SAN FERNANDO CITY, Pampanga, Philippines?Malacañang stood firm Tuesday on the ceiling it set on oil prices despite warnings by the oil companies of a possible supply shortage and steep price increases once once price controls are lifted.

Press Secretary Cerge Remonde said the Palace was not bowing down to the threats and instead warned that ?the government will use every power vested by law {in it] to put everything in order.?

In the Cabinet meeting here, Energy Secretary Angelo Reyes told President Macapagal-Arroyo that the oil companies would have jacked up pump prices by another P2 per liter if not for Executive Order No. 839.

Defiant firms had also all complied with the directive, which brought down prices to their Oct. 15 levels, according to Reyes.

?Right now, we don?t see any oil company that is not following the order,? Cabinet Secretary Silvestre Bello III told reporters.

?Apparently, everybody?s following although it?s clear that they?re following with reluctance, but that is understandable. What?s important is, even if they are reluctant, they are following.?

But the companies? submission to the EO might be the calm before the storm.

Edgar Chua, chair of Shell in the Philippines, had said that his company will comply with the presidential order, but warned of its supposedly ?serious implications, not only to the supply of products in the country, but also to investments.?

?Would you consider higher public interest for products to be cheap but not available or for products to be expensive but reflecting the true cost, but available?? he asked.

Another oil company warned of a sudden increase in pump prices when the proclamation of a state of calamity in Luzon, which was the basis for EO 839, is lifted.

Remonde said he would not describe the threats as a form of ?blackmail,? but appealed to the oil companies to exercise their ?corporate social responsibility.?

?It is the duty of the President and the government to promote the so-called general welfare and under the circumstances, this is exactly what the President is doing,? he said.

Gary Oliver, deputy presidential spokesperson, reminded the oil companies that the price ceiling was a ?specific and short-term response to the state of calamity.?

?The issue of possible shortages in the medium term because of price pressure is something to be addressed at that time and not an excuse for non-compliance today,? he said. ?Nothing about it, however, can be construed as a retreat by the government from its long-standing commitments to market liberalization, policy stability, and a favorable climate for foreign investments.?