I understand the fear. But I think the fear is aimed at the wrong target.

Schools teach information. But information is now ubiquitous, freely available, instantly searchable, endlessly generated. What made education valuable in the past was access to knowledge that was scarce. That scarcity no longer exists. What remains scarce, dangerously and increasingly scarce, is the human capacity to think, feel, and lead.

Look at history. Humans have proven to be remarkably adaptive creatures. We navigated the Renaissance, which upended how we understood art, science, and the self. We survived the Industrial Revolution, which replaced muscle with machine and reorganized entire civilizations around factories. We are still navigating the Digital Age, which rewired how we communicate, consume, and connect. Every era brought disruption. Every era produced humans who adapted and led.

But here is where I diverge from the optimists. The threat of the AI Age is not that machines will replace us. It is that we will allow ourselves to become dependent on them before we have fully developed ourselves. I am not afraid of AI. I am afraid of a generation that outsources its thinking to AI, its creativity to AI, its judgment to AI, and arrives at adulthood having never built the inner architecture that leadership requires. Imagine a world where the most powerful tool ever built is operated by people who have forgotten how to be human. That is the real risk.

So when my friend asked me what he could do, I gave him five concrete answers. Not app subscriptions. Not coding camps. Five fundamentals, executable at home, starting tonight.

First: Read with your child every night, with a book. Not a tablet. A physical book. The ritual of a parent reading aloud builds vocabulary, comprehension, attention span, and the experience of sustained, linear narrative. Children who are read to learn to follow an argument, absorb a story arc, and sit with ideas long enough to understand them. That is the foundation of critical thinking.

Second: Have your child read aloud. Loud. With confidence. Reading aloud builds fluency, diction, and the courage to occupy space with one’s voice. Communication is not a soft skill. It is the primary skill of leadership. Every great leader, in every field, has been able to articulate a vision, move a room, and persuade another human being. That begins with a child learning to project their voice across the living room.

Third: Learn a musical instrument, any instrument. Even cymbals. Or a guitar. Music is not about performance. It is about activating the creative hemisphere of the brain that logical training tends to neglect. Playing an instrument builds pattern recognition, discipline, and the ability to translate abstract feeling into structured expression. These are exactly the capacities that AI cannot replicate.

Fourth: Learn a second language, any language. A regional dialect. Spanish. Even Latin, though it has been dead for centuries. Acquiring a second language opens neural pathways that a single-language existence leaves dormant. It builds cognitive flexibility, the ability to hold two conceptual frameworks in the mind simultaneously and move between them. That is precisely what you need in an AI world, where the ability to reframe a problem and think in multiple registers will separate leaders from followers.

Fifth: Play a sport, any sport. Chess counts. Swimming counts. Even a backyard game counts. Sport builds the inner competitive spirit, the will to improve, to persist through failure, to measure oneself honestly. It teaches a child that outcomes are not guaranteed, that effort matters, that losing is survivable and instructive. In a world increasingly optimized for frictionless experience, children need the friction of competition to develop resilience.

These five things develop what matters most in an AI world: critical thinking, emotional intelligence, and adaptability. These are not supplementary virtues. They are the core operating system for human leadership in any era, and they are built at home, not in a classroom.

Many parents today are waiting. Waiting for schools to teach AI. Waiting for the right curriculum, the right program, the right government policy. That wait may never end. Schools are still figuring it out, and the curricula being written today will be obsolete before your seven-year-old finishes high school.

But here is what I know for certain. AI learning, real AI readiness, begins long before your child ever sits in a tech classroom. It begins at home, in the early years, through the fundamentals. And it does not begin with a screen. It begins with a parent.

We are also seeing the consequences of neglecting these fundamentals in real time. Student suicides are rising. Young people are struggling to manage pressure, failure, and uncertainty in ways that previous generations, for all their disadvantages, seemed better equipped to handle. This is not a school problem. It is a foundation problem. Children who read develop inner worlds rich enough to process difficulty. Children who play sports learn that losing does not end you. Children who make music find an outlet for what they cannot yet put into words. These are not academic exercises. They are mental health interventions, preparing them for life’s battle ahead.

