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Philippine inflation accelerated to a 13-month high in February as rising costs for rice, fuel, electricity and other utilities added pressure on household budgets, the Philippine Statistics Authority said on Thursday.

The consumer price index (CPI) picked up to 2.4% from 2% in January and 2.1% in February 2025. It was the fastest since January 2025, when inflation hit 2.9%.

February inflation fell within the Bangko Sentral ng Pilipinas’ (BSP) 2.3%-3.1% forecast and matched the 2.4% median estimate in a BusinessWorld poll of 17 analysts.

February also marked the second straight month that inflation stayed within the central bank’s 2%-4% target, bringing the two-month average inflation rate to 2.2%.

“Overall price conditions remain stable,” Economy Secretary Arsenio M. Balisacan said in a statement. “However, we are mindful of recent geopolitical developments, which we are closely monitoring, along with domestic supply conditions of key commodities.”

The peso’s purchasing power remained at PHP 0.76 for every PHP 100 worth of goods and services in 2018, the same level recorded in January and the lowest since the base year was adopted.

National Statistician Claire Dennis S. Mapa said faster price increases in food and nonalcoholic beverages, housing and utilities and restaurants and accommodation services pushed inflation higher last month.

Inflation for food and nonalcoholic beverages accelerated to 1.8% from 1.1% in January, driven by faster price increases for vegetables, fish and seafood, as well as a slower decline in cereals and cereal products.

Inflation for restaurants and accommodation services also quickened to 4.4% from 4% a month earlier. Prices for restaurants, cafés and similar establishments rose 4.5% from 4.1% pace in January.

Core inflation, which strips out volatile food and fuel prices, edged up to 2.9% in February from 2.8% in January and 2.4% a year earlier. This was the fastest  since June 2024.

Energy costs

Inflation for housing, water, electricity, gas and other fuels, which accounted for almost 30% of the headline CPI, rose to 3.5% in February from 3.3% a month earlier.

Fuel prices have been rising steadily in recent weeks, with diesel and kerosene marking 10 consecutive weekly increases and gasoline climbing for eight straight weeks.

In February alone, pump price adjustments led to a net increase of PHP 3.20 a liter for gasoline, PHP 4.40 for diesel and P3.50 for kerosene.

Liquefied petroleum gas (LPG) prices also increased after oil companies implemented a PHP 1.50- to PHP 1.55-per-kilo hike, bringing the price of a standard 11-kilo household tank to PHP 836.50 to PHP 1,137.05.

Rising tensions in the Middle East have raised concerns about possible disruptions in global oil supply, which could further push up energy costs for net oil importers such as the Philippines.

The Department of Economy, Planning and Development said authorities are monitoring domestic fuel price movements and could intervene if global oil prices rise sharply.

“Further, the government will implement measures to reduce fuel consumption, first by government offices, and we encourage the private sector to do the same,” Mr. Balisacan said.

These measures include the use of shuttle buses, encouraging carpooling and adopting flexible work arrangements such as work-from-home or compressed workweeks.

Electricity costs also rose after Manila Electric Co. increased its rate by 22.26 centavos per kilowatt-hour (kWh) in February to PHP 13.1734 per kWh from January. Electricity inflation climbed to 6.7% from 6.5%.

Rental inflation also edged higher to 3% from 2.9%, while inflation for water supply rose to 4% from 3.5%.

Rice prices, a key driver of Philippine inflation, showed signs of firming in February.

Rice inflation remained negative at -3.4%, but this was a slower decline than -8.5% in January, indicating a gradual rebound in prices.

Regular milled rice prices fell 2.5% year on year to an average of PHP 46.01 per kilo but rose 5.14% compared with January levels.

Mr. Mapa said rice inflation could move closer to zero — or even turn positive — if month-on-month price increases persist in March.

Meanwhile, inflation for the bottom 30% of income households accelerated to 2.5% in February from 1.6% in January and 1.5% a year earlier, the fastest in more than a year.

Inflation outlook

The BSP said inflation expectations remain well anchored despite the February uptick, although authorities are assessing the potential impact of Middle East tensions on the domestic economy.

“The BSP will ensure that policy settings remain in line with its pursuit of price stability conducive to sustainable growth and employment,” it said in a statement.

Jonathan L. Ravelas, a senior adviser at Reyes Tacandong & Co., said the latest data point to rising risks, particularly from global oil markets.

“While inflation remains manageable, the third straight monthly uptick tells us upside risks are building — especially if global oil supply disruptions persist,” he said via Viber.

