Oil price, dollar rally seen to boost BOC revenue

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March 5, 2026 | 12:00am

MANILA, Philippines —  The Bureau of Customs (BOC) may see gains from surging oil prices and a stronger dollar, triggered by widening tensions in the Middle East, which are expected to last for several weeks.

Fresh from posting its second revenue surplus in February, the BOC said revenue may likely get a lift from higher oil prices, driven by potential supply disruptions arising from the US-Iran conflict.

“Elevated oil prices, particularly when coupled with a stronger dollar, may translate into higher customs revenues, provided that oil import volumes from alternative sources remain stable,” the agency told The STAR.

BOC collects import duties and other levies under its fuel marking program, which reached P247.12 billion in 2025.

Energy Secretary Sharon Garin earlier said pump prices are likely to rise next week amid supply disruptions.

Amid jitters from the Middle East conflict, the peso slipped to 58.57 against the greenback yesterday, shedding 13.5 centavos from Tuesday’s 58.435 finish.

The BOC earlier said the weaker peso in December provided a temporary boost in its January revenue collections.

In addition, the BOC said this view is consistent with the assessment of the Petroleum Industry of the Philippines (PIP) that the conflict is unlikely to cause immediate supply disruptions.

PIP said oil companies keep sufficient inventory levels and that alternative suppliers and shipping routes remain available, supporting the continued flow of fuel imports.

“While sourcing from nontraditional routes may result in higher product costs, freight charges and traders’ premiums, fuel demand is expected to remain largely inelastic and continue growing in line with economic activity,” the BOC added.

Meanwhile, analysts expect higher oil import costs to weigh on economic growth, the peso and even soften remittance flows.

BMI country risk analyst Brandon Ong said the Middle East situation remains “highly uncertain” but is still flagging downside risks to their growth forecast as oil prices spike.

“Higher import costs will drag on growth,” Ong told The STAR in a statement yesterday.

“We also expect a near?term bump in headline inflation, with higher prices likely constraining the BSP’s policy space to cut rates further amid slowing economic growth,” he said.

Headline inflation stood at two percent in January, still within the Bangko Sentral ng Pilipinas’ two to four percent target range. The BSP lowered its key policy rate last month by 25 basis points to 4.25 percent.

Ong said that the Philippines’ reliance on imported oil would add to the depreciation momentum as oil prices rise but does not see the peso eclipsing the all-time low of 59.46 on Jan. 15 in the near-term.

More than 90 percent of the Philippines’ oil imports pass through the Strait of Hormuz, leaving the country disproportionately vulnerable compared to its regional neighbors.

“BSP retains a healthy level of forex reserves, which will allow them to intervene against peso weakness when needed,” he said.

The BMI expects near-term remittance flows to soften, as nearly 20 percent of total inflows come from the Middle East, where heightened tensions could disrupt employment and temporarily dampen money sent home by overseas Filipino workers.

Finance Secretary Frederick Go earlier told The STAR that the economic impact of the ongoing US-Iran tensions is temporary and not significant.

GlobalSource Partners country analyst Diwa Guinigundo also anticipates impact on the country’s external trade, where both exports and imports may see “negative shocks.”

“Those developments, plus a more serious speculative play in the forex market, could see more volatile gyrations of the peso,” he said.