Your presence in these activities is not optional. It is the variable that makes the difference. A teacher can introduce a concept. Only a parent can build a foundation. The most advanced school in the world will always be secondary to a parent who shows up, consistently and intentionally, in the small daily moments that shape a child’s character.

So read the book. Not the tablet. The book.

That is where AI readiness begins.

(The author is President of the Management Association of the Philippines (MAP). He is also President and COO of DITO CME Holdings Corporation. Feedback at <map@map.org.ph> and <donaldpatricklim@gmail.com>).

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The first part of this piece noted what House Bill 8389 prohibits: simultaneous holding of elective office by close relatives at the same level of government. This part examines how the bill proposes to enforce that prohibition — and why the mechanism raises questions that go beyond mere implementation.

Section 7 of the bill addresses the scenario where two relatives have both filed certificates of candidacy, creating what it calls a “potential political dynasty relationship.” COMELEC notifies them within five days. They then have 48 hours to submit a joint written agreement identifying which of them will assume office if both win. If they cannot agree in 48 hours, COMELEC draws lots.

The provision deserves careful study. Philippine voters do not elect families. They elect individuals. The right of suffrage under Article V is the right to choose a specific person for a specific office. A mechanism that randomly removes a duly nominated candidate from contention — before a single vote is cast — substitutes chance for the sovereign choice of the electorate. It invites a serious constitutional challenge that COMELEC and the courts will eventually have to resolve.

A more defensible approach would apply disqualification after the election: the relative who receives fewer votes steps down. This preserves voter expression while enforcing the prohibition. It is also more consistent with how COMELEC handles other disqualification scenarios. The lot-drawing provision reflects an unresolved policy choice rather than a considered constitutional design.

A stronger Anti-Dynasty Law must be measured against established legal and international standards. Philippine jurisprudence already supports this direction. In Sema v. COMELEC, G.R. Nos. 177597 and 178628, the Court affirmed the state’s compelling interest in limiting political monopolies. A more robust statute could build on that principle by prohibiting not only simultaneous office-holding, but also successive office-holding — a familiar tactic for evading term limits. Brazil and Costa Rica, for example, use candidacy-ineligibility rules that bar immediate relatives from succeeding incumbents, treating public office as a finite public trust rather than an inheritable family estate. Indonesia’s legal efforts have likewise increasingly targeted vertical succession to prevent party capture, offering a model that moves beyond a narrow focus on simultaneity.

Section 6 compounds the concern. Every candidate must file a sworn statement declaring no prohibited dynastic relationship. But the bill specifies no penalty for a false declaration beyond whatever general perjury law might provide. A candidate who conceals a family connection, wins, and is later exposed faces no dynasty-specific sanction. COMELEC is given no investigative authority, no verification timeline, and no enforcement tool specific to this Act — unless the implementing rules supply what the text omits. The sworn statement becomes a formality rather than a safeguard.

It is important to distinguish between a law crafted to function effectively and one intended merely to exist on paper. While HB 8389 contains substantive provisions, broad coverage, and a clear constitutional foundation in Article II, Section 26, it lacks a genuine enforcement framework. Without concrete mechanisms for implementation and accountability, the bill risks becoming a symbolic gesture rather than a meaningful tool for reform.

For these reasons, HB 8389 should not advance in its present form. Its limited prohibitions create the appearance of compliance while leaving untouched the practices that allow dynastic control to endure. The Senate should withhold approval; if the bill reaches Malacañang, the President should return it with a veto.

The more credible path is citizen-led reform. When Congress has strong incentives to preserve family-based power, the People’s Initiative offers voters a constitutional route to define, for themselves, the boundaries of public office. That is why the “Dapat Isa Lang” campaign of the People’s Initiative Coalition Against Dynasties deserves broad public support.

Its core reforms respond directly to the loopholes HB 8389 leaves open:

• one family member, up to the fourth civil degree, may hold a national position, and one may hold a local position, at any given time; and
• succession and office-switching are barred as means of keeping power within the same family.

When Congress is unable or unwilling to legislate against entrenched family interests, direct legislation by the people becomes not only appropriate but necessary.

