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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

The government is aiming to sign this year 25 official development assistance (ODA) agreements amounting to USD 10.3 billion (PHP 593.382 billion) before the country reaches upper middle-income status by mid-2026.

Finance Secretary Frederick D. Go said there are 10 ODA loans from Japan, 10 pipeline loans from South Korea, and five loan deals from France lined up for this year.

“These total 25 ODA loan agreements with a total value of USD 10.3 billion,” he said on Thursday.

Mr. Go said the Philippines is expected to be classified as an upper middle-income country (UMIC) by the World Bank within the year.

“We will be less reliant on concessional loans once the country moves into an upper-middle class according to the World Bank. So, we will have to find other sources of financing,” Mr. Go said, adding that he expects the government to be more reliant on public-private-partnership projects.

The Philippines has remained in the lower middle-income bracket since 1987, despite posting a higher gross national income (GNI) per capita of USD 4,470 in 2024. This was only USD 26 shy of the World Bank’s adjusted GNI per capita requirement of USD 4,496-USD 13,935 for UMIC status.

The Washington-based lender is scheduled to release its updated annual country status thresholds in July.

Mr. Go added that the government is eyeing alternative financing sources for projects in infrastructure, climate change, energy, and agriculture.

The government is also in discussions with the Asian Infrastructure Investment Bank (AIIB) to fund two projects this year.

This includes the Luzon Digital Connectivity project under the Department of Information and Communications Technology (DICT) worth USD 500 million and “Metro Manila Sponge City” under the Metropolitan Manila Development Authority (MMDA) worth USD 150 million.

“So those are the two that they are looking at but not certain yet. We are still discussing with the AIIB, DICT, and MMDA. The cooperation with AIIB continues to be robust,” Mr. Go said.

Since the start of the Marcos administration, the Philippines and Japan have signed 12 financing deals worth ¥910.38 billion (about PHP 341.2 billion).

As of December last year, Japan accounted for USD 13.9 billion or 33.54% of the Philippines’ total ODA portfolio.

Japan is the Philippines’ largest ODA loan provider and third-largest source of ODA grants.

Meanwhile, Mr. Go said the government is still awaiting clarification from the US on the newly imposed global tariffs.

“What we are hopeful for and what we assume it to be is that if they apply the 15% tariffs on us, it will continue to apply on the goods that they were applying a 19% tariff on. So, our assumption is all the goods that were exempted before, which are the semiconductors and the major agricultural exports, will continue to be not included in the list of items to be subjected to the new 15% tariff,” he said.

The US on Tuesday started collecting a temporary 10% global import tariff, but said it was working to raise it to 15%.

The Trump administration’s new tariff policy comes after the US Supreme Court ruled that President Donald J. Trump had exceeded his authority when he imposed the reciprocal tariffs.

The ruling had invalidated the tariffs imposed by the Trump administration on China, Japan, South Korea, Taiwan and Association of Southeast Asian Nations economies. Most Philippine-made goods had faced a 19% US tariff. — Aaron Michael C. Sy

 

The administration of Philippine President Ferdinand R. Marcos, Jr. is accelerating structural reforms and diversifying trade ties to shield the economy from global volatility following sluggish economic growth last year.

During the Association of Southeast Asian Nations (ASEAN) Editors and Economic Opinion Leaders Forum in Makati City on Tuesday, Mr. Marcos said the government is pushing the bureaucracy to make it more responsive to policy shifts as external shocks, from geopolitics to supply chain disruptions, become more frequent.

Mr. Marcos cited trade negotiations with nontraditional partners such as Latin American nations, members of the European Union (EU) and Canada, among others.

The President framed the next phase of his administration around strengthening economic resilience after the pandemic and amid what he described as increasingly complex geopolitical tensions.

While the government had expected a more stable global environment after the pandemic, he said successive economic and political shocks have required a recalibration.

“One of the main things that we are striving for is to provide stability,” he said. “Whatever shocks come, we are more robust, we are resilient and we are able to adjust.”

That balancing act, preserving policy continuity while remaining agile, will define Manila’s economic strategy in the coming years, he added.

Halfway through his six-year term, Mr. Marcos said that embedding reforms deep enough to outlast political cycles will be key to turning short-term growth into a long-lasting one.

The Philippines’ gross domestic product (GDP) growth slowed to a post-pandemic low of 4.4% in 2025, after a graft scandal affected government spending, consumption and investor and consumer confidence.

The Marcos administration is now targeting GDP growth of 5-6% in 2026, 5.5-6.5% in 2027 and 6-7% in 2028. These new targets are slightly lower than the earlier 6-7% growth goal for 2026 to 2028.

“Flood control problems, scandal, whatever you want to call it, have certainly played a very large part in that,” Mr. Marcos said, referring to his exposé about anomalous flood control projects last July in his annual address to Congress.

“Unfortunately, it had to be done. It is one of those things where you just have to rip the band-aid off. There was no easy way to do it. And otherwise, then the old practices would continue and the Philippines would flatline.”

The President also blamed the Ukraine-Russia war and disruptions in global commodity markets, which have also affected the Philippines through higher food and energy prices.

“It is uncertainty that we are fighting with,” he noted.

John Paolo R. Rivera, a senior research fellow at the Philippine Institute for Development Studies, said the Philippines is “moderately sensitive” to global volatility but generally less trade-dependent than export-heavy peers such as Vietnam and Thailand.

“The main transmission channels of global volatility are oil prices (import dependence), exchange rate pass-through to inflation, and financial conditions (portfolio flows, risk-off episodes),” Mr. Rivera said via Viber.

Compared with regional peers that are more deeply integrated into global manufacturing supply chains, the Philippines faces smaller exposure to abrupt trade disruptions, he noted.

Mr. Rivera said the country’s defenses include international reserves, a flexible exchange rate, a predominantly domestic-currency public debt profile and resilient forex (foreign exchange) inflows from remittances and services.

Mr. Rivera said energy and logistics costs, limited export diversification and uneven infrastructure execution may hamper competitiveness and the economy’s recovery.

He said productivity gains and investment in infrastructure will be critical to sustaining long-term growth.

University of Asia and the Pacific Associate Professor George N. Manzano said the Philippines is an open economy but is less exposed to global trade shocks than more export-dependent ASEAN peers.

He noted the country’s trade as a share of GDP is smaller than in Singapore, Vietnam and Thailand, meaning external disruptions transmit with somewhat less intensity. — Chloe Mari A. Hufana, Reporter