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Malaysia PM tells parliament of plot to destabilize government

Malaysia’s Prime Minister Anwar Ibrahim — REUTERS

KUALA LUMPUR — Malaysia’s prime minister said a suspect in an alleged plot to topple the government had engaged an international public relations firm to launch a coordinated attack aimed at undermining national institutions before the next election.

Police said last week they were investigating an alleged conspiracy to “sabotage national stability”, under laws against undermining parliamentary democracy.

In an address to parliament on Tuesday, Prime Minister Anwar Ibrahim provided further details of the alleged plot, saying the suspect had engaged the PR firm as part of a response to being the subject of a large-scale graft investigation by the Malaysian Anti-Corruption Commission (MACC).

Neither Mr. Anwar, nor the police, have identified the individual suspect or the PR firm.

Mr. Anwar said the PR strategy, which began in August 2024 and included engaging media agencies, banks, and lawmakers, was to run until the next general election, due by early 2028.

“Their strategy… was to contact all foreign media with a strategy of undermining the government’s efforts, especially the MACC’s,” Mr. Anwar told parliament, citing documents obtained by authorities.

“And then to use their power and contacts in foreign countries to shape a narrative questioning the authority of the Malaysian government and organize a movement through the Malaysian parliament. That is what worries us.”

Mr. Anwar said documents identified media firm Bloomberg as one of the agencies targeted by the alleged conspiracy.

A Bloomberg spokesperson did not immediately respond to an emailed request for comment on Mr. Anwar’s remarks.

A special government committee is conducting a separate investigation into allegations in a Bloomberg report last month that head of MACC, Azam Baki, may have breached shareholding laws.

Mr. Azam has said he is willing to be investigated as he had “nothing to hide” and all his financial declarations have been made according to public service laws.

Lawmakers, including a key party in Mr. Anwar’s ruling coalition, have called for a royal inquiry into another Bloomberg article alleging broader misconduct at the anti-graft agency.

The MACC has said the allegations were “baseless”, and that they were an attempt to discredit its investigations and enforcement actions within the corporate sector.

On Tuesday, Mr. Anwar said a royal inquiry into the matter was “premature” as the special committee was expected to complete its probe this week. — Reuters

Progress on rules for lethal autonomous weapons urgently needed, says chair of Geneva talks

A combat-ready STM Kargu drone on display at the Asian Defense and Security Exhibition (ADAS) 2024. — ED GERONIA

GENEVA — Progress on a potential international framework to prohibit and restrict Lethal Autonomous Weapons Systems (LAWS) is urgently needed, as talks on the matter in Geneva enter a crucial phase, their chair said.

From this week to the mandate’s end in September, 128 states will discuss whether to agree by consensus a non-binding text that could pave the way for future negotiations on prohibitions and regulations on LAWS.

Since 2014, more than a hundred states party to the Convention on Certain Conventional Weapons have met in the Swiss city to discuss banning LAWS that do not comply with existing international law while regulating others.

“If we wait then it almost gets to a stage where you’re too late… We will be overtaken by technological developments,” Robert in den Bosch, the Dutch Disarmament Ambassador in Geneva and Chair of the CCW Group of Governmental Experts on LAWS, told Reuters.

There are mounting concerns over the role of AI-assisted semi-autonomous weapons that have been used in conflicts in Ukraine, Sudan, Gaza, and in Iran and the Gulf.

While states agree international humanitarian law (IHL) applies to LAWS, specific internationally binding standards for these systems remain virtually non-existent.

Russia and the United States, among others, oppose new legally binding instruments, arguing existing laws suffice.

Mr. In den Bosch stated that others say new rules are needed to bridge supposed accountability gaps in IHL, which place obligations on states and individuals, not on machines.

The Rolling Text under discussion in Geneva proposes “context appropriate human judgment and control” as a measure to ensure that systems that “identify, select and engage” targets without human intervention comply with IHL.

Despite growing calls for urgent regulation, UN Secretary-General Antonio Guterres’ deadline for agreeing a legally binding instrument on LAWS this year will realistically be missed, Mr. In den Bosch said.

While the deadline is outside the Geneva talks’ remit, the challenge of securing consensus on even non-binding elements underscores the difficulty of making progress, Mr. In den Bosch stated.