On its face, HB 8389 is constitutionally permissible. It rests on a valid enabling provision and does not, by itself, violate equal protection or suffrage rights. But permissibility is not the same as fidelity. The framers of the 1987 Constitution did not write Article II, Section 26 to allow one family one seat per level, per jurisdiction, at the same time. They wrote it to dismantle rotational dynasties, cross-level dynasties, and dynasties that simply wait their turn.

A law that leaves those practices intact may satisfy the letter of the constitutional mandate, but it betrays its spirit.

[The author is a member of the Governance Committee of Management Association of the Philippines (MAP). He is a lawyer, industrial engineer, and the President of Justice Reform Initiative (JRI). He is former Chair of Institute of Corporate Directors (ICD) and National Renewable Energy Board, a senior policy adviser to the Institute for Climate and Sustainable Cities, and Chair Emeritus of Energy Lawyers Association of the Philippines (ELAP). Feedback at <map@map.org.ph> and <phmaniego@gmail.com>.)

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Thirty-eight years. That is how long Congress sat on Article II, Section 26 of the 1987 Constitution, which directed it to prohibit political dynasties “as may be defined by law.” The framers wrote it expecting action within a legislature or two. Instead, every Congress found reasons to defer — committee referrals that went nowhere, substitute bills that died on second reading, and the quiet solidarity of incumbents who understood, without saying so, that the status quo served them well.

I wrote in “Enabling the Anti-Dynasty Mandate,” Inquirer, Dec. 27, 2025, that the numbers explain why. Studies consistently show that 75 percent of district representatives, 85 percent of governors, and nearly 67 percent of mayors are dynastic, with dynastic candidates winning by larger margins than non-dynastic counterparts. From 1988 to 2019, the share of families controlling multiple positions simultaneously rose from 19 to 29 percent, with roughly 170 positions added per election year. A legislature so constituted has limited institutional incentive to legislate itself out of existence.

House Bill 8389 finally breaks that silence. Approved by the House Committee on Suffrage and Electoral Reforms last March 9, it carries over a hundred authors, consolidates seventeen predecessor bills, and bears the formal title “An Act Prohibiting Political Dynasties in National and Local Elective Offices.” On paper, it is the anti-dynasty law the Constitution has been waiting for since 1987.

However, on closer reading, it functions less as a barrier to political dynasties and more as a regulatory framework for their management. The bill’s operative rule is simultaneity. It prohibits spouses and relatives within the second civil degree of consanguinity or affinity from concurrently holding elective office at the same level of government. A husband and wife may not both sit in the Senate at the same time. Two siblings may not simultaneously hold positions in the same provincial government. The logic is clean, the coverage is nationwide from barangay to Senate, and the definition of dynasty — second-degree relatives, legitimate or illegitimate, full or half-blood — is precise enough to survive a constitutional challenge.

So far, so good. The problem is what the simultaneity rule does not reach.

The classic Philippine political dynasty does not operate through simultaneous holding. It operates through rotation. A patriarch serves three terms as governor, then steps aside for his wife, who serves her three terms, then yields to a son or daughter. Nobody holds office at the same time. The succession does not violate HB 8389. But the family never leaves. This scenario is a description of how power has actually been transmitted across decades in many local government units. The constitutional directive was written precisely to address this pattern. A law that leaves it untouched is a law that has defined the problem narrowly enough to avoid solving it.

The drafters were not unaware of this. Regulating successive holding — penalizing a candidate because of what a family member did in a prior term — raises harder equal protection questions. A candidate is an individual. Disqualifying her because her husband was governor ten years ago requires a constitutional justification that courts have not yet been asked to provide. The simultaneity approach is the more defensible legislative choice. It is also the more limited one.

There is a second gap that must receive equal, if not more, attention. HB 8389 allows relatives to hold office simultaneously across different levels of government within the same territory. A congressman and a governor from the same family, representing the same province, are not prohibited. The bill’s restriction is level-specific: no two relatives in the same provincial government, but a relative in the provincial capitol and another in the congressional district it overlaps — that is permitted. The concentration of influence is real, but the prohibition does not apply.

