Philippines declares energy emergency, on alert for oil price spike

JAKARTA - The Philippines has declared a national energy emergency after a conflict involving the United States, Israel, and Iran sparked concerns about global oil supplies. The government assessed that turmoil in the Middle East could push up fuel and electricity prices, as well as put pressure on the domestic economy.

The Straits Times, quoted Wednesday, March 25, reported that President Ferdinand Marcos Jr. signed an executive order on Tuesday, March 24, which said the conflict had created uncertainty in the global energy market, disrupted supply chains, and pushed oil prices higher. The condition is considered a threat to Philippine energy security.

The Philippines imports almost all of its fuel needs. Therefore, disruptions in important shipping lanes such as the Strait of Hormuz are considered to directly hit transportation costs, electricity, and inflation.

The government is preparing a number of steps, including fuel subsidies for public transport drivers, stricter supervision to prevent hoarding and excessive profiteering, and accelerating the approval of energy projects. The government is also opening up faster procurement and coordination with the private sector to maintain supplies and electricity generation.

Energy Minister Sharon Garin, still from The Straits Times, said the Philippines still has a fuel supply of about 45 days. Even so, the government has prepared around 20 billion pesos to build a solar reserve. The target is two million barrels or the equivalent of an additional supply of about 10 days.

The pressure is already felt on the ground. Thousands of jeepney drivers, a typical public transport in the Philippines, went on strike on March 13 and 19, with two more actions scheduled for March 26 and 27. They complain about rising solar prices that continue to cut daily income.

The impact is also beginning to be seen in the aviation sector. Cebu Pacific has suspended a number of international flights until October due to operational adjustments amid rising fuel costs and regional uncertainty. Marcos also said that more drastic measures, including the possible suspension of flights, could not be ruled out if the situation worsened.

This policy has given rise to two views. Jonathan Ravelas, former head of market strategy at BDO Unibank, also quoted from The Straits Times, assessed the government's move as a form of anticipation, not panic. On the other hand, economist J.C. Punongbayan called the policy reactive and late because it was issued after the price of oil had already risen. He also assessed that the government had not shown a clear stance on fuel taxes, subsidies, and fiscal consequences.