Under a high oil price scenario (USD 105 per barrel with a 35% pass-through), national poverty is projected to rise from 13.2 percent in 2025 to 14.4 percent, pushing an additional 1.34 million Filipinos—mostly near-poor households—into poverty. In the event of a prolonged or severe disruption, poverty could increase further to 15.3 percent or even 16.3 percent nationally, with rural areas potentially experiencing a rate of 22.5 percent. This Policy Note finds that this oil price shock is highly regressive, with poor households losing 16.2 percent of their real purchasing power, compared to a loss of only 3.4 percent among the richest households. Additionally, universal fuel subsidies exacerbate inequity, providing about four times more benefits in absolute peso terms to the wealthy than to the poor. The Note concludes that a targeted emergency cash transfer presents a more equitable and fiscally manageable response: a PHP 6,000 per-household tranche (PHP 1,500 per individual), delivered through the vertical expansion of existing programs (e.g., Pantawid, Social Pension, other pensions), horizontal expansion to waitlists, and emergency transfers to persons with disabilities, minimum-wage workers, and newly identified poor households. This approach would reduce poverty from 16.4 percent to 15.8 percent, protecting approximately 754,000 individuals at an estimated cost of PHP 64.6 billion after deduplication.
