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Russia sanctions to have minimal impact on Philippines
Publication Date : 25-03-2014
The effect of the West’s economic sanctions on Russia will not likely spill over into the Philippines, which has little trade with its north Asian neighbor.
A senior economic manager also questioned the effectiveness of sanctions on Russia, aimed at punishing Moscow’s move to annex Crimea from Ukraine, given the spotty history of such moves, particularly on oil-exporting countries.
“Let’s not forget, Russia produces oil and sanctions in this area might not be very effective,” Philippine central bank Deputy Governor Diwa C. Guinigundo said.
Russia is the third-biggest oil exporter in the world, trailing behind the US and Saudi Arabia. Revenue from the oil and gas industry accounted for more than half of its federal budget, latest data from the US Energy Information Administration showed.
The current sanctions announced earlier this month by the United States targets oligarchs and their companies with known ties to Russia’s president, Vladimir Putin. Twenty prominent Russian businessmen were added to the US list of specially designated nationals (SDN), which is usually reserved for suspected terrorists and drug traffickers.
US citizens and companies are barred from dealing with people in the list. Assets of SDNs are also blocked from entering the US.
Broader sanctions were also being drawn up, US President Obama said. These may include measures that affect Russia’s financial services, oil and mining sectors.
The prospect of broader sanctions hitting Russia’s oil sector have already been reflected in international oil prices. Benchmark US crude rose 56 cents to $99 a barrel last week, despite an increase in supply out of America.
Guinigundo added that the US and other western countries could also be on the losing end of its own sanctions if these led to restricted investment flows.
“Cross-border investments would also be difficult to restrain given the tight situation in many Western economies,” he said. As for any direct impact on the economy, the Philippines should fare well, citing the limited trade and investment links with Russia.