MANILA, Philippines — Economic experts are warning that the Philippines faces a more severe and rapid economic impact from surging global oil prices than many of its Asian neighbors.
Deepali Bhargava, regional head of research for Asia-Pacific at ING, highlighted that the Philippines is particularly vulnerable due to its limited fuel buffers and a “fastest pass-through” mechanism that reflects global price hikes at domestic pumps almost immediately. With oil prices recently surpassing $100 a barrel following conflict in the Middle East and the closure of the Strait of Hormuz, the impact is already manifesting in the country’s shift toward four-day workweeks for several government agencies and a weakening peso, which closed at 59.385 against the US dollar.
Beyond direct fuel costs, there are growing concerns regarding food security. Rising fertilizer prices, a byproduct of Middle Eastern supply tightening, are expected to weigh on crop yields and push food prices higher later this year.
Bangko Sentral ng Pilipinas (BSP) Governor Eli Remolona Jr. indicated that the central bank might reverse its course and raise interest rates if oil prices remain elevated and the dollar continues its rally, potentially shutting the door on rate cuts for the remainder of 2026.
While President Ferdinand Marcos Jr. has sought authority to suspend fuel excise taxes and has announced a ₱5,000 fuel subsidy for public transport drivers, some economists suggest that more targeted financial support for vulnerable sectors would be a more effective social response than broad tax suspensions. Analysts predict that if disruptions persist, inflation could inch closer to the upper end of the BSP’s 4% target range, further disrupting the country’s fragile economic recovery.
