FROM MARCOS SR. and now Marcos Jr., the oil crisis had haunted their leadership.
During Marcos Sr., it was the OPEC (Organization of Petroleum Exporting Countries) that dictated supply and prices of fuel oil in the world.
The former strongman’s son and namesake Ferdinand Jr. is being scrutinized as to whether or not he would be able to find ways to address local concerns following the closure of the Strait of Hormuz due to the ongoing war between Iran and Israel (backed by the United States).
The Strait of Hormuz traverses the Persian Gulf and the Gulf of Oman, the only sea passage from the Persian Gulf to the open ocean and is one of the world’s most strategically important choke points.
During the time of Marcos Sr., the oil industry was still under the control of the government and because of OPEC’s unilateral decisions on supply and prices of fuel oil, the country had experienced not just a fuel crisis but a subsequent dollar crisis– prompting the regulation by the Central Bank of foreign exchange payments for imports, borrowing and travel and setting a maximum amount of dollars (through letters of credit) that can leave the country.
Under Marcos Jr., the Bangko Sentral is closely watching the foreign exchange reserves should a prolonged war in the Middle East drain whatever reserves are left in the country.
STILL ENOUGH
Although the dollar reserves are still ample, analysts are warning that prolonged conflict in the Middle East, particularly possible hikes on global oil prices, could gradually drain the country of its buffers against such external shocks.
Business Mirror quoted Jonathan L. Ravelas, senior adviser at Reyes Tacandong & Co., saying amid the conflict in the Middle East, the country’s dollar reserves “may ease at the margin, but a sharp decline is unlikely unless we see a prolonged oil shock or a sudden loss of market confidence.”
This was echoed by Philippine Institute for Development Studies (PIDS) Senior Research Fellow John Paolo R. Rivera, who explained that while latest data from the Bangko Sentral ng Pilipinas (BSP) showed that the current reserve level of the country can cover 7.5 months’ worth of imports of goods and payments, “sustained” geopolitical conflict could slowly put pressure on the country’s reserves, the paper added.
HIGHER CRUDE
“Since the Philippines is a net oil importer, higher crude prices increase the country’s import bill, meaning more dollars are needed to pay for energy imports,” Rivera said.
“This raises demand for forex currency and may widen the trade deficit. If BSP intervenes in the forex market to prevent sharp PHP depreciation, it may use part of the GIR to supply USD to the market,” added the senior research fellow of the state-run think tank.
Rivera further noted that episodes of “global risk aversion” may trigger capital outflows, which could also put pressure on reserves.
Local experts raised these points even as preliminary BSP data showed the country’s Gross International Reserves (GIR) reached an “all-time high” of $112.72 billion as of end-February 2026.
ROBUST BUFFER
The BSP said this level provides a “robust” external liquidity buffer, equivalent to 7.5 months’ worth of imports of goods and payments of services and primary income.
“GIR consists of foreign‑denominated securities, foreign exchange, and other reserve assets, including gold. These reserves serve as a buffer against external economic shocks, enabling a country to pay for its imports, service its foreign debt obligations, and stabilize its currency,” the BSP explained.
The country’s $112.72-billion reserves as of end-February 2026 is .1 percent or $105 million higher than the $112.61 billion as of end-January 2026. This is also nearly 5 percent higher than GIR’s level in February 2025 of $107.395 million.
Despite raising the concern of a potentially protracted conflict in the Middle East, analysts noted that the BSP has sufficient reserves.
“The BSP has ample reserves and has been clear it won’t burn GIR just to fight global pressures like higher oil prices or a strong dollar. Intervention will stay measured and tactical,” Ravelas said.
“I don’t expect a significant drawdown in GIR,” he also noted.
IMPORT COVER
Rivera shared that “at 7.5 months of import cover, the reserve level is well above the commonly accepted adequacy benchmark of around three months.”
“This gives BSP enough room to smooth excessive forex rate volatility, stabilize investor confidence, and ensure that the country can continue paying for essential imports even during periods of global uncertainty, such as the current tensions in the Middle East,” he added.
Rivera underscored that the current GIR level provides a significant cushion, so while reserves could fluctuate due to higher oil imports or forex interventions, PH remains well-positioned to absorb external shocks in the near term.
Rizal Commercial Banking Corp. (RCBC) chief economist Michael L. Ricafort said the monthly increase in the GIR to new record highs again is largely due to the continued month-on-month increase in gold holdings, by $2.4 billion or an 11.6-percent increase to a new record high of $23.1 billion.
Ricafort also explained that foreign exchange holdings went up by 7.57 percent or by $92 million month-on-month to $1.307 billion.
However, foreign investments saw a 2.8-percent decline or a reduction of $2.737 billion to $83.650 billion. Ricafort traced this to the increased US/global market volatility in view of geopolitical risks since January 2026 such as events involving Iran, Greenland, Venezuela, among others.