Senators back DFA dialogue with Iran to secure safe passage of Philippine-bound oil tankers

Senators commended the efforts of the Department of Foreign Affairs to secure the safe and unhindered passage of Philippine-bound oil tankers through the Strait of Hormuz, despite the worsening conflict in the Middle East, following successful talks with Iran.

Senator JV Ejercito, who recently criticized the administration's supposed slow response and lack of concrete solutions to mitigate the dire effects of the looming oil supply shortage, labeled the move on Saturday as a "welcome development" expected to replenish petroleum reserves in the country.

He commended the administration and the DFA in initiating diplomatic negotiations with Iranian Foreign Minister Seyed Abbas Araghchi, though the senator remains hopeful that it will immediately materialize and will be sustained.

Araghchi assured the expeditious passage of Philippine-flagged vessels, energy sources, and all Filipino seafarers to the Strait, where about 20 percent of the world's total oil passes through, following a call with DFA Secretary Ma. Theresa Lazaro, who requested that the Philippines be designated as a "non-hostile country."

The Strait remains technically closed to the United States, Israel, and its allies, who supported their war on Iran.

"Hopefully, this development will help, even in a small way, to ease the situation so that the people can breathe a sigh of relief. Because we are already feeling it—this supply problem, oil prices, and so on, including even fares, food, and other goods," Ejercito said in Filipino.

In the same vein, Senator Ping Lacson also commended Lazaro for "quietly and effectively negotiating with Iran to allow passage of vessels through the Strait of Hormuz that deliver 80 percent to 100 percent of the Philippines oil imports."

Senate PROTECT committee chair Win Gatchalian, who pressed Malacañang to hold a high-stakes dialogue with Iran to ensure that the oil shipments bound for the Philippines would be recognized as "neutral entities," projected that the "economic disruption caused by the Middle East conflict will be tempered" by the deal.

Iran's commitment is expected to

secure an adequate supply in the country in the months ahead, according to Gatchalian, though he assured that the ad hoc committee will continue to push forward contingency plans to ensure that the socio-economic impacts of the oil crisis will be cushioned and that the essential goods and services remain uninterrupted.

The Philippines has been greatly affected by the ongoing US-Israel conflict with Iran, as it is heavily dependent on the Middle East in terms of oil imports, ranging from 95 to 98 percent.

Though Iran is not officially an ally of the Philippines, the two nations have maintained diplomatic relations since 1964. They also have resident embassies in their capitals. 

Meanwhile, the Philippines is a longstanding ally of the US, and its military has been granted rotational access to some of Manila’s military units through the Enhanced Defense Cooperation Agreement (EDCA) sites. 

These sites earlier sparked concerns that the Philippines may pose a threat to Iran, which has launched drone airstrikes in the Middle East, hosting US military bases.

The DFA had allayed these fears, saying that the Philippines maintains a “good relationship” with Iran, and that it had already been informed as early as November that the Philippines retains full ownership and control over EDCA sites.

Despite the positive developments, Ejercito said the safe passage of Philippine-bound oil tankers through the Strait, which is seen to boost petroleum supplies and prevent prices from skyrocketing, must be coupled with the full and swift implementation of fuel excise tax suspension.

President Marcos Jr. is already empowered to cut or suspend excise tax on petroleum products following the passage of Republic Act 12316 in late March to curb the inflationary impacts of persistent oil price hikes, which also drive up costs of transportation and essential goods, weakening the public's purchasing power.

The Department of Finance earlier warned that suspending the excise tax could cost the government a staggering P121.4 billion in revenue loss, though the projected shortfall could reach as high as P136 billion if coupled with the proposed suspension of the value-added tax. The estimated revenue foregone covers only eight months, from May to December.

Marcos has already placed the country under a state of national energy emergency, though some lawmakers are pressing the administration to declare a full state of national emergency to address rising prices of fuel and food through a price ceiling mandated under the Price Control Act (RA 7581). 

Inflation is expected to hit between 7.4 percent and 8.9 percent this month and could spike as high as 14.3 percent under the “worst-case scenario” in the months ahead, or when crude oil reaches $200 per barrel for an average of 180 days, Planning Secretary Arsenio Balisacan projected.

At present, only LPG (liquefied petroleum gas) and kerosene, under the types of petroleum products, are considered basic necessities, leaving gasoline and diesel not covered by the price ceiling during periods of crisis situations.

RA 7581 defines basic needs as prime commodities like rice, corn, bread, eggs, vegetables, canned fish, and red meat. 

Coffee, sugar, cooking oil, salt, laundry soap, firewood, charcoal, candles, and drugs are also classified as essential under the law.