These are not drafting oversights. They reflect the outer boundary of what a legislature composed significantly of political families was willing to enact. That boundary deserves to be clearly defined and delineated.

(To be continued)

[The author is a member of Governance Committee of the Management Association of the Philippines (MAP). He is a lawyer, industrial engineer, and the President of the Justice Reform Initiative (JRI). He previously served as Chair of the Institute of Corporate Directors and National Renewable Energy Board and is a senior policy adviser to the Institute for Climate and Sustainable Cities, and Chair Emeritus of the Energy Lawyers Association of the Philippines. Feedback at <map@map.org.ph> and <phmaniego@gmail.com>.)

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“Ilaw ng Tahanan”

In the Philippines, women are considered the “Light of the Household” or “Ilaw ng Tahanan”. The responsibility for household care—healthcare, domestic work, and childcare—is borne by women, in addition to jobs outside the house. Household care work can be paid or unpaid, but women usually bear the burden of unpaid care work. As women are disadvantaged when it comes to care work, geopolitical events and disasters exacerbate their difficulties.

It is the women who are compelled to maintain a sense of normalcy and shield the family from further impacts. Women also carry a heavier burden as social gender norms require self-sacrificing behavior from women. Women forego food to make ends meet and prioritize the family before themselves. This means that external shocks expose vulnerabilities and place women in even more precarious situations. While they may appear to be resilient on the outside, this does not imply that it is not a pressing issue that should be addressed by the whole of society.

The impact is even worse on women who are living on the economic margins. Their everyday lives are affected by rising prices of food, fuel, and other basic commodities. Economic crises not only reveal class disparities but accentuate gender inequalities within households and reduce opportunities for social empowerment. As geopolitical events seem to have no end in sight, how long must women be resilient before families, communities, and nations share the burden that they carry?

Redefining Women’s Resilience

Resilience is not just a buzzword that is meant to uplift women and make them feel better despite the weight they carry. Resilience should mean women’s ability to anticipate, mitigate, adapt, and recover from aftershocks in a way that reduces their vulnerability. Empowering women is crucial to strengthening nations’ resilience to disasters and conflict.

My experience working with women in multiple sectors has only emphasized the need to equip and empower women financially and economically. It is better for a nation for women to be economically empowered, whether it is through their own enterprises, in their workplaces, or in their households. While women’s contributions to the economy is already significant in spite of the many challenges they face, what more if they are given the opportunity to reach their full potential.

To build more resilience, women need financial assistance and support, strong networks for knowledge sharing, and access to capacity-building. Above all, policies need to be created with a “gender lens” with women in mind, acknowledging the gendered differences they face. While women’s leadership already exists informally, it is time for them to be represented and acknowledged in decision-making processes. When women lead, they reinvest their time in sectors that benefit the community and the nation, such as in health and nutrition, education, and care.

Women and girls should not be viewed as after-thoughts during crisis; rather they should be considered as driving forces in creating more inclusive and resilient policies. Women continue to be outwardly resilient even when conflicts, policies, and geopolitical events impact them severely. Is that good enough? Why should we be satisfied with this outward resilience? It is time that this resilience is made permanent with lasting economic and financial policies designed by men and women for women.

(The author is a member of ���Ĵ�ýDiversity, Equity & Inclusion (DEI) Committee and ���Ĵ�ýEducation Committee. She is Founding Chair and President of Philippine Women’s Economic Network (PhilWEN) and Chair of the Governing Council of PBCWE. She was the first female Chair of the Bases Conversion & Development Authority (BCDA).  She is President of Mageo Consulting Inc., a company providing corporate finance advisory services. Feedback at <map@map.org.ph> and <magg@mageo.net>.)

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The company was recognized for its human-centric approach to predictive AI, helping organizations anticipate employee attrition while improving workplace experiences and workforce management.

This year, the GTI Competition is once again looking for the next generation of technology innovators whose ideas and solutions have the potential to transform industries and create meaningful impact.

