PHILIPPINES SHIFTS TO 4-DAY GOVERNMENT WORK WEEK AS IRAN WAR PUSHES OIL PAST $100 AND STRAIT OF HORMUZ STAYS SHUT

Brent crude closed at $100.46 per barrel on March 12, 2026. That is the first sustained close above $100 since Russia invaded Ukraine in 2022, and it came hours after Iran's new supreme leader went on state television and declared the Strait of Hormuz would remain closed as a "tool of pressure" against the United States and Israel.

For the Philippines, which imports between 95 and 98 percent of its crude oil from the Middle East, that single number carries enormous weight across the entire economy.

THE 4-DAY WORK WEEK ORDER

On Friday, March 6, President Ferdinand Marcos Jr. signed Memorandum Circular No. 114, shifting all executive branch offices to a compressed four-day workweek starting Monday, March 9.

The new schedule runs Monday through Thursday, with 10-hour days starting between 7 AM and 8 AM and ending between 6 PM and 7 PM. Fridays, Saturdays, and Sundays are now rest days. Overtime is banned from Monday through Thursday, and allowed on Fridays or Saturdays only with prior approval.

Frontline services, police, firefighters, health, and emergency response offices are exempt but must implement energy-saving measures and rotational staffing.

Marcos framed the order in blunt terms: "We are victims of a war that is not of our choosing. But we control how we will protect the Filipino people." The target is a 10 to 20 percent cut in government fuel and power consumption.

Metro Manila LGUs including Makati, Marikina, Pasay, and Manila followed suit within days.

WHY THE STRAIT OF HORMUZ CHANGES EVERYTHING

The war started on February 28 when US-Israeli joint strikes under "Operation Epic Fury" began targeting Iran. Approximately 6,000 targets have been struck by CENTCOM forces since then. Ali Khamenei, the former supreme leader, was killed in the initial strikes. His son, Mojtaba Khamenei, was appointed as the new supreme leader around March 8.

On March 12, in his first public statement read on Iranian state television, Mojtaba Khamenei vowed to keep the Strait of Hormuz closed, warned that US bases in the region "will be attacked" unless shut down, and called on Gulf nations to close American military installations.

IRGC Navy Commander Alireza Tangsiri followed up with a pledge to "inflict the harshest retaliation" while "adhering to the strategy of closing the Strait of Hormuz."

The International Energy Agency called this the supply disruption with the greatest magnitude "in the history of the global market," surpassing the 1970s oil crises.

About 20 percent of the world's seaborne oil and one-fifth of global LNG passes through that 54-kilometer chokepoint. Six vessels have been attacked in the Gulf as of March 12. Iraq's oil ports have completely stopped operations.

THE PHILIPPINE PRICE SHOCK

Oil prices are up 40 to 50 percent since the war began. The week of March 10 brought the largest single-week fuel price increase on record in the Philippines: diesel up by 17.28 to 24.25 pesos per liter, gasoline up by 7 to 13 pesos per liter, and kerosene up by 32 to 38.50 pesos per liter.

Jet fuel is up over 90 percent since the conflict began, according to Air Carriers Association of the Philippines Executive Director Enrique Perez Tagle. Between February 28 and March 5, 114 flights were canceled or diverted to and from destinations including Dubai, Riyadh, Doha, Abu Dhabi, and Bahrain. Starlite Ferries announced a 25 percent fare increase effective March 10.

The Philippine peso fell to a historic low of 59.5 per US dollar on March 9. MUFG Research projects the rate could reach 60 to 61 if oil sustains above $100 per barrel.

INFLATION, GROWTH, AND THE BSP

DEPDev Secretary Arsenio Balisacan told House lawmakers on March 10 that 2026 inflation could breach the government's 2 to 4 percent target and approach 5 percent. Under his self-described "doomsday" scenario where oil reaches $140 per barrel, inflation could spike to 6.3 to 7.5 percent by March or April. GDP growth could be pushed below 5 percent, trimmed by 0.2 to 0.3 percentage points depending on how long the conflict lasts.

BSP Governor Eli Remolona Jr. warned on Bloomberg TV that oil at $100 per barrel could push Philippine inflation to about 4 percent and may force the central bank to reverse its easing stance. Over 36 percent of the Philippine CPI basket is directly or indirectly exposed to oil prices, according to National Statistician Claire Dennis Mapa.

OFWS AND TRANSPORT

More than 2 million Filipino overseas workers are deployed across the Middle East, according to the Philippine Chamber of Commerce and Industry. As of March 11, 110 OFWs and dependents have been repatriated, with two charter flights organized from Riyadh and Fujairah for Gulf-based workers. Nearly 2,000 initially sought repatriation as of March 5.

On the ground, transport group PISTON held a rally on March 9 in Quezon City demanding the removal of excise tax and VAT on petroleum products, along with a provisional fare increase of 2 pesos. The government responded with a 5,000-peso fuel subsidy for public utility drivers starting the week of March 16. The House passed the emergency excise tax suspension bill on second reading March 11, with third reading expected March 16.

Marcos has only two months of petroleum inventory to work with. PNOC is scrambling to acquire at least 1 million barrels of diesel from South Korea, Japan, Singapore, and Indonesia to extend supply by five more days.

Day 14 of the Iran war. The Strait of Hormuz remains closed. And the Philippines just shortened its work week to cope.