Chinabank Research said inflation might average around 3.6% this year, near the upper end of the BSP’s target, though the outlook could worsen if geopolitical tensions persist.

Morningstar DBRS also warned that net oil-importing economies such as the Philippines remain vulnerable to rising energy costs and potential supply disruptions stemming from the war in the Middle East.

The Bangko Sentral ng Pilipinas (BSP) should hold interest rates steady, rather than cut or raise, amid rising global oil price pressures from the Middle East war, according to the Institute for Risk and Strategic Studies, Inc. (Salceda Research).

In a report released on Wednesday, the think tank said further rate adjustments might be unwise amid uncertainties over crude prices stemming from disruptions linked to the war between Israel and Iran.

“The appropriate response is a pause, not a hike — the inflation is supply-driven and rate hikes would not reduce oil prices,” Salceda Research said. “The BSP should communicate clearly that the easing cycle is on hold, not reversed, to avoid market overreaction.”

The Strait of Hormuz, a critical oil transit point, has become a flashpoint after Israeli and US military strikes on Iran. Roughly one-fifth of the world’s oil supply passes through the strait, and any disruption could push global oil prices higher, squeezing import-dependent economies such as the Philippines.

Salceda Research estimated that sustained crude prices above $80 per barrel for more than a month could push Philippine inflation toward 4%, near the upper limit of the central bank’s target band. “Second-round consumer price index effects will push inflation toward the 4% upper target boundary within two quarters,” it added.

At its first policy review of 2026, the BSP cut the key interest rate by 25 basis points (bps) to 4.25%, the sixth consecutive reduction and a total easing of 225 bps since August 2024.

BSP Governor Eli M. Remolona, Jr. has noted that easing alone might not stimulate an economy constrained by weak sentiment and lingering governance issues.

Salceda Research also cautioned that the Philippine peso could come under renewed pressure, potentially testing PHP 59.50 to PHP 65 a dollar.

The peso briefly recovered to around PHP 57 a dollar last month after record lows in January but has remained above PHP 58 amid geopolitical uncertainty.

“The BSP should allow the peso to depreciate within the PHP 59.50-PHP 61 band… intervening [only] to prevent disorderly overshooting beyond P62,” the think tank said.

Rapid moves past PHP 62 could front-load inflation and trigger capital outflows, it said. “Graduated, transparent intervention is preferable to defending a fixed level. — Katherine K. Chan, Reporter

The Philippine goverment plans to procure at least a million barrels of diesel to secure domestic fuel supply as tensions in the Middle East threaten global oil trade and China moves to curb refined fuel exports.

The Department of Energy (DoE) is studying a proposal to direct state-run Philippine National Oil Co. (PNOC) to buy the diesel for a strategic stockpile that could cover about five days of domestic consumption, Oil Industry Management Bureau Director Rino E. Abad told reporters on Thursday.

The planned purchase is equivalent to roughly 200,000 barrels a day, or about 33 million liters of diesel consumption daily in the Philippines.

Mr. Abad said the volume could be increased to as much as 3 million barrels, which would be enough to cover up to 15 days of supply, especially after reports that China is asking refiners to halt new export contracts for refined fuel.

“That’s a game changer,” he said, noting that about 30% of the Philippines’ diesel imports come from China. “Hopefully, South Korea will not follow because about 40% of our imports come from South Korea,” he added in mixed English and Filipino.

China has asked companies to stop signing new contracts to export refined fuel and attempt to cancel shipments already committed, according to a Reuters report, citing industry sources.

Mr. Abad said PNOC could buy diesel from nearby suppliers such as South Korea, Japan, Singapore, Malaysia and Indonesia if Chinese shipments are disrupted.

The fuel purchased by PNOC would still be sold to domestic oil companies to ensure continued supply in the local market, he said.

“At best, PNOC may sell the fuel at cost,” Mr. Abad said. “It will simply recover the procurement expenses and distribute the supply to domestic oil companies.”

Global oil supply chains have come under pressure after the closure of the Strait of Hormuz, a critical chokepoint through which roughly a fifth of the world’s oil and liquefied natural gas shipments pass.

The disruption stems from escalating hostilities involving Iran, the US and Israel.

As a net oil importer, the Philippines is particularly vulnerable to fluctuations in global oil supply and prices.

About 98% of the country’s crude oil imports come from the Middle East, according to DoE data, with the remainder obtained from nearby producers such as Brunei and Malaysia.

Fuel retailers have implemented several rounds of price increases this year as global oil prices climbed.

