By Tracy Cabrera
BGC, Taguig City — Business leaders are raising alarms over the renewed conflict in the Middle East, warning that its effects could ripple through the Philippine economy, particularly in energy costs and remittances from overseas Filipino workers (OFWs).
Bank holding firm Mitsubishi UFJ Financial Group (MUFG) highlighted the Philippines’ vulnerability, noting the country’s heavy reliance on imported oil. With prices surging after recent American and Israeli strikes on Iran, the nation ranks among the most exposed in Asia if the conflict prolongs.
In response, the Department of Energy (DoE) said it is considering phased fuel price increases next week should tensions remain unresolved.
Robert Young, president of the Foreign Buyers Association of the Philippines, warned that the crisis could disrupt supply chains, affecting exports. Meanwhile, Perry Ferrer, president of the Philippine Chamber of Commerce and Industry (PCCI), emphasized that the conflict would have a direct impact on the country. Both agreed that sustained higher fuel costs would push up commodity and import prices “unless a resolution is reached soon.”
The PCCI urged the Marcos Jr. administration to diversify its oil sources, noting that the Philippines imports all its crude oil from the Middle East. “With crude prices climbing amid concerns over the Strait of Hormuz, the government must urgently secure alternative fuel supplies to reduce dependence on a single region,” the PCCI said. The group also called on authorities to stabilize fuel prices, maintain sufficient basic goods, and use monetary tools to support the peso. Protecting Filipinos in the Middle East, whose remittances underpin domestic consumption, remains a top priority. The PCCI stressed that repatriated workers should receive support for livelihood and reintegration.
Elizabeth Lee, chairman of the Federation of Philippines, warned that higher fuel and electricity costs, coupled with rising logistics expenses, could hurt manufacturers reliant on imported materials. “This may result in higher freight costs, longer shipping times, and more expensive raw materials,” she said.
MUFG added that a US$10 per barrel rise in oil prices could weaken current account positions in Asia by 0.2 to 0.9 percent of GDP, with the Philippines among the most affected. Inflation across the region could also increase by 0.1 to 0.9 percentage point, with the Philippines, Thailand, Vietnam, and South Korea facing the most pressure.
Oil prices approaching US$90 per barrel could push Philippine inflation toward the upper limit of the central bank’s target range, intensifying the challenge of maintaining price stability.
