Surging oil prices could push 1.34 million Filipinos into poverty – PIDS

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Rural areas will also be hit particularly hard by the oil crisis as families there depend on farming and other fuel-intensive activities as a source of livelihood

MANILA, Philippines – Rising global oil prices could push some 1.34 million Filipinos below the poverty line, a policy note by the Philippine Institute of Development Studies (PIDS) found.

The PIDS’ latest policy note found that the country’s poverty rate could rise to 14.4% in 2026 from 13.2% in 2025 under its latest energy shock scenario. The policy note was based on a simulation of current oil price conditions, which assumes oil prices will be at $105 per barrel, with a 35% pass-through to domestic prices.

Under more severe scenarios, poverty could jump to 15.3% to 16.3%, equivalent to around 3.1 million Filipinos.

According to PIDS senior research fellow Jose Ramon Albert, the burden of rising costs due to the oil crisis brought by the conflict in the Middle East is not shared equally. He explained that higher-income households may lose more in terms of the amount, poorer families will be hit harder by rising prices since they spend a bigger portion of their income on essentials and often have little to no savings.

“Pag tumaas ang presyo ng langis, tataas din ang presyo ng bigas, isda, karne, gulay — lahat ng mga pangunahing pangangailangan,” he said.

(If oil prices rise, the prices of rice, prices of fish, meat, vegetables will also rise — all basic needs.)

Rural areas will also be hit particularly hard by the oil crisis as families there depend on farming and other fuel-intensive activities for livelihood. They also have fewer income-earning opportunities and spend more on food.

Regions that are already grappling with higher poverty rates — the Bangsamoro Autonomous Region in Muslim Mindanao, Bicol Region, and parts of Mindanao — are seen to be hit the hardest.

“If these vulnerable groups are suddenly pushed into poverty, it will be a bigger problem for us in the future,” Albert said in Filipino.

Since the oil crisis has uneven effects on higher income and lower income Filipinos, the PIDS’ policy note recommended directing support towards poorer and near-poor households. It also found that blanket fuel subsidies tend to benefit higher-income households since they consume more fuel.

“Talagang sakit sa tingin ang targeted kasi pagtitipid yan, pagpipili ng gobyerno, napasan ng mayorya yung hirap ng pag-adjust sa krisis, habang pinoprotektahan yung P47 billion na tubo ng mga kumpanya,” Albert said.

(It really hurts for them to hear targeted aid distribution because it entails cost-cutting, the government being forced to prioritize, the majority bearing the brunt of adjusting to the crisis, all while protecting the P47-billion profit of companies.)

In a bid to temper the rising costs of petrol products, President Ferdinand Marcos Jr. suspended the excise tax on liquefied petroleum products and kerosene for three months. The Department of Finance earlier explained that LPG and kerosene excise levies were suspended first since these were mostly used by the bottom 30% households.

– Rappler.com