Informal Workers Reel from Impact of Soaring Oil Prices

In cities like Cagayan de Oro, poor Filipinos contend with the impact of the conflict in the Middle East and government measures that, while important, are nearly not enough to mitigate their hardship.

By Cong B. Corrales
Rights Report Philippines

CAGAYAN DE ORO CITY — When Diosporo Caballa pulls up to a gas station these days, he braces himself.

“Gasaka ang presyo sa gasolina. Adtong una kay P250 lang full tank na ang motor. Karon bisan tubilan nako’g P300 dili na mapuno,” said the 64-year-old habal-habal driver, who has ferried passengers on his motorcycle taxi for two decades. (“The price of gasoline just keeps climbing. Before, P250 was enough for a full tank. Now even if I put in P300, it still won’t fill up.”)

Caballa is among the informal workers in this city who say they are bearing the brunt of rising fuel costs, and who feel the government has been slow to respond as prices climb in the wake of escalating hostilities in the Middle East after the United States and Israel launched coordinated airstrikes on Iran. Iran has since retaliated with missile attacks on Gulf states and ship attacks in the Strait of Hormuz, which it declared “closed” on March 4. Multiple shipping giants have suspended Strait operations.

These have contributed to global crude price volatility in recent weeks. In the Philippines, which imports virtually all of its petroleum – with 98% of its crude oil coming from the Middle East – that volatility lands almost immediately at the pump.

“Layo lagi kaayo ang Iran pero gibati nato karon diretso sa atong mga bulsa ang epekto sa kagubot didto,” said James Judith, a lawyer and former city councilor. (“Iran may be very far away, but we’re already feeling the effects of that turmoil directly in our pockets.”)

Prices Above Government Guidelines

The Cagayan de Oro Regulatory Compliance Board (RCB) flagged nine gasoline stations last Wednesday, March 11, for alleged overpricing and premature price adjustments — a sign, critics say, that regulatory enforcement has lagged behind market realities.

RCB chairman Jose Edgardo Uy said the stations were found selling diesel at as much as P92 per liter and gasoline at P76 per liter during ocular inspections — well above the Department of Energy’s suggested pump prices for Mindanao of about P69.59 for diesel and P71 for gasoline.

Uy said the flagged stations would be investigated to determine whether sanctions or penalties were warranted.

But for workers whose livelihoods depend on affordable fuel and steady foot traffic, government action feels too little, too late.

A Squeeze from Multiple Directions

The pain is compounding. Lourderico Pedimonte, who drives a motorela in Barangay Consolacion, is also dealing with a drop in ridership caused by Cagayan de Oro City Hall’s recently implemented four-day workweek — a measure adopted to reduce government operating costs, but one that has cut into the income of drivers and vendors who depend on office workers as daily customers.

“Naa pa man mga estudyante, pero dako gyud ang makuhaan sa akong senemanang kita kung wala’y trabaho ang mga taga City Hall og usa ka adlaw,” Pedimonte said. (“There are still students, but it really takes a big chunk out of my weekly income when City Hall employees don’t work for one day.”)

Ambulant vendor Robert Bonhan, who has sold goods along Capistrano Street near City Hall for nearly 10 years, said the compressed workweek has emptied the streets at precisely the hours he most needs customers.

“Maapektuhan gyud ang akong inadlaw nga kita kung upat na lang ka adlaw magtrabaho ang mga empleyado sa City Hall. Kinsa man mupalit sa akong paninda alas-6 sa gabii? Ang mga tao tua na sa ilang mga panimalay ana nga orasa,” Bonhan said. (“My daily income is really affected when City Hall employees only work four days. Who’s going to buy my goods at 6 in the evening? People are already at home by then.”)

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Fellow vendor Arcadio Ubalde was equally skeptical of extending office hours to compensate. “Nagdigamo na sila sa ilang mga panimalay ana nga orasa,” he said. (“They’re already cooking at their homes by that time.”)

For local banker Ethel Mae Gabutina, who has 30 years of experience in the industry, an oil crisis does not hit banking directly, but its downstream effects are significant.

“It first raises costs across the economy, and those pressures eventually show up in borrowing behavior, investment decisions, and overall economic activity,” she said. “People become more cautious in their spending.”

Calls for Rationing, Warnings of Hoarding

Longtime businessman and former city councilor George Goking is calling on local officials to act now before the situation worsens, warning that some individuals are already allegedly stockpiling fuel. He urged the city government to consider early petroleum rationing, drawing on logistics frameworks developed during the COVID-19 pandemic.

“We can use our experience with the pandemic and apply it to the Middle East situation,” Goking said.

His warning, though anecdotal, arrives as regulatory authorities are already documenting pricing violations,  suggesting market discipline is beginning to fray.

Under Department of Energy Circular No. DC2003-01-001, oil refiners in the Philippines are required to maintain a minimum 30-day inventory of crude oil and petroleum products, while non-refiners and bulk importers must maintain 15 days of supply. Philippine energy officials confirmed last week the country holds a 60-day fuel inventory, which is triple the minimum requirement.

Whether those requirements are being met — and enforced — remains an open question.

Deeper Roots

The vulnerability of Filipino consumers to global fuel shocks is not accidental, economic observers say. It is the product of structural choices stretching back decades.

Despite the country’s agricultural history, a significant share of Filipino farmers do not own the land they cultivate. Advocates for economic reform argue that large tracts of fertile land remain devoted to cash crops for export, leaving the country dependent on imported rice and exposed to global commodity swings.

Critics trace this dependency to pre-independence trade arrangements — including the 1946 Bell Trade Act, which granted American citizens and corporations equal rights to Philippine natural resources two days before independence and conditioned $800 million in post-war aid on Philippine acceptance of those terms — and later to structural adjustment conditions attached to World Bank and International Monetary Fund loans in subsequent decades.

For workers like Caballa, Pedimonte and Bonhan, those historical arguments are cold comfort on a day when the tank won’t fill and the customers aren’t coming. (Rights Report Philippines)

Cong Corrales is a journalist based in Cagayan de Oro City. He was a writing fellow for Vera Files and served as deputy director of the multimedia desk at the Philippine Center for Investigative Journalism.