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 could tap its unobligated allotments amounting to P1.96 billion under its MSME programs in this year’s budget to ramp up lending to small businesses, whose capital is disrupted by the high energy costs.

The budget was on top of the P309.9 million in unobligated funds from the continuing appropriations in 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 pointed out.

Labor market spill

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.

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

As a result, Gatchalian stressed that the government must swiftly roll out loan support for MSMEs to protect the labor market, given that the Philippines is highly vulnerable to the ongoing energy crisis due to its heavy reliance on oil imports from the Middle East.

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