Cebu must be more than a talk shop

The leaders gathered in Cebu on Friday carry a burden that no polite communiqué can discharge. The Iran war has done what years of supply-chain disruptions and pandemic aftershocks could not quite accomplish: it has struck at the jugular of Southeast Asia’s energy supply simultaneously, leaving the region exposed, divided and dangerously close to the edge of recession. 

The question is no longer whether ASEAN must act — it is whether the ASEAN Leaders Summit in Cebu will be able to muster real action or merely produce the usual pronouncements.  

Most urgently, ASEAN must establish at the earliest time possible a regional strategic energy reserve — a shared buffer of oil, LNG, and refined products drawn from member states and supplemented with accelerated agreements with alternative suppliers in West Africa, the Americas, and Australasia.

The bloc’s economic ministers have acknowledged the danger; the summit must now task its senior officials to draw up a concrete framework for reserve-pooling.

Member economies must also collectively fast-track intra-ASEAN trade in energy. Brunei, Malaysia and Indonesia are significant hydrocarbon producers. 

The crisis demands that domestic export caps be temporarily eased and intra-bloc pricing mechanisms be negotiated so that net importers — Thailand, Vietnam, the Philippines — can access regional supplies at stabilized prices rather than be left to the mercy of a spiking spot market.

ASEAN should also more boldly activate its existing financial architecture. The Chiang Mai Initiative Multilateralisation (CMIM), the $240-billion regional currency swap arrangement established by ASEAN+3 (10 ASEAN member countries plus China, Japan, and South Korea) was designed for exactly this kind of external shock — providing, as it does, financial support and short-term liquidity during crises. 

Leaders should agree to lower the triggering threshold for precautionary credit lines, giving vulnerable members the fiscal headroom to sustain subsidies without blowing up their budgets or their sovereign credit ratings.

For the Philippines, where inflation has hit 7.2 percent, a declaration of an “energy emergency” by the government was the right instinct — but emergency powers need emergency speed.

Manila must move on three tracks at once: shielding the poorest households with targeted cash transfers rather than blanket fuel subsidies (which disproportionately benefit the rich); accelerating renewable energy licensing to reduce oil dependency structurally; and opening bilateral energy talks with Australia and the United States to lock in medium-term LNG contracts before the competition intensifies.

Across the region, governments should resist the temptation to simply subsidize their way through the crisis.

Blanket price controls drain fiscal reserves without changing the underlying supply equation. The smarter path is demand-side relief paired with supply-side diversification: a shorter civil servant work week buys time, but only investments in solar, wind, and grid interconnection buy genuine resilience.

ASEAN was built on the principle of non-interference, and that principle has genuine value. But non-interference in the politics of the Middle East does not mean passivity in defense of Southeast Asian livelihoods. 

The bloc should speak with one clear voice at the United Nations, at the G20, and through every bilateral channel available, demanding a humanitarian corridor through the Strait of Hormuz and calling for immediate ceasefire negotiations — not as partisans, but as the economies that will bear the most lasting damage if the war drags on.

Cebu is a beautiful city. But beauty will not cushion a recession. ASEAN leaders owe their people more than a photograph and a communiqué. They owe them a workable plan.