The Marcos Jr. administration’s response to the global energy crisis, combined with Vice President Sara Duterte’s ongoing impeachment proceedings, may have tangible long-term consequences for the Philippine economy, according to political economist Bob Herrera-Lim.

Speaking last week at a webinar hosted by the Makati Business Club (MBC), Herrera-Lim said the country’s domestic political issues and the economic downturn driven by the Middle East crisis cannot be viewed in isolation.

“[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,” he added.

The national government has faced heavy criticism as domestic fuel prices surged to triple-digit levels per liter in April. Despite mandated rollbacks, subsidies, and excise tax suspensions on liquefied petroleum gas (LPG) and kerosene, concerns over limited oil reserves and alleged “cartelized” pricing—linked to the deregulated oil industry—have drawn criticism from politicians, business groups, and consumers. Pump prices remain significantly higher than levels prior to the conflict’s escalation in early March. The central bank has also warned that the oil shock could spill over into broader price increases, further fueling inflation.

Headline inflation spiked to 7.2% in April—four times higher than end-2025 levels—driven by elevated fuel, transport, and food costs, eroding household purchasing power. Herrera-Lim said rising prices remain a key challenge for the Ferdinand R. Marcos Jr. administration and could influence voter sentiment ahead of the 2028 elections.

“[W]hatever price effects we’re seeing today, it’s not yet finished,” he said.

Meanwhile, the House Committee on Justice has unanimously approved its report and Articles of Impeachment against Sara Duterte for transmittal to the plenary, where lawmakers will decide whether to elevate the case to the Senate acting as an impeachment court.

Herrera-Lim said public perception of the government’s handling of the energy crisis could influence the trajectory of Duterte’s impeachment.

“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.

Economic growth slowed to 4.4% last year, which many analysts attributed to the fallout from the flood control scandal that dampened infrastructure spending and investor confidence, causing the country to miss its growth target for the third consecutive year. Economy, Planning, and Development Secretary Arsenio Balisacan said last week that the country is also likely to miss its growth target this year as the Middle East conflict and its spillover effects persist.

Herrera-Lim’s comments echo those of political scientist Julio Teehankee, who previously said the Marcos administration’s political turmoil is weighing on 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 at a November MBC event.

Teehankee added that tensions between the Marcos and Duterte camps have “fundamentally fractured the ruling coalition, creating an environment of intense political instability that directly impedes effective governance and risks delaying key structural economic reforms.”