The talks are set within a challenging context of geopolitical tensions and recent European withdrawals from the landmine ban treaty over Russian threats.

The Review Conference of the CCW in November could decide to launch negotiations for a binding protocol after the Geneva talks end. However, in the absence of agreement, there is a risk some countries might pursue a breakaway treaty elsewhere, Mr. In den Bosch stated. — Reuters

Marcos eyes fuel tax cut amid Middle East strikes

Smoke rises after reported Iranian missile attacks, following strikes by the United States and Israel against Iran, in Manama, Bahrain, February 28, 2026. — REUTERS/STRINGER TPX IMAGES OF THE DAY

Philippine President Ferdinand R. Marcos, Jr. on Tuesday said he would ask Congress to grant him emergency powers to reduce excise taxes on petroleum products if global oil prices surge amid the escalating war in the Middle East.

The President said he plans to discuss the proposal with lawmakers should Dubai crude hit $80 per barrel.

“We are discussing, and it could be helpful to give the President the authority to reduce the excise tax on petroleum products should Dubai crude exceed $80 per barrel,” he told a news briefing. “We’re not yet there. But if that happens, then maybe this is one tool that we will have.”

Mr. Marcos added that he would raise the matter with congressional leaders to determine whether it should be treated as an emergency measure rather than a permanent policy change.

“I will discuss it with the leadership of Congress and see if it’s going to be an emergency measure — not a permanent measure — something that we will dispose of as soon as the crisis is over,” he added.

The Philippines imports most of its oil requirements from the Middle East, leaving it exposed to geopolitical tensions that could drive domestic pump prices higher if disruptions persist.

The crisis erupted after the US and Israel carried out coordinated airstrikes on multiple Iranian military and nuclear facilities, part of what officials described as a major joint campaign targeting Tehran’s strategic capabilities.

In response, Iran launched widespread missile and drone strikes against US military bases and allied territories across the Middle East, including in Iraq, the United Arab Emirates, Qatar, Bahrain, Kuwait and Saudi Arabia.

The retaliatory attacks prompted airspace closures, air defense interceptions and reports of civilian casualties, further deepening regional tensions and raising concerns about potential disruptions to global energy supplies.

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

The measure imposed higher levies on all oil and fuel products. However, it also allows the suspension of scheduled excise tax increases if the three-month average Dubai crude price, based on Mean of Platts Singapore (MOPS), hits $80 per barrel.

From 2018 to 2020, the biggest excise tax increases were applied to diesel fuel oil, liquefied petroleum gas and bunker fuel oil, with rates rising from P2.50 to P6 per liter. — Chloe Mari A. Hufana

Netanyahu says war against Iran may take ‘some time’, but not years

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WASHINGTON — Israeli Prime Minister Benjamin Netanyahu said on Monday that the US and Israel’s war against Iran may take “some time” but it will not take years.

The US and Israeli air war ⁠against ​Iran began with attacks against Tehran on Saturday, killing Iranian Supreme Leader Ali Khamenei, and prompting Iranian retaliation against Israel and missile attacks at Arab nations with US bases across the Middle East.

President Donald Trump initially projected the war to last four to five weeks, but added it could go on longer, and has since sought to justify a broad, open-ended war on Iran.

Mr. Netanyahu rejected the idea of the conflict lasting years, like previous wars in the region.

“I said it could be quick and decisive. It may take some time, but it’s not going to take years. It’s not an endless war,” Mr. Netanyahu said on Fox News’ “Hannity” program.

The assault on Iran formed part of a list of Mr. Trump’s foreign policy actions that have marked a striking shift from his “America First” rhetoric against US interventions when he campaigned in the 2024 elections.

Mr. Netanyahu said he saw the war as an opportunity for lasting peace in the Middle East, including between Israel and Saudi Arabia.

“Yes I do,” he said, when asked if he saw a lasting path to peace in the region.

A Reuters/Ipsos poll showed over the weekend that only one in four Americans approved of ​US strikes on Iran that have plunged the Middle East into chaos.

US wars in Iraq and Afghanistan that lasted several years made many Americans skeptical of Washington’s direct involvement in wars on foreign soil.

