Middle East War

The Philippine Statistics Authority reported that 2.41 million Filipinos were jobless in April 2026 — a 4.7% unemployment rate and the highest for any April since 2022 — while underemployment rose to 15.2%, its highest since July 2023, with the national statistician attributing the deterioration partly to the Middle East war's effect on fuel prices and retail trade.

Fitch Ratings has cut its outlook on Philippine banks to "deteriorating" from "neutral" and S&P Global Ratings expects lenders to absorb credit losses of about 1% to 1.2% of total loans, as the country's heavy reliance on Gulf oil leaves its banking system exposed to a drawn-out US-Iran conflict — with bad loans already at their highest ratio since August 2025.

The Philippine Stock Exchange index closed at 5,941.36 on June 10 and the peso weakened anew as the United States and Iran traded their heaviest blows since an April ceasefire, sending crude near $90 a barrel and pushing the mining and oil sub-index down almost 6% in a single session.

Government economists now project the debt-to-GDP ratio will linger in the 60–63% range through 2026 — the worst sustained level in two decades — as Middle East war-driven oil shocks force fresh emergency borrowings on top of a fiscal position already strained by collapsing infrastructure spending and slowing growth.

BSP Governor Eli Remolona said on May 22 that the Monetary Board is "considering" a second straight rate hike before its scheduled June 18 meeting, as April inflation surged to a three-year high of 7.2% — well above target. The same day, the Asian Development Bank signaled it will likely cut the Philippines' already-reduced growth forecast when it next publishes projections in July.

On March 23, Palace spokesperson Claire Castro told the public the Philippines was facing only a "price disruption," not a crisis. Twenty-four hours later, President Marcos signed Executive Order 110 declaring a State of National Energy Emergency. No correction was issued.

As the worst energy crisis in a decade batters Filipino households, the President's response has been palengke visits and reassurances — while neighboring Asian leaders are securing concrete deals and enacting real relief.