Beautiful Principles, No Oil

April 13, 2026

The Philippines imports 98 percent of its crude oil from the Middle East. Nearly all of it passes through the Strait of Hormuz.

On February 28, 2026, the United States and Israel launched airstrikes on Iran. Iran closed the strait. Six weeks later, a fragile two-week ceasefire brokered by Pakistan took effect on April 8. By April 12, the Islamabad peace talks had collapsed after 21 hours. Trump announced the U.S. would blockade the Strait of Hormuz, saying Iran was unwilling to give up its nuclear ambitions. The ceasefire's status is now uncertain. The strait remains functionally closed.

Before the war, diesel cost roughly ₱55 per liter. By late March it had crossed ₱130. By early April, pump prices ranged from ₱148.70 to ₱170.10 per liter. Gasoline cleared ₱100 for most grades. On April 12, Marcos announced a rollback. Diesel will drop by at least ₱20 per liter, gasoline by ₱4.43. The Energy Secretary said the same day that fuel prices are unlikely to return to ₱60 per liter, citing long-term disruptions caused by the conflict. The rollback is real. The relief is temporary. Dubai crude still sits above $117 per barrel.

No physical shortage exists. The country holds roughly 50 days of fuel inventory. Iran granted Philippine-linked cargo preferential passage through the strait. But global crude above $115, tripled shipping insurance, and a weakening peso drive relentless weekly hikes regardless of what arrives at port. The price is set in Singapore, not Batangas.

Intervention as Instinct

The Philippines declared a national energy emergency on March 24, the first country in the world to do so. Executive Order 110 activated powers under RA 8479, the Downstream Oil Industry Deregulation Act. That law prohibits routine price controls but allows the Energy Secretary to temporarily take over or direct oil industry operations during emergencies. Even so, the DOE has resisted imposing price caps. Secretary Garin warned that setting prices below international market rates would cause companies to stop importing and selling altogether.

Instead, the government layered interventions. A brief price cap ran from March 6 to March 9 and expired. Fuel subsidies followed. Traditional jeepney operators received ₱5,000 per unit. Drivers got ₱1,500 each. A ₱10 per liter fuel discount program at accredited stations launched April 14, initially covering NCR routes before expanding nationwide. A service contracting program will pay PUV operators ₱40 to ₱100 per kilometer on top of regular fare income, with a ₱1.5 billion budget through July. Marcos signed RA 12316 granting authority to suspend excise taxes on fuel. The wholesale electricity spot market was suspended. None of this fixes the price. All of it prevents collapse.

The Big Three oil companies, Petron, Shell, and Chevron, once controlled more than half the market. Their combined share has eroded to roughly 45 percent, with independents like Unioil, Phoenix, and Seaoil gaining ground. Petron operates the country's only remaining refinery in Bataan. Shell and Chevron are now purely import-based. The refined products come mainly from Singapore, South Korea, and Japan. The crude feeding those refineries comes from Saudi Arabia, the UAE, and Iraq. Every link in the chain runs through the same chokepoint.

The Free Market Thought Experiment

In a pure libertarian free market. No taxes, subsidies, regulations, or government stockpiles. Prices would surge even higher initially. Diesel potentially ₱200 or more per liter. The logic is clean. Inefficient jeepney operators would fail. Fares would double. Entrepreneurs would flood the market with alternatives. Biofuels, electric vehicles, non-Middle East imports. Demand destruction would follow. Less driving, more carpooling, compressed workweeks. Supply innovation would stabilize prices within months, building long-term resilience the subsidy model never produces.

This fails spectacularly in the Philippine context.

The culture prioritizes kapwa, shared identity, and utang na loob, reciprocity. These are not slogans. They are operating instructions. They clash with libertarian individualism at the level of reflex. Jeepney strikes would paralyze cities within days. Mass protests would demand bailouts within weeks. Oligarchs would dominate whatever new market emerged, not because they are smarter but because they own the terminals, the permits, and the politicians. True competition requires infrastructure that does not exist.

Historical crises confirm the pattern. The 2008 rice crisis produced hoarding, not innovation. PUV (Public Utility Vehicle) modernization met organized resistance for years. Filipinos revolt against suffering faster than they adapt to market signals. This is not a moral judgment. It is a structural observation. High collectivism and high power distance make top-down intervention intuitive. Market correction is an abstraction. A fare hike is a fact.