Mr. Netanyahu said the US and Israel’s war against Iran was creating a scenario for the Iranian people to topple their government.

“Now, of course, it’s up to the people of Iran in the final count to change the government, but we are creating – America and Israel together are creating – the conditions for them to do so,” he said.

Mr. Trump’s stated aims and timeline for the war have shifted since it began over the weekend. On Saturday when he announced the strikes, he urged Iranians to “take back your country” and implied a goal of toppling the government.

In comments on Monday, Mr. Trump made no mention of toppling Iran’s government and said the war was needed to prevent Iran from developing a nuclear weapon, which Tehran denies seeking, and to thwart its long-range ballistic missile program.

Israel is widely believed to be the only Middle Eastern country with nuclear weapons. Washington also has nuclear weapons. — Reuters

Philippines has sufficient oil supply, says President Marcos

PRESIDENT FERDINAND R. MARCOS, JR. — PHILIPPINE STAR/KJ ROSALES
MANILA — Philippine President Ferdinand Marcos Jr said on Tuesday that the country has sufficient oil supply, but warned of higher prices as the US-Israeli conflict with Iran widens.
Marcos also said at a press conference that the government was studying targeted fuel subsidies for the transport and agriculture sectors.
  • Marcos said the government will watch “very, very closely” the impact of the crisis on the foreign exchange rate.
  • He said he may ask Congress for authority to suspend excise taxes on oil.
  • Marcos urged Filipinos in Israel and other countries in the Middle East affected by the crisis to move to safety, saying the government will arrange repatriation flights once it is secure to do so.
  • More than 2.4 million Filipinos are living and working in the Middle East, including 31,000 in Israel and 800 in Iran.
  • More than a thousand Filipino migrant workers have requested to be repatriated

— Reuters

Amazon cloud unit’s data centers in UAE, Bahrain damaged in drone strikes

The Amazon Web Services signage in Bonifacio Global City. — EDG A. EVA

AMAZON said on Monday some of its data centers in the United Arab Emirates and Bahrain were damaged by drone strikes in the Middle East conflict, disrupting cloud services and making a recovery “prolonged”.

Iran fired a barrage of drones and missiles at Gulf States in retaliation for US and Israeli strikes that killed Supreme Leader Ayatollah Ali Khamenei on Saturday.

A strike on the UAE facility marks the first time a major US tech company’s data center has been disrupted by military action. It raises questions around Big Tech’s pace of expansion in the region.

“In the UAE, two of our facilities were directly struck, while in Bahrain, a drone strike in close proximity to one of our facilities caused physical impact to our infrastructure,” Amazon’s cloud unit Amazon Web Services (AWS) said in an update on its status page.

“These strikes have caused structural damage, disrupted power delivery to our infrastructure, and in some cases required fire suppression activities that resulted in additional water damage,” AWS said.

“We are working to restore full service availability as quickly as possible, though we expect recovery to be prolonged given the nature of the physical damage involved,” it added.

AWS had previously said “objects” had triggered a fire on Sunday that forced authorities to eventually cut power to a cluster of Amazon data centers in the UAE, with restoration expected to take at least a day.

Financial institutions that use AWS services have been affected by the outage, one person with direct knowledge of the situation told Reuters, requesting anonymity because of the sensitivity of the matter.

“Even as we work to restore these facilities, the ongoing conflict in the region means that the broader operating environment in the Middle East remains unpredictable,” AWS said.

REGIONAL AI HUB
US tech giants have been positioning the UAE as a regional hub for artificial intelligence computing needed to power services such as ChatGPT. Microsoft said in November it plans to bring its total investment in the UAE to $15 billion by the end of 2029 and will use Nvidia chips for its data centers there.

“In previous conflicts, regional adversaries such as Iran and its proxies targeted pipelines, refineries, and oil fields in Gulf partner states. In the compute era, these actors could also target data centers, energy infrastructure supporting compute, and fiber chokepoints,” Washington-based think tank Center for Strategic and International Studies said last week.

Microsoft as well as Google and Oracle – which also operate facilities in the UAE – did not immediately respond to Reuters’ requests for comment.

The AWS outage disrupted a dozen core cloud services and the company advised customers to back up critical data and shift operations to servers in unaffected AWS regions.

