Where’s the oil?

Where’s the oil? | Daily Tribune

With the peso facing significant pressure against the dollar, our purchasing power is being eroded from two sides: we are paying more for fuel in a currency that is struggling to hold its ground.

If we do not act with radical speed, we risk a “stagflation” trap, where prices soar while economic growth grinds to a halt.

The Philippines is not alone in this crisis, but we can be faster in our adaptation. Other nations are already deploying aggressive strategies that go beyond simple “wait-and-see” politics. For instance, several neighbors in Southeast Asia have utilized their strategic reserves and direct market interventions to stabilize local prices. In Europe, governments have reinstated “work-from-home” incentives and lowered highway speed limits to cut national fuel consumption.

Meanwhile, countries like South Korea have expanded transport subsidies significantly to protect the most vulnerable. While our government has initiated fuel subsidies for public utility vehicle operators, the rollout must be instantaneous and digitized to be effective. A driver waiting weeks for a voucher is a driver who might have to stop operating entirely, paralyzing the workforce.

Our response must be twofold. In the short term, there must be a serious conversation regarding “trigger-based” reductions of excise taxes on fuel during global spikes. While the government naturally worries about revenue loss, the “loss” to the economy from a paralyzed transport sector and double-digit inflation would be far more catastrophic.

In the long term, this crisis is a loud, expensive signal that our dependence on imported fossil fuels is a national security risk. We must pivot toward homegrown renewables and electric mass transport with the urgency of a wartime effort.

The Filipino people are famously resilient, but resilience is not a policy. It is a plea for help. We cannot afford to let the beating the economy has taken turn into a knockout blow. It is time to move beyond temporary band-aids and start structural reforms before the next global crisis hits.