Lack of reserves exposes Philippines risks – Cu-Unjieng

The lack of foresight and initiative on the part of the national government could worsen the already negative effects of the Middle East conflict in the long run, according to Stephen Cu-Unjieng, independent director of Maharlika Investment Corporation (MIC).

Speaking at a Wednesday webinar hosted by the Makati Business Club, Cu-Unjieng said the country lags behind its regional peers in terms of oil reserves and energy security—an issue he attributed to overdependence on the private sector and limited government intervention.

“Most countries, unlike us, don’t leave it entirely to the private sector and market forces. They carry much more days of strategic reserves than we do,” he said.

“China has close to a year’s worth of oil supply stored in-country. Most other countries have 90 to 180 days. We, because we want to privatize everything and leave it to market forces, have [54] days,” he added.

The Department of Energy (DOE) reported last Tuesday that the country has enough energy supply to last a little under two months. The DOE has also tapped the Philippine Competition Commission (PCC) to investigate possible unfair practices by oil companies amid allegations of “cartelized” pricing, with fuel costs breaching P100 per liter amid a deepening energy crisis.

Energy Secretary Sharon Garin said recent price movements raised concerns, noting that increases appeared to be simultaneous and identical across firms.

“As observed in Congress, it seems they move together—not only in timing but also in how much they increase,” she said, adding that the DOE is open to revisiting the current pricing system and welcomes legislative guidance to improve market transparency and fairness.

The government has since implemented mandated price cuts, bringing diesel prices down by more than P20 per liter over the past two weeks. However, Cu-Unjieng noted that it typically takes about a month for oil shipments to reach Asia from the Strait of Hormuz—which remains under US blockade—meaning countries are only beginning to tap into existing reserves.

“That is why, even if [the war] ends tomorrow, it doesn’t end. And if you think what we’ve seen is bad, if things don’t end, it will get worse, because people are not yet overtly panicking—they are only now starting to run out of new oil,” he said.

Despite government efforts to preserve purchasing power, inflation is projected to range between 5.6 and 6.4 percent in April, according to the Bangko Sentral ng Pilipinas (BSP), reflecting spillover effects such as higher food, transport, and energy costs, as well as a weakening peso, which has hit record lows eight times since the conflict escalated in March.

MIC, which manages the country’s sovereign wealth fund, has previously said it is exploring the development of an expanded oil storage facility, co-funded by the government and private sector, to shield the Philippines from future oil price shocks linked to overseas conflicts.

“You cannot direct the wind, but you can adjust the sails. We have not adjusted the sails. Given our complete abandonment of any semblance of government or industrial policy in this area, and leaving it entirely to the private sector, our motto really is bahala na si Batman,” Cu-Unjieng added.