Abu Dhabi Commercial Bank said its platforms and mobile app were unavailable due to a region-wide IT disruption, although it did not directly link the outage to the AWS incident.  — Reuters

Iran conflict widens to Lebanon, Kuwait mistakenly downs US jets

AN EXPLOSION caused by a projectile impact after Iran launched missiles into Israel following Israel and the US launched strikes on Iran, in Tel Aviv, Israel, Feb. 28, 2026. — REUTERS/GIDEON MARKOWICZ

DUBAI/WASHINGTON — The US and Israeli air war against Iran widened on Monday, with no end in sight as Israel attacked Lebanon in response to strikes by Hezbollah and Iran kept up its attacks on Gulf states that host US military bases.

US President Donald Trump said the operation could continue for weeks and that it was unclear who was in charge in Iran after the targeted killing of Supreme Leader Ayatollah Ali Khamenei in the opening hours of the US-Israel campaign over the weekend.

The attack on Iran has pitched the Gulf into war, killed scores of civilians in Iran, Israel and Lebanon, thrown global air transport into chaos and shut down shipping through the Strait of Hormuz, where one-fifth of the world’s oil trade skirts the Iranian coast, sending oil prices surging.

Underlining the risks, Kuwait mistakenly shot down three American F-15E fighter jets during an Iranian attack, US Central Command said. All six crew members ejected and were safely recovered.

The US military said it had struck more than 1,250 targets in Iran and destroyed 11 Iranian ships. Six US service personnel have been killed so far, all in Iran’s retaliatory attacks over the weekend on Kuwait.

As night fell on Monday, Israel warned of imminent attacks on towns in Lebanon and said it had attacked the complex that houses Iran’s state broadcaster IRIB in Tehran. Explosions shook buildings across Tel Aviv as air defenses intercepted incoming Iranian missiles.

Early on Tuesday, two drones struck the US embassy in Riyadh, causing minor damage and starting a fire, Saudi Arabia’s Defense Ministry said.

For Mr. Trump, joining Israel to attack Iran amounts to the biggest US foreign policy gamble in decades and a major political risk for his Republican Party in this year’s midterm elections. Only one in four Americans support the Iran campaign, according to a weekend Reuters/Ipsos poll.

Average US retail gasoline prices rose above $3 per gallon, in part due to the conflict, as Mr. Trump faces growing discontent over bread-and-butter issues.

WAR WIDENS TO LEBANON
Mr. Trump has said the US faced an imminent threat from Iran that justified war, although he gave no specifics and some US lawmakers said he has shown no evidence to back that assessment.

Before briefing lawmakers, Secretary of State Marco Rubio told reporters on Monday the US acted preemptively because it knew of its close ally Israel’s determination and plans to strike Iran.

“We knew that that would precipitate an attack against American forces, and we knew that if we didn’t preemptively go after them before they launched those attacks, we would suffer higher casualties,” Mr. Rubio said.

In his most extensive public comments so far on the conflict, Mr. Trump on Monday said he had ordered the attack to thwart Tehran’s nuclear program and a ballistic missile program that he said was growing rapidly.

Mr. Trump gave no sign that the operation would end soon, and military officials said more US forces were being sent to the region.

“Right from the beginning, we projected four to five weeks, but we have capability to go far longer than that,” Mr. Trump said at the White House.

A new front in the war opened on Monday when the Lebanese Hezbollah militia, one of Tehran’s principal allies in the Middle East, launched missiles and drones towards Israel.

Israel responded with sweeping airstrikes on the Hezbollah-controlled southern suburbs of Beirut. The Lebanese state news agency NNA said at least 31 people had been killed and 149 injured.

STATE DEPARTMENT WARNING
The US State Department on Monday urged Americans to immediately leave more than a dozen countries in the region, including every Gulf and Levant state, although airspace closures have made doing so neither easy nor cheap.

Turkey joined Russia and China in condemning the war, which President Tayyip Erdogan called a “clear violation” of international law.

Iran denies seeking a nuclear weapon, and it said the US assault was unprovoked, occurring as Tehran negotiated a nuclear accord with Mr. Trump’s envoys. Mr. Trump withdrew from a prior international agreement curbing Iran’s nuclear program during his first term in 2018.

