Shocks converge
It does not take much to disrupt this balance. A supply shock far from Manila tightens fuel access, and prices begin to rise.
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It does not take much to disrupt this balance. A supply shock far from Manila tightens fuel access, and prices begin to rise.
The Philippines often tells itself a reassuring story in moments of strain: that it is a fast-growing economy, that crises are temporary, that the country is merely passing through another rough patch.
But the shocks are no longer taking turns. They are beginning to overlap and, in some cases, reinforce each other. The country is losing the space between them.
Another is already forming offshore. Weather bureau PAGASA places the probability of a moderate to strong El Niño at 92 percent toward the end of the year.
During the last episode, authorities reported P15.3 billion in agricultural damage, with rice and corn among the hardest hit. The forecast again points to below-normal rainfall and renewed pressure on farm output.
The warning signs are not limited to rainfall. In April, a super typhoon formed in the Pacific ahead of the usual season, even outside the Philippine Area of Responsibility.
Agriculture runs on expected rainfall patterns. When storms arrive at the wrong time, they can damage crops before harvest. When rains come late, planting is delayed. That mismatch reduces output.
As these pressures build, the country is also grappling with an energy crisis. Last month, the President declared a national energy emergency linked to tensions in the Middle East. The Philippines had fuel reserves estimated to last about 45 days under normal conditions.
Within weeks, Malacañang suspended taxes on kerosene and LPG. Manila sought a US waiver to continue importing Russian oil and turned to ASEAN for closer coordination on fuel supply.
The issue is not scarcity, but access at critical moments.
The Philippines has long identified offshore energy prospects, such as Recto Bank, within its exclusive economic zone. Yet development has stalled, constrained by Chinese pressure and constitutional limits on foreign participation.
Renewed discussions on joint exploration with China remain contentious. Manila insists any agreement must comply with the Constitution and preserve sovereignty, with the Supreme Court having previously voided a joint seismic undertaking.
The country also holds significant deposits of nickel and other critical minerals used in batteries and clean energy technologies, placing it at the center of a growing global competition for supply.
China continues to dominate processing and trade in these materials, while the United States and Japan are working with Manila to develop alternative supply chains.
Earlier this year, the Philippines signed an agreement with Washington to strengthen cooperation on critical minerals, including processing. Separate initiatives tied to a broader US-Japan-Philippines economic corridor have also been proposed.
Whether these shifts will alter the country’s position remains uncertain. The Philippines has long exported raw materials, while higher-value processing takes place abroad. Without moving up the value chain, new partnerships may change routes but not outcomes.
It does not take much to disrupt this balance. A supply shock far from Manila tightens fuel access and prices begin to rise.
Inflation climbed to 4.1 percent in March from 2.4 percent in February, according to the Philippine Statistics Authority. Transport costs rose 9.9 percent, while housing, water, electricity, gas and other fuels increased 4.5 percent.
The effects are felt in daily expenses: higher fares, rising electricity bills and more expensive food. Households absorb the cost or reduce consumption.
Only about one-third of Filipino workers hold formal jobs, according to the Organization for Economic Cooperation and Development. Many others work without stable income, paid leave, or employer-provided health coverage.
Yet government projections suggest the Philippines is nearing upper-middle-income status, a threshold the World Bank may assess as early as July based on 2025 data.
A country can post strong economic figures and still remain vulnerable to disruption. The question is no longer how fast the economy can grow, but whether it retains control over the conditions that sustain that growth.
