BWorld 875, ‘Trumpflation’ in energy and fertilizer products

‘Trumpflation’ in energy and fertilizer products

June 11, 2026 | 12:02 am

My Cup Of Liberty

By Bienvenido S. Oplas, Jr.

https://bworldonline.com/opinion/2026/06/11/755854/trumpflation-in-energy-and-fertilizer-products/

 

Two reports related to Philippine commodity prices were released this week: the Philippine Statistics Authority released the inflation rate for May, and the Independent Electricity Market Operator of the Philippines (IEMOP) released the market operations highlights at the Wholesale Electricity Spot Market (WESM).

 

Our inflation rate of 6.8% in May was the highest in East Asia but was lower than that of South Asian economies like Pakistan and Bangladesh. The average inflation from January-May  was highest in Pakistan with 10%, Bangladesh with 9.1%, and the Philippines’ 6%.

 

Comparing this with the average inflation from January-May 2025, Pakistan saw the largest increase, from 0.5% to 10%, followed by the Philippines, from 1.9% to 6% (see Table 1).

 

The Marcos Jr. administration’s subsidies and ayuda (assistance) to the public land transport and agriculture sectors so far have not succeeded in controlling transport and food inflation. I think the administration should consider suspending the diesel excise tax even if temporarily.

 

The reduction in diesel prices — the P6/liter excise tax plus 12% VAT or a reduction of P6.72/liter total — would be a big respite for those whose machines, like tractors, harvesters, threshers, irrigation pumps, trucks, fishing boats, buses and jeepneys, run on diesel. These savings can be translated to lower cost of farming and transporting goods and people.

 

The IEMOP data show a significant increase in WESM prices (not the overall power generation prices), from P5.63 per kilowatt-hour (kWh) in April to P7.79/kWh in the May billing period that will be collected this month.

 

I checked WESM prices in the same months in the last two years, and it turns out that it was much higher in May 2024 at P8.22/kWh than it was this year. The main explanation is the thin power margins of only 1,867 megawatts (MW) in May 2024 vs 3,629 MW in May 2026 (see Table 2).

 

TRUMPFLATION

Finally, an update on Trumpflation in energy and fertilizer-related products and inputs. While the prices of crude oil (WTI, Brent, Dubai, Urals/Russia, etc.) and liquefied natural gas or LNG at Japan Korea Marker (JKM) fluctuated, prices of coal and fertilizers inputs keep rising. The price of sulfur, in particular, has nearly tripled since Feb. 27 or day before the US-Israel attack on Iran (see Table 3).

 

The Middle East war should end soon, and the US and Israel should recognize that their political and military actions have largely contributed to high inflation in many countries — what I call the Trumpflation effect.

 

The Philippines should embrace again the usefulness of hydrocarbons and fossil fuels. Climate and renewables objectives should take a backseat relative to our tight economic situation. High taxes on, and the demonization of, fossil fuels, and favoritism towards intermittent renewable energy should stop.