Ali Larijani, Iran’s top security official, said on social media that Iran would not negotiate with Mr. Trump, who had “delusional ambitions.”

Within Iran, where residents have jammed highways to flee the bombing, there was uncertainty about the future mixed with euphoria, apprehension, and rage.

Many have openly celebrated the death of Mr. Khamenei, 86, who ruled since 1989 and directed security forces that killed thousands of anti-government protesters early this year.

But the conservative clerical leaders have shown no sign of yielding power, and military experts say airstrikes without ground forces may not be enough to drive them out, a possibility Mr. Trump said he had not ruled out.

Meanwhile, scores of Iranians have been reported killed in strikes, including several that hit apparent civilian targets.

“They are killing children, they are attacking hospitals. Is this the kind of democracy Trump wants to bring us?” Morteza Sedighi, a 52-year-old teacher, said by phone from Tabriz in northwestern Iran. “Innocent people were first killed by the regime and now by Israel and the United States.”

As Washington’s allies in the Gulf came under renewed attack from Iranian missiles and drones, black smoke rose above the area around the US embassy in Kuwait. There were loud blasts in Dubai and Samha in the United Arab Emirates, and in the Qatari capital Doha.

Qatar, one of the world’s biggest exporters of liquefied natural gas, halted production, with no prospect of being able to ship safely through the chokepoint of the Strait of Hormuz.

Saudi Arabia shut its biggest refinery after drone strikes caused a fire there, one of a number of energy installations that became targets. — Reuters

Oil rises as expanding US-Israeli conflict with Iran elevates supply risks

REUTERS

OIL prices rose for a third day on Tuesday as the widening US-Israeli conflict with Iran and threats to shipping through the Strait of Hormuz heightened fears of supply disruptions from the key Middle East producing region.

Brent crude futures were at $78.83 a barrel, up $1.10, or 1.4%, by 0107 GMT. On Monday, the contract surged to as high as $82.37, its highest since January 2025, though it pared those gains to settle 6.7% higher.

US West Texas Intermediate crude  jumped 74 cents, or 1%, to $71.97 a barrel. In the previous session, the contract initially climbed to its highest since June 2025 before sliding back to still settle up 6.3%.

“With no quick de-escalation in sight, the Strait of Hormuz effectively closed and Iran showing a willingness to target energy infrastructure in the region, upside risks remain and they grow the longer the conflict drags on,” Tony Sycamore, IG market analyst, said in a note.

The US and Israeli air war against Iran widened on Monday with Israel attacking Lebanon and Iran responding with strikes against energy infrastructure in Gulf countries and against tankers in the Strait of Hormuz.

On a typical day, ships carrying crude oil equal to about one-fifth of global demand sail through the Strait of Hormuz along with tankers hauling diesel, gasoline and other fuels to major Asian markets including China and India. The waterway is also the conduit for about 20% of the world’s liquefied natural gas.

Tankers and container ships are avoiding the waterway as insurers have canceled their coverage for vessels.

The concerns about transiting the waterway are increasing as Iranian media reported on Monday an Iranian Revolutionary Guards senior official saying the Strait of Hormuz is closed and Iran will fire on any ship trying to pass.

Earlier on Monday, the Revolutionary Guards said a fuel tanker, identified as the Honduran-flagged Athe Nova, was burning in the Strait after being hit by two drones, Iranian news agencies reported.

Analysts expect oil prices to remain elevated over the coming days while markets focus on the impact of escalating Middle East conflict.

Bernstein on Monday raised its 2026 Brent oil price assumption from $65 to $80 a barrel, but sees prices reaching $120-$150 in an extreme case of prolonged conflict.

Refined product futures are also gaining as the Middle East is a key supplier of fuels and their processing facilities are at risk. On Monday, Saudi Arabia shut its biggest domestic oil refinery after a drone strike.

US ultra-low-sulfur diesel futures were up 3.1% at $2.991 after reaching a two-year high on Monday, while gasoline futures were up 1.1% after climbing 3.7% in the previous session.

