Philippines Declares Energy Emergency

The Philippines has become the first country in the world to declare an energy emergency since the Iran war broke out. The war has resulted in increasing oil prices, air travel disruptions and financial volatility, leading to street protests over slow governmental proactiveness and anticipation of the situation. The blockade of the Strait of Hormuz was the final straw, since 98% of the country’s oil is imported from the Middle East. 

Initial governmental responses included shifting to four-day workweeks to conserve fuel, giving cash subsidies to public transportation drivers, and lowering fuel quality standards to increase supply. But, feeling the brunt of the emergency are transportation workers, such as taxi drivers. Their reliance on fuel means that they now face decreased daily earnings, and are forced to work longer for less. Recently, these workers went on a two-day strike against the government to demand for price controls on petrol and diesel and more rigid governmental regulation on fuel. Due to the Oil Industry Deregulation Law of 1998, oil companies were allowed to set their own prices without governmental control. This law is frequently cited by Philippine citizens as to what has led to the dire situation today, since small oil price adjustments can have drastic impacts on the mostly poor population. Protestors have been calling on President Marcos to repeal or amend the law. 

For now, the energy emergency declaration will stay in place for a year, and will allow the government to obtain fuel and petroleum products to feed their diminishing supply in a timely manner. They are currently trying to acquire oil from other countries such as Russia, India and Malaysia and are working to get oil from U.S. sanctioned countries as well. But, there is only so much that this temporary solution can provide. Since 95% of Philippines crude oil is imported, the government might be further exacerbating this problem by buying oil from other countries. The economy of the Philippines is becoming weak and vulnerable, and the total debt is expected to exceed 19 trillion pesos. By relying on foreign nations and continuously spending money, there is a high probability that the country will be pushed further into debt. Overall, this is a prime example of the detrimental influence of a country’s primary reliance on imported fuel, which is seen in the Philippines’ susceptibility to global energy shocks. The instability of the economy is troublesome for citizen job security and their trust in the government has effectively been eroded. The road to not only overcoming this fuel crisis but also reestablishing trust in the government is questionable, and it could take some time before any successful progressions are made in either issue.