PHL households, firms brace for hard times

The war in West Asia has just entered its 3rd week with no signs of abatement.

The conflict has been punishing all Filipinos—rich, poor and the middle class—from the wealthy government officials, businessmen, traders, professionals, to the masses of farmers, fisherfolk and ordinary workers.

Nothing has prepared the Ferdinand Marcos Jr. government and the local business community for this economic disaster that resulted in the shooting up of oil and energy prices—the very commodities that run the economy.

Official assurances from Malacañang that everything is under control and that fiscal and legislative measures are being taken to cushion the impact of the present oil crisis just test the Filipino people’s credulity.

Jeepney and tricycle drivers, along with their passengers, have been feeling the pinch in their wallets, and daily take-home pay.

Industry sources said the price of diesel may surge by P19.30 to P22.30 starting March 17.  Gasoline prices may also rise by P14 to P17 a liter.

Existing prices of P70 to P80 per liter of ordinary diesel in Luzon are already beyond the reach of many jeepney drivers.  Premium diesel costs more than P94 a liter.

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.

Strait of Hormuz

The Strait of Hormuz, a 30-kilometer waterway between Oman and Iran, is a chokepoint where 20 percent of the world’s oil supplies pass, or 20 million barrels of oil daily.

The strait is also one of the most vital shipping lanes for the planet, with food, fertilizers, LNG and LPG, chemicals, and other export and import items pass every hour.  Already, the partial closure of the Strait of Hormuz has disrupted the world’s supply chain of most commodities.

When the war began last February 28, the strait turned into a war zone and oil tankers were prohibited from crossing.  Iran, which controls the strait, has partially opened it but only for tankers and bulk carriers friendly to it, among them Russia, China, India and Bangladesh.

The oil squeeze will have a negative impact on Filipino families, in such areas as daily commutes, water and electricity bills, high food and medicine prices, education and health care, etc.

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).

Stocks down, peso falls

The PHL business community is already reeling from the impact of the Iran war.

Transport, industrial, and consumer goods sectors have been hit hard in financial markets.

The Philippine Stock Exchange (PSE) index has plunged from a high of 6,622 last February 26 to its present 6,058, a plunge of 613 points.

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.

Inflationary pressures are compounded by the peso, which recently fell to a record low of P59.50 against the dollar.

This weakening of the peso has provided the justification for the Metropolitan Waterworks and Sewerage System (MWSS) regulatory office to announce that water rates will go up in the second quarter, or specifically in April.

The rate adjustments are determined by the foreign currency differential adjustment (FCDA), a tariff mechanism used by the concessionaires Manila Water and Maynilad to pass on gains or losses from foreign exchange rate fluctuations on loans to customers.

What growth?

The war of choice that Israel and the United States started against Iran “could trim  0.2-0.3 percentage points 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 target set by the Bangko Sentral ng Pilipinas.

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.

Local businesses are expected to be hit hard.  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.

The DOE said strategic stockpiles and inbound shipments could cover demand until at least April, even amid prolonged disruptions.

Meanwhile, the 32-member International Energy Agency (IEA) said it will make available to the market some 400 million barrels of oil from its emergency reserves to address disruptions in oil markets stemming from the Middle East war.