European gasoil futures  gained 2.7% to $909.50 a metric ton, after climbing 18% on Monday. — Reuters

Canada’s Carney arrives in Australia for meeting of ‘middle powers’

Canada’s Prime Minister Mark Carney — REUTERS

SYDNEY — Canadian Prime Minister Mark Carney arrived in Australia on Tuesday, aiming to bolster relations between the two so-called “middle powers” amid what he has called a “rupture” in world order.

The leaders of both nations, close allies of the United States, are meeting as war escalates in the Middle East, and will look to strengthen ties as top producers of critical minerals.

Mr. Carney is on a multi-leg trip across the Asia-Pacific region also taking in Japan and India, where he signed trade deals and reset relations with New Delhi after a year-long spat over Sikh separatism.

Canada and Australia have warmer ties, with the two nations expected to deepen cooperation in areas such as defense and maritime security, critical minerals, trade and artificial intelligence, Mr. Carney’s office said ahead of the visit.

Mr. Carney is set to address Australia’s parliament and meet Prime Minister Anthony Albanese, who described Canada last week as one of Australia’s “closest friends, built on generations of trust”, and urged closer ties to promote national interests.

Western nations seek to build their own stockpiles of critical minerals, key for production of semiconductors and defense applications, as China, the world’s dominant producer, tightens supply.

“There’s a lot Canada and Australia can do together on critical minerals as producer nations,” Australian Resources Minister Madeline King said on Monday, when asked about Mr. Carney’s visit.

“Middle powers” needed to work more closely together, Mr. Carney said last month in a widely publicized speech at the World Economic Forum in Davos.

“Middle powers must act together because if we’re not at the table, we’re on the menu,” he said.

In a speech on Wednesday at the Lowy Institute think tank in Sydney, Mr. Carney is expected to press his point further, outlining shifts in the global order and the opportunities they offer middle powers such as Canada and Australia. — Reuters

Philippine factory activity surges in February

Semiconductor chips are seen on a circuit board of a computer in this illustration picture. — REUTERS/FLORENCE LO/ILLUSTRATION

By Justine Irish D. Tabile, Senior Reporter

PHILIPPINE FACTORY activity in February expanded at its fastest pace in eight years amid an increase in production and new orders as well as a “surge in business confidence,” S&P Global said on Monday.

However, the US-Iran conflict may cause a spike in oil prices, which may pose a risk to the manufacturing sector in the coming months, S&P added.

S&P Global Philippines Manufacturing Purchasing Managers’ Index (PMI) rose to 54.6 in February from 52.9 in January, the strongest improvement since November 2017 when PMI stood at 54.8.

A PMI reading above 50 denotes better operating conditions than in the preceding month, while a reading below 50 shows deterioration.

“The Philippines manufacturing sector has had a solid start to 2026, with February marking its strongest performance since late 2017,” Maryam Baluch, an economist at S&P Global Market Intelligence, said in the report.

“A sharp influx of new orders underpinned robust growth of output, and in both cases, the expansions were historically pronounced and reached multi-year highs,” she added.

The Philippines recorded the fastest expansion in manufacturing activity in the Association of Southeast Asian Nations (ASEAN) region in February.

Based on available data from S&P as of Monday, the Philippines was ahead of Vietnam (54.3), Indonesia (53.8) and Thailand (53.5). Malaysia saw a deterioration in PMI to 49.3.

“The (Philippine manufacturing) sector’s positive performance was accompanied by a surge in business confidence. Firms were hopeful that demand conditions would continue to improve and drive further expansions in production volumes,” Ms. Baluch said.

Full ASEAN PMI data, as well as Myanmar’s PMI, are expected to come out on Tuesday.

S&P Global said February marked the third straight month where operating conditions have improved in the Philippines.

It noted Philippine manufacturers posted faster rise in production volumes and new orders in February,

“The sharp expansions across these two measures were accompanied by an uplift in business confidence, which rebounded notably from the recent low recorded in the month prior,” it added.

Output had increased for a second straight month, and at the fastest pace since November 2018.

S&P Global said there was a strong rise in order book volumes in the Philippine manufacturing sector in February.

“The respective seasonally adjusted index hit the highest level in just over eight years. The acquisition of new clients and bulk buying activity among customers was said to have pushed up new sales,” it said.

