Some economic and energy trends in Q1

Last week, Vietnam released their GDP growth for the first quarter (Q1) of this year, the first country in the world to do so so far. So, I went back to look at their Q1 growth in previous years: 3.4% in 2023, 6% in 2024, 7% in 2025, and 7.8% in 2026. Vietnam rocks, with rising growth despite worsening global economic condition this year because of the Iran war.

The Philippines will release its Q1 GDP performance on May 7. This has been our Q1 GDP growth in previous years: 6.4% in 2023, 5.9% in 2024, and 5.4% in 2025, a declining trend. Our Q4 2025 growth was a dismal 3%, and our Q1 this year looks like it will be another dismal number, mainly because of high energy and transportation prices and overall inflation.

Vietnam and South Korea were the first two countries in the world to release their exports data for March. They also released their inflation data for the same period. So, I also looked at some European countries that released their inflation numbers early.

South Korea’s exports exploded to $86 billion this March, a 47.7% increase over $58 billion in March 2025. The main reason — South Korea exported lots of computer chips and semiconductors as other countries rushed to import from them while the supply of various petrochem products from the Middle East has been limited if not choked.

Vietnam’s exports also jumped, to $46 billion in March, a 20.2% increase over that a year ago.

Vietnam and Indonesia experienced higher inflation last month than they did in March in previous years, but South Korea was able to rein in their consumer prices this year, keeping them at 2025’s level. The European countries also experienced higher inflation so far this year except for Italy (see Table 1).

OIL PRICES
Last week I was interviewed by two reporters — from Philippine Star (Brix Lelis) and Bilyonaryo News Channel (Joash Malimban) — on why Philippine domestic oil prices remain high even if Philippine-bound oil tankers are allowed free exit at the Strait of Hormuz. I explained the higher prices of Dubai oil compared to oil from the US (WTI), Europe (Brent), and Russia (Urals) as we get about 98% of our crude oil from the Middle East, the depreciation of the Peso (from P57/$ on Feb. 27, the day before the war started, to the current P60/$), the higher cost of insurance per tanker, etc.

I checked our trade data from the Philippine Statistics Authority (PSA) for January and February. There is one noticeable thing about the period — our imports of crude oil declined significantly, from $669 million in 2025 to only $285 million in 2026, a big contraction of 57.4%. Meanwhile imports of other products — capital goods, raw materials and intermediate goods, and consumer goods — were flat or higher than their levels in 2025.

Our imports of refined petroleum products — diesel, gasoline, jet fuel, and other refined fuels — increased, from $1.97 billion in 2025 to $2.04 billion in 2026. Meaning only crude oil imports declined during that period, but finished oil products imports increased (see Table 2).

I asked an oil-gas expert, a Filipino executive in one of the country’s biggest energy companies, if the low crude imports this year was the main reason why we have high domestic oil prices. And if Petron, the only oil refinery company in the country, had under imported oil before the war started, so they have had to quickly source more expensive oil elsewhere by March. I also sent him the PSA excel file of imports.

His quick answer was “no,” saying that “the table does not show inventory levels, refinery runs, or timing of purchases, so it cannot establish that conclusion. There is some seasonality in demand, with consumption usually easing after the year-end peak. The effect is not large enough to explain a drop of this size. It may explain part of the overall decline in fuel imports, but not the sharp reduction in crude. What the data does point to is a change in supply mix. Possible reasons include refining economics, lower refinery utilization, or timing of crude cargo arrivals, with more reliance on imported finished fuels.

“To get to the root cause, a few areas would need to be checked: Petron refinery utilization in Jan.-Feb. 2025 versus 2026; any maintenance or operational issues affecting runs; Singapore refining margins and product crack spreads over the same period; relative economics of importing products versus refining crude; crude and product inventory levels at the start of 2026; and, whether crude cargoes were deferred from January-February into March.

“In short, the drop in crude imports is clear, but it does not by itself explain higher domestic oil prices. The data is more consistent with a shift in how supply was sourced rather than a shortfall caused by under-importing.”

Whew. That’s a mouthful of high caliber insights from an engineer-finance guy with decades of experience.

Meanwhile, US President Donald Trump has gone wild and irrational in further escalating and prolonging the Iran conflict. There is nothing we can do here to change his policies.

What we can adjust are domestic policies: in the short-run, engage in more energy and foreign affairs diplomacy to get more oil-gas from more countries, and make agreements on energy cooperation with our neighbors in the South China Sea. In the long run, we should embrace fossil fuels and explore more oil, gas, and coal sources in the country plus nuclear energy. We should junk climate alarmism and prioritize energy realism and sustain high economic growth.

I want to mention three energy conglomerates that are keeping and expanding their gas-coal facilities: Aboitiz Power, Meralco PowerGen (MGEN), and San Miguel Corp. They all have coal plants, and they are all partners in LNGPH, the owner and operator of three big LNG facilities in Batangas (South Premiere Power Corp. or SPPC, Excellent Energy Resources, Inc. or EERI, and Linseed). MGEN in particular is very serious about having a nuclear power facility very soon. Go for it, MGEN.

Bienvenido S. Oplas, Jr. is the president of Bienvenido S. Oplas, Jr. Research Consultancy Services, and Minimal Government Thinkers. He is an international fellow of the Tholos Foundation.

minimalgovernment@gmail.com