels, an 8.51 percent increase from a year earlier.

Of the total, finished petroleum products accounted for 682.9 million U.S. dollars or 6.152 million barrels while crude oil had 265.3 million U.S. dollars or 2,492 million barrels. Endi