The impact of the Middle East conflict on the Philippine economy is minimal for now, according to energy officer-in-charge Sharon Garin. The meeting was held yesterday in Malacañang where President Ferdinand Marcos Jr. and his economic team discussed the possible impact of the war between Israel and Iran, especially on oil prices and its impact on poor sectors.
According to Garin, oil prices dropped from $70 to $69 per barrel after US President Donald Trump announced a temporary ceasefire. While the situation in the Middle East remains volatile, Garin assured that the impact on the economy is not worrisome if tensions do not escalate.
The government is preparing for the worst possible scenario—the closure of the Strait of Hormuz, which could cause an oil supply shortage. But according to the DOE, there are other routes and alternative sources such as the US, Canada, and Brazil that the Philippines can use if this happens.
The government is also ready to provide aid to transport and agriculture if the price of oil increases beyond $80 per barrel. A P2.5 billion fund has been set aside to help drivers so that fares will not be increased. An oil company has also provided a P1/liter discount for PUV drivers.
Regarding the call to eliminate excise and VAT on oil, Garin said that this is provided for in the law and requires action from Congress. Oil taxes amount to P300 billion, which is used for roads, schools, and health services. That is why the government has preferred aid as an immediate response while awaiting the situation in the Middle East.
