DEPDev Secretary Arsenio Balisacan (PNA photo by Joann Villanueva)
The Philippine government is mobilizing economic safeguards to cushion the potential fallout of the escalating crisis in the Middle East, with officials warning that the conflict could disrupt overseas employment, weaken remittances, and push fuel prices higher.
Department of Economy, Planning, and Development Secretary Arsenio Balisacan said the government is preparing targeted assistance for Filipinos who may be forced to return home due to deployment restrictions and repatriation efforts.
“Obviously with the deployment ban and repatriation of workers, there will be an effect and we need to provide assistance to those who are coming back especially for integration and training,” Balisacan said on the sidelines of the Juana Trabaho launch in Mandaluyong City on Tuesday.
He noted that remittances from the Middle East—an important source of income for many Filipino households—could also take a hit if the situation worsens. “Remittances from the region will also be affected and that will have an impact on many households and the economy,” he added.
Speaking separately at a briefing at the House of Representatives of the Philippines, Balisacan said the government is preparing safety net programs to protect vulnerable sectors while exploring ways to soften the impact of rising fuel costs.
Among the measures being considered is the staggered implementation of price adjustments to avoid sudden spikes in consumer costs. The government is also pushing for expanded use of lower-cost bioethanol as part of efforts to ease fuel prices and gradually reduce the country’s dependence on imported oil.
Economic managers are likewise working with Congress to grant the President authority to temporarily reduce or suspend excise taxes on fuel if global oil prices surge further.
According to Balisacan, suspending the excise tax on diesel could significantly temper price increases. “For diesel, the suspension of excise tax will reduce the increase to about 13 percent from 24 percent,” he said.
Gasoline prices could see an even bigger relief. Without the excise tax, the projected price increase for gasoline in 2026 could drop dramatically—from an expected 20 percent rise to roughly just 1 percent.
“The reason is the excise tax on gasoline is higher, around ₱10 per liter, compared with ₱6 per liter for diesel,” Balisacan explained.
While the move could help curb inflationary pressures and ease the burden on consumers, Balisacan acknowledged it would come with fiscal costs. The government estimates potential revenue losses ranging from about ₱40 billion to ₱106 billion depending on the duration and scale of the tax suspension.
Still, he stressed that the broader economic benefits of stabilizing prices and protecting vulnerable sectors could outweigh the loss in revenue.
“Let me note that while the effects on revenue are quite significant, the net effect on the economy of not doing anything about it is even worse,” Balisacan said. “Providing assistance to vulnerable groups, particularly by taming inflation, will ultimately help stabilize the economy.
