Palace readies measures as peso tumbles to record; House eyes bills

By Chloe Mari A. Hufana and Kenneth Christiane L. Basilio, Reporters

THE Presidential Palace on Tuesday signaled that it is prepared to roll out additional measures to soften the economic impact of a weakening peso, as escalating war in the Middle East continues to weigh on the currency and fuel inflation risks.

Palace Press Officer Clarissa A. Castro said the peso’s fall to historic lows reflects external pressures linked to the conflict and warned that volatility could persist if hostilities drag on, though she stressed that the administration is working to contain the fallout.

“We know what the President and the administration are doing to mitigate the impact of the Middle East conflict and to do everything possible to address the situation, including helping our fellow Filipinos,” she told reporters in Filipino, without providing details.

She said the peso’s slide to successive record lows might continue as long as the war drags on. “This is the possible outcome while the conflict is not contained.”

The peso has posted multiple sharp declines this month as the conflict disrupts global energy markets, stoking fears of imported inflation and renewed strain on financial stability in an economy heavily reliant on foreign fuel supplies.

In a separate video message, President Ferdinand R. Marcos, Jr. said his administration would continue providing intervention and relief to Filipinos as the economic effects of the war weigh on households, citing government aid measures aimed at cushioning consumers.

He said an inter‑agency committee is coordinating efforts to stabilize prices and speed up the delivery of assistance. These include a planned price cap of P50 per kilo on imported rice and the expansion of subsidized P20 rice outlets nationwide.

The committee met on Monday to discuss additional measures in response to the war. The Development Budget Coordination Committee is scheduled to meet later this week to submit its assessment on the possible suspension or reduction of excise taxes on petroleum products.

“As long as there is even one Filipino who needs help, we will continue to work to reach them,” Mr. Marcos said in Filipino. “We will not stop taking action until this is felt in every household.”

Mr. Marcos has said the government would not exhaust the country’s foreign exchange reserves solely to defend the peso, noting that there is a limit to state intervention against market forces driving the dollar higher.

He said a degree of peso weakness would be tolerated, reflecting a policy stance focused on curbing excessive volatility rather than targeting a specific exchange rate level.

The peso closed at an all‑time low of P60.748 to the dollar on Tuesday, breaching its previous record of P60.69 set a day earlier, according to Bankers Association of the Philippines data posted on its website.

Bangko Sentral ng Pilipinas Governor Eli M. Remolona, Jr. has said the central bank sees no need for aggressive market intervention, reiterating that it steps in only during periods of excessive volatility rather than defending a fixed exchange rate.

Currency depreciation raises the cost of imported goods, particularly petroleum products, heightening inflation risks at a time when global oil prices remain elevated due to supply concerns linked to the Middle East war.

The administration has rolled out subsidies and transport discounts as part of efforts to cushion households and workers from higher fuel and transport costs.

The Philippines is under a one‑year national state of energy emergency, the first such declaration globally, as the war threatens fuel supply chains and exposes vulnerabilities in the country’s energy system.

‘UNIFIED RESPONSE’
At the House of Representatives, lawmakers are moving to draft a package of measures aimed at shielding the economy from oil shocks that could deepen inflation and weaken growth.

The chamber would form a joint congressional panel composed of 13 committees to craft proposals to blunt the impact of oil price spikes, including improving subsidy-targeting and possibly expanding assistance through budget realignments, Marikina Rep. Romero “Miro” S. Quimbo told a news briefing.

“We want something very comprehensive that will make the economy more resilient, so we don’t suddenly stumble whenever there are drastic increases in oil prices,” he said in mixed English and Filipino.

Urgency has grown as the month‑long conflict involving the US, Israel and Iran has underscored how exposed the country’s import‑dependent economy is to geopolitical disruptions.

Now in its fifth week, the conflict has already prompted President Marcos to reopen talks with China on joint energy exploration in the South China Sea.

“The sole purpose is to have an orchestrated and unified response to confront and examine the urgent steps we can take to address this oil price crisis,” Mr. Quimbo said.

The Philippines, a net crude importer sourcing most supplies from the Middle East, is facing record pump prices, with gasoline in Metro Manila nearing P115 per liter and diesel climbing to as high as P156 per liter.

Mr. Quimbo said the 13 House committees, including those on budget, taxation, economic affairs, transport and agriculture, will meet on April 8 for briefings by economic managers before forming subcommittees to develop proposals.

The key objective is to identify which sectors and industries are immediately affected, he said. “We want to know what industries will have deep, threatening effects on the entire economy.”

He recommended tax incentives and subsidies for electric vehicle manufacturers to encourage adoption and reduce dependence on oil, and called for faster renewable energy investments by cutting bureaucratic bottlenecks.

“The role of the government is to create a climate where investments are easily attracted and protected,” Mr. Quimbo said.

The joint panel will also review the 1998 Oil Deregulation Law and examine proposals to establish a national petroleum reserve, while studying options to reallocate funds for aid programs without disrupting existing spending commitments.

“The first step is really to have an aid program — identifying available cash and looking for new sources,” he added.