The Philippine government is moving to secure additional oil supply, with plans to procure up to two million barrels of fuel, as escalating conflict in the Middle East threatens global energy flows and drives prices higher, according to Finance Secretary Frederick Go.

Speaking at the InvestPH seminar hosted by the local bourse earlier today, Go said the move is part of efforts to cushion the country from supply disruptions and price volatility triggered by tensions involving the United States, Israel and Iran.

“The primary objective, of course, is to create that buffer stock — additional buffer stock. Also, when you put out a big order into the global market, the belief is you should be able to get some economies of scale and procure at lower prices,” he said.

The planned stockpiling comes as the Strait of Hormuz — through which about 20 percent of global oil supply passes — faces disruptions, raising concerns over sustained spikes in crude prices and tighter global supply.

The President said last week the Philippines currently maintains an oil buffer equivalent to around 50 to 60 days of national demand, providing some protection against short-term shocks while allowing flexibility to source supply from multiple producers.

The Middle East conflict has also exerted pressure on the local currency, which hit record lows three times over the past week, peaking at P59.87 per US dollar on Monday. Analysts have noted that rising inflationary pressures and peso depreciation could limit the Bangko Sentral ng Pilipinas’ (BSP) room for further monetary policy easing.

Go, who sits on the BSP’s Monetary Board, said the government is closely monitoring developments in global oil markets, particularly price movements and the duration of the conflict, which will determine the extent of policy responses.

“The Monetary Board, in its last policy meeting, decided on easing,” Go said.

“We also made a statement that we are reaching the end of the easing cycle. If oil prices remain high — if oil prices remain elevated and the situation persists for some time — the Monetary Board will most likely have to consider tightening.”

The Monetary Board approved a 25-basis-point reduction in the central bank’s key policy rate last February — the second such cut in three months — as tepid economic growth linked to the flood control scandal continued to weigh on the Philippines’ economic outlook.

As oil prices continue to surge, Go — who has previously said the government is pushing for a temporary reduction in excise taxes on fuel — noted that action will depend on Congress, and that it may still be too early to decide.

“We’ve only entered the 17th day of the war, so I think it’s probably too early for us to say that the DBCC will recommend to the President reducing excise taxes on fuel,” Go said. “Congress and the Senate are still working on the bill. My understanding is that the House has already passed the measure, while the Senate has a draft bill.”

“The Senate draft bill is completely aligned with the position of the Department of Finance, and so we would be very supportive of the draft bill that the Senate is coming up with,” he added.