M.E. conflict threatens Migrants’ remittances
‘The conflict is expected to affect labor markets for some time, with the scale and duration of its effects depending on how the situation evolves.’
Daily Tribune‘The conflict is expected to affect labor markets for some time, with the scale and duration of its effects depending on how the situation evolves.’
MIDDLE East War 2026
The Middle East (ME) conflict has raised economic risks for the Philippines and the Asia-Pacific region through weaker remittance flows, according to the International Labor Organization (ILO).
In a report dated 18 May, the ILO said heavily remittance-reliant economies such as the Philippines face elevated risks as mass repatriations and political instability stemming from the Middle East conflict threaten overseas Filipino worker (OFW) households.
“Between early March and late April, close to 5,000 Filipino workers were repatriated from Gulf countries. Migrant worker outflows to the Gulf also fell sharply — from more than 72,000 in March 2025 to around 16,000 in March 2026,” the ILO said.
The organization said the effects are expected to be “highly uneven across regions, sectors, and workers,” with the Asia-Pacific region — to which the Philippines belongs — as well as the Arab states identified as the most exposed due to their integration into Gulf energy flows, trade routes, supply chains, and labor migration.
Cash remittances from OFWs reached $2.87 billion in March, rebounding by $85 million from February’s nine-month low and bringing total inflows for the first quarter to $8.68 billion, according to preliminary data from the Bangko Sentral ng Pilipinas.
Cash remittances, however, grew by just 2.8 percent year-on-year in the January-to-March period, slightly slower than the 3.1-percent growth recorded in the same period last year.
On average, remittances account for around nine percent of the Philippines’ gross domestic product, with the Middle East accounting for roughly 18 percent of total remittance inflows.
The ILO reported that OFW deployments to the Middle East contracted by 78 percent year-on-year following the escalation of the conflict in March, warning that prolonged disruptions to migration and overseas employment could place additional pressure on remittance flows moving forward.
“The conflict is expected to affect labor markets for some time, with the scale and duration of its effects depending on how the situation evolves,” the ILO said.
“While the full consequences will take time to materialize, the ILO warns that the shock is already transmitting through multiple channels, with pressures expected to build gradually in a global economy still marked by weak growth and decent work deficits,” it said.
The ILO reported that the spillover effect of the conflict has constrained Filipino purchasing power through elevated inflation, which accelerated to 7.2 percent in April.
The organization warned that increasing pressure on household incomes and purchasing power “could weigh on domestic demand and local labor markets.”
Analysts noted, however, that OFW earnings in dollars may benefit from the peso’s sharp depreciation, with the local currency posting a fresh record low of P61.75 per US dollar on Monday, boosting the purchasing power of remittances sent home.
According to RCBC chief economist Michael Ricafort, OFWs may be adjusting to the higher prices and broader uncertainty brought about by the Middle East conflict.
“OFW remittances remain resilient, similar to the pandemic period, as OFWs may need to send more to their families to better cope with higher prices, inflation, slower demand, and weaker economic and business conditions,” he said.
Ricafort said the March remittance figure was “partly weighed by some OFWs adversely affected by the disruptions in the Middle East in terms of some reductions in OFW deployments.”
