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The national government’s (NG) budget deficit breached its 2025 ceiling after the main tax agencies missed their collection targets and state spending slowed amid a corruption scandal, the Bureau of the Treasury (BTr) said.

Data from the Treasury released on Tuesday showed that the budget deficit widened by 4.68% or PHP 70.5 billion to PHP 1.58 trillion in 2025 from PHP 1.51 trillion in 2024.

It exceeded the PHP 1.56-trillion deficit ceiling set by the Development Budget Coordination Committee for 2025 or by PHP 15.1 billion.

“The deficit only slightly exceeded the 2025 target by 0.97% as the 1.48% shortfall in revenue collections was partly offset by spending restraint, with actual disbursements kept below the programmed level by 0.85%,” the Treasury said.

As of end-2025, the deficit as a share of gross domestic product (GDP) settled at 5.63%, reflecting an improvement from the 5.7% in 2024 but slightly higher than the 5.5% target.

BTr data showed revenue collection inched up by 0.78% to PHP 4.45 trillion, higher than the PHP 4.42 trillion collected in 2024.

“The revenue uptake fell short of the revised fiscal year 2025 program of PHP 4.52 trillion by PHP 67 billion, as the PHP 69.8-billion overperformance in nontax revenues was not enough to offset the PHP 136.8-billion shortfall in tax collections,” it said.

Tax revenues, which accounted for 91.55% of the total revenues, jumped by 7.27% to PHP 4.08 trillion in 2025, but 3.25% below the PHP 4.52-trillion program.

Broken down, collections by the Bureau of the Internal Revenue (BIR) increased by 9.06% year on year to PHP 3.11 trillion from PHP 2.85 trillion collected in 2024.

“This growth was driven by stronger collections from corporate income tax, personal income tax, value-added tax (VAT), documentary stamp tax, and excise tax on tobacco,” the Treasury said.

However, BIR collections were 3.41% lower than the PHP 3.22-trillion target for the year due to a pause in payments for infrastructure-related government contracts amid investigations into flood control projects and the temporary suspension of audit operations.

On the other hand, the Bureau of Customs’ (BoC) revenues inched up by 1.75% to PHP 932.7 billion in 2025 from the PHP 916.7 billion collected a year prior, amid strengthened enforcement measures and better monitoring of import declarations.

“VAT remained the principal driver of growth among the import taxes, with excise collection likewise posting year-on-year gains, effectively mitigating the significant effect of the decline in collections from import duties,” it said.

However, BoC collections were 2.72% short of its P958.7-billion target for the year due to “weaker import volumes, the suspension of rice importation, and lower global oil and commodity prices.”

Meanwhile, nontax revenues, which accounted for 8.45% of the total receipts, slumped by 39.15% to PHP 376.3 billion in 2025 from PHP 618.3 billion in 2024. However, it exceeded the full-year target of PHP 306.5 billion by 22.77%.

“This drop was mainly due to the expected absence of one-time remittances received in 2024,” the BTr said. “However, full-year nontax collections surpassed the revised target… largely due to above-target performance of BTr income, particularly from its operations and dividend collections.”

The Treasury’s income declined by 17.7% to PHP 233.2 billion last year, due to the base effect of non-recurring windfall receipts and the impact of interest rate cuts on income from investments and deposit earnings.

Despite the decline, BTr’s income still surpassed the PHP 179.2-billion target for 2025 by 30.11% amid stronger dividend remittances, income from managed funds, higher interest income on government deposits, and guarantee fee collections.

The BTr also attributed this to the NG share from the profits of Philippine Amusement and Gaming Corp. and the Manila International Airport Authority’s terminal fees.

Revenue from other offices declined by 57.29% to PHP 143.1 billion in 2025 but exceeded its PHP 127.2-billion program by 12.43%.

Spending slowdown

Meanwhile, government expenditures edged up by 1.77% to PHP 6.03 trillion in 2025 from PHP 5.93 trillion a year prior. This was 0.85% below the P6.08-trillion annual program.

“The increase in spending was primarily driven by higher allocations for the National Tax Allotment to local government units, interest payments, and personnel services expenditures due to the implementation of the second tranche of salary adjustment of qualified civilian government employees,” the BTr said.