But here is the thing the thought experiment never confronts. The Philippines is not the exception. It is the norm made visible.

The Failure Is Not Filipino

The libertarian critique frames the Philippines as a country that lacks the discipline for free markets. Too collectivist. Too corrupt. Too prone to political intervention. The implication is that somewhere else, with better institutions and harder people, the model would work.

Look at where it supposedly does. Singapore scores 84.4 on the 2026 Heritage Foundation Economic Freedom Index. Switzerland scores 83.7. These are the libertarian showcase economies. Singapore maintains strategic petroleum reserves mandated by law, operates a state-owned oil company, and controls housing for 80 percent of its population through a government agency. Switzerland subsidizes its agricultural sector at rates that would make a Manila technocrat blush. Both countries deployed massive fiscal interventions during COVID. Switzerland funded short-time work programs and emergency business credits. Singapore spent over $70 billion in stimulus. The mechanisms were quieter than Manila's. The instinct was identical. Both maintain price stability through mechanisms no libertarian would design from scratch.

The difference is not that Singapore lets markets clear while the Philippines does not. The difference is that Singapore can afford to hide its interventions inside institutions that function quietly. The Philippines cannot. When diesel hits ₱170, there is no sovereign wealth fund to absorb the shock, no state petroleum reserve to release, no fiscal buffer deep enough to matter. The intervention happens in public because the country has no back room.

Every oil-importing nation hit by the Hormuz closure responded the same way. Thailand capped diesel prices using its Oil Fuel Fund. Vietnam slashed fuel tariffs to zero. Japan and South Korea coordinated emergency crude shipments. Not one government in the region said: let the market sort it out. The instinct is universal. The vocabulary changes. The action does not.

Political patronage and oligarchic capture make the Philippine version messier. Private profits with public safety nets. Market rhetoric with cartel behavior. Shock therapy risks coups. Gradualism gets corrupted. But the underlying move, the state stepping between its people and a price they cannot bear, is not a Philippine dysfunction. It is what governments do. The ones that do it well get called free markets. The ones that do it badly get called interventionist. The mechanism is the same.

The oil crisis exposes this with unusual clarity. The price is not set by supply and demand in any local sense. It is set by a war, a blockade, a failed negotiation in Islamabad, and a threat posted on Truth Social. The world that determines what a jeepney driver pays at the pump is not a market. It is a geopolitical arena where the largest actors operate on leverage, threat, and brute force. Libertarianism has no theory for this. It assumes the price is a signal. Sometimes the price is a weapon.

The Rescue and the Image

On the evening of April 12, while JD Vance was telling reporters in Islamabad that Iran had refused American terms, while Trump was posting that the U.S. would blockade the Strait of Hormuz, while the ceasefire was dissolving into threats and counter-threats, Ferdinand Marcos Jr. appeared in a video message.

He announced a ₱20 diesel rollback.

Not a strategic framework. Not a pivot to alternative energy. Not a renegotiation of the country's structural dependency on a single chokepoint controlled by a country at war. A price cut. Delivered personally. Framed as relief.

The Energy Secretary had already said prices would never return to ₱60. The ceasefire talks had already failed. The two-week truce expires April 22 with no successor agreement in sight. And the president of an archipelago of 115 million people, 98 percent dependent on Middle Eastern crude, stood in front of a camera and said: this is a big help.

He is not wrong. For the jeepney driver burning ₱700 a day in diesel, ₱20 per liter is groceries. It is the difference between working and parking. The system does not wait for price signals to allocate resources efficiently. It performs rescue. Whether the rescue works is a separate question. But the instinct is the point.

Libertarianism assumes rational actors in transparent markets making self-interested decisions that aggregate into optimal outcomes. The Philippines assumes that someone in authority will do something before the streets fill with people who have stopped believing in the next adjustment cycle. Both are theories of order. One requires cultural soil that does not exist here. The other produces the only order available.

Beautiful principles. No oil. The jeepney idles at the pump, waiting for Tuesday.

— no-one
Thoughts you didn't think, written for you anyway

Related essays:

The Unbreakable Structure
In Philippine politics, dynasties are not a flaw in the system. They are the system, doing the work institutions cannot.

The Eternal Circus: Senator Dela Rosa's Escape and the Enduring Patterns of Philippine Political Impunity
The same instinct, the other direction. When the state cannot enforce the law, it performs spectacle instead of rescue.