Marcos Declares National Energy Emergency Amid Fuel Price Surge

President Ferdinand Marcos Jr. has declared a state of national energy emergency as fuel prices continue to climb and concerns over supply stability grow. The declaration, made through Executive Order 110, activates broader government powers to manage energy resources and cushion the impact on key sectors.

Under the order, the government will implement a coordinated response through the Unified Package for Livelihoods, Industry, Food and Transport (UPLIFT), bringing together multiple agencies to address the effects of rising oil prices on the economy. It marks the first time such authority has been exercised under Republic Act 7638 to respond to a potential energy supply disruption.

Malacañang cited the ongoing conflict in the Middle East and the closure of key oil routes as major factors driving volatility in global markets. “uncertainty in global energy markets, severe disruption in supply chains and significant volatility and upward pressure on international oil prices, thereby posing a threat to the country’s energy security.”

As a country heavily dependent on imported fuel, the Philippines remains vulnerable to these external shocks. Energy officials earlier warned of the risk of a critically low supply, prompting the need for measures such as fuel allocation and conservation.

Lawmakers are also exploring additional relief measures for consumers. While the suspension of fuel excise taxes is already underway, senators are now studying the possibility of reducing or adjusting the 12-percent value-added tax (VAT) on petroleum products to further ease pump prices.

“We’ve already talked about VAT. It is 12 percent of the price of fuel at the gas station. Is that a possibility – to also suspend VAT? Because if it’s 12 percent of P120, then it would be considerable. That’s what, P14 to P15 right away,” Sen. Bam Aquino said.

However, economic managers warned of trade-offs. Reducing or removing fuel taxes could lower inflation but may also lead to revenue losses and slower economic growth. Officials noted that in a worst-case scenario, GDP growth could dip significantly if global oil prices remain elevated for an extended period.

Meanwhile, President Marcos acknowledged limits in managing the peso’s decline against the dollar. “I think it will be futile to spend all our foreign reserves to (defend) the peso. We will defend the peso to an extent, but we also recognize that there’s only so much you can do because the dollar’s going to move the way it does,” he said.

Despite the challenges, the administration said it is focused on stabilizing supply, supporting affected sectors, and mitigating the broader economic impact of the global energy crisis.