Philippines: Crude relief to the current account

Research evidence excerpt

Philippines: Crude relief to the current account

Jin Tik Ngai (65) 6807 5556 Asia Pacific Economic Research J P M O R G A Njintik.ngai@jpmorgan.com

JPMorgan Chase Bank, N.A., Singapore Branch 10 July 2026

Figure 1: Energy price index¹ vs. Philippines energy trade balancePhilippines: Crude relief to

2010=100 % of GDP, inverse

Energy price index -8the current account Energy trade balance 200

-6

• The recent downshift in oil prices, if sustained, 150

would provide significant relief to the energy 100 -4

import bill 50 -2

• Core trade deficits have stayed sticky despite the 0 0

overall capex slowdown in recent years… 10 13 16 19 22 25

• … but may narrow as renewable energy capex Source:1. Brent,CEIC,diesel,J.P.coal,Morganand naturalforecastgasinpricesshadedweightedregion by import composition

takes a breather and public infrastructure spend-

ing stays weak Nonetheless, how fast energy import costs normalize depends

• Remittances from the Middle East have held up so more on refined product prices than crude oil prices. Philip-

far but are susceptible to weaker labor market out- pines’ onshore refinery capacity meets only 35-40% of

turns domestic demand, meaning that a sizable portion (over 50%)

• IT-BPM revenues continue to expand at trend-like of the energy import mix consists of refined products such as

gasoline, diesel and LPG (Figure 2). Even after the US-Iran pace as firms adopt AI and upskill workforce

deal, gasoil spreads over crude remain historically elevated

As an energy-importing, current account deficit (CAD) econ- (Figure 3), possibly reflecting physical tightness in Asian

omy, the Philippines has sustained a significant terms-of-trade refineries and a lingering geopolitical risk premium.

shock in the aftermath of the Middle East conflict. However,