MANILA, Philippines — The recent drone attacks on a huge oil facility of state-owned Aramco in Saudi Arabia will affect the Philippines “deeply,” Foreign Affairs Secretary Teodoro Locsin Jr. said.
Yemen-based rebels who have been fighting a Saudi-led coalition claimed responsibility for the drone assault on Saturday, but the United States said there was no evidence to back up the claim, and instead accused Iran of an “unprecedented attack on the world’s energy supply.”
“This is serious. It will – not could – affect us deeply; to put it bluntly, an oil shortage or steep rise in oil price will rock the Philippine boat & tip it over,” Locsin said on Twitter on Sunday.
“So everybody shut the f**k up and focus. No more clowns. Declaring state of emergency won’t save our economy but kill it,” he said.
Economic managers said it’s still too early to tell how much the attacks would affect the local economy.
Iran denied any responsibility on Sunday, but increased tensions in the region by pointing out US facilities were within range of Iranian missiles.
Saudi oilfields have been target of attacks by Houthi forces, which control much of the territory close to the kingdom’s southern border with Yemen.
Following the attack, Aramco reportedly said it may have to cut output by around 5.7 barrels per day, more than five percent of the world’s supply of crude oil.
The attacks sent oil prices surging by as much as 20 percent on Monday as half of Saudi Arabia’s oil output was wiped out.
In a statement, UN Secretary General Antonio Guterres, through his spokesman, “condemns Saturday’s attacks on Aramco oil facilities in the Eastern Province in the Kingdom of Saudi Arabia claimed by the Houthis,” and “calls upon all parties to exercise maximum restraint, prevent any escalation amid heightened tensions and to comply at all times with International Humanitarian Law.”
UN Special Envoy for Yemen Martin Griffiths described the escalation of violence as “extremely worrying” and urged “all parties to prevent such further incidents, which pose a serious threat to regional security, complicate the already fragile situation and jeopardize the UN-led political process.”
The National Economic and Development Authority said it could not yet determine the impact of the drone attack.
“There are no impact estimates yet,” said Socioeconomic Planning Secretary Ernesto Pernia when sought for comment yesterday.
He said economic managers are set to meet to assess the situation. “Yes, we’re assessing,” he added.
Several oil firms have increased pump prices but made it clear the Saudi attacks have not yet been factored in the prices hikes.
The Philippine economy is forecast to rebound in the second half of the year from two consecutive quarters of weak growth, as inflation decelerates and domestic demand leading up to the holiday season strengthens.
The Bangko Sentral ng Pilipinas (BSP) is also expected to slash rates anew as inflation decelerates further to a three-year low in August.
These expectations, however, are anchored on the continued deceleration of food and transportation prices as well as lower global oil prices.