The escalating US-led wars of aggression in West Asia have once again exposed a fundamental weakness of the Philippine oil regime: the nation’s complete exposure to global oil price shocks under the Republic Act No. 8479, or the Downstream Oil Industry Deregulation Act of 1998, also known as the Oil Deregulation Law.
Closure of trade routes, especially the Strait of Hormuz—a chokepoint through which many oil tankers pass—has halted oil movement. It has also driven worldwide price surges, whether due to companies responding to actual cost hikes in imported oil or to leveraging deregulated pricing mechanisms.
Inevitably, whenever the global market enters a recessionary phase, the Philippines also follows and falls with it. Yet among the Association of Southeast Asian Nations (ASEAN) nations, it remains one of the most vulnerable in handling economic shocks arising from the energy crisis because the government has given up all the critical policy tools it could have used to effectively protect the public from extreme price spikes and supply insecurity.
For import-dependent economies like the Philippines with oil deregulation laws in place, global disruptions such as higher global oil prices translate into higher transportation costs and more expensive basic goods. And the effects extend beyond domestic consumption, as precarious overseas employment conditions and disruptions to remittance flows further destabilize the financial foundation of millions of Filipino households.
Jeepney drivers, motorists, and commuters in the Philippines bear the full burden of volatile global oil prices due to oil deregulation and are left to absorb soaring costs as diesel edges past P100 per liter. In contrast, consumers in ASEAN neighbors are well protected by their governments from the devastating impacts of the ongoing oil shock: Indonesia, Malaysia, and Thailand continue to benefit from state regulatory mechanisms and subsidy schemes that their governments maintain.
With their fuel stabilization funds and strategic monitoring of the oil price ceiling, they have been able to curb the steep price hike. Consequently, all the administration of President Ferdinand Marcos Jr. can do is to reduce the work week for government agencies, appeal to the oil companies to stagger the price hikes, or propose to cut the excise tax on petroleum products—all band-aid solutions given the magnitude of the crisis.
Even with recognition of the economic vulnerabilities to external forces arising from overreliance on other countries, it became even more complicated when the country decided to liberalize the oil industry through deregulation, leaving oil prices a matter of competition between private corporations. With it came the monopoly of the so-called “Big Three” oil cartels, namely Petron, Shell, and Caltex—which overall determine the price of oil in the country—without truly disclosing the wholesale cost and retail margin that might lead to abuse unseen but felt by over a million Filipinos.
Unlike other Southeast Asian governments that have attempted to buffer economic shocks, the Philippine government continues to debate suspending Excise and Value-added taxes, which could reduce the tax burden on Filipino households. However, due to continued overreliance on foreign oil and a neoliberal structure of the oil industry, the Philippines has become powerless, choosing to mutilate itself into a state of incapacity and paralysis in the face of stronger economic forces.
The imperialist alignment and geopolitical maneuvers of the US and Israel in launching their attacks against Iran remain outside of our control as ordinary Filipinos, yet their economic aftershocks are immediate and unforgiving. But what remains firmly in our state’s control, however, is how it chooses to respond—and here, its failures are stark.
The absence of price controls or strategic reserves reflects our government’s longstanding commitment to deregulation that privileges private oil interests over public failure. In effect, they have ceded their capacity to shield their people, leaving transport workers and ordinary households to absorb costs that should have been mitigated through decisive state action.
This crisis ultimately underscores our vulnerability as a country. A non-industrial, import-dependent economy cannot withstand prolonged global disruptions without inflicting widespread social harm. Without a decisive shift toward people-centred economic planning and self-sufficiency in our energy, the Philippines will remain trapped in a cycle where every imperialist war abroad becomes a crisis at home.
Editor’s Note: This article was first issued in the January to May 2026 Second Semester Newsletter of Atenews.