Lack of reserves exposes Philippines risks – Cu-Unjieng

The lack of foresight and initiative on the part of the national government could worsen the already negative effects of the Middle East conflict in the long run, according to Stephen Cu-Unjieng, independent director of Maharlika Investment Corporation (MIC). Speaking at a webinar hosted by the Makati Business Club, Cu-Unjieng highlighted that the Philippines lags behind regional peers in oil reserves and energy security due to overreliance on the private sector and minimal government intervention. He noted that most countries maintain 90 to 180 days of strategic oil reserves, while the Philippines has only about 54 days, citing privatization and market forces as key factors. The Department of Energy (DOE) reported that the country’s energy supply lasts under two months. The DOE is investigating alleged cartelized pricing by oil companies, with fuel costs exceeding P100 per liter amid an energy crisis. Energy Secretary Sharon Garin observed simultaneous price increases across firms, suggesting coordinated actions. The government has implemented mandated price cuts, reducing diesel prices by over P20 per liter in the past two weeks. However, Cu-Unjieng warned that delays in oil shipments—typically a month from the Strait of Hormuz—mean countries are only beginning to tap existing reserves. He emphasized that if the conflict continues, energy shortages will worsen, as panic has not yet set in. Despite government efforts to preserve purchasing power, inflation is projected between 5.6% and 6.4% in April due to higher food, transport, and energy costs, alongside a weakening peso. MIC is exploring an expanded oil storage facility, co-funded by the government and private sector, to mitigate future price shocks. Cu-Unjieng criticized the lack of government or industrial policy, stating, 'You cannot direct the wind, but you can adjust the sails. We have not adjusted the sails.'