The Philippines has rolled out some of the most extensive policy responses in the Asia-Pacific to cushion the impact of rising oil prices and supply disruptions, according to the Asian Development Bank (ADB).

In a recent report, the Metro Manila-based multilateral lender said the country implemented a broad mix of measures to mitigate the effects of the global energy shock, including fuel subsidies, targeted cash transfers, and support for the transport sector, as it faced among the steepest fuel price increases in the region—up roughly 60% from end-February.

Government measures included subsidies for public transport operators and fuel discounts for key sectors, alongside broader fiscal interventions aimed at stabilizing prices and supporting household consumption.

The ADB noted that many economies across the Asia-Pacific responded to the oil shock with a combination of fiscal support and price management policies, with the Philippines standing out for the scale and breadth of its response.

Despite these efforts, the country still recorded one of the sharpest fuel price increases in the region, with diesel peaking at around P120 per liter in mid-April—highlighting its vulnerability as a net oil importer exposed to global price swings. The government has since moved to suspend excise taxes on liquefied petroleum gas (LPG) and kerosene, while also implementing mandated price cuts on gasoline and diesel, bringing prices below the triple-digit-per-liter threshold in most Metro Manila stations.

However, global oil prices remain volatile. Crude benchmarks fell late last week after reports that Tehran had proposed fresh talks with Washington through intermediaries. The decline followed a sharp surge in recent weeks, with Brent crude briefly climbing above $126 per barrel—the highest level in four years—amid fears of supply shortages linked to the conflict and restricted flows through the Strait of Hormuz, a key global shipping route.

Industry sources also project another round of increases beginning tomorrow, with diesel expected to rise by as much as P2 per liter and gasoline by up to P3 per liter.

These elevated prices have contributed to a sharp acceleration in headline inflation, with the Bangko Sentral ng Pilipinas (BSP) projecting prices could rise by as much as 2.3% month-on-month in April as the oil shock spills over into other goods and services. Meanwhile, the peso dropped to consecutive record lows last week, reaching an all-time low of P61.56 against the US dollar as of Wednesday, 29 April, driven by safe-haven demand for the dollar and elevated oil prices.

The same report also warned that the energy shock could reduce economic growth in developing Asia and the Pacific by up to 1.3 percentage points over 2026–2027 and raise inflation by as much as 3.2 percentage points if disruptions in energy markets persist for more than a year.