The head of the Senate PROTECT committee on Saturday pressed the administration to extend concessional loans to micro, small, and medium enterprises (MSMEs) to avert potential layoffs and a job freeze amid the threat of a prolonged oil price shock driven by global disruptions.

Committee chair Win Gatchalian, who also heads the Senate finance panel, said the Department of Trade and Industry (DTI) could tap its unobligated allotments amounting to P1.96 billion under its MSME programs in this year’s budget to ramp up lending support to small businesses, whose capital is strained by high energy costs.

The amount is on top of P309.9 million in unobligated funds from continuing appropriations under the 2025 General Appropriations Act.

“Higher fuel costs could trigger more layoffs and hiring freezes, especially in sectors that rely heavily on transport, power, and delivery,” Gatchalian said.

Senator Christopher "Bong" Go also called for a similar measure under his proposed “Fuel Crisis Immediate Relief and Response Act” filed last week.

The bill seeks to provide MSMEs with expanded access to loans, including interest rate subsidies for critically affected businesses.

A concessional credit, or “soft loan,” is extended on more favorable terms than commercial loans, such as lower interest rates, longer grace periods, or extended repayment terms.

The DTI typically activates such programs during periods of crisis, including calamities, public health emergencies such as the COVID-19 pandemic, and economic slowdowns.

Although the country’s unemployment rate dropped to 5.1 percent (2.66 million) in February from 5.8 percent (2.96 million) in January, the energy crisis is expected to spill over into the labor market.

Claire Dennis Mapa of the Philippine Statistics Authority warned that the Middle East crisis poses a threat to labor market stability due to rising operational costs, which could affect economic recovery.

Gatchalian stressed the need for the government to swiftly roll out loan support for MSMEs to protect jobs, noting that the Philippines remains highly vulnerable to the ongoing energy crisis due to its heavy dependence on oil imports from the Middle East.

The recommendation forms part of broader short-term measures crafted by the ad hoc panel to assist sectors heavily affected by soaring oil prices, particularly public utility vehicle drivers, farmers, and fisherfolk.

He added that MSME support programs should be complemented by emergency measures from the Department of Labor and Employment (DOLE) and the Technical Education and Skills Development Authority, particularly in reskilling and upskilling displaced workers.

The DOLE has set aside P1.2 billion in standby funds to address potential job losses resulting from global oil disruptions that could affect businesses and employment.

A large portion of the budget will fund the Tulong Panghanapbuhay sa Ating Disadvantaged/Displaced Workers (TUPAD) program and the Integrated Livelihood Program to provide short-term employment and small livelihood assistance to displaced workers.

The Senate PROTECT committee is empowered to submit recommendations on the development and implementation of national contingency plans to President Ferdinand Marcos Jr. for appropriate action.

The United States-Israel conflict with Iran, although paused for two weeks, has disrupted shipping through the Strait of Hormuz, a vital route through which about 20 percent of the world’s oil and liquefied natural gas supply passes.

The Philippines has been significantly affected by the conflict, as it imports about 95 to 98 percent of its oil from the Middle East.