A meeting with the General Alliance of Workers Assn. (GAWA) council of leaders, presided by its secretary general Wennie Sancho, arrived at a consensus that the war in the Middle East between Iran, U.S.- 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, a statement from the group said.
“It will be exacerbated by the Philippines’ total foreign debts which is projected to reach P5.78 trillion by the end of 2026. Our high foreign debt is currently around 60.1 percent of GDP. The loss of confidence to our government’s institutions due to pervasive corruption will add to the country’s vulnerability. The ongoing conflict may also disrupt remittances from the Overseas Filipino Workers (OFWs) in the Middle East which reached a record of $38.3 billion in 2024,” Sancho said, adding that rising oil prices could push inflation close to 4 percent, affecting consumer spending and business investments. A strong U.S. dollar may weaken the peso increasing import costs. OFW’s conflict zones may face employment disruptions, impacting household incomes.
Sancho defined the challenges confronting the labor sector which includes short-term pains like higher inflation, weaker peso and economic slowdown. A 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.*
