The Marcos administration’s handling of the global energy shock — now colliding with the looming impeachment trial of Vice President Sara Duterte —could leave lasting scars on the Philippine economy, a leading political economist has warned.

Speaking at a Makati Business Club (MBC) webinar, Bob Herrera-Lim said the oil crisis and the country’s deepening political rift are no longer separate issues, as both are reshaping investor sentiment and long-term growth prospects.

“[T]here are a lot of complicating factors in terms of how our ability to manage the crisis turns into a broader political narrative,” he said. “We can’t disentangle these things from what is happening in the world outside.”

Fuel prices surged to triple-digit levels per liter on some products in April, drawing criticism despite government rollbacks, subsidies, and tax suspensions on LPG and kerosene. Concerns over limited reserves and alleged “cartelized” pricing have persisted, while pump prices remain elevated compared to pre‑conflict levels in early March. The Bangko Sentral ng Pilipinas has also warned of broader inflationary spillovers.

Inflation jumped to 7.2 percent in April from 4.1 percent in March — the fastest pace in more than three years — driven by higher fuel, transport, and food costs, with price growth for the poorest 30 percent of households climbing to 8.5 percent and underscoring the disproportionate impact on low-income families.

“[W]hatever price effects we’re seeing today, it’s not yet finished,” said Herrera-Lim, warning that sustained price pressures could weigh on public sentiment ahead of the 2028 elections.

Food remained the biggest driver of inflation, particularly rice, which posted a 13.7-percent increase and carries significant weight in household spending, while other staples such as fish, vegetables, and corn also recorded faster price gains. Transport and housing-related costs, including electricity and gas, added further pressure.

Core inflation — which leaves out volatile food and energy items — rose to 3.9 percent, signaling that price pressures are spreading more broadly across the economy.

Against this backdrop, the House Committee on Justice has approved the Articles of Impeachment against Duterte, bringing it to the plenary for deliberation and a vote, a step that could eventually elevate the case to a Senate trial.

Herrera-Lim said how the government manages the economic crisis could influence the political trajectory of the impeachment — and vice versa.

“If Sara’s impeachment pushes forward, does this affect the political calculations around that impeachment?” he said, noting that the Vice President’s fate could have “material effects” on the economy.

The economic growth has already shown signs of strain, slowing to 4.4 percent last year — missing government targets for a third straight year — with Economy, Planning and Development Secretary Arsenio Balisacan indicating that growth may again fall short this year as the Middle East conflict continues to weigh on the outlook.

Political analyst Julio Teehankee echoed the warning, saying prolonged instability could undermine long-term economic prospects.

“[The] business and [the] private sector thrive on stability. Stability provides profits when there is strong government, strong institutions, and the rule of law,” Teehankee said.

He added that the tensions between the Marcos and Duterte camps have “fundamentally fractured the ruling coalition,” creating instability that risks delaying key economic reforms.

Across regions, inflation picked up broadly.