NextFin News -- The early morning calm in the Philippines' capital Manila on Thursday was shattered by the sounds of protest. Outside his home, Wang Xiao, a cross-border e-commerce businessman, heard the rising chants of jeepney drivers rallying in the streets, demanding the government address skyrocketing fuel prices that have doubled since the late February outbreak of tensions in the Middle East. As the conflict between the U.S./Israel and Iran escalates in the region, its ripple effects are beginning to reverberate throughout Asia, and the Philippines is bearing the brunt of the energy crisis.

Hundreds of jeepney drivers gathered in front of fueling stations in Manila, voicing their frustration over soaring diesel prices. These drivers, who operate the country’s most common form of public transport, face increasingly unaffordable fuel costs, which are now significantly impacting daily life. Their protest not only called for immediate action but also decried the ongoing war in the Middle East, urging the U.S. to reconsider its military actions.

The situation has deteriorated since the U.S.-Israeli airstrikes on Iran in late February, which triggered the closure of the Strait of Hormuz, the vital conduit for Asian oil and liquefied natural gas. Asia has long been heavily dependent on the Middle East for its energy needs, with roughly 90% of the region's oil and 83% of its LNG passing through this critical waterway. The conflict has led to a sharp rise in energy costs and prompted countries, including the Philippines, to declare an energy emergency.

With 98% of its oil imported from the Gulf, the Philippines was quick to react. On March 24, the country's president Ferdinand Marcos declared a national energy emergency, following a drastic increase in both diesel and gasoline prices. On March 26, the country’s energy regulatory body announced the suspension of its wholesale electricity spot market (WESM) due to fuel supply risks and market volatility caused by the ongoing conflict.

The Philippines has long been dependent on imported fossil fuels for its power generation, a reliance that has now left the nation vulnerable. As energy prices soar and supply chains tighten, ordinary Filipinos are beginning to feel the brunt of the crisis, with rising utility bills and increasing transportation costs adding to the strain.

Rising Living Costs and the Strain on Families

For Wang, a Manila resident, the financial strain is becoming all too clear. This March, his electric bill for a typical 62 kWh usage has climbed from 779 pesos (roughly $15) to 840 pesos (about $16). "The energy crisis means higher bills for electricity and more difficult travel for everyone," he said, underscoring the everyday realities faced by many Filipinos.

Similarly, Alfredo Orencia, a school principal in Nueva Ecija province, expressed his frustration at the rising utility bills, which further squeeze his family's already tight budget. “It’s not just an economic burden, it’s an emotional one too,” he said.

For many Filipino families, the crisis is forcing a dramatic shift in behavior. Marjorie Montalban-Borreo, a 36-year-old homemaker from Pasig City, remarked that the crisis has turned into a “forced shrinkage of lifestyle,” where even small changes in behavior, such as staggering appliance use to reduce electricity consumption, have become necessary. As gasoline prices rise, her family's commuting costs have surged, leading them to reduce travel and activities outside their residential area.

Jose Dominic Tolentino, a small business owner in Quezon province, has started to adjust his business practices to mitigate rising costs. He is reducing non-essential expenses and postponing expansion plans to preserve cash flow. Tolentino has also begun to purchase supplies in advance to shield his printing business from future price hikes, while also adjusting working hours to cut back on electricity costs.

However, it's not just the families who are feeling the impact. Small and medium-sized businesses are facing a ripple effect from higher energy costs, forcing them to reconsider expansion plans and find ways to survive amid the escalating energy crisis.

A Short-Term Fix: Coal’s Return

In a bid to mitigate the rising power costs and supply shortages, the Philippine government has announced plans to ramp up coal-fired power generation. Energy Secretary Sharon Garin stated that the country will increase coal use at power plants as a stopgap measure to stabilize the energy supply and reduce electricity prices, which may begin as early as April 1. This decision marks a stark reversal from the Philippines’ previous efforts to move away from coal toward cleaner energy sources.

The government has also allocated 5,000 pesos (roughly $100) in subsidies to motorcycle taxi drivers and other public transport workers, while providing free bus services in some urban areas to help alleviate transportation burdens. Still, as the government scrambles to secure energy supplies, there are growing concerns about the long-term implications of this energy strategy.

Despite these short-term fixes, experts warn that overreliance on coal and other fossil fuels could pose even greater risks for the country in the future. As neighboring Indonesia, the world's largest coal exporter, prioritizes domestic demand, the Philippines could face a supply squeeze that drives up coal prices regionally.

Energy Transition in the Philippines: A Long Road Ahead

For many energy experts, the current crisis highlights the structural dependence of Southeast Asia on fossil fuels, which is increasingly unsustainable. Short-term solutions, such as turning to coal, may temporarily ease the burden, but they do not address the underlying problem: the region's deep reliance on imported energy.

Yang Muyi, a senior analyst at Ember, a global energy think tank, noted that while coal may offer a temporary respite, the ultimate solution lies in transitioning to clean energy. "The crisis shows how deeply Southeast Asia is tied to fossil fuels, and how much more work needs to be done to develop clean power sources like solar and wind."

For many Filipinos, transitioning to renewable energy is not just an economic necessity, but a potential lifeline for the future. However, this shift is easier said than done. High upfront costs and lack of infrastructure remain major barriers, especially for those in urban areas like Montalban-Borreo, who expressed a desire for more government support in the form of subsidies or public installations of renewable energy infrastructure.

Meanwhile, Tolentino, who runs a small business, remains cautious. While he recognizes the promise of renewables, he is wary of their ability to meet the country’s growing energy demands without driving up costs. “It’s not just about being cleaner, it’s about whether renewable energy can keep up with economic realities,” he said.

For the time being, the Philippines faces an uncomfortable balancing act: relying on fossil fuels to survive in the short term while grappling with the necessity of transitioning to a more sustainable, green energy future. As the country’s energy crisis continues to unfold, the urgency for change has never been more apparent — but the path forward remains unclear.

Ultimately, this energy crisis might serve as a wake-up call for the Philippines. Wang's perspective captures the sentiment shared by many: "This isn’t just an energy emergency. It’s a fossil fuel emergency." The crisis, he argues, should propel the nation toward long-term solutions that reduce its dependency on fossil fuels, such as expanding renewable energy infrastructure and encouraging decentralized solar power in rural areas.

As the Philippines contemplates its energy future, it faces a choice: continue down the perilous path of fossil fuel dependency, or take bold steps toward a more sustainable, clean energy future that could offer greater resilience against the next global energy shock.

For now, though, the country's energy emergency remains a stark reminder of the vulnerability inherent in the current system — and the pressing need for reform.