In a televised briefing, Finance Secretary Margarito Teves said taxes on imported oil would be cut or removed to cushion the impact on local prices, while Energy Secretary Raphael Lotilla said conservation measures were being drawn up.
"If we do not conserve, we will reach a point where the oil bill of the country is going to threaten our foreign exchange reserves," Lotilla said.
At the end of July, the country’s foreign exchange reserves were at a near record high of $17.67 billion.
"Economic managers are seriously considering making a recommendation to the President and Congress to adopt a law giving government agencies emergency powers, for a limited duration, to prescribe mandatory measures for public and private sectors to accelerate the implementation of the energy conservation program," he added.
The move apparently has the approval of President Arroyo as Executive Secretary Eduardo Ermita said Malacañang would be drafting the proposed legislation.
Lotilla also indicated that the draft bill would be ready in the coming days.
The energy chief said that Batas Pambansa 73, a law used to cope with the oil crisis in the early 1980s during the Marcos years when prices of crude oil also reached historic highs, could be revived.
BP 73 allowed the government to ration fuel, cut working hours and limit the use of airconditioners and vehicles.
The Philippines, which imports nearly all its oil, bought 126 million barrels of oil last year for $4.57 billion.
"For every $10 a barrel increase in oil prices, we need an additional $1.26 billion to finance our (annual) oil imports," Lotilla disclosed.
Santos said the projected inflation rate for the year could reach 8.1 percent once the price of crude oil reaches $70 per barrel while gross domestic product (GDP) could slow down from 5.3 percent to 5.1 percent at the same price level.
So far, the government has only imposed mandatory energy conservation in state agencies and offices. It remains voluntary in the private sector.
The state-owned National Power Corp. (Napocor), for one, has targeted reducing the use of its oil-powered plants from 15 percent to 11 percent, which could generate savings or avoid costs amounting to P5.6 billion.
Another conservation measure is the plan to expand the use of non-oil power plants such as geothermal and hydroelectric stations.
The Department of Energy, for its part, has proposed that industrial, commercial and transport entities or establishments be required to collect waste oil for recycling.
Meanwhile, the Department of Labor and Employment is being urged to impose staggered working hours in industrial and commercial establishments or fix the number of working days per week. It was also proposed that the Department of Trade and Industry consider limiting and fixing the operating hours of business and entertainment establishments.
Energy Undersecretary Peter Abaya said the more feasible options for the Philippines would be to develop the oil rim of the Malampaya gas-to-power project, speed up the inflow of investments to develop renewable alternative energy sources such as wind, geothermal and coco-biodiesel, implement coal liquefaction project and aggressively pursue new oil exploration projects. — Paolo Romero, Rocel Felix, AP