The 3-year-high oil price shock-driven 7.2% inflation could have been mitigated had the Marcos Jr government acted with real urgency on two fronts: moderating price increases and delivering adequate relief.
First, inflation could have been significantly tempered if the government had cut oil taxes, regulated overpricing by oil firms, and implemented a stricter and non-voluntary price freeze. The situation fully warrants these emergency interventions and would have prevented rising fuel costs from fully cascading across the economy.
The poorest half of Filipino families, or some 14 million households, could have direct and indirect savings of around Php450–550 monthly if oil excise taxes, for instance, were cut. Savings come from lower prices of direct oil product purchases and from the pass-through effect on other goods and services. Also, cutting oil value-added tax (VAT) or zero-rating this would result in even more savings.
The government could also have used its emergency powers under the oil deregulation law to directly control the prices oil firms charge, instead of allowing so-called replacement cost pricing to support windfall oil profits of almost Php47 billion in March 2026 alone.
Instead, the government’s measures to curb rising prices have been limited and largely tokenistic. Despite recent rollbacks, gasoline and diesel prices remain high at around Php84 and Php100 per liter, respectively, as of the last week of April. Excise tax cuts on LPG and kerosene give measly relief, or less than Php20 in monthly savings, to just over 8.4 million users.
Price controls on basic goods have also been limited and short-lived. These include the Php50- per-kilo-cap on well-milled rice and a voluntary 30-60-day freeze on selected grocery items. Lower-cost food is restricted to just around 780 Kadiwa stores nationwide.
As a result, food inflation more than doubled from 2.7% in March to 6.1% in April. Department of Agriculture (DA) data shows year-on-year increases of Php5-80 per kilo for rice, vegetables, and fish, while poultry and pork remain expensive at over Php190 and Php355, respectively.
Utility costs have also increased amid weak regulation and oligarch corporate capture. Metro Manila water rates have rise by an average of Php2 per cubic meter since last year. Meralco electricity bills increased by around Php270 for households consuming 200 kilowatt-hours (kWh) monthly, despite the supposed suspension of the Wholesale Electricity Spot Market (WESM).
Second, the burden of oil shock-driven inflation has been made heavier by the government’s failure to deliver sufficient relief. Social assistance has been too slow, too limited in coverage, and too small to offset the rapidly rising cost of living.
The combined effect is that the burden of adjusting to the oil price shocks has been shifted onto over 21 million poor and vulnerable Filipino families. The government’s refusal to cut oil taxes and regulate prices reflects a policy failure that leaves the majority to fend for themselves amid a deepening crisis.
The government has also ignored long-term policy measures to reduce vulnerability to recurring price shocks. These include repealing the Oil Deregulation Law to curb systematic overpricing, advancing a coherent program for domestic industrial development, and pursuing a self-reliant energy strategy to reduce import dependence.
Strengthening local food production and expanding the supply of essential goods are likewise critical. Without these structural reforms, the country will remain exposed to every new wave of price shocks, with ordinary Filipinos always bearing the highest costs of adjusting.###