The GTI Competition in the Philippines will culminate at the 2nd ���Ĵ�ýx KPMG Technology Summit on June 30, 2026 at Shangri-La The Fort, where the winning teams will be recognized before an audience of business executives, policy-makers, technology leaders, and industry professionals. With the theme “AI at Scale: Driving Value with Governance and Security,” the Summit will explore how artificial intelligence (AI) continues to transform industries, governance, and the broader business landscape through discussions on AI adoption in the Philippines, AI governance and public policy, enterprise and sector applications including the BPO industry, and data governance and cybersecurity.

As AI becomes more deeply embedded across both public and private sector systems, it is reshaping how organizations design policies, manage risk, and deploy technology at scale. This shift underscores the growing need to align innovation with governance frameworks that ensure responsible use, protect data integrity, strengthen cybersecurity resilience, and support sustainable enterprise transformation across industries. At the same time, as organizations increasingly integrate AI into decision-making processes, trust, transparency, and accountability are becoming essential pillars alongside technological advancement.

The Philippines also continues to benefit from a young, digitally connected, and highly adaptable workforce that is contributing to the country’s growing innovation landscape. As more organizations invest in digital capabilities and emerging technologies, there is significant opportunity for Filipino innovators to help shape solutions that are both locally relevant and globally competitive.

With the 2026 GTI Competition in the Philippines, we look forward to seeing the next wave of Filipino companies bring forward innovations that can help shape industries, accelerate digital transformation, and contribute to the country’s growing technology landscape.

As innovation continues to drive the future of business and society, we remain committed to supporting technology entrepreneurs whose ideas and solutions have the potential to create meaningful impact and contribute to a more innovative and resilient future for the Philippines and beyond.

(The author is former Vice President of the Management Association of the Philippines (MAP). He is the Vice Chair, COO and Head of Global Services Center of R. G. Manabat & Co. (KPMG in the Philippines). Feedback at <map@map.org.ph> and <ebonoan@kpmg.com>).

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Innovation continues to shape the future of industries, economies, and societies. Across the world, technology entrepreneurs are developing solutions that are transforming how businesses operate, how communities connect, and how challenges are addressed. As digital transformation accelerates, platforms that support and recognize innovation have become increasingly important in helping emerging companies grow, scale, and create meaningful impact.

Over the past years, the KPMG Private Enterprise Global Tech Innovator (GTI) Competition has recognized hundreds of technology entrepreneurs from around the world, providing a platform that highlights innovative tech solutions capable of transforming industries and improving lives. More than a competition, the GTI program serves as a global platform where entrepreneurs, investors, business leaders, and advisers can connect, exchange ideas, and explore opportunities for collaboration and growth. It also helps surface emerging technologies that may otherwise remain within local markets, giving founders greater visibility and access to global networks that are critical to scaling innovation.

At the same time, innovation ecosystems are becoming increasingly inter-connected, where ideas, capital, and capabilities move more fluidly across borders. For emerging markets like the Philippines, this creates new opportunities for local start-ups to engage with global networks, adopt best practices faster, and position themselves more competitively in international markets.

Over the years, the GTI Competition in the Philippines has featured a growing range of local innovations addressing challenges across industries. In 2023, Peddlr, a local start-up providing digital solutions for micro, small, and medium-sized enterprises (MSMEs), was recognized for helping small businesses transition from manual sales tracking, inventory monitoring, and credit management into more efficient digital processes. The company’s solution highlighted how technology can help empower smaller enterprises, which remain an important driver of the Philippine economy.

In 2024, Rezbin, a cleantech start-up, won the competition with its smart recycling solutions focused on modernizing plastic waste recovery and sustainability initiatives. Its innovation demonstrated how technology can contribute to addressing environmental challenges while promoting more sustainable business practices and community engagement.  The 2025 GTI Competition once again highlighted the growing strength of Filipino innovation and entrepreneurship through a diverse range   of technology-driven solutions. Among the participating start-ups, Betterteem, a human resources (HR) technology company specializing in predictive AI solutions, emerged as the local winner and represented the country at the GTI Global Finals during the Web Summit in Lisbon in November 2025.

(The author is former Vice President of the Management Association of the Philippines (MAP). He is the Vice Chair, COO and Head of Global Services Center of R. G. Manabat & Co. (KPMG in the Philippines). Feedback at <map@map.org.ph> and <ebonoan@kpmg.com>).

