PBBM, econ team meeting on oil woes By Jovee Marie N. dela Cruz and Samuel P. Medenilla
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WORLD » A6
INTERNATIONAL COMMUNITY SOUNDS ALARM ON US-IRAN CONFLICT, URGES NEGOTIATIONS
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HILE a full-scale war between Iran and Israel remains unlikely despite recent US involvement, an economist-lawmaker said the Philippines must strengthen its economic defenses as he urged Development Budget Coordination Committee (DBCC) to incorporate oil price shocks into macroeconomic planning and social protection funding. House Committee on Ways and
Means Chairman Joey Sarte Salceda warned that Iran’s regional allies may conduct small-scale retaliatory attacks in the Red Sea and nearby shipping lanes, which, while limited, could still disrupt global trade. “Even without major attacks, the threat alone could raise shipping costs and cause delays. That would affect the price of oil and food coming into the Philippines. That’s what we get for being dependent on imports of food and fuel,” said Salceda. The Marcos administration is
set to announce plans to mitigate the economic impact of the projected surge in oil prices, including the rollout of its targeted fuel subsidies, after Iran threatened to block the Strait of Hormuz—an important waterway for the international oil supply chain. Palace Press Office Claire Castro announced that President Ferdinand Marcos Jr. called for a meeting on Tuesday with his economic team, including the Department of Energy (DOE), to discuss their response to the oil price hikes. Among the measures, she said,
is the fuel subsidy for public transport as well as farmers and fisherfolk. “Tomorrow we will know all of the plans [to mitigate the high oil prices],” Castro said, when asked.
Fuel subsidy
UNDER the 2025 General Appropriations Act (GAA), the Department of Transportation (DOTr) was allocated P2.5 billion and the Department of Agriculture (DA) with P585 million for their fuel subsidy initiatives. See “PBBM,” A11
BusinessMirror A broader look at today’s business
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‘MIDEAST WAR TO DETER RATE CUT, WAGE-HIKE BID’ www.businessmirror.com.ph
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Tuesday, June 24, 2025 Vol. 20 No. 254
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Fuel excise tax tweaks urged as oil prices soar
By Cai U. Ordinario @caiordinario
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HE conflict in the Middle East could deter further rate cuts and derail efforts to increase the minimum wage, according to local economists. RIPPLE EFFECT: MIDEAST TENSIONS FUEL PHL ECONOMIC WOES
Economists break down economic fallout from oil shock Stagflation Risk “This will highlight the risk of higher stagflation and greater unemployment.”— Leonardo Lanzona Jr.
Wage Hike Tension “If oil prices increase, inflation will also increase. This will be a burden to households, leading workers to ask for higher wages.”—Maria Ella Oplas
Interest Rates and Investment “The inflationary pressure may discourage the BSP from cutting interest rates further, thus dampening investments.” — Manzano
Employment / OFW Repatriation “Unemployment will balloon because of the returning OFWs.”— Oplas
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ments,” he also said. De La Salle University economist Maria Ella Oplas told this newspaper that the conflict in the Middle East could start a domino effect that would hurt households and local workers, even those abroad. If oil prices increase, Oplas said, inflation will also increase. This will be a burden to households, leading workers to ask for higher wages. But due to higher labor and other production costs, firms may not be as willing to grant the increase. Oplas said instead of higher wages, firms may reduce the number of their workers. See “Mideast,” A11
“The government should not benefit from this crisis while the rest of us suffer.” — Ateneo de Manila University economist Leonardo Lanzona
OIL FIRMS SPLIT HEFTY OIL PRICE HIKE INTO 2 TO SOFTEN IMPACT By Lenie Lectura
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@llectura
NSTEAD of a one-time big hike in fuel prices, oil companies announced Monday night they will split this week’s price adjustment into two. For most oil firms, the total price increase for gasoline is P3.5 per liter, P5.2 per liter for diesel, and P4.8 per liter for kerosene. These will be implemented on a staggered basis. The first tranche will take effect at 6.a.m. of Tuesday, June 24, with the following price adjustments: P1.75 per liter hike in gasoline products, P2.4 per liter in kero-
@reine_alberto
HILE the government can boost its fuel excise tax collections due to soaring oil prices, economists said it should also consider lowering the tax rates so as not to burden consumers grappling with already high commodity prices. Meanwhile, a party-list group on Monday called on President Ferdinand Marcos Jr. to immediately suspend the 12-percent value-added tax (VAT) on petroleum products to help ease the burden on ordinary consumers. Gabriela Women’s Party Rep. Arlene Brosas warned that the looming hike could trigger another round of price increases in food and other basic goods, further deepening the cost-of-living crisis for Filipino families.
