Philippine government starts four-day workweek as energy prices bite
Vietnam to remove tariffs on imported fuel; Indonesia and Malaysia stand pat
MANILA/JAKARTA/KUALA LUMPUR -- Civil servants in the Philippines have begun working four days a week as the government of the net fuel-importing nation seeks to reduce its energy use now that the war in the Middle East is driving oil prices to their highest level in years.
The policy's full details, such as who would work when and whether pay would be cut, have yet to be announced. But analysts say they expect civil servants will have to work longer each day to compensate and that delays to projects and other work would be inevitable. In-person meetings and visits will also be reduced, and the standard thermostat reading will be set at 24 C. The government hopes to reduce energy consumption by 10% to 20%.
The Philippines imports the vast majority of its energy, with 96% of its crude oil imports coming from the Middle East in 2024.
Domini Velasquez, chief economist at Manila-based Chinabank, told Nikkei Asia the policy will "temper fuel consumption as long as productivity does not suffer."
Vietnam's finance ministry on Sunday proposed removing tariffs on imported fuels until the end of April, a move that will trim the state budget revenue by 1 trillion dong ($38 million) but is deemed necessary to “support businesses in proactively securing their supply sources, contributing to stabilizing the domestic petroleum market and ensuring energy security,” the government news website reported.
But the Indonesian and Malaysian governments said they would not immediately adjust fuel prices or subsidies.
Velasquez and other observers warned that the four-day workweek would not compensate for rising inflation, driven by higher energy costs cascading through the economy.
She said the rapid oil price increases will "affect both household spending and business costs, creating immediate inflationary pressures."
The weakening peso is also adding to the financial pain. Since Wednesday, the currency has weakened from 57.53 to 59.45 to the dollar.
Michael Ricafort, chief economist at Rizal Commercial Banking, said that higher inflation and prices "would be a drag on economic growth in terms of lower disposable income." The Philippines gross domestic product slumped to 4.4% in 2025, its slowest annual growth in five years, as domestic spending took a hit from a high-profile infrastructure corruption scandal.
Velasquez said that a sustained $10 increase in oil prices could "reduce GDP growth by around 0.4 percentage points."
Government employee Roland Panaguiton, 54, said he will find it difficult to select where to pare back his family's spending. "Cutting down on food will be hard. It's a weakness of mine, so maybe we'll cut down to half a kilo of meat so we can save on money," he told Nikkei Asia. "Even now it's hard to make ends meet, so what more when these price increases actually happen?"
One of the few benefits of working four days a week, he said, will be that he and his wife, who is also a civil servant, will be able to spend more time with their child.
Another government employee, Ron Soriano, told Nikkei would now buy essentials in bulk when possible. "I think a work-from-home or on-call setup could be beneficial because it reduces energy consumption both for employees and for the office while still allowing us to remain productive," he said.
The Philippines does not cap retail fuel prices, but the energy department said it was closely monitoring prices, even asking the public to do their own price policing. "If they go beyond the [preferred] price range, we are asking consumers, the mayors, the police, everyone, to report on any unauthorized adjustments," the energy department said.
On Monday, over 80 gas stations in Metro Manila increased their prices to levels higher than the government wanted. The Philippines is planning "a staggered implementation" of local pump price increases.
"We have enough supply until the end of April," Energy Secretary Sharon Garin told an online press briefing on Monday, "and we have enough time also to order more."
Transport costs historically account for 8% to 9% of the Philippines' consumer price index.
Meanwhile, Indonesian Finance Minister Purbaya Yudhi Sadewa said the government had no plans to raise fuel prices yet, even though the global price of above $110 per barrel is well above the state budget assessment of $70 per barrel. However, he added that if prices remain high, the government will "evaluate" changing the state budget.
"But now is not the time to make a decision because we still have sufficient funds. [Foreign exchange reserves] are also sufficient," he said on a visit to a Jakarta market. "I haven't seen any disruption to domestic economic activity due to the high price increases, but it's only been a short time."
Amir Hamzah, Malaysia's second finance minister, on Monday said the country is in a "reasonable position" despite oil prices soaring above $100 per barrel. "We must remember that Malaysia is a net energy exporter, so the oil price also has positive [effects] today," he told reporters.
However, Mohd Sedek Jantan, director at IPP Global Wealth, told Nikkei that the government could face an "additional fiscal burden" due to the soaring crude oil prices.
"Assume the crisis escalates to one month, based on our simulation, if the [subsidized] fuel price continues to be maintained at 1.99 ringgit ($0.50) per liter, the government could face an additional fiscal burden of around 13 billion ringgit to 15 billion ringgit in fuel subsidies," he said.
Additional reporting by Ella Hermonio in Manila and Mai Nguyen in Hanoi.