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The 2026 Landscape: A Q2 and Year-End Reality Check

The declaration of a State of National Energy Emergency has created a landscape defined by scarcity and soaring costs. We saw diesel prices reached staggering heights of ₱107 to ₱134 per liter, while gasoline fluctuates around ₱112 per liter before going down the past few weeks. Approximately 400 to 425 gas stations have shuttered temporarily across the nation because they simply cannot get products to sell. By the end of 2026, inflation might likely exceed the current 4.1%, directly hitting the purchasing power of every Filipino family. With real income for vulnerable households dropping, the cost of doing business has fundamentally shifted. Internal labor stability and external customer demand are both under extreme pressure.

Financial Management and Crisis Impact Report

Consistent with its enterprise risk mandate, the AudComm should require Management to move beyond retrospective review and provide a forward-looking “Crisis Impact Report”. The Report should critically address areas like:

Revenue and Expense Modeling: The company must assess the impact on revenues and identify which expenses are skyrocketing. With logistics and raw material costs expected to rise, the company must evaluate whether to pass these to customers or absorb them. This isn’t just a financial choice; it is a strategic one that considers the absorption capability of customers who are also feeling the pinch.

Liquidity and “Cash is King”: Survival depends on liquidity. The AudComm must oversee actions being taken by the company to not only pursue the timely collection of receivables but also to ensure the availability of credit lines. In a credit crunch, the AudComm must confirm that committed facilities are in place to sustain operations.

Inventory Risk Management: The focus shifts from “just-in-time” to “just-in-case”. The company must look at inventory not just as a cost, but as supply security. It must evaluate the risk of supply unavailability and the company’s ability to use local substitutes to minimize the high premium of “war imports”. Conversely, for products where demand is expected to drop or disappear, the company should recognize inventory obsolescence provisions. AudComm has to check actions by Management on this regard.

Energy Transition to Renewables: Crisis is a catalyst for structural change. It is an opportune time to reengineer processes and transition to crisis – resilient operations. For example, the company should study the replacement of oil-sensitive fixed assets with renewables. This might require a collaborative look at “lease vs. buy” financing that protects the company’s long-term future while recognizing immediate impairment on obsolete equipment. AudComm can help crystallize actions on this matter.

Covenant Monitoring and Contract Review: High energy costs directly impact EBITDA and interest coverage ratios. The AudComm should demand monthly stress tests on debt covenants to anticipate potential breaches before they occur. Moreover, many long-term agreements might have become “onerous” as the cost of delivery or fulfillment significantly exceeds agreed contract prices. The AudComm should oversee legal assessments to determine if the crisis constitutes a “Force Majeure” event, allowing for the renegotiation of terms with suppliers or customers.

Cybersecurity: Crisis heightens the risk of cyberattacks and fraud on financial infrastructure. The AudComm must ensure the IT disaster recovery plan is stress-tested for worst case scenarios.

The Working Environment: Protecting the Human Capital

Labor often bears the brunt of the crisis through eroded wages. The company’s HR management response defines the true values of an organization. HR actions may include regular, honest updates on how the crisis is impacting the company. Transparency builds the trust necessary for employees to accept difficult changes, like compressed workweeks. Treating employees with dignity and strategic care during a national emergency isn’t just a moral choice; it’s a business continuity requirement. Support should be practical and empathetic, ranging from allowances or company provided transportation for essential staff when public utility vehicles stop operating.

Summary

Ultimately, the 2026 energy emergency transcends technical compliance; it is a foundational test of our institutional character. The AudComm’s mandate must now encompass a dual necessity: serving as the unyielding anchor for fiscal survival while acting as the strategic catalyst for resilience and renewal. Yet, its most enduring legacy will not be found in the balance sheets, but in how effectively it protected the human core of the organization amidst the chaos. It is through this synthesis of rigorous discipline and deep empathy that AudComm honors its highest fiduciary duty—to the stockholders, to the employees, and to the public.

