Oil crisis to drive more Filipinos into poverty—PIDS

THE PHILIPPINE Institute for Development Studies (PIDS) projects an additional 1.34 million Filipinos will be pushed into poverty this year amid surging oil prices due to the Middle East war.

- - Justine Irish D. Tabile

In a policy note, PIDS Senior Research Fellow Jose Ramon G. Albert said the national poverty rate is projected to go up to 14.4% this year under the current scenario where oil is at around $105 per barrel and a 35% pass-through effect. The poverty rate stood at 13.2% in 2025.

"The poverty impact is substantial and immediate. The current scenario has already pushed an estimated 1.34 million Filipinos into poverty, reversing much of the progress made since 2023. Fuel price stability must be treated as a priority for social protection," he said.

In a "prolonged crisis" scenario where oil prices hit $125 per barrel, Mr. Albert projects the poverty rate to go up to 15.3% with 2.35 million considered as "newly poor."

Under a severe disruption where oil goes up to $145 per barrel, the poverty rate could hit 16.3% as an additional 3.5 million Filipinos are pushed into poverty.

All these newly poor individuals come from low-income but not poor households.

The PIDS policy note drew on three fuel price shock scenarios developed by the Asian Development Bank in the context of Middle East conflict risks.

Mr. Albert said rural areas will see a sharper increase in poverty rates — 20% under the current scenario and up to 22.5% in the most severe scenario.