Caloocan City 2nd district Rep. Edgar "Egay" Erice has filed a measure that would limit prices of diesel to a maximum of ₱70 per liter, as part of possible legislative responses to elevated pump fuel prices in the country.

Dubbed as the proposed Diesel Cap Act, the measure was patterned after South Korean government's fuel subsidy program.

Under Erice's bill, retail prices of diesel will be limited to ₱70.00 per liter nationwide--a price cap to be supported by a ₱400-billion subsidy program. The subsidy will cover the gap between the capped retail price and prevailing international market prices.

The House minority bloc member highlighted on Wednesday that such intervention had been successfully implemented in other economies facing similar crises.

“In South Korea, fuel prices were capped at around ₱74 per liter, with government subsidies cushioning the impact of the Middle East crisis. As a result, daily life remained stable, commodity prices did not surge, inflation was controlled, and the economy continued to grow,” Erice said.

He added that a similar approach was adopted in Taiwan, where the government subsidized up to 75 percent of oil price increases, keeping inflation significantly lower compared to the Philippines.

“In our country, inflation has already reached 4.1 percent in the first quarter and continues to rise. The effects are now being felt across the entire economy,” he noted.

Even with Tuesday's ₱21 per liter price cut on diesel, local oil firms are still retailing it at over ₱100--nearly double of its price last February.

According to Erice, the continued rise in diesel prices is heavily impacting key sectors, including public transport workers, logistics and supply chains, farmers and fisherfolk, and industrial producers.

The veteran lawmaker warned that these pressures could lead to slower production, economic contraction, and increased unemployment if left unaddressed.

Erice also raised concerns over the current reliance on cash assistance programs.

“Direct cash aid is insufficient. Many beneficiaries are left out, leakages are significant, and administrative costs are high. The distribution is also not equitable. In contrast, a price cap is direct, simple, and minimizes wastage,” he said.

He further cautioned government that continued geopolitical tensions in the Middle East could push oil prices even higher, worsening the situation.

“If the conflict persists, oil prices will continue to rise until the economy eventually slows down,” he added.

Erice underscored the scale of the issue, as he noted that the Philippines consumes approximately 33 million liters of diesel daily. This makes the commodity a critical component of both economic activity and everyday life.

“The only way to avert a major economic catastrophe is to cap diesel prices at ₱70 per liter. This is a straightforward solution that stabilizes costs across all sectors while minimizing inefficiencies,” he stressed.

To finance the proposed ₱400 billion subsidy, Erice suggested that the government may realign funds from less essential projects and operating expenditures, improve fiscal efficiency, or resort to emergency foreign borrowing, if necessary.

“The government must find a way to raise ₱400 billion. This is the cost of sustaining a functioning and stable economy for the next six months,” Erice said.