S&P attributed the growth in new factory orders to improvements in domestic and international demand, amid a modest rise in new export orders.

“Foreign sales increased for the second consecutive month, though the pace of expansion held steady in February,” it added.

JOB GROWTH SUSTAINED
Meanwhile, S&P Global saw a modest growth in employment last month, which it said reflects a rise in backlogs of work following a drop in January, as the increase in new orders put pressure on Filipino manufacturers’ capacity.

“Employment growth across the Philippines’ manufacturing sector was sustained in February, with staffing numbers rising for a second straight month,” it said.

“The pace of job creation was only modest overall and therefore insufficient to prevent a fresh buildup in backlogs of work,” it added.

Ms. Baluch said that jobs growth will further increase in the coming months as manufacturers scope to increase their staffing numbers amid rising backlogs.

Philippine manufacturers also recorded an accelerated input buying rate in February, which was the strongest pace in expansion since January 2025.

However, S&P Global said that there have been more delays in February due to increased buying activity, bad weather, and port congestion.

“Average delivery times for inputs lengthened for a third successive month. The incidence of delay was sharp overall and the most pronounced in 14 months,” it added.

Meanwhile, manufacturers reported falling operating expenses in February, which in turn allowed them to reduce their own charges.

S&P Global also noted manufacturers’ outlook for the next 12 months improved in February.

“The degree of confidence lifted notably from the recent low observed at the turn of the year. Panelists that foresee growth in production volumes largely linked this to hopes of further improvements in underlying demand trends,” it said.

RISING OIL PRICES
Meanwhile, the S&P said that the US-Iran conflict could impact oil prices and thus affect operations of manufacturers in the Philippines.

“I think it is going to be something to watch if it does extend for an extended period of time,” S&P Global Market Intelligence Economics Associate Director Jingyi Pan said in an interview on Money Talks with Cathy Yang on One News on Monday.

Ms. Pan said that the impact of the war will depend on if this is just a knee-jerk reaction and “how some of the oil suppliers themselves are managing the risk altogether with their current supply.”

“In the manufacturing PMI for the Philippines, the price indicators have actually shown below 50, so just a very slight decline. But I think that could actually very well change if we do see the spike coming through and being reflected in March,” Ms. Pan said.

“But if it doesn’t turn out to be a prolonged situation, I think that is still going to help keep inflation a bit more moderated,” she added.

Oil companies on Monday announced an increase in the price of gasoline by P1.90 per liter, diesel by P1.20 per liter, and kerosene by P1.50 per liter, effective March 3.

The upward adjustments marked the 10th 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 P6.70, P9.40, and P7.70, respectively.

Ms. Pan also said that the fresh global tariffs of Mr. Trump were not strongly felt in the February survey amid a below-50 input and output price indicators.

“I do see this as a bit of a reflection of the manufacturers themselves also keeping prices rather suppressed in February just to support the export growth [and new orders] situation as we see,” she said.

However, Ms. Pan noted that confidence remains subdued in February despite a recovery from January.

PHL central bank may pause easing amid inflation risks from oil shock

Nomura Global Markets Research said every 10% increase in global oil prices could add 0.5 percentage point (ppt) to Philippine inflation. — REUTERS/DADO RUVIC/ILLUSTRATION

By Katherine K. Chan, Reporter

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 $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 $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 $15.5 billion in 2025 or -3.2% of GDP, before narrowing to $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 P57-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 P57.40 and P58 per dollar this week. — with Reuters

Oil prices go up but bigger hikes likely next week

A motorist pays a gas attendant at a gas station on March 1, 2026. — PHILIPPINE STAR/RYAN BALDEMOR

By Sheldeen Joy Talavera, Reporter

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 P1 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 P1.90 per liter, diesel by P1.20 per liter, and kerosene by P1.50 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 10th 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 P6.70, P9.40, and P7.70, 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 $80 per barrel. Last week, the price averaged around $70-71, he said.

Palace Press Officer Clarissa A. Castro said the Department of Transportation (DoTr) has allotted P2.5 billion in fuel subsidies for transport workers from the 2025 national budget.

Once Dubai crude prices breach $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 P25 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 $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. — with Beatriz Marie D. Cruz and Chloe Mari A. Hufana