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A broader look at today’s business
TRICKY BALANCE WEIGHING THE WAGE HIKE’S IMPACTS www.businessmirror.com.ph
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Sunday, May 3, 2026 Vol. 21 No. 201
The oil price shocks and related impacts of the Middle East conflict have added fuel to the call for increases in workers’ pay; and economists concede there’s no clear view of the right path. By Justine Xyrah Garcia
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ITH prices already elevated and expected to remain so amid the Middle East crisis, the debate over wage hikes has returned to the fore, once again testing how far such measures can ease the burden on workers. Recently, labor groups renewed calls for an across-theboard increase of as much as P200 a day, while others are pushing for a more sweeping reform— scrapping the current regional wage system in favor of a uniform daily wage of P1,200 across all regions and sectors. For labor advocates, the timing is urgent, as persistent price pressures continue to squeeze household incomes and strain already tight budgets. Economists, however, caution that the issue extends beyond the immediate call for higher wages. Former Socioeconomic Planning Secretary Dante B. Canlas said the clamor for higher wages reflects mounting pressures from oil-price shocks, rising inflation and unemployment, which are pushing more families toward poverty. This view is echoed by data from the Philippine Institute for Development Studies (PIDS), which warned that the Middle East crisis could push up to 3.1 million more Filipinos into poverty in a worst-case scenario of prolonged conflict—equivalent to a poverty
rate of 16.3 percent, reversing the 13.2-percent baseline projection for 2025. Still, Canlas emphasized that policy responses must be carefully calibrated to avoid placing additional strain on the economy. “The cost and burden of the oil crisis is unavoidable; a burden-sharing scheme may have to be considered as a matter of course. Consider a policy mix that’s least distorting to the growth of the economy,” Canlas told the BusinessMirror.
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Mideast war splits Asian diesel market into haves and have-nots
DRIVERS refuel their trucks in Indonesia. Countries in Southeast Asia have limited oil stocks, leaving them more vulnerable to supply disruptions. BLOOMBERG
By Yongchang Chin Bloomberg
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The wage trade-off
CONCERNS over economic distortions have been echoed by several economists, including another former Socioeconomic Planning Secretary, Cielito F. Habito, who warned in an earlier interview that sharp wage hikes could trigger a wage-price spiral, with higher labor costs feeding into rising prices and further inflation. At the company level, De La Salle University (DLSU) economist Ella C. Oplas said legislated wage increases may not be sustainable, even if they boost workers’ purchasing power.
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WAGE BALANCING ACT Protesters march through Manila and Quezon City on Labor Day, pressing demands for higher wages, job security, and an end to contractualization. The demonstrations come as economists warn of a delicate trade-off: while wage hikes could ease the burden of soaring living costs, they may also fuel inflation or strain businesses, particularly MSMEs. With oil-price shocks threatening to push millions more Filipinos into poverty in a worstcase scenario, the Labor Day protests underscore a deepening policy dilemma—how to raise incomes without undermining jobs and economic stability. NONIE REYES
HE war in the Middle East has left Asian buyers grappling with a two-speed diesel economy, as poorer states face acute shortfalls, while wealthier nations with large refining industries enjoy sizable buffers. Diesel—vital for transport, agriculture and industry—has been among the fuels most immediately affected by the conflict. In Asia, refining powerhouses China and South Korea curbed product exports after processors were forced to cut run rates. That triggered a drop in fuel flows to regional buyers, with importers such as Indonesia and the Philippines bearing the brunt. For richer nations, the curbs paid off as their domestic supplies remain healthy. Among indicators of relative abundance, commercial diesel inventories in China recently touched the highest in nearly two years even as state-owned refineries ran slower, according to data from Mysteel Oilchem. But for poorer countries such as India—where diesel runs through the backbone of the economy, and most goods are moved by road—there are mounting problems. Truck owner Smruti Ranjan Samantaray said that one of his vehicles headed to pick up a load of iron ore has been stranded by the roadside in the eastern state of Odisha as pumps run dry. “The situation is quite serious,” Samantaray said by phone on Thursday, adding that he also halted the departure of seven additional trucks as the shortages appeared to be worsening. “When I last spoke to the driver, he said several other trucks are idling on the side of roads.” The war between the US and Iran—now in its third month—has forced the neartotal closure of the Strait of
Hormuz, crippling shipments of crude as well as products. Brent topped $126 a barrel this week to hit the highest in almost four years, and product prices including diesel have soared. For the world’s most populous region, that’s feeding into inflation as costs rise for farmers, factories and drivers. In the Philippines—which declared a national energy emergency—price gains hit 4.1% in March, the fastest in nearly two years, and the central bank expects they’ll go higher.
‘More vulnerable’
“THE impact of the diesel shortage isn’t evenly distributed across Asian countries,” said Xavier Tang, a senior market analyst at Vortexa Ltd. “Countries in Southeast Asia have limited oil stocks, leaving them more vulnerable to supply disruptions.” Asia typically sources most of its diesel from plants within the region, which in turn rely on flows of crude from the Middle East for a substantial share of their input. With oil supplies from the Persian Gulf down by more than 14 million barrels a day, according to an estimate from Goldman Sachs Group Inc., that’s had a knock-on effect in Asia as seaborne diesel exports contract. In Indonesia, the shortage of diesel has prompted Southeast Asia’s largest economy to fast-track the roll-out of a blend comprised 50% of biofuels from its vast oil palm plantations. That push has come as the surge in international crude oil prices lifted the cost of regular diesel far above its crop-based counterpart, a reversal of the usual pattern, traders said. In Vietnam, industries including steel- and cementmaking have been asked by the government to conserve fuel, while Nghi Son Refinery and Petrochemical LLC, a maContinued on A2
PESO EXCHANGE RATES n US 61.5060 n JAPAN 0.3836 n UK 82.8978 n HK 7.8490 n CHINA 8.9882 n SINGAPORE 48.0178 n AUSTRALIA 43.7492 n EU 71.8206 n KOREA 0.0413 n SAUDI ARABIA 16.3998 Source: BSP (April 30, 2026)