CARTOON BY: AARON PAUL C. CARIL
EDITORIAL
A War We Can’t Afford
A wider conflict involving the United States, Israel, Iran, and other Middle East countries may feel geographically remote, but its economic consequences will reach the Philippines long before the first headline fades. The Middle East remains the world’s most sensitive energy corridor, and every spike in tension there has already pushed global oil prices upward. Local pump prices have been rising since January, and economic managers have begun flagging the conflict as a clear risk to the country’s near-term outlook. For an economy that imports almost all its fuel, distance offers no protection.
Oil is the first pressure point. In recent weeks, Brent crude climbed sharply as markets reacted to the possibility of a regional war, and local fuel prices followed suit. Diesel and kerosene have logged consecutive weekly increases, while gasoline has risen for two months straight. These adjustments do not occur in an airtight vacuum. They translate into higher transport fares, more expensive food, and thinner margins for businesses already struggling with elevated costs. Analysts have warned that a direct confrontation involving Iran would trigger a fresh round of global oil volatility—an outcome the Philippines is ill-equipped to absorb.
Inflation is the next casualty. Economists estimate that a 10-percent jump in global oil prices can add roughly half a percentage point to Philippine inflation, and the pass-through is swift. Higher fuel costs raise the price of moving goods, powering factories, and lighting homes. This leaves the Bangko Sentral ng Pilipinas with little room to ease interest rates, tightening credit conditions just as households and firms need relief. The result is a familiar squeeze: rising prices on one side, and borrowing costs that refuse to budge on the other.
The strategic chokepoint is the Strait of Hormuz, through which about a fifth of the world’s oil supply passes. Any threat to tanker routes forces shippers to reroute vessels, insurers to raise premiums, and markets to price in scarcity. Even without a formal blockade, the mere risk of disruption is enough to unsettle supply chains. For the Philippines, which sources most of its crude from the Middle East, this means immediate exposure to higher import costs, delayed shipments, and more expensive logistics across the board.
The domestic impact will not be uniform. Because retail fuel prices in the Philippines are largely market-driven and subsidies are limited, the country is among the most exposed in Asia to external oil shocks. A sustained increase in global prices weakens the peso, widens the current account deficit, and raises the cost of imported goods. Exporters have already warned that higher freight rates and disrupted air routes could erode competitiveness. In regions where fuel is already more expensive—Mindanao among them—the strain will be sharper and the economic slack harder to absorb.
The Philippines cannot treat this as someone else’s war. A US–Israel–Iran conflict threatens to reignite inflation, weaken the currency, disrupt trade routes, and slow growth at a time when the economy is still finding its footing. The government must prepare for the worst: stabilize fuel supply, ease logistics bottlenecks, support vulnerable sectors, and cushion households from sudden price shocks. In a global economy this tightly wound, wars fought thousands of kilometers away can empty wallets and unsettle livelihoods at home. This is, in every sense, a war we cannot afford.