President Gloria Arroyo has ordered the country's Department of Transportation and Communication and the Department of Energy to conduct a thorough study on the capability of the Philippine government to subsidise petroleum prices in order to keep a lid on the price of diesel.

The Philippines government is currently observing austerity measures designed to keep the national budget within its target ceiling of US$3.69 billion. Economists at the Asian Development Bank have indicated that the measures will arrest a five-year-old fiscal crisis but the deficit could still threaten economic stability in the country.