MANILA (June 16) — The economic effects of the ongoing conflict in the Middle East may be felt far beyond the region’s borders, with millions of Filipinos facing higher living costs and increased financial hardship, according to a new report from the United Nations Development Programme (UNDP).
In a policy brief released on June 10, the UN agency warned that the Philippines is among the countries in Asia most vulnerable to the indirect impacts of the conflict because of its dependence on imported oil, food, fertilizer, and remittances from overseas Filipino workers in the Middle East.
While the fighting is taking place thousands of kilometers away, UNDP said its effects are already reaching Filipino households through rising fuel prices, more expensive food and farm inputs, and potential disruptions affecting migrant workers and remittance flows.
“The shock has reached households through three reinforcing channels: energy imports, agricultural inputs, and labour migration and remittances,” the report noted.
For many Filipino families, especially those already struggling to make ends meet, the concern goes beyond temporary price increases. The UNDP warned that prolonged economic pressure could force vulnerable households to make painful choices such as skipping meals, postponing medical treatment, or withdrawing children from school.
The agency cautioned that these coping mechanisms can have long-term consequences that extend beyond the immediate crisis.
“The goal is to prevent a temporary price shock from becoming a permanent human development setback,” the report emphasized.
Poor Families Bear the Heaviest Burden
According to the UNDP, the impact of rising oil prices is falling disproportionately on low-income households.
Citing an analysis by the Philippine Institute for Development Studies (PIDS), the report found that poor households could lose as much as 16.2 percent of their purchasing power because of the oil-price shock, compared with only 3.4 percent among the wealthiest households.
In practical terms, this means that poorer families are losing nearly five times more of their spending capacity than richer households, making it harder to afford basic necessities.
The same study estimated that between 1.3 million and 3.5 million Filipinos could fall into poverty if disruptions continue and global oil prices remain elevated.
A separate estimate from the World Bank, also cited by UNDP, suggested that nearly 2 million Filipinos could be pushed below the poverty line because of fuel-related economic pressures.
These warnings come despite significant progress in poverty reduction. The Philippines recorded a poverty rate of 15.5 percent in 2023—the lowest level on record. However, the UNDP stressed that many Filipinos remain economically vulnerable, with nearly three out of every ten people still at risk of falling back into poverty.
Rising Prices Already Being Felt
The report pointed to inflation data as evidence of how quickly global disruptions can affect local households.
Headline inflation climbed from 2.4 percent in February 2026 to 7.2 percent in April before easing slightly to 6.8 percent in May. The increase was largely driven by higher transportation and food costs.
Rice prices remain a particular concern. Rice inflation reached 15.6 percent, adding pressure to household budgets at a time when many families are already struggling with other rising expenses.
The report noted that increases in fuel, food, and utility costs occurring simultaneously have made the current situation especially difficult for ordinary consumers.
Farmers Also Face Growing Challenges
The agricultural sector is likewise feeling the impact of the crisis.
Higher fuel and freight costs have increased the cost of transporting goods, while fertilizer prices have risen sharply. The report found that granular urea—a key fertilizer used in rice and corn production—rose by around 37 percent between the first two months of the year and the March-April period.
These higher production costs could eventually translate into more expensive food for consumers while squeezing the incomes of farmers.
Mindanao and Other Vulnerable Regions at Risk
UNDP identified several regions that may face greater risks because of weaker development indicators and more limited fiscal resources.
Among the areas cited were the Bangsamoro Autonomous Region in Muslim Mindanao (BARMM), Bicol Region, MIMAROPA, parts of the Visayas, and several areas in Mindanao.
The agency warned that these regions may have fewer resources to cushion the impact of rising prices and economic disruptions.
Call for Targeted Government Support
To reduce the impact on vulnerable households, UNDP urged the government to sustain efforts to stabilize food and fuel prices, secure energy supplies, and provide targeted assistance to low-income families.
The agency also recommended continued support for farmers, workers, and small businesses that are most vulnerable to economic shocks.
While many of these programs are already being implemented by the Marcos administration, UNDP stressed that the effectiveness of government intervention will depend on how quickly and accurately assistance reaches those who need it most.
As global uncertainty continues, the report serves as a reminder that conflicts abroad can have profound consequences at home—especially for families already living on the edge of poverty. For policymakers, the challenge is not only managing rising prices but ensuring that temporary economic shocks do not reverse years of progress in improving the lives of Filipinos.
