Courtesy: Philippine Chamber of Commerce and Industry and Federation of Philippine Industries
The Philippine Chamber of Commerce and Industry (PCCI) on Monday raised alarm over the escalating military conflict in the Middle East, warning that the crisis could trigger inflation and serious economic repercussions for the Philippines.
In a statement, the group called for an immediate ceasefire and a return to diplomatic dialogue, saying that intensifying tensions threaten global oil supply and the country’s economic stability.
The PCCI urged the government to urgently secure alternative fuel sources, stressing that the Philippines sources all of its crude oil imports from the Middle East and is highly vulnerable to supply disruptions, particularly amid fears of instability in the Strait of Hormuz.
It pressed the Department of Energy to accelerate the development of renewable energy and domestic energy alternatives as a long-term solution to the country’s energy vulnerability.
Highlighting the plight of more than 2 million overseas Filipino workers across the Middle East, the chamber appealed to the Department of Migrant Workers, the Department of Foreign Affairs, and the Overseas Workers Welfare Administration to activate emergency protocols, maintain open communication with workers, and fast-track evacuation and repatriation plans when necessary.
The PCCI also called for immediate livelihood and reintegration support for repatriated workers, noting that remittances reached a record $38.3 billion in 2024 and remain a lifeline for millions of Filipino families.
Domestically, it warned that higher fuel prices, potential supply chain disruptions, and weaker remittance inflows could stoke inflation and erode purchasing power, with micro, small, and medium enterprises (MSMEs) among the most affected given their limited financial buffers.
The chamber urged authorities to stabilize fuel prices, prevent speculative practices, ensure adequate supply of basic goods through buffer stocking and price monitoring, and deploy monetary measures to protect the peso, maintain financial stability, and preserve investor confidence.
Similarly, Federation of Philippine Industries chairperson Elizabeth Lee warned of rising costs for both consumers and producers if tensions persist: “The Middle East crisis is not just a distant conflict, it is an inflationary shock that could affect Philippine households and industries.”
As a net energy importer, the Philippines faces higher global crude prices that could push up pump prices, electricity generation costs, and transport fares, with local oil firms’ inventories providing only a temporary cushion from immediate price hikes.
Lee cautioned that if the conflict escalates or becomes prolonged, inventories will be replenished at higher global prices, resulting in sustained upward pressure on domestic fuel costs.
The crisis also threatens logistics and shipping, as geopolitical risks raise insurance premiums and freight costs, potentially leading to longer transit times and higher raw material expenses for manufacturers reliant on imported inputs.
Currency volatility further complicates the outlook, as a stronger US dollar during geopolitical uncertainty may benefit exporters but increase costs for import-dependent industries, while rising electricity and fuel prices are expected to hit manufacturing, aviation, food processing, and tourism sectors.
Warning that prolonged instability would sustain pressure on inflation, logistics, and growth, the FPI chairperson urged accelerated energy diversification, renewable expansion, energy efficiency, local sourcing, and infrastructure modernization.
She also called on businesses to tighten belts, manage financial risks, and push reforms, easing the cost of doing business and reducing hidden taxes on local manufacturers and MSMEs to help offset global pressures.