By Erika Mae P. Sinaking, A reporter and Justine Irish D. Tabile, Senior Journalist
GOVERNMENT is aheadCoordinating measures to protect the flow of money and reduce the domestic impact of the escalating tensions between Israel and Iran, the presidential palace on Wednesday, as President Ferdinand R. Marcos, Jr. ordered agencies to protect overseas Filipinos and monitor oil price and financial market risks.
The President is closely monitoring developments in the Middle East, especially its potential impact on overseas Filipino workers (OFW) and remittances, an important source of foreign exchange for the Philippines, it added.
“President Marcos wants to ensure that Filipinos, here and abroad, are protected while we look at the market movements caused by the conflict,” Palace Press chief Clarissa A. Castro told a news conference.
The dire warning follows a series of emergency high-level meetings in the palace, including a special Cabinet session called to deal with political instability.
Central to the administration’s strategy is to reduce inflationary pressures caused by global crude oil prices, which threaten the purchasing power of remittance-dependent Filipino families.
Economists are considering interventions to protect the domestic economy from “energy shocks.” Among the most important is the proposal that the President seek emergency powers from Congress to reduce or suspend the tax on fuel products.
“One of the options of President Marcos is to talk to the leadership of the Senate and the House so that they are given the power to reduce the excise tax on fuel products as a new person.cy is only an estimate,” said Ms. Castro.
Under the proposal, this authority would be temporary and limited to certain rates. While the Acceleration and Incorporation Tax Changes the law includes certain suspension procedures, the palace said these do not existfwe are facing a crisis, which necessitates urgent action.
The Department of Budget and Management said there are undisbursed funds and potential funds worth more than P15 billion that could be made available to finance fuel.
“Continued appropriations from 2025 can still be used until the end of 2026,” Budget Undersecretary Goddes Hope O. Libiran he told BusinessWorld via Viber.
He said that the Ministry of Transport has R2.5 billion that has not been spent last year. Department of Agriculture – OffThe Bureau of Fisheries and Aquatic Resources has P25 million left for farmers, while the Bureau of Fisheries and Aquatic Resources also has P25 million for fishermen.
THE SIXTH MOST DANGEROUS
“If more support is needed, there is also a P13 billion fund under the General Appropriations Act of 2026,” he added.
The Philippines is ranked as the sixth most vulnerable country in the world to an increase in oil spills amid the turmoil in the Middle East, according to Fitch Solutions unit BMI.
As an oil importer with a large current account deficit, the country faces high economic risks due to energy price fluctuations. Only Egypt, Poland, Turkey, India and China are more exposed.
Rickinder Chima, director of BMI and global economist, noted during the webinar that an economy that relies heavily on energy exports like the Philippines could experience domestic energy shortages if the Strait of Hormuz were to be closed.
The findings highlight the urgent need for energy and financial measures.
The palace assured the public that there is a shortage of oil in the countryfusually takes 50 to 60 days. If crude prices reach $80 per barrel, the authorities are ready to issue fuel subsidies targeting transport, agriculture and fisheries.
Beyond financial measures, the government is looking at structural changes in the work week to save energy. Proposals include a four-day work week and extended work-from-home (WFH) arrangements.
“The President may read that proposal, especially if the ongoing Israel-Iran issue becomes more difficult,” said Ms. Castro.
‘NO DEPENDENCE ON MONEY’
Labor groups have expressed conditional support for these plans, insisting that any change must protect workers’ rights.
“This must focus on workers – no reduction in wages, no unpaid overtime, no forced labor, and clear standards of safety and health at work, especially WFH,” Federation of Free Workers (FFW) President Jose Sonny G. Matula told BusinessWorld via Viber.
FFW is ready to support the government’s energy saving campaign if flexible work plans are made through negotiations and to protect labor standards.
The group called for a tripartite meeting with the government, employers and workers’ representatives to create safeguards, including wage protection, limits on working hours, voluntary participation, data privacy, safety at work, the right to terminate and support for workers who cannot work from home.
Analysts say the conflict threatens the safety and livelihoods of 1 to 2.5 million people in the Middle East, which could disrupt workplaces, delay wages or trigger repatriations that could dent cash flow.
“Some OFWs may return home voluntarily, and those who remain may face income insecurity,” Benjamin B. Velasco, assistant professor at the University of the Philippines Diliman School of Labor and Industrial Relations, told. BusinessWorld in a Facebook Messenger chat.
“Even if remittances are still there, high oil prices will reduce the purchasing power of OFW families here,” he added.
Excise duty reductions may help reduce oil prices and curb inflation but may reduce government revenue. Mr. Velasco said the Government could consider borrowing to finance short-term welfare for low-income families.
Labor proposals such as a four-day work week with one day of work from home are acceptable if they respect workers’ rights. “These policy proposals are welcome as adaptations to the escalating war,” he said.
Mr. Matula cited the risks of overseas job disruptions, remittance volatility and oil price shocks.
Remittances fund billions for food, transportation, tuition, rent and health care. If the conflict continues, he said, growth in remittances may slow, while higher global oil prices will increase the cost of transport, electricity and food.
With 64% of domestic transportation dependent on imported fuel, purchasing power will erode further.
Economists said targeted subsidies would be more manageable than global programs. John Paolo R. Rivera, a senior researcher at the Philippine Institute for Development Studies, said that limited support for transportation and agriculture will reduce the strain on the budget allocation, unlike extensive subsidies that could increase the deficit.
Asian Development Bank economist James P. Villafuerte recommended cash or income subsidies for vulnerable families, saying blanket fuel subsidies often benefit wealthy families and do not encourage energy conservation.
He added that the government can reposition projects, improve the budget ifficency or loan for temporary help if needed.
Michael L. Ricafort, chief economist at Rizal Commercial Banking Corp., said emerging government responses reflect actions during pre-violent outbreaks, including the June 2025 Iran-Israel retaliation attack and the October 2023 Israel-Hamas conflict.
Authorities are expected to provide subsidies, targeted assistance and legally mandated measures to target vulnerable sectors such as transport workers, fishermen, farmers and low-income families.
Apart from temporary relief, he emphasized conservation and structural changes. “Measures to conserve oil and energy, as well as switching to renewable sources – solar, wind, geothermal, hydroelectric – and more electric and hybrid vehicles, will reduce dependence on imported energy,” he said, noting that continued investment in energy diversification will strengthen the country’s resilience against shocks. – with Katherine K. Chan
