25/03/2026
Energy emergencyā¼ļø
The Philippines just declared a state of national energy emergency.
President Marcos signed Executive Order 110 today. It stays in effect for one year.
The US-Israel war on Iran shut down the Strait of Hormuz, where 20% of the world's oil passes through. Oil prices jumped over 40%. The peso hit a historic low. Diesel is up 38.6%.
And 98% of our crude oil imports pass through that strait.
We are one of the most exposed countries in the world right now.
Capital Economics just cut our GDP forecast to 3.8%. Inflation is expected to breach 4% by Q2. BSP may be forced to hike interest rates instead of cutting them. Summer electricity demand is about to collide with the oil shock.
This is not temporary. The government just gave us a 12-month timeline.
History tells us what happens next. In 1973, a similar oil shock caused prices to quadruple. Japan cut industrial energy use by 20%. The US and Europe fell into stagflation. In 2018, our own TRAIN law pushed inflation to 6.9% and consumer spending dropped for months.
The pattern is always the same: oil goes up, then transport, electricity, food, and everything else follows.
What to expect:
šQ2 (Apr-Jun) will be the hardest quarter. Electricity, food, and transport costs all climb at the same time.
šQ3 (Jul-Sep) depends on whether the war ends. If it does, recovery starts. If not, sustained pressure.
šQ4 (Oct-Dec) becomes the new normal. Whatever you adjust now is your baseline for the next year.
FOR BUSINESS OWNERS:
Here is what I would do right now, regardless of your industry.
1. Know your energy cost exposure. Run the numbers on how much of your operating cost is tied to fuel, electricity, and transport. If you do not know this number, you are flying blind into the most expensive operating environment in years.
2. Stress-test your top accounts. If you serve clients, local or international, have the hard conversation now. Do not wait for them to renegotiate. Show up first with a plan. Clients remember who kept them informed during a crisis.
3. Do not freeze. In the 2008 recession, 57% of companies that used outsourcing actually increased it after the downturn. Crises do not kill businesses that move. They kill businesses that stop. If you can find ways to deliver the same value at lower cost, whether through process improvements, remote work, or restructuring, do it now while you still have options.
4. Watch for the demand shift. When costs rise everywhere, companies start looking for cheaper ways to operate. If you offer a service that saves money for your clients, your value just went up. Position accordingly.
5. Protect your people. Your team is watching how you respond. If their costs go up and you say nothing, they will remember. A fuel allowance, a transport subsidy, even a clear message about what the company is doing - these things build loyalty that outlasts any crisis.
FOR EMPLOYEES AND FAMILIES
This is the time to tighten your household budget, not out of panic, but out of discipline.
1. Track every peso for the next 30 days. You cannot manage what you do not measure. Write down every expense. You will be surprised where money is leaking.
2. Cut discretionary spending now, before you are forced to. The families that survive price shocks are the ones who adjust before the peak, not after.
3. Stock up on essentials gradually. Do not hoard. But if you normally buy rice, cooking oil, and canned goods weekly, consider buying two weeks' worth at current prices before the next round of increases.
4. Reduce energy use at home. EO 110 is pushing conservation across the board. Switch to LED lights, unplug appliances when not in use, limit air conditioning. Every kilowatt you save is money you keep.
5. If you have family working in the Middle East, stay in close contact. The government is actively repatriating OFWs. Know what support is available through DMW - financial assistance, reintegration programs, and reemployment services are being mobilized.
6. Build your emergency fund, even if it is PHP 500 per week. In a crisis, cash on hand is not a luxury. It is survival.
We have survived oil shocks before. We survived TRAIN. We survived COVID.
But surviving and surviving well are two different things. The difference is what you do right now, while you still have room to move.
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