Philippine Business Groups Warn Mideast Conflict Fuels Inflation

(Philexport), warned that escalating Middle East tensions will drive up domestic inflation, disrupt supply chains, and reduce remittance inflows, directly impacting households and industries. FPI Chairperson Elizabeth Lee stated that as a net oil importer, the Philippines will experience higher global crude prices, exacerbated by disruptions in oil shipments through the Strait of Hormuz, a route for 20 percent of global oil.

Lee noted existing oil inventories offer only a short-term buffer, with prolonged conflict leading to sustained upward pressure on fuel costs. PCCI highlighted that increased fuel prices, supply chain disruptions, and reduced remittances will compound to accelerate inflation, weakening Filipino purchasing power and severely affecting micro, small, and medium enterprises (MSMEs).

Philexport anticipates impacts on exports to the Middle East, a significant market for Philippine food products, construction materials, and services, with increased shipping rates, insurance premiums, and longer transit times for electronics, garments, processed food, and furniture. The National Confederation of Irrigators Association Inc.

(NCIA) warned President Ferdinand “Bongbong” Marcos Jr. that disruptions in urea fertilizer shipments from the Middle East will trigger a surge in prices, directly affecting the agriculture sector.

Business groups urged the government to stabilize fuel prices, guard against speculative practices, explore alternative fuel sources, and accelerate renewable energy development as long-term solutions.