On Monday, oil companies raised gasoline prices by PHP 1.90 a liter, diesel by PHP 1.20 and kerosene by PHP 1.50.

The adjustments marked the 10^th consecutive weekly increase for diesel and kerosene prices and the eighth straight week for gasoline.

Since January, gasoline prices have increased by PHP 6.70 a liter, diesel by PHP 9.40 a liter and kerosene by PHP 7.70 a liter.

Staggered increasese

Energy Secretary Sharon S. Garin said some oil firms have agreed to implement potential increases in pump prices on a staggered basis next week to cushion the impact on consumers.

Oil companies assured the DoE during a meeting on Wednesday that existing fuel inventories remain adequate and that additional shipments previously ordered were on the way, Ms. Garin told DZMM radio.

“We also talked about staggering the increases and the discounts. They seem amenable,” she said.

Tanya Samillano, president of the Independent Philippine Petroleum Companies Association, said oil companies briefed the DoE on their plans for price adjustments and inventory levels.

“We discussed how we plan to implement our price adjustments this coming week and updated the department on our inventories,” she said in a Viber message.

Leo P. Bellas, president of Jetti Petroleum, Inc., said many independent fuel retailers had agreed to stagger price increases if global oil costs continue to climb.

“Almost all nonmajor players agreed to implement the potential increase on a staggered basis,” he told BusinessWorld.

Brigitte Carmel C. Lim, senior vice-president and chief operating officer of Cebu-based Top Line Business Development Corp., said the company supports the DoE’s call for measures that could soften the impact of rising oil prices.

“We will continue to monitor global price movements and regulatory advisories,” she said in a Viber message.

Ms. Garin said the government would determine the scale and timing of fuel price adjustments after assessing global market movements over a full five-day trading cycle.

“We will determine by the weekend because we need five days of simulation to estimate the increase,” she said.

Economists said even staggered fuel price increases could weigh on household spending.

Foundation for Economic Freedom President Calixto V. Chikiamco said spreading out price increases might reduce the shock to consumers but would still erode purchasing power.

“Staggering the increases is slightly better than a one-time price shock,” he said via Viber. “But the total increase is still large and will cut deeply into disposable income.”

IBON Foundation Executive Director Jose Enrique “Sonny” A. Africa said gradual adjustments might soften the immediate impact but would not reduce the overall burden on households.

“The increase is paced but households will still eventually pay the same higher prices,” he told BusinessWorld. — Sheldeen Joy Talavera, Reporter

The government is preparing measures to protect remittance flows and cushion the domestic impact of escalating tensions between Israel and Iran, the presidential palace said on Wednesday, as President Ferdinand R. Marcos, Jr. ordered agencies to safeguard overseas Filipinos and monitor risks to fuel prices and financial markets.

The President is closely tracking developments in the Middle East, particularly their potential effect on overseas Filipino workers (OFW) and remittances, a critical source of foreign exchange for the Philippines, it added.

“President Marcos wants to ensure that Filipinos, both here and abroad, are protected while we brace for market movements caused by the conflict,” Palace Press Officer Clarissa A. Castro told a news briefing.

The heightened alert follows a series of emergency high-level meetings at the palace, including a special Cabinet session convened to address the geopolitical instability.

Central to the administration’s strategy is mitigating inflationary pressures triggered by volatile global crude prices, which threaten the purchasing power of Filipino families dependent on remittances.

Economic managers are weighing interventions to shield the domestic economy from “energy shocks.” Among the most significant is a proposal for the President to seek emergency powers from Congress to reduce or suspend excise taxes on petroleum products.

“One of the options for President Marcos is to talk to the Senate and House leadership to be granted the power to reduce the excise tax on petroleum products as an emergency measure only,” Ms. Castro said.

Under the proposal, this authority would be temporary and triggered by specific price thresholds. While the Tax Reform for Acceleration and Inclusion  law includes certain suspension mechanisms, the palace said these are insufficient for the crisis, prompting the need for an urgent measure.

The Department of Budget and Management said there are undisbursed appropriations and contingent funds worth over PHP 15 billion that could be tapped for fuel subsidies.

“Continuing appropriations from 2025 can still be used until the end of 2026,” Budget Undersecretary Goddes Hope O. Libiran told BusinessWorld via Viber.

She said the Department of Transportation has PHP 2.5 billion in unspent funds from last year. The Department of Agriculture – Office of the Secretary has PHP 25 million remaining for farmers, while the Bureau of Fisheries and Aquatic Resources also has PHP 25 million for fisherfolk.

