Government officials seeking effective ways to blunt the backlash of the Middle East war on domestic prices said the declaration of a state of national emergency is on the table.

A Department of Trade and Industry (DTI) official told DAILY TRIBUNE that if the war is extended and the prices of goods spike, President Ferdinand Marcos Jr. can impose a price freeze if he declares a state of national emergency.

The DTI official said vendors caught violating the threshold set for necessities during a price freeze would be issued a notice of violation and made to pay a fine ranging from P5,000 to P1 million.

Asked if the department would also be monitoring sari-sari stores, he said the DTI was only concerned with supermarkets, as these set the prices for small convenience stores.

The official said the DTI expects an eventual increase, noting that the hike in oil prices will affect product deliveries.

“As Secretary Roque said in the Senate hearing on 11 March, we may see an increase because of the logistical concern,” he said.

“We know that when it comes to gasoline, it is used for deliveries by trucks and they will be affected,” he added.

Senator Loren Legarda has filed two bills to lower the cost of basic goods and services by expanding the value-added tax (VAT) exemptions for essential items and medical services.

The measures seek to create a more progressive VAT system while easing the burden on low income households.

“These proposals will provide immediate relief to those with lower incomes, helping them get by day to day and build a better future for their families,” Legarda said.

“By treating healthcare and daily subsistence as fundamental rights rather than taxable transactions, the bills aim to reduce out-of-pocket costs for vulnerable sectors and ensure that life-saving medical care and necessities remain affordable,” she added.

Under Senate Bill 1851, or the Differentiated Value-Added Tax Rates Act, goods and services for poor and middle-class Filipinos will revert to a 10-percent VAT rate.

Meanwhile, luxury goods (designer brands, jewelry, expensive watches, premium perfumes), high-value assets (fine art, antiques, private aircraft, luxury vehicles), sin products (alcohol, tobacco, vaping items), environmentally hazardous items (legal fireworks), and premium real estate (penthouse suites, luxury condominiums, exclusive club memberships) will remain at the 12-percent VAT rate.

“This dual-rate system will lower the cost of living for most Filipinos while ensuring that higher income earners contribute a fairer share through slightly higher taxes on premium, luxury and environmentally hazardous items,” Legarda said. “We also hope it encourages our countrymen to spend their hard-earned income prudently.”

Senate Bill 1857, or the Murang Bilihin at Serbisyong Medikal Act, seeks to fully exempt goods and services tied to daily subsistence and public health from VAT.

These include staple food like canned fish, chicken, beef, milk, eggs, flour, rice, cooking oil, instant noodles, vinegar; household essentials such as laundry soap, toilet paper, sanitary napkins, diapers; basic medical services like checkups by doctors, dentists, and licensed practitioners; over-the-counter medicine for fever, cough, flu and body pain; and essential first-aid supplies.

Russia an option

The government is also considering sourcing oil from Russia as it explores options to cushion the impact of the ongoing global oil crisis triggered by the Israeli-US war on Iran and the disruption of oil shipments through the Strait of Hormuz.

Foreign Affairs Secretary Ma. Theresa Lazaro confirmed that the possibility is under study, noting that the United States has temporarily eased the sanctions on Russian oil.

“That is something being considered, but I will leave it to the Cabinet (department) in charge of this, which is the Department of Energy,” Lazaro told reporters in a virtual briefing on Friday after she convened a Special Asean Foreign Ministers Meeting on the Middle East security crisis.

Lazaro said there is also an ongoing discussion about synergy between economic ministers and foreign ministers in light of concerns about economic and security issues sparked by the ongoing conflict.

Data from the Department of Energy showed that the Philippines sources the lion’s share, or about 98 percent, of its crude oil from the Middle East, now at the center of drone and airstrike attacks by Israel, the US and Iran. The neighboring countries account for the remaining two percent.

President Marcos confirmed the Philippines is talking to other countries as alternative sources of fuel.

Asian countries such as China and India have emerged as top buyers of Russian crude oil.

Marcos did not say if the Philippines was also eyeing Russia as a temporary source of fuel imports, although in 2022 he expressed willingness to buy Russian oil amid rising global fuel prices driven by its conflict with Ukraine.

Restrictions ‘crippling’ farmers

Meanwhile, Senator Imee Marcos said some provincial fuel stations were reportedly limiting diesel purchases by farmers during the peak harvest season, which could disrupt farm operations and threaten the food supply.

“Farmers should be getting support at this difficult time. Instead, they are facing an additional crisis,” Marcos said, noting that diesel is crucial for irrigation pumps, tractors and harvest equipment.

Diesel prices currently range from P80 to P86 per liter nationwide, according to the senator. In Nueva Ecija, prices range from P81 to P88 per liter; in Cebu, from P84 to P89; in Zambales, from P81 to P83; and in Camarines Sur, from P72 to P76.

“Production costs are rising, and now some farmers can’t even fill their tanks. This threatens not just farm operations but the country’s food supply,” Marcos said.

The senator warned that stalled harvests could ripple across the economy, affecting food availability and prices nationwide. She noted that farmers are already struggling with rising costs of fertilizer, seeds, and fuel while farmgate rice prices remain low, ranging from P16 to P23 per kilo.

Marcos urged the government to accelerate fuel subsidies for farmers, noting that about 65 liters of diesel per hectare is typically needed for irrigation, tractors, and post-harvest drying.

She also proposed temporarily suspending the 12-percent value-added tax on fuel purchases by farmers and other small sectors.

“If there are hoarding concerns, authorities should target abusers, not farmers who feed the nation,” Marcos said.

Go urges bayanihan

Traders must uphold the bayanihan spirit as food prices climb amid looming fuel hikes, further burdening ordinary Filipinos, Senator Christopher “Bong” Go said.

Food prices have begun climbing in several markets even before major fuel price adjustments take effect, prompting Go to call on traders and suppliers to refrain from exploiting the situation by hoarding, overpricing and other practices that place an additional strain on consumers, particularly low income households.

The senator noted that the fuel price hikes are partly driven by global tensions and oil supply disruptions stemming from ongoing missile attacks in the Middle East, which have put added pressure on markets and contributed to rising transportation and logistics costs.