[The author is member of the Ease of Doing Business Committee of the Management Association of the Philippines (MAP).  He is an ICD Fellow, a Board member and Corporate Treasurer of Color Philippines, Marking Services Philippines and Eagan Services Philippines. He was Chair of the Quality Assurance Review Council of the Board of Accountancy and the Philippine Institute of CPAs. He was a Partner and Head of the Assurance Division of P&A and former President of P&A Grant Thornton Outsourcing Inc. Feedback at <map@map.org.ph> and <jccarpio627@gmail.com>]. 

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The fourth lesson is about the importance of central banking. In the 1970s, weakly independent central banks, heavy wage indexation, and strong political pressure to accommodate inflation led European countries to experience stagflation—high inflation with low growth. Only in the late 1980s and 1990s, with stronger central bank independence and clear inflation-targeting regimes, did Europe manage to anchor expectations and control inflation; ASEAN reforms in these areas came much later.

Indeed, in 2026, ASEAN central banks are, in several respects, ahead of where Europe once stood decades ago: most have explicit or implicit inflation targets, operational independence, and experience in managing capital flows and commodity shocks. This is a significant advantage.

However, monetary policy alone cannot resolve the problems caused by oil shocks. Energy price spikes are supply-side shocks: while raising interest rates can suppress demand and prevent secondary effects, it cannot generate new supplies of oil, gas, or electricity. Relying solely on central banks to “solve” such crises risks unnecessary economic sacrifices and social tension.

Why ASEAN Needs a Broader Policy Mix

To manage extended oil-shock conditions in the modern era, monetary policy must be supplemented by at least three additional pillars: fiscal policy, structural competitiveness, and human capital.

Fiscal policy : Avoid blanket subsidies; use targeted fiscal support.

1. Protect the vulnerable through targeted cash transfers or lifeline tariffs, instead of across-the-board fuel subsidies that distort prices and strain public budgets.
2. Invest in efficiency and alternatives, such as public transport, building retrofits, and industrial energy-efficiency programs, so that every unit of GDP requires less imported fuel.
3. Use fiscal tools to crowd in private investment in renewables, storage, and grids, rather than locking the region into continued fossil-fuel dependency.

Structural competitiveness: Reform to keep energy markets efficient and prices transparent.

1. Avoid monopolistic practices, inefficient state-owned enterprises, and closed markets since oil shocks expose and worsen rigidities.
2. Make firms more resilient to price spikes through competition policy, transparent regulation, and regional market integration that can lower structural energy costs.
3. Deepen energy integration (AEMI), harmonize standards to create a larger and more flexible energy market for businesses.

Human capital: Build the skills/ knowledge plus values/ attitudes for a resilient energy system—from engineers, regulators, financiers, entrepreneurs, to politicians and diplomats.

1. A resilient energy system ultimately depends on such people, especially those with the values/ attitudes required for transparent 21st C. public and private governance systems for higher realized standards of ethical public service; for the latter, domestic work vs. overseas employment to be more attractive for family conditions to be socially tenable.
2. Investing in STEM education, vocational training, and energy-sector skills will enable ASEAN to adopt new technologies—such as smart grids, hydrogen, and advanced storage—rather than just importing them.
3. Joint ASEAN–EU R&D and training programs can accelerate progress, echoing Europe’s own history of collaborative technology development after the 1970s.

Central banks can stabilize expectations better through a whole-of-government and whole-of-economy strategy to transform an oil shock from a crisis into a catalyst for positive change.

A 2026 Opportunity

The 2026 Philippines leadership of ASEAN comes at a time when energy security, climate transition, and geopolitical fragmentation are intersecting. Europe’s history from the 1970s to the 1990s demonstrates the right policy combinations for ASEAN to survive the next oil shock—but only if matched with smart fiscal choices, competitive markets, and strong human capital in ASEAN.

To avoid geopolitical and geoeconomic traps, it is time for regional leaders and diplomats to creatively strategize ASEAN’s vision as a Zone of Peace, Freedom, and Neutrality.