Sixth most vulnerable

“If additional support is needed, there’s also the PHP 13-billion contingent fund under the 2026 General Appropriations Act,” she added.

The Philippines ranks as the sixth-most vulnerable country globally to rising oil shocks amid Middle East tensions, according to Fitch Solutions unit BMI.

As a net oil importer with a sizable current account deficit, the country faces heightened economic risks from fluctuating energy prices. Only Egypt, Poland, Turkiye, India and China are more exposed.

Rickinder Chima, BMI director and global economist, noted during a webinar that economies heavily reliant on energy imports like the Philippines could experience domestic energy shortages if the Strait of Hormuz were to be closed.

The findings highlight the urgent need for energy and fiscal measures.

The palace assured the public that the country’s oil supply is sufficient to last 50 to 60 days. Should global crude prices hit USD 80 per barrel, authorities are prepared to release fuel subsidies specifically targeting transport, agriculture and fisheries.

Beyond fiscal measures, the government is exploring structural changes to the workweek to conserve energy. Proposals include a four-day workweek and expanded work-from-home (WFH) arrangements.

“The President may study that suggestion, especially if the ongoing Israel-Iran issue becomes more severe,” Ms. Castro said.

‘No wage cuts’

Labor groups expressed conditional support for these plans, emphasizing that any transition must safeguard workers’ rights.

“This must be worker-centered — no wage cuts, no unpaid overtime, no compulsion, with clear occupational safety and health standards, especially for WFH,” Federation of Free Workers (FFW) President Jose Sonny G. Matula told BusinessWorld via Viber.

The FFW is ready to support the government’s energy-conservation push if flexible work arrangements are implemented through dialogue and protect labor standards.

The group called for a tripartite meeting with the government, employers and labor representatives to design safeguards, including wage protection, limits on working hours, voluntary participation, data privacy, occupational safety, the right to disconnect and support for workers unable to work from home.

Analysts said the conflict poses direct risks to the safety and livelihoods of 1 million to 2.5 million OFWs in the Middle East, potentially disrupting workplaces, delaying salaries or prompting repatriation that could dent remittance flows.

“Some OFWs may repatriate voluntarily, and those who remain may face income insecurities,” Benjamin B. Velasco, an assistant professor at the University of the Philippines Diliman School of Labor and Industrial Relations, told BusinessWorld in a Facebook Messenger chat.

“Even if remittances hold, higher global oil prices will reduce the purchasing power of OFW families here,” he added.

Reducing excise taxes could help temper oil prices and curb inflation but may lower government revenues. Mr. Velasco said the government could consider borrowing to fund short-term welfare support for low-income households.

Labor proposals such as a four-day workweek with one work-from-home day are acceptable if they respect worker rights. “These policy proposals are welcome as adaptations to the escalating war,” he said.

Mr. Matula cited the risks from employment disruptions overseas, remittance instability and oil price shocks.

Remittances fund food, transport, tuition, rent and healthcare for millions. If the conflict persists, he said, remittance growth could slow, while higher global oil prices would drive up transport, electricity and food costs.

With 64% of domestic transport reliant on imported fuel, purchasing power would erode further.

Economists said targeted subsidies would be more manageable than universal programs. John Paolo R. Rivera, a senior research fellow at the Philippine Institute for Development Studies, said limited support for transport and agriculture would reduce strain on the budget, unlike broad subsidies that could widen the deficit.

Asian Development Bank economist James P. Villafuerte recommended cash or income support for vulnerable households, saying blanket fuel subsidies often benefit wealthier families and do not encourage energy conservation.

He added that the government could also reprioritize projects, improve budget efficiency or borrow for short-term relief if needed.

Michael L. Ricafort, chief economist at Rizal Commercial Banking Corp., said the government’s emerging response mirrors measures during prior flare-ups, including the June 2025 Iran-Israel retaliatory attacks and the October 2023 Israel-Hamas conflict.

Authorities are expected to roll out subsidies, targeted assistance and legally mandated mechanisms to cushion vulnerable sectors such as transport operators, fisherfolk, farmers and low-income households.

Beyond short-term relief, he stressed conservation and structural reforms. “Conservation measures for oil and energy, alongside a shift to renewable sources — solar, wind, geothermal, hydroelectric — and more electric and hybrid vehicles, will reduce dependence on imported energy,” he said, noting that sustained investment in energy diversification will strengthen resilience against recurring geopolitical shocks. — Erika Mae P. Sinaking, Reporter and Justine Irish D. Tabile, Senior Reporter with Katherine K. Chan

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