| Photo by Wolfgang Weiser on Unsplash
When war erupted between Iran and Israel early this year, global crude prices shot past USD 120 per barrel, freight insurance rates doubled, and Asian refiners braced for supply crunches. Within weeks, the peso weakened, inflation expectations rose, and the government rushed to “study” subsidies, price caps, and tax relief.
Once again, the Philippines was caught flat-footed before an oil shock it knew was coming. Governments don’t plan to fail—they fail to plan.
There’s a familiar rhythm to every crisis here. A task force is created. Fuel vouchers are distributed. Jeepney drivers protest. Economic managers meet to patch the latest fiscal hole. These reflexes have become routine—but reflex is not a strategy. A government that reacts rather than plans spends more time treating symptoms than addressing causes.
The Department of Energy (DOE) announced as early as 2021 a plan to build a strategic petroleum reserve (SPR)—a policy that advanced Asian economies adopted decades ago. Yet five years later, the plan remains just that: a plan. When the Iran conflict disrupted Gulf shipping lanes, the Philippines had no stockpiles, no hedging system, and no clear line of coordination among the Department of Energy (DOE, the Department of Finance, and the National Economic and Development Authority (NEDA). The main move was to suspend fuel excise taxes—the very revenues that could have financed long-term energy security.
Japan and South Korea maintain 90 to 100 days’ worth of oil reserves, in line with International Energy Agency standards. Even Vietnam, with a smaller economy, has a month’s worth of domestic consumption in reserves and long-term contracts to guarantee supply. The Philippines, by contrast, has less than 10 days’ cover and no legal requirement to improve it. The DOE’s 2023 energy security allocation—barely ₱1 billion—was hardly enough for feasibility studies, much less for building storage.
The country’s supply chain is equally fragile. About 70 percent of our crude and refined oil comes from the Middle East, according to the Philippine Statistics Authority. That dependence makes every geopolitical tremor in the region an economic quake at home. Japan, by comparison, deliberately diversified its suppliers to include Southeast Asia, Australia, and the United States—reducing risk through redundancy.
The cost of our inaction is measurable. Every 10 percent increase in world oil prices adds around 0.4 percentage points to inflation, according to Bangko Sentral ng Pilipinas. The 2022 Russia-Ukraine war pushed inflation above 8 percent; the Iran conflict threatens to do it again. The government may call this “external,” but the unpreparedness is homegrown.
Each crisis brings short-term fixes: subsidies, tax suspensions, price freezes. Take the ₱2.5-billion Pantawid Pasada program in 2023, which covered just half of registered drivers. These are temporary salves, not solutions. The Department of Finance estimates that suspending fuel excise taxes for three months costs about ₱70 billion in lost revenue—money that could have been invested in reserves or renewable projects. We keep draining our defenses to patch the same wound.
“Governments don’t plan to fail; they fail to plan. The next oil crisis will come, as surely as the last one did. The real test is whether the Philippines will finally be ready when it does.”
The deeper problem lies in our political culture. Firefighting wins votes; foresight rarely does. Politicians gain credit for visible relief measures, not for quiet risk prevention. So our agencies plan reactively. Strategic foresight units remain understaffed. Simulations and scenario planning exist mostly on paper.
Some progress has been made. The Energy Virtual One-Stop Shop (EVOSS) Act of 2019 streamlined power project approvals. The 2022 amendment to the Renewable Energy Act opened the door to 100 percent foreign equity in clean energy ventures. But implementation lags. Grid constraints and red tape slow the growth of renewable capacity, while dependence on imported oil remains nearly unchanged.
We already know what works. The DOE must finally launch the national strategic petroleum reserve, targeting at least 30 days’ worth of domestic coverage by 2030. Oil import sources should be diversified through long-term supply deals with Indonesia, Malaysia, and Brunei. Renewable energy’s share of generation should reach 50 percent by 2040, supported by investments in energy storage and decentralized solar programs.
Public transport modernization should accelerate toward electrification, not just replacement. Jeepney reform must go hand in hand with clean bus corridors and charging infrastructure. In logistics, improved cold-chain efficiency and port operations could meaningfully cut fuel use and inflation sensitivity.
Beyond hardware, the Philippines needs institutional reform. Government agencies should conduct regular simulations of global disruptions—such as war in the Gulf or a major shipping blockade—and integrate those findings into the Medium-Term Fiscal Framework and public investment planning. An Energy Resilience Fund could capture windfall revenues when oil prices fall, channeling the savings into future crisis preparation.
Energy vulnerability is, ultimately, a matter of national security. A distant war in the Middle East is now raising jeepney fares in Metro Manila and destabilizing food transport in Mindanao. Dependence on external supply means surrendering control over our domestic stability.
Governance that merely reacts is governance that drifts. Crises are constants; their arrival shouldn’t be a surprise. Building stockpiles, diversifying supply, electrifying transport, and embedding foresight in the bureaucracy—these are not idealistic goals but the basic homework of a state that intends to endure.
Governments don’t plan to fail; they fail to plan. The next oil crisis will come, as surely as the last one did. The real test is whether the Philippines will finally be ready when it does.
ABOUT THE AUTHOR: Dr. Crispin Fernandez advocates for overseas Filipinos, public health, transformative political change, and patriotic economics. He is also a community organizer, leader, and freelance writer.
