ADB offers support amid Middle East conflict

The Philippine-headquartered Asian Development Bank (ADB) is extending financial support to assist developing member countries as the Middle East conflict continues to weigh on global and regional economies.

In a statement, the multilateral lender said it is prepared to deploy financial and technical assistance to help developing member countries (DMCs) manage risks, maintain macroeconomic stability and protect vulnerable populations.

“ADB will deliver rapid, flexible, and scalable assistance to help countries manage immediate pressures and strengthen long-term resilience, notably fast-disbursing budget support and trade and supply chain finance to secure the import of essential goods, now including oil,” said ADB President Masato Kanda.

The statement said ADB’s assistance will take two main forms. The first is fast-disbursing budget support to help DMCs facing heightened fiscal pressures, including the use of the bank’s Countercyclical Support Facility to stabilize economies and mitigate the impact of shocks on the most vulnerable. The second is the ADB’s Trade and Supply Chain Finance Program (TSCFP), which supports the private sector to ensure the continued flow of critical imports, including energy and food.

“The bank has decided to reactivate support for oil imports under the program on an exceptional basis for this limited period. This decision acknowledges that economies and people across the region are being severely affected by the rapid surge in oil prices and supply chain disruptions,” the statement added.

Domestically, the President said on Wednesday that the country is facing an “energy emergency” as supply constraints and rising oil prices push costs beyond the average Filipino’s purchasing power. Department of Economy, Planning and Development (DEPDev) Secretary Arsenio Balisacan told a Senate panel on Tuesday that the country’s inflation rate could reach double-digit levels, with diesel prices potentially rising by as much as 176 percent under a “most severe scenario” if crude oil hits $200 per barrel amid the Middle East crisis.

“The latest ADB analysis indicates that disruptions to shipping routes have already increased costs and delivery times, while supply risks extend beyond energy to key industrial inputs such as petrochemicals and fertilizers, with serious implications for agriculture and food production,” the statement added.

ADB noted that tourism- and remittance-dependent economies such as the Philippines face compounding vulnerabilities beyond these initial shocks, adding that the escalation of the conflict is “increasing uncertainty and tightening financial conditions across the region, putting pressure on currencies and capital flows.”

The bank said it has begun discussions with severely affected developing member countries on possible immediate support and will continue to work closely with governments, development partners and the private sector to ensure coordinated and effective responses to maintain economic stability and protect the poor and most vulnerable.