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1. The Philippines has been here before. A disruption in global oil supply drives up fuel prices, raises the cost of natural gas, which is the primary feedstock for nitrogen fertilizers, forces farmers to cut back on fertilizer application or abandon it entirely, and then, with a lag of one to two crop seasons, depresses rice yields precisely when import markets are also tightening because every other rice-importing country is facing the same pressures simultaneously. This is not a coincidence or a novelty of the 2026 oil crisis. It is a pattern that has appeared in Philippine history at least three times in the last fifty years.
2. The first and most instructive episode is 1972 to 1974. In 1972, Typhoons Edeng and Gloring devastated Luzon, flooding the central plains and cutting local rice production by roughly 17 percent. A major drought followed. Tungro, a rice-infecting pest, spread through the fields. Local production collapsed and the government scrambled for imports, purchasing 455,000 metric tons of rice in 1972, up from just 10 metric tons in 1968. Then, in October 1973, the Arab oil-producing states declared an embargo following the Yom Kippur War, and the global oil price quadrupled. This had an immediate secondary effect that is largely forgotten today: it devastated fertilizer supply. Nitrogen fertilizers are manufactured from natural gas, and the oil shock drove natural gas prices up with it. Fertilizer prices spiked internationally, shipments contracted, and Philippine farmers who were already reeling from typhoon damage and trying to recover production found themselves unable to source or afford adequate fertilizer for the next planting season. The rice shortage, which had begun as a weather event, was prolonged and deepened by the fertilizer shock that followed the oil shock. By 1973, white rice had disappeared from Philippine markets. Corngrits were mixed into rations. Block-long queues formed in Manila and the provinces as people waited for rationed supply.
3. Within months of the typhoon damage, President Marcos Sr. launched the Masagana 99 program on May 21, 1973, an agricultural mobilization that pushed high-yielding rice varieties, subsidized credit through the rural banking system with the Central Bank providing preferential rediscounting, and above all intensive use of chemical fertilizers. To address the fertilizer supply problem directly, Presidential Decree No. 135 was issued on February 22, 1973, creating the Fertilizer Industry Authority with the broadest possible mandate: it was empowered to control prices, production schedules, distribution channels, import quotas, export volumes, and financing for the entire fertilizer industry. Tax exemptions on fertilizer imports were granted outright. The National Grains Authority was created in 1973 to manage rice buffer stocks and stabilize prices, eventually becoming the National Food Authority under Presidential Decree No. 1770 in 1981. The Philippine National Oil Company was created under Presidential Decree No. 334 in 1973 to give the state direct control over petroleum procurement and distribution. These institutions were not created because of one crisis. They were created because the government understood that the oil crisis, the fertilizer crisis, and the rice crisis were a single cascading event, and that the only adequate response was a set of institutions capable of intervening in all three simultaneously.
4. The second episode is 2007 to 2008. Global oil prices surged from around USD 50 per barrel in early 2007 to over USD 140 per barrel by mid-2008. The natural gas price spike that followed drove up the cost of nitrogen fertilizer production worldwide. India and China, large domestic fertilizer producers, restricted exports to protect their own farmers, reducing global supply further. In the Philippines, farm input costs rose sharply. At the same time, rice-exporting countries including India, Vietnam, and Egypt imposed export restrictions as a precautionary measure, triggering panic buying in global rice markets. Philippine retail rice prices surged from around P24 per kilogram in late 2007 to P28 and above within weeks in early 2008. Millions of Filipinos queued for hours at NFA Bigasang Bayan outlets to buy rationed rice at P10.25 per kilogram. The government scrambled for emergency imports, and the episode exposed how thin the NFA buffer stock had become after years of institutional underfunding. The cascade was identical to 1973: oil shock, fertilizer pressure, rice price emergency, import panic. The institutional response this time was more limited, essentially emergency procurement and price monitoring, because the Fertilizer Industry Authority had been deregulated out of its price-control functions in 1986 and the market-oriented framework of the post-EDSA period had no equivalent instrument for direct fertilizer supply intervention.
5. The third episode, still fresh, is 2022. Russia’s invasion of Ukraine in February 2022 disrupted two of the world’s largest fertilizer exporters simultaneously: Russia was a major producer of nitrogen, phosphate, and potash fertilizers, and Belarus (subject to sanctions) was a major potash source. Global urea prices more than doubled from their 2021 levels. In the Philippines, analysts estimated that by the first half of 2022 the country was unable to secure roughly 35 percent of its normal fertilizer volume because of price and availability constraints. Farmers who could not afford the spiked input costs reduced application rates or switched to less fertilizer-intensive crops, compressing yields. This time the rice import market held because the war was geographically distant from the main Asian rice exporters, but the lesson was unavoidable: a former NFA administrator noted in 2026, with the current crisis in view, that the Philippines was entering the Iran war crisis with urea prices already double their pre-Ukraine war levels, meaning the baseline from which the 2026 spike is measured is already elevated. The country is absorbing a second major fertilizer shock on top of an unrecovered first one.
6. The 2026 crisis is therefore not a novel event. It is the fourth iteration of a known pattern, and the most severe because the Strait of Hormuz carries fertilizer as well as oil, because global rice buffer stocks are thinner than in prior crises, and because the Philippines has a NFA supply of roughly ten days against a recommended buffer of at least thirty. The legal lesson that 1973 taught, and that the 2008 and 2022 crises re-confirmed, is this: the oil crisis, the fertilizer crisis, and the food crisis are not three separate emergencies requiring three separate policy responses. They are one cascading emergency with three downstream manifestations.
Geronimo Law advises clients on energy regulation, oil and power law, DOE and ERC proceedings, and energy contracting. For inquiries, contact us at attorney@geronimo.law, +63 9999329836, or through www.geronimo.law. We are located at 6/F Valero One Center, Valero St., Salcedo Village, Makati City.
This advisory is for general information only and does not constitute legal advice. Consult counsel for advice on specific situations.