However, it said that the lower-than-program-level disbursements resulted from “proactive fiscal management, including stricter oversight on infrastructure projects linked to corruption scandals.”

Primary spending — which refers to total expenditures minus interest payments — was flat at PHP 5.166 trillion last year from PHP 5.162 trillion a year prior. It was also 1.3% short of the programmed PHP 5.23 trillion.

Interest payments jumped by 13.21% to PHP 864.1 billion in 2025 due to the “additional debt incurred to support the deficit program and the repricing of matured pandemic debt at higher prevailing rates.” This is 1.9% higher than the programmed PHP 848 billion for 2025.

The full-year expenditure was 21.53% of GDP, slightly above the 21.45% target for 2025, but lower than the 22.41% seen in 2024.

December deficit

In December alone, the NG’s budget deficit narrowed by 4.96% to PHP 313.2 billion from PHP 329.5 billion in the same month in 2024.

Revenue collection declined by 3.31% to PHP 304.3 billion in December as nontax revenues plunged by 59.31% to PHP 25.7 billion.

This is as Treasury’s revenues fell 64.42% to PHP 18 billion, and other offices’ revenues dropped by 38.47% to PHP 7.6 billion.

However, tax revenues jumped by 10.73% in December to P278.6 billion as BIR collections went up by 11.08% to P204.2 billion, while Customs collections rose by 9.75% to P73.2 billion.

On the other hand, government spending slid by 4.15% to PHP 617.4 billion in December, even as interest payments rose by 9.75% to PHP 63.6 billion. Primary spending contracted by 5.53% to PHP 553.8 billion.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said that last year’s budget deficit could have been wider if not for government underspending on infrastructure.

“Going forward, geopolitical risks, especially in the Middle East, could lead to higher inflation that could bloat government spending,” he said in a Viber message.

He said the government’s catch-up spending plan, particularly for infrastructure, could also lead to a wider budget deficit.

Union Bank of the Philippines Chief Economist Ruben Carlo O. Asuncion said that the National Government’s slightly higher budget deficit in 2025 “was driven mainly by weaker‑than‑expected tax collections, even as spending remained below program.” 

“Despite these pressures, disbursements were kept 0.85% below the full-year program due to tighter project oversight, indicating that the deficit expansion was rooted in revenue underperformance rather than overspending,” Mr. Asuncion said in a Viber message.

“Looking ahead to 2026, the fiscal position is expected to improve modestly, supported by recovering tax operations as administrative disruptions ease and by continued fiscal consolidation efforts, although elevated interest payments — which rose 13.21% in 2025 — will remain a structural constraint,” he added. — Justine Irish D. Tabile, Senior Reporter

President Ferdinand R. Marcos, Jr. on Tuesday said he might seek “special powers” to temporarily lower the excise tax on petroleum products, as the Middle East war threatens to trim the Philippines’ economic growth this year.

At a news briefing, the President framed the possible tax relief as a direct measure to ease the burden on Filipino consumers, who are already feeling the impact of higher fuel costs.

“We are discussing [with lawmakers], and it could be helpful to give the President the authority to reduce the excise tax on petroleum products should Dubai crude exceed USD 80,” Mr. Marcos said. “We’re not yet there. But if that happens, then maybe this is one tool that we will have.”

Mr. Marcos said he will discuss the proposed lower excise tax with Congress leaders, adding that it will only be a temporary measure.

“It is not going to be a permanent measure. It will be something that we will dispose of as soon as the crisis is over,” he said.

Finance Secretary Frederick D. Go said the economic team will work with Congress to give the President the authority to temporarily cut excise taxes on fuel if Dubai crude oil breaches the USD 80-per-barrel level.

“To be clear, this does not mean the authority will be automatically exercised. It is a precautionary measure — a ready policy tool that the President may use, if necessary, to act swiftly in protecting Filipino consumers and safeguarding the broader economy,” Mr. Go said in a statement.

Under the Tax Reform for Acceleration and Inclusion (TRAIN) law, excise taxes on all oil and fuel products were increased in three tranches from Jan. 1, 2018 to Jan. 1, 2020.

The TRAIN law also automatically suspends the excise tax on petroleum products if the average price of oil in the global market reaches USD 80 per barrel in the next three months.

