Shockwaves from Iran
Remittances from overseas Filipinos consistently provide stability to the Philippine economy and support millions of households at home.
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Remittances from overseas Filipinos consistently provide stability to the Philippine economy and support millions of households at home.
War in the Middle East rarely stays confined to the Middle East. For the Philippines, the distance between Manila and Tehran may stretch across continents, but the economic consequences of conflict in that region often reach our shores with surprising speed. History has shown that when tensions escalate in the Persian Gulf, the first tremor is almost always felt in the global oil market.
The Philippines remains one of the most energy import-dependent economies in Asia, sourcing nearly 90 percent of its petroleum requirements from abroad. This reality leaves the country particularly vulnerable to disruptions in global supply, especially when instability occurs in regions that produce and transport a significant share of the world’s energy.
The current conflict involving Iran has once again unsettled global markets. Analysts warn that any escalation threatening shipping routes through the Strait of Hormuz could push oil prices sharply higher. This narrow channel carries roughly a fifth of the world’s crude oil supply, making it one of the most critical arteries of global energy trade.
When that artery tightens, economies around the world feel the pressure. The Philippines is no exception. Higher global oil prices translate into higher pump prices for diesel and gasoline. Transport operators face rising fuel costs, electricity generation becomes more expensive and businesses absorb higher operating expenses. The DoE must police rising fuel prices as some gas stations may take advantage of the crisis by padding their price per liter by a few more pesos.
These increases inevitably cascade through the supply chain, eventually appearing in the form of inflation that affects food prices, transportation and basic household goods. Thus, the DTI should keep a close watch on the surge in these goods that will directly affect each Filipino.
Further, millions of Filipinos live and work in the region. Government estimates place more than two million overseas Filipino workers across the Middle East, particularly in Saudi Arabia, the UAE, Qatar and Kuwait. Their contributions form a vital economic lifeline for the country. Remittances from overseas Filipinos consistently provide stability to the Philippine economy and support millions of households at home.
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In many ways, this steady inflow of foreign currency has helped shield the Philippines from the full impact of global economic downturns, but a war in the Middle East strikes directly at that lifeline. Armed conflict in the region threatens the livelihood and security of Filipinos working there. Evacuations, job disruptions or economic slowdown in host countries could quickly ripple back to families and communities across the Philippines.
Ultimately, we cannot control conflicts unfolding thousands of miles away. What we can control is how prepared we should be for their consequences. Thus, President Marcos may be correct in flying to New York to the United Nations to ask for help after declaring a four-day workweek for the Executive Branch to curb expenses expected from rising oil prices. With his sixth visit to the United States, let us hope for proper results that should benefit our country.
For comments, email him at darren.dejesus@gmail.com.
