The Real Cost of the Israel-Iran Conflict for the Filipino Economy

Understanding the Global Crisis and Its Local Impact

The recent military escalations between Israel and Iran have stirred global concern and brought suffering to countless lives. Although this conflict may seem far removed from our shores, its repercussions are already being felt in the Philippines, beginning with rising fuel prices and extending into key sectors of our economy.

As a nation intertwined with global trade and heavily reliant on imported energy, we must prepare for the economic challenges ahead while also nurturing our compassion for those who are directly impacted by the violence.

Rising Oil Prices and Immediate Effects

The Israel-Iran conflict has reverberated through global oil markets. According to BBC News (June 16, 2025), Brent crude oil prices surged above $78 per barrel before settling at around $74.50, a significant rise of about $10 in just a month. While this is still below the peaks experienced in 2022, it underscores the heightened geopolitical tensions that threaten all of us.

In the Philippines, the effects are swift and significant. Based on four days of global trading data, the Department of Energy (DOE) and Jetti Petroleum have projected the following local fuel price increases for the coming week (Philippine Daily Inquirer, June 21, 2025):

• Gasoline: ₱2.50 to ₱3.20 per liter
• Diesel: ₱4.30 to ₱4.80 per liter
• Kerosene: ₱4.25 to ₱4.40 per liter

These increases will impact not just motorists but also families, small businesses, and countless livelihoods intertwined with our food supply chains.

Broader Economic Impact

When fuel costs rise, the financial burden quietly extends to nearly every aspect of life—from the transport of fresh produce and operation of farm equipment to the functioning of public utilities and small enterprises.

• Transport operators may need to raise fares just to keep afloat.
• Farmers and fisherfolk will struggle with increased operational costs related to machinery, cold storage, and logistics.
• Families may soon notice rising prices at the grocery store, for manufactured goods, and potentially even for basic utilities.

A sustained increase in energy prices threatens to push inflation higher, placing additional strain on Filipino households that are still healing from the challenges brought about by the pandemic.

Geopolitical Uncertainty and the Strait of Hormuz

At the heart of this global turmoil lies the Strait of Hormuz, a vital waterway off the coast of Iran that transports nearly 20 percent of the world's oil supply, as stated by the U.S. Energy Information Administration. Any disruption here—whether real or perceived—can lead to soaring oil prices. Although a full-scale supply cut may be unlikely, the risks have certainly grown.

According to BBC, growing market anxiety is linked to fears of U.S. involvement or retaliatory actions against energy infrastructure. For nations like the Philippines that depend on imported energy, even the slightest threat can elevate costs and deepen market instability, impacting our everyday lives.

The Philippine Government's Response

Our government is taking proactive measures to manage the economic fallout:

• The DOE has reached out to oil companies to encourage them to stagger price hikes, aiming to cushion consumers from sudden shocks.
• They have allocated ₱2.5 billion in fuel subsidies under the 2025 budget to support public utility drivers, ride-hailing partners, and delivery service operators.
• An additional ₱585 million has been set aside for farmers and fisherfolk grappling with increased fuel expenses.

These support systems will become active once Dubai crude prices exceed $80 per barrel. As of June 21, the price stands at $74.86 (Philippine Daily Inquirer), just shy of this threshold. While these measures may alleviate some immediate burdens, enduring conflict may require further collaboration between government agencies and local communities.

Moving Forward: What Can Be Done?

While we may feel powerless in the face of global events, we can choose to respond with foresight, unity, and compassion.

For our policymakers, now is the time to prioritize energy security, diversify supply sources, and strengthen support systems for our most vulnerable.

For businesses, this is a chance to lead with transparency and responsibility—avoiding unnecessary price hikes while striving for greater efficiency.

For consumers, small actions like conserving energy, making mindful purchases, and supporting local products can create meaningful impact in our communities.

But beyond economic concerns lies a deeper human cost. Civilians in Israel, Iran, and Gaza live under the shadow of fear, loss, and uncertainty. As Filipinos, we know hardship—and we also carry an enduring spirit of hope. Let us pray for their safety and call for the diplomacy and courage needed to build peace.

The Israel-Iran conflict reminds us how deeply interconnected we are. A missile launched thousands of kilometers away can still affect our fuel prices, food costs, and local stability.

As we navigate this uncertainty, may we do so together—with empathy, readiness, and the resilience that defines the Filipino spirit. Let this moment move us not only to protect our economy, but to live out the values of peace, humanity, and collective care.