The Philippines imports its oil mostly from the Middle East, making it vulnerable from geopolitical tensions that would impact domestic prices upward should they persist.

Growth at risk?

At the same time, Mr. Go told reporters the conflict could shave off as much as 0.25 percentage point (ppt) from the country’s economic output this year, highlighting the broader fallout of rising oil prices and global uncertainty.

Mr. Go said they are closely monitoring movements in global oil prices and the duration of the conflict and the possibility of sustained higher oil prices.

US President Donald J. Trump earlier said the war could last four to five weeks but may extend far longer.

“In one scenario that was looked at, I think there’s an impact on GDP (gross domestic product) of between 0.1 [ppt] and 0.25 [ppt],” he said.

According to Mr. Go, there is no need to revise this year’s 5-6% GDP growth target for now, noting global oil prices are currently around USD 76 to USD 78 per barrel.

Growth targets could be revised if oil prices rise to around USD 85 per barrel, he added.

Suspension of excise tax

Meanwhile, legislators are backing calls to suspend the collection of excise tax on fuel products.

“Now is the time to prepare before prices surge further,” Marikina Rep. Romero “Miro” S. Quimbo, who heads the Committee on House Ways and Means, said in a statement. “Congress must immediately pass a measure authorizing the President to suspend excise tax on fuel during extraordinary circumstances.”

Mr. Quimbo filed House Bill No. 8257 which seeks to grant the President authority to suspend or reduce excise taxes on petroleum products during national or global emergencies. However, it proposed that any suspension or cut in the fuel excise tax rate should be effective for a maximum of six months, unless extended by lawmakers through a joint congressional resolution.

The bill requires the President to submit to Congress within 15 days of issuing a suspension order a “factual basis” for halting or cutting excise taxes, including estimates of foregone revenue and the impact on inflation, fuel prices and economic activity.

Navotas Rep. Tobias Reynald M. Tiangco filed a joint congressional resolution that would allow Mr. Marcos to temporarily halt the collection of value-added tax (VAT) on fuel products.

At the Senate, Senator Emmanuel Joel J. Villanueva filed Senate Bill No. 1922 that seeks to provide the President with powers to suspend or reduce excise tax on gasoline and diesel once the average price of crude oil exceeds USD 80 per barrel.

Under the bill, the President can suspend or reduce the excise tax on fuel through an executive order, upon the recommendation of the Energy and Finance secretaries.

The bill also provides for the automatic lifting of the suspension once global oil prices stabilize.

Senator Paolo Benigno “Bam” Aquino IV also filed Senate Bill No. 1923, which proposes to suspend the excise tax imposed in cases of national emergencies or when public interest requires it.

Senate Finance Committee Chair Sherwin T. Gatchalian expressed concern that the suspension of excise tax collection on petroleum products could hurt revenue collection, and impact economic growth.

He estimated the government may forego around PHP 30 billion a month in revenues or around PHP 300 billion in annual revenues due to the measure.

“If the option is to remove excise tax, there will be a lot of losses. My worry is that we’re coming from a slow growth. Maybe we won’t reach the target growth,” Mr. Gatchalian told reporters.

Secure oil supply

Meanwhile, Mr. Marcos said the Philippines has ample energy supply but urged the public to lessen energy use.

Mr. Go said the country’s oil supply is secure, as it has the flexibility to source from other oil-producing states.

“The Philippines maintains an adequate oil buffer equivalent to approximately 50 to 60 days of national demand, providing a cushion against short-term price volatility,” he said.

The President said he will also direct government agencies to minimize their energy use.

“We have given instruction to all government offices to find ways to save on energy. That applies — this is my call to the people as well — let’s find a way to reduce our use of all our sources of energy,” Mr. Marcos said.

Also, Mr. Marcos urged for restraint from all parties but noted the Philippines is only “tangentially” involved due to the number of Filipinos in the region.

“Let’s hope that there is a ceasefire, and we, the Philippines, ask all parties to show restraint and to bring this to a close as quickly as possible,” he said.

The Middle East is home to over 2.4 million migrant Filipino workers, who send a steady stream of remittances that is an important component of the Philippine economy. — Chloe Mari A. Hufana, Reporter with Kenneth Christiane L. Basilio and Adrian H. Halili

 

Further monetary policy easing may be delayed as inflation could heat up again as oil prices surge amid a widening conflict in the Middle East, analysts said.