(This article reflects the personal opinion of the author and does not reflect the official stand of the Management Association of the Philippines or MAP. The author is Philippines’ Undersecretary /Acting Secretary of Foreign Affairs in the 1990s, chaired the preparatory Senior Officials Meetings for the 1996 APEC Economic Leaders’ Meeting in Manila/Subic, and is now active with the MAP. Feedback at <map@map.org.ph> and <fmmacaranas@gmail.com>).

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Interestingly, on top of Europe’s later preparation for oil-shocks, China, also an ASEAN Dialogue Partner, added energy transition solutions dependent on rare earth metals (EVs and renewables), domestic production (to meet 30% of its demand). and the import of discounted oil (by “teapot” refineries from sanctioned countries, like Russia and Iran).

1. Diversify Supply Before Crisis, Not After

Europe’s initial problem in the 1970s was a heavy reliance on a single supplier for oil, the Middle East. Only after enduring two major energy crises did it take decisive steps to diversify through North Sea production, nuclear power, coal, and later, gas pipelines from multiple sources. It also broadened its technologies and suppliers.

ASEAN now finds itself in a similar position of vulnerability, with most member states being net importers of oil and gas and significantly dependent on Gulf producers. However, it can expand its current ASEAN energy security cooperation beyond its members’ strengths in gas & LNG (Malaysia, Indonesia, Brunei), coal (Indonesia), hydro & power trade (Lao PDR, Malaysia, Thailand), refined products & trading (Singapore, Malaysia).

For governments and business leaders, the essential lessons are clear:

• Lock in diversified LNG and oil supply contracts across the US, Australia, Africa, and the Gulf (even LPG from Russia).
• Accelerate renewables and regional power trade so that electricity, rather than imported fuel, becomes the primary energy carrier.
• Treat diversification as insurance, not as a climate luxury.

2. Build Strategic Reserves and Shared Buffers

Europe’s second major insight was that fragmented national stockpiles were insufficient. After the 1970s, strategic oil stocks and emergency-sharing rules were developed to enable coordinated releases during later disruptions. These helped in smoothing price spikes and allowed time for diplomatic and market adjustments (via the Paris-based International Energy Agency (IEA) and the European Community mechanisms).

ASEAN has begun to move in this direction, but progress has been uneven. A modern adaptation of Europe’s approach would entail:

• An ASEAN Strategic Petroleum and LNG Reserve Network, with agreed rules for when and how stocks are released.
• Co-investment in storage hubs in Malaysia, Singapore, Indonesia, and potentially the Philippines, with established protocols for emergency access.
• Use of Islamic finance and sukuk to fund these facilities, leveraging Malaysia, Indonesia, and Brunei as financial bridges to Gulf capital.

Strategic reserves should be seen not as a replacement for markets, but as a stabilizer when markets come under stress.

3. Coordinate Policy Across Borders, Not Just Within Them

Europe’s experience demonstrated that uncoordinated national responses—such as export bans, unilateral subsidies, or ad hoc price controls—worsened regional shocks. Over time, the creation of an internal regional energy market, cross-border connectors, and solidarity mechanisms turned energy into a shared infrastructure project rather than a zero-sum game.

For ASEAN, equivalent initiatives are already in progress: the ASEAN Power Grid (APG), the Trans ASEAN Gas Pipeline (TAGP), and efforts toward deeper ASEAN Energy Market Integration (AEMI). The Philippine chairship in 2026 presents an opportunity to advance these efforts by:

• Setting time-bound targets for key APG and TAGP links, with transparent project pipelines.
• Harmonizing cross-border trading rules to enable energy to flow where and when it is most needed.
• Establishing a standing Energy Crisis Task Force under ASEAN, charged with running annual stress-tests and proposing joint responses.

Europe’s experience makes clear that regional coordination is not simply an agenda item — it is a vital tool for crisis management.

(This article reflects the personal opinion of the author and does not reflect the official stand of the Management Association of the Philippines or MAP. The author is Philippines’ Undersecretary /Acting Secretary of Foreign Affairs in the 1990s, chaired the preparatory Senior Officials Meetings for the 1996 APEC Economic Leaders’ Meeting in Manila/Subic, and is now active with the MAP. Feedback at <map@map.org.ph> and <fmmacaranas@gmail.com>).

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