The longer the crisis the deeper the effect. The impact of the ongoing oil crisis on Filipino households suggests that 1.34-million Filipinos face the prospect of falling below the poverty line in 2026.

A study carried out by the state think tank, Philippine Institute for Development Studies (PIDS), based the scenario on the current price of oil per barrel, which is at $105, reflecting a 35-percent increase in local currency value.

Jose Ramon Albert, PIDS senior researcher, explained that their analysis considered all income levels but put into perspective the differences in effect the crisis has depending on where an individual falls on the spectrum.

“The effects are not equally felt, the most affected, in spite of the miniscule effect on the peso, are the poor,” he said.

Poor suffer most

Albert posited that the crisis is merely shoving the poor deeper into poverty as richer individuals can absorb the massive cuts to their income without necessarily facing staggering consequences.

Data revealed that the projected cut in poor households’ purchasing power was as much as 16.2 percent, while those in the upper decile of society faced only a 3.4-percent reduction.

These results will reportedly increase the national poverty rate, which was at 13.2 percent in 2025, to 14.4 percent by the end of the year.

It also details how poorer communities, such as in the Visayas and Mindanao, are likely to be hit harder than urban areas in Luzon, despite their generally consuming less fuel.

To put that in perspective, former LPG Marketers Association representative Arnel Ty revealed that 65 percent of LPG use is in Luzon, while only about 30 percent and 20 percent are in the Visayas and Mindanao, respectively.

The senior researcher said the figures reflect the indirect effects of the crisis on households, regardless of whether they use oil daily.

“If the price of oil increases, the prices of rice, fish, meat, vegetables, and all basic goods will also rise,” he explained.

In addition to examining the effects of the crisis, PIDS investigated the effectiveness of the national government’s relief efforts in resolving it.

It found that direct support to vulnerable sectors would have a more substantial effect in curbing the impact of the price shocks than simply providing fuel subsidies.

The research showed the distribution of subsidies benefit higher-income households more than vulnerable sectors that barely use fuel.