The Philippines is currently experiencing record-high gas prices. This is due to a number of factors, including the global price of crude oil and the weakening of the Philippine peso versus other currencies. The average price of gasoline in the Philippines in 2024 is PHP 65.93 per liter, significantly higher than 2019’s average price of PHP 45 per liter.
The rising price of gas has a direct impact on Filipino households. Many families are already struggling to make ends meet. Beyond just cars and transportation, rising gas prices also have a direct effect on the price of most consumer goods and services. The additional expense of higher gas prices only adds to Filipinos’ financial difficulties, making it tricky for families to budget for their household needs.
Why are gas prices going up?
There are a number of reasons why gas prices are on the rise. The global price of crude oil is one of the main factors. Crude oil is a major component of gasoline, so when the price of crude oil goes up, gas prices usually follow suit.
Additionally, as the Philippine peso continues to weaken versus other currencies such as the US dollar, it costs more for the Philippines to purchase barrels of oil compared to previous years.
How do the rising gas prices in the Philippines affect consumers?
The Philippines is a country that heavily relies on importation when it comes to oil and gas. The prices of these are greatly affected by the international market. Over the past few months, there has been a steady increase in the price of gas in the Philippines and this has a pretty big impact on Filipino consumers.
- Higher prices on basic commodities and inflation – In addition to the direct impact on transportation costs, higher gas prices also cause indirect price increases. When the price of transporting goods increases, the price of the goods themselves increase too. This includes basic necessities like food and medicine. This leads to inflation because businesses pass on the higher costs to consumers. The increased cost of living can be especially difficult for low-income families. Inflation can also erode the purchasing power of wages, leading to further economic hardship.
- Economic slowdown – The rising cost of gasoline also has an impact on the economy. When consumers have to spend more money on transportation, they have less to spend on other things. This can lead to a decrease in consumer spending, which can slow down economic growth.
- Unemployment – The increase in gas prices is also likely to lead to job losses. Many businesses, especially small businesses, will not be able to afford the higher costs of operation. This could lead to layoffs and an increase in unemployment.
How much is the gas budget in the Philippines?
With the current average price of gasoline in the Philippines at PHP 65.93 per liter, a typical Filipino family would need to spend at least PHP 2,700 per month on gas. However, this is just an estimate. Actual gas costs will vary depending on the size and type of vehicle, as well as driving habits.
How to budget for gas
Many people find that one of the biggest challenges of owning a car is the cost of gasoline. With prices fluctuating on a regular basis, it can be tricky to keep your budget on track. However, there are a few simple budgeting tips for new homeowners or for families that can help you to keep your gas expenses under control.
- Calculate how much you typically spend on gas each month and set aside that amount of money in a dedicated account or envelope.
- Make a point of filling up your tank when prices are lowest in your area. This may require some planning ahead, but it will save you money in the long run. Pay attention to gas price announcements on the news or social media. Since gas price changes take effect on Tuesdays, the best time to load up before an increase is on Mondays, and when there is a rollback, the Tuesday onwards.
- If you have a long commute, see if there are ways to shorten it, such as taking a different route or doing all your errands on one trip.
- Look for credit card promos or special loyalty cards that give you discounts or cashback. A little research can go a long way toward saving you money at the pump.
What can you do to cope with the rising cost of gasoline?
Here are a few small changes you can adopt to help you cope with the rising cost of gasoline.
- Try to use public transportation whenever possible. This will help you save money on fuel costs. While it may not always be convenient, taking the bus, the MRT, and the LRT can help you save a significant amount of money over time.
- Try to create a carpool with friends or co-workers. This will allow you to split the cost of gas, making it more affordable.
- Do errands on one trip instead of making multiple trips. This saves you both gas time.
- Another way to save money on transportation costs is to discuss the possibility of continuing to work from home with your employer. In addition to saving money on gas or public transportation, working from home can also help you save time.
Gas prices are on the rise and affecting everyone. You need to factor in these changes as well as the effects they have on consumers so you can create a proper gas budget. The good news is that there are some things you can do to help offset the cost of gas. If you need more help, check out our other budgeting tips on Earnest Learning!