What is Stagflation?
A rare economic condition marked by high inflation, slowing economic growth, and rising unemployment. Popularized during the 1970s US oil crisis, when expansionary policies failed to reduce joblessness and instead triggered runaway inflation.
The bright spot, they said, is that this could hasten the country’s green transition in an effort to reduce the Philippines’s dependence on imported oil. “Because Iran can control the Strait of Hormuz where around 20 percent of oil passes, if Iran decides to close it, the price of oil will accelerate,” University of Asia and the Pacific economist and former Tariff Commissioner George B. Manzano told BusinessMirror. “This will be felt in the Philippines through inflation—we are a net oil importer. The inflationary pressure may discourage the BSP [Bangko Sentral ng Pilipinas] from cutting interest rates further, thus dampening invest-
By Reine Juvierre S. Alberto
Green Transition “The Philippines can try to reduce its dependence on oil by engaging in more green investments which unfortunately are now going to involve more funds.”— Lanzona
BM Graphics: Ed Davad
Oil Price Shock / Inflation “Because Iran can control the Strait of Hormuz where around 20 percent of oil passes, if Iran decides to close it, the price of oil will accelerate.”—George B. Manzano
sene, and P2.6 per liter in diesel. Two days after, or on June 26, the second tranche will be implemented at 6 a.m. Gasoline prices will go up by P1.75 per liter, kerosene by P2.4 per liter, and diesel by P2.6 per liter. Seaoil, Shell, Caltex, and Petron will implement the same price schedule and adjustment. Other oil firms are expected to follow suit. “In support of the government’s call to help cushion the impact of significant fuel price movements, Seaoil will implement a staggered price adjustment reflecting last week’s See “Oil,” A2
FAITH, FRUSTRATION, AND THE FUTURE OF FUEL A jeepney driver pays for gasoline under the gaze of the Madonna and Child—a familiar symbol of hope among Filipino transport workers—as a big-time fuel price hike takes effect at a station in Parañaque City. In Caloocan, an EV taxi driver charges his unit in a quiet shift toward cleaner, cost-saving alternatives. Meanwhile, militant groups protest in front of a gas station along Commonwealth Avenue in Quezon City, denouncing what they claim is profiteering by oil companies amid escalating tensions in the Middle East. Protesters are calling for the repeal of the Oil Deregulation Law and the nationalization of the oil industry to protect commuters and drivers from speculative price shocks. NONIE REYES AND NONOY LACZA
According to Philippine Institute for Development Studies (PIDS) senior research fellow John Paolo Rivera, the Israel-Iran war is pushing global oil prices higher due to heightened geopolitical risks in the Middle East, a critical region for oil production and transit. In the context of the Philippines, Rivera told BusinessMirror that oil price hikes will worsen inflationary pressures, weaken consumer purchasing power and increase transport and logistics costs. “While higher pump prices can boost government excise tax collections on fuel, they also disproportionately burden vulnerable sectors like public transport and micro, small and medium enterprises [MSMEs],” Rivera said. To minimize the impact of increased oil prices, Ateneo de Manila University economist Leonardo Lanzona told BusinessMirror that lowering the excise tax rates on fuel is a viable way to do so. See “Fuel,” A2
PESO EXCHANGE RATES n US 57.2170 n JAPAN 0.3904 n UK 76.7280 n HK 7.2896 n CHINA 7.9667 n SINGAPORE 44.3887 n AUSTRALIA 36.7390 n EU 65.6680 n KOREA 0.0417 n SAUDI ARABIA 15.2481 Source: BSP (June 23, 2025)