Marco Antonio C. Agonia, an economist at the University of Asia and the Pacific, said the Bangko Sentral ng Pilipinas (BSP) may opt to stand pat before easing further to anchor its inflation expectations, considering the latest oil shock is a supply-driven issue.

“The higher inflation scenario due to these spikes could delay the BSP’s easing path, depending on the severity of the conflict,” Mr. Agonia told BusinessWorld in an e-mail.

“Being a supply-driven episode, the BSP cannot directly address this type of inflation through rate hikes,” he added. “Instead, the BSP may delay its rate cuts to anchor inflation expectations and prevent second-round inflation drivers from springing up.”

Reuters reported that oil prices surged on Monday as military conflict in the Middle East looked set to last weeks, threatening to upend a global economic recovery and perhaps reignite inflation.

Military strikes by the United States and Israel on Iran showed no sign of lessening, while Iran responded with missile barrages across the region, risking dragging its neighbors into the conflict.

All eyes were on the Strait of Hormuz where around a fifth of the world’s seaborne oil trade flows and 20% of its liquefied natural gas. While the vital waterway has not yet been blocked, marine tracking sites showed tankers piling up on either side of the strait wary of attack or maybe unable to get insurance for the voyage.

In a report dated March 1, Nomura Global Markets Research said every 10% increase in global oil prices could add 0.5 percentage point (ppt) to Philippine inflation, the largest impact, on par with India, seen in the region.

“Still the pass-through to domestic retail fuel prices will be significant and quick, exerting substantial upward pressure on headline CPI (consumer price index) inflation,” Nomura said.

“By our estimates, every 10% rise in oil prices could add about 0.5 ppt to CPI inflation, which suggests headline inflation could return to the upper end of BSP’s 2-4% target this year, instead of averaging at 2.5% as our forecasts envisage.”

The Philippines is a net importer of crude oil, making the country extremely vulnerable to global price swings.

Analysts already expect inflation to be on an uptrend this year, with costlier oil prices among the sources of inflationary pressures.

A BusinessWorld poll of 17 analysts yielded a median estimate of 2.4% for the February inflation print, faster than the 2% in January and the 2.1% seen a year ago.

If realized, this would be the fastest clip in 13 months or since the 2.9% in January 2025.

The BSP expects inflation to average 3.6% by yearend.

However, Mr. Agonia noted that inflation might not go as high as the 2022 levels when geopolitical tensions between Russia and Ukraine jolted the global oil market as well, adding that oil prices typically normalize as soon as such conflicts cease.

“However, it is unlikely that we will see inflation figures similar to the 2022 Russia-Ukraine conflict due to the (so far) relatively contained scale of the conflict,” Mr. Agonia said. “Stable food prices may also keep inflation from breaching the 4% target over a prolonged period of time.”

BSP Governor Eli M. Remolona, Jr. has noted that the policy path ahead is now less certain as they see “tentative” signs of a recovery in confidence even as inflation expectations remain “manageable.”

The central bank trimmed the key interest rate last month by 25 basis points (bps) to an over three-year low of 4.25%. Its sixth straight cut brought its total reductions to 225 bps since it began easing in August 2024.

Current account deficit

Meanwhile, think tanks warned that costlier oil also risks widening the country’s current account deficit (CAD).

“Our analysis shows that every USD 10/bbl (barrel) oil price increase could decrease the current account position across Asian economies by around 0.2-0.9% of GDP, with Thailand, Singapore, Taiwan, India and the Philippines seeing bigger hits purely from a current account perspective,” MUFG Research Senior Currency Analyst Michael Wan said in a report on Monday.

The Philippines’ current account balance stood at a USD 12.5-billion deficit by the end of the third quarter, based on latest central bank data. This was equivalent to -3.6% of gross domestic product (GDP).

The BSP expects the current account gap to end at USD 15.5 billion in 2025 or -3.2% of GDP, before narrowing to USD 15.3 billion or -3% of GDP this year.

Mr. Wan said the country’s current account gap could settle around 2%-3% of GDP this year “despite softer imports and domestic demand.”

