'Economy, inflation at risk from Middle East conflict'

The intensifying conflict in the Middle East following the United States' airstrikes on Iran's nuclear sites may undo the Philippines' price stability gains and dampen economic growth, economists warned.

- By Louella Desiderio

Philippine Institute for Development Studies senior research fellow John Paolo Rivera told The STAR yesterday that the escalating conflict and US strikes on Iran's nuclear facilities could pose indirect, but significant economic risks to the Philippines.

"The most immediate concern is a potential spike in global oil prices, which would raise domestic transport and power costs feeding into inflation. This could reverse recent gains in price stability," Rivera said.

As the Philippines imports nearly all of its oil requirements, Jonathan Ravelas, senior adviser at professional services firm Reyes, Tacandong & Co., said that any disruption in supply from the Middle East could lead to a spike in global oil prices and increase the cost of gasoline, diesel, and electricