GENERAL Alliance of Workers Association (Gawa) Secretary General Wennie Sancho said the war in the Middle East between Iran and US-Israel could worsen the Philippine economic situation.
“As a net oil importer, the country is vulnerable to rising global crude prices, which could lead to higher fuel costs, increased transportation fares and elevated electricity rates. This, in turn will fuel inflation, strain micro small and medium enterprises (MSME's) and undermine economic growth,” Sancho said.
He said it will be exacerbated by the Philippines total foreign debts, which are projected to reach P5.78 trillion by the end of 2026.
“Our high foreign debt is currently around 60.1 percent of Gross Domestic Product (GDP). The loss of confidence to our government's institutions due to pervasive corruption will add to the country's vulnerability,” he added.
Sancho noted that the ongoing conflict may also disrupt remittances, from overseas Filipino workers (OFWs) in the Middle East, which reached a record of $38.3 billion in 2024.
Sancho stressed that rising oil prices could push inflation close to four percent affecting consumer spending and business investments.
“A strong US dollar may weaken the peso increasing import costs. OFWs conflict zones may face employment disruptions, impacting household incomes,” Sancho said
He said the challenges confronting the labor sector which includes short-term pains like higher inflation, weaker peso and economic slowdown.
“Prolonged conflict could lead to job losses, recession and social unrest. Government's response will be crucial in navigating these challenges in terms of policy direction,” he added. (MAP)