By Norman P. Aquino, Special Reports Editor and Ashley Erika O. Jose, Reporter
ON A HUMID Thursday afternoon in Las Piñas City near the Philippine capital, jeepney driver Michael I. Resuello, 48, watched the diesel pump at the RedStar Fuel station in Pilar Village tick past P70 per liter, up from P48 just weeks ago.
“The fuel is just too expensive,” he told BusinessWorld in Filipino, wiping sweat from his brow. Before the crisis, he said, he could fill a 35-liter tank for less than P1,700 for his Alabang-Baclaran route.
“Now, I have to gas up as often as four times a day because of my limited budget,” he said, as the pump stopped at P250 for 3.33 liters of diesel.
Daily earnings barely cover household expenses, and rising oil prices are forcing families and small businesses alike to rethink budgets. For millions of Filipinos, soaring energy costs are no longer a distant headline — they’re an immediate financial strain.
The Philippines imports nearly all of its crude from the Middle East. The US-Israel strikes on Iranian targets and Tehran’s retaliatory attacks have disrupted global oil flows, pushing Brent crude above $100 per barrel at the start of March, the highest since mid-2022.
On Thursday, Brent futures climbed 6.19% or $5.69 to $97.67 a barrel after Iranian explosive-laden boats hit two Iraqi fuel oil tankers in its waters, causing them to catch fire, Reuters reported, citing Iraqi security officials.
Analysts warn that continued instability near the Strait of Hormuz, a chokepoint for one-fifth of the world’s oil, could drive prices even higher, intensifying inflation and eroding household purchasing power.
Families are expected to feel the impact on daily commutes, electricity bills and food prices in the coming days.
Oil companies have agreed to stagger price increases, but diesel could balloon by as much as 62% to about P96.76 per liter in March, while gasoline prices could rise by 52% to about P88.79 per liter under a more severe scenario, according to the Department of Economy, Planning, and Development (DEPDev).
Mr. Resuello’s household is trimming discretionary spending to cover higher energy costs.
“People are cutting back where they can,” he said. “My grandkid and I need to cut back on eat-outs to Jollibee from now on. Everything costs more, even the basics.”
Inflationary pressures are compounded by the peso, which recently fell to a record low of P59.50 against the dollar.
The Iran war could trim 0.2-0.3 percentage point from Philippine economic growth this year, DEPDev Secretary Arsenio M. Balisacan said on Tuesday.
He added that inflation could quicken to as much as 5.1% this month and to 4.8% in April based on the agency’s baseline scenario, with full-year inflation settling at 4-4.2% — above the central bank’s target.
In a worst-case scenario where oil prices hit $140 this month and stay above $80 until September, DEPDev said inflation could hit as high as 7.5% in March and April, bringing the full-year print to as much as 4.8% and affecting consumer spending and corporate margins.
CORPORATE STRAIN
Philippine businesses are also bracing for impact. Shipping and logistics firms face steep bunker fuel costs, while manufacturers reliant on energy-intensive processes are weighing price adjustments. Retailers and food distributors are expected to pass higher energy costs to consumers, and utilities will have to contend with increased generation expenses.
Transport, industrial, and consumer goods sectors have been hit hard in financial markets. The Philippine Stock Exchange index (PSEi) recently dipped to near six-month lows, dragged down by shares of transport, manufacturing, and energy companies.
The slump reflects investor concerns over inflation, profit margins, and potential monetary tightening.
The Department of Energy said strategic stockpiles and inbound shipments could cover demand until at least April, even amid prolonged disruptions. President Ferdinand R. Marcos, Jr. on Wednesday said the government is exploring alternative suppliers while monitoring logistics to prevent shortages.
Lawmakers are debating excise tax relief for petroleum products. A lapsed provision previously allowed the government to suspend excise taxes when global oil exceeded $80 per barrel for three months. Finance officials estimate that suspending duties from May to December could cut revenues by roughly P136 billion.
The Bangko Sentral ng Pilipinas, which cut its benchmark interest rate last year to support growth, is monitoring inflation. Sustained oil shocks above $100 per barrel could prompt tighter monetary policy to safeguard price stability.
Overseas Filipino workers, particularly in the Middle East, are also affected. While remittance flows remain robust, heightened geopolitical tensions raise concerns about workplace safety, contract disruptions, and timely money transfers — key income sources for millions of families.
Businesses and households are recalibrating strategies for an energy-constrained environment. Companies are exploring efficiency measures, fuel hedging, and renewable energy alternatives.
Meanwhile, households are rethinking spending priorities and conserving energy wherever possible.
Mylene M. Villanueva, who runs a mom-and-pop store along a busy street in the same village, has had to contend with slower sales since Monday.
“Filipinos are spending less,” Ms. Villanueva, 52, said in an interview, sitting idly in her store that used to be full of customers.
Her daily sales have dropped to P15,000 from P30,000, she told BusinessWorld. “It feels like money has just disappeared.”
Economists caution that if tensions persist, inflationary pressures could last through much of 2026, potentially slowing economic growth.
“The war will likely push inflation upward and slightly dampen economic growth, as energy costs feed into transportation, logistics and food prices, reducing household purchasing power,” John Paolo R. Rivera, a senior research fellow at the Philippine Institute for Development Studies, said in a Viber message.
He said state measures such as temporary excise tax cuts, targeted fuel subsidies and staggered oil price increases could help soften the immediate shock from the crisis, but these must remain strategic to prevent fiscal strain.
“The oil shock may persist while geopolitical tensions continue, although such spikes are often volatile rather than permanent,” he added.
“You have to consider two things: how big the changes are and how often they happen,” Nigel Paul C. Villarete, a senior adviser on public-private partnerships at Libra Konsult, said in a Viber message.
Global oil prices are volatile, and small fluctuations occur frequently, while large swings are rarer. It is the larger shifts that require careful management, he pointed out.
FINANCIAL MARKETS
Rising oil prices have triggered sell-offs in the stock market. Investors are factoring in the impact on corporate earnings and consumer spending.
The PSEi plunged 4.97% or 314.19 points to 6,006.22 on March 9, its lowest close since Dec. 19, 2025. Heavy foreign selling was reported, while bond market yields climbed, reflecting caution amid global risk. The peso’s depreciation compounds the effect, making imported commodities costlier.
Energy-intensive industries including shipping, airlines, and petrochemicals are most exposed.
Some analysts see potential for structural shifts. Renewable energy adoption, energy-efficient transport and alternative fuels could gain traction as companies seek to reduce exposure to volatile oil prices.
“In addition to conserving oil and petroleum, the structural transition to renewable energy — solar, wind, geothermal and hydroelectric, among others — together with the growing use of electric and hybrid vehicles, will lessen dependence on imported oil,” Michael Ricafort, chief economist at Rizal Commercial Banking Corp., said in a Viber message.
Rising fuel prices are pushing more people to consider cycling in cities where it is practical. Companies are also expanding work-from-home schemes to help cut commuting costs.
“While the government should consider short-term relief for the transport industry and commuters, the country is overdue for more sustainable solutions,” Patricia Mariano, director and co-founder of AltMobility PH, said via Viber.
Ms. Mariano said the government could have invested more over the past four years in active transport and public transit, which could have eased the impact of fuel price swings on commuters.
For people like Mr. Resuello, the effects are immediate. Higher fuel prices mean rising daily costs and difficult choices. “We just have to keep moving,” he said. “Even if it costs more, the work must go on.”