Nomura analysts also noted that a wider current account deficit amid rising oil prices could weigh on the peso and reinforce a pause by the central bank.

“The country’s relatively large net energy imports suggest an increase in oil prices could put the CAD back on a widening path, exerting currency pressures and adding to the likelihood of unchanged BSP policy rates,” they said.

Following back-to-back record lows in January, the peso began to recover last month as it returned to the PHP 57-a-dollar level.

The market is anticipating further depreciation amid worries over geopolitical risks from the attacks on Iran, with the peso likely to trade between PHP 57.40 and PHP 58 per dollar this week. — Katherine K. Chan, Reporter with Reuters

 

Oil prices are set to further rise next week amid supply disruptions due to the escalating conflict in the Middle East, Energy Secretary Sharon S. Garin said.

This comes as fuel retailers announced pump price hikes of over PHP 1 per liter, which were scheduled to take effect on Tuesday.

Ms. Garin said fuel prices are really expected to spike due to the US-Iran conflict.

“Prices will really go up. I will not sugarcoat that. Even if you say that oil imports are arriving, prices will still rise because of that tension. The stress in the market will push the price higher until it stabilizes. So, we need to expect that,” she said in a radio interview on DZMM on Monday morning.

Seaoil Philippines, Inc., Shell Pilipinas Corp., Petron Corp., Chevron Philippines, Inc. (Caltex), Jetti Petroleum, Inc., and PTT Philippines Corp. announced an increase in gasoline prices by PHP 1.90 per liter, diesel by PHP 1.20 per liter, and kerosene by PHP 1.50 per liter, effective March 3.

PetroGazz Ventures Philippines Corp. and Cleanfuel will implement the same adjustments, except for kerosone, which they do not offer.

The upward adjustments marked the 10^th consecutive week of increase for diesel and kerosene, and eight straight weeks for gasoline. Since January, per-liter prices of gasoline, diesel, and kerosene rose by PHP 6.70, PHP 9.40, and PHP 7.70, respectively.

Ms. Garin said the government is monitoring the situation as supply is crucial for the Philippines since it has no domestic production.

If the war lasts for a month, she said that pump prices may spike, and the country has to ensure there is enough supply by exploring other options.

The Philippines is a net importer of oil, making it vulnerable to swings in global oil prices.

The Department of Energy (DoE) on Monday called for an emergency meeting with oil companies to assess the situation and measures that may be implemented.

Rino E. Abad, director of the DoE-Oil Industry Management Bureau, said they have to observe the trend during the five-day trading this week to assess whether to implement a staggered approach should there be a big-time price hike next week.

“Just in case there will be a big-time adjustment next week, we will then discuss the staggered implementation,” Mr. Abad told reporters partly in Filipino.

He noted that most of the oil companies have nearly two months’ worth of existing inventory.

Currently, oil companies are required to maintain at least a 30-day inventory of crude oil and a 15-day inventory of finished petroleum products.

“We’ve yet to see any clarity on where the latest developments in the Middle East will lead to and for how long. Given the current situation, we expect high volatility in oil prices in the near term,” Jetti President Leo P. Bellas said in a Viber message.

Eugene Erik C. Lim, president and chief executive officer of Top Line Business Development Corp., said the current upward pressure on oil prices is a bit higher compared with the 12-day Iran-Israel war in June 2025.

Mr. Lim said the movement in oil prices moving forward will depend on how the conflict would drag on.

“I think the important thing right now is to understand that there’s always a knee-jerk activity or a knee-jerk reaction on the onset of the conflict,” he said in an interview on Money Talks with Cathy Yang on One News on Monday.

“So, the question now is, how long is the conflict to be resolved? Or basically… it can be easier for us to discuss in terms of pricing, but I think we have to check the world market in the next few days,” he added.

US President Donald J. Trump said that the conflict with Iran could go on for the next four weeks, according to Reuters, citing the report from Daily Mail newspaper.

Mr. Lim said that the company is conducting several hedging activities, such as entering into forward contracts, to manage financial and supply risks.

Fuel subsidies

At the same time, the Philippine government is prepared to release fuel subsidies to sectors that are most vulnerable to a spike in oil prices.

Mr. Abad said that the fuel subsidy program will be implemented should the one-month average of Dubai crude breach USD 80 per barrel. Last week, the price averaged around USD 70-71, he said.

Palace Press Officer Clarissa A. Castro said the Department of Transportation (DoTr) has allotted PHP 2.5 billion in fuel subsidies for transport workers from the 2025 national budget.

Once Dubai crude prices breach USD 80 per barrel, the DoTr can immediately start distribution to qualified beneficiaries, Ms. Castro said at a briefing, quoting Transportation Secretary Giovanni Z. Lopez.

The Department of Agriculture’s Office of the Secretary and the Bureau of Fisheries and Aquatic Resources have allotted PHP 25 million each for subsidies for farmers and fisherfolk.

Meanwhile, business groups expressed grave concern over the Middle East conflict, citing its impact on oil prices and remittance inflows.

In a statement, the Philippine Chamber of Commerce and Industry (PCCI) urged the government to explore alternative sources of oil amid fears of disruption in the Strait of Hormuz, where about 20% of the world’s oil and liquefied natural gas pass through.

“We likewise urge the Department of Energy to accelerate the development of renewable energy and domestic energy alternatives as a long-term structural solution to our energy vulnerability,” PCCI said.

Federation of Philippine Industries Chairperson Elizabeth H. Lee warned that if the crisis escalates or becomes prolonged, “inventories will be replenished at higher global prices — resulting in sustained upward pressure on domestic fuel costs.”

“The Middle East crisis is not just a distant conflict — it is an inflationary shock that could affect Philippine households and industries if tensions persist,” she said in a statement.

Rising oil costs will drive up transport costs and electricity generation costs, as well as affect domestic sectors like manufacturing, aviation, food processing, and tourism.

“Further, businesses will need to tighten their belts and actively manage financial risks. Quick, low hanging reforms that ease the cost of doing business and reduce the ‘hidden taxes’ on local manufacturers and small businesses can help cushion, at least in part, the impact of global pressures,” Ms. Lee said.

Leonardo A. Lanzona, Jr., an economics professor at the Ateneo de Manila University, said that if the conflict widens to include Saudi Arabia and the United Arab Emirates, where millions of migrant Filipino workers could face safety threats or forced repatriation, remittance inflows might be affected.

“[This could] deal a severe blow to the roughly USD 37 billion in annual remittances that sustain household consumption and support the peso,” he said.

A prolonged crisis would also weaken the local currency through global risk-off sentiment, raise shipping costs and put the central bank in a “difficult position” of balancing growth support against inflation pressures.

The PCCI also urged the Departments of Migrant Workers, Foreign Affairs, and the Overseas Workers Welfare Administration to ensure the safety of over two million overseas Filipino workers based in the Middle East. — Sheldeen Joy Talavera, Reporter with Beatriz Marie D. Cruz and Chloe Mari A. Hufana

Local pump prices may spike after the US and Israel launched strikes on Iran, which may cause a major oil supply disruption in the Middle East, according to industry players and analysts.

“The latest developments are seen to push prices much higher, despite the hefty risk premiums that were already factored in, because of the latest developments in the Middle East,” Leo P. Bellas, president of Jetti Petroleum, Inc., told BusinessWorld.

On Saturday, the US and Israel launched a wave of attacks on Iran, which resulted in the death of the latter’s supreme leader Ayatollah Ali Khamenei, Reuters reported. 

In retaliation, Iran launched missiles and counterattacks against Israel and US bases across the Gulf region including Bahrain, Qatar, and the United Arab Emirates, which are oil-producing countries.

As a net importer of crude oil, the Philippines is vulnerable to global crude price swings, which are triggered by geopolitical tensions.

Initial estimates from the Department of Energy (DoE) on Friday showed a potential increase this week of around PHP 1.10 per liter in gasoline, PHP 0.50 per liter in diesel, and PHP 0.90 per liter in kerosene, based on the four-day trading of the Mean of Platts Singapore last week, a benchmark used for refined oil products.

Rodela I. Romero, an assistant director at the DoE-Oil Industry Management Bureau, said on Friday that reports of massive US military buildup in the Middle East had contributed to expectations of price hikes this week.

Jetti’s Mr. Bellas said that this week’s oil price hikes may be higher than initial estimates as “it can be influenced by the much larger freight and premium that will be used in the cost buildup.”

He added that oil-producing countries hosting US military bases may be affected as well from energy infrastructure damage from Iran’s counterattacks.

“Early market reactions suggest that the US-Israel-Iran tensions could put upward pressure on oil prices, especially if the Strait of Hormuz becomes less stable, affecting oil trade routes,” Brigitte Carmel C. Lim, senior vice-present and chief operating officer, at Top Line Business Development Corp., said via Viber.

Ms. Lim said that this may translate to higher prices in the near term in the Philippines since local pump prices tracks international benchmarks.

She said Top Line is managing the volatility by “maintaining adequate inventory levels complemented with our price hedging strategies to lock in prices as a buffer against sudden market fluctuations.”

Reuters reported that several tanker owners, oil majors and trading houses have suspended crude oil, fuel and liquefied natural gas shipments via the Strait of Hormuz, citing trading sources.

Tehran had also closed navigation in the Strait of Hormuz. Around 20% of global oil, including from Saudi Arabia, the United Arab Emirates, Iraq, Kuwait and Iran, passes through the strait.

“With (Hormuz) being a critical chokepoint that can easily debilitate oil resources, then we can expect spikes on oil prices if a way forward will not be devised,” Raphael J. Cortez, diplomacy lecturer at De La Salle-College of St. Benilde, said.

Former Albay Rep. Jose Maria Clemente “Joey” S. Salceda said President Ferdinand R. Marcos, Jr. should give the go signal for the fuel subsidy program before the next round of pump price hikes.

“Every week of delay means billions of pesos in additional costs that fall disproportionately on jeepney drivers, tricycle operators, farmers, and fisherfolk,” he said in a post on Substack.

Mr. Salceda also urged the Congress to suspend or reduce the excise tax on diesel and kerosene under the Tax Reform for Acceleration and Inclusion Law to provide immediate relief to the transport and agriculture sectors, which he deemed were most exposed to fuel price shocks.

Last week, gasoline prices increased by PHP 0.60 per liter, while diesel and kerosene went up by PHP 1.20 per liter each. Year-to-date, price increases stand at PHP 4.80 per liter for gasoline, PHP 8.20 per liter for diesel, and PHP 6.20 per liter for kerosene.

Spillover effect

Aside from higher oil prices, the US-Iran conflict could slow deployment of overseas Filipino workers (OFWs) to the Middle East, analysts said.

“The US-Israel-Iran war will have a serious negative impact on the Philippines, especially if it engulfs the entire Middle East and is more prolonged than the surgical strike against Venezuela’s Maduro,” Foundation for Economic Freedom President Calixto V. Chikiamco said in a Viber message.

“It will definitely raise oil prices and slow down the deployment of OFWs to the Middle East,” he added.

Mr. Chikiamco said that the event is also likely to impact the already shaken consumer confidence back home.

“It was already shattered by the public works scandal, and therefore (could) further slow down gross domestic product growth and increase unemployment,” he added.

Reyes Tacandong & Co. Senior Adviser Jonathan L. Ravelas said that the country should closely monitor oil prices, global risk sentiment, and foreign exchange.

“This is a major geopolitical escalation, and markets are reacting the usual way — higher oil, a stronger dollar, and more volatility. For the Philippines, the risk isn’t direct conflict but spillovers: higher fuel prices, imported inflation, and pressure on the peso,” he said in a Viber message.

“If tensions drag on, volatility stays; if there’s quick de‑escalation, markets can stabilize just as fast. It’s a global shock — but one we need to manage carefully at home,” he added.

Francis M. Esteban, who teaches international studies at the Far Eastern University, said that the ongoing conflict should prompt the Philippines to diversify energy sources.

“This might be an opportunity for us to further explore renewable sources of energy, and other sources such as the ones newly discovered in Malampaya,” he said in a Facebook chat.

Last month, the Philippine government announced that it had discovered natural gas at Malampaya East-1, located 5 kilometers east of the existing Malampaya gas field off Palawan province.

The discovery is seen to bolster the country’s domestic energy supply, amid rising power demands. — Sheldeen Joy Talavera, Reporter with Justine Irish D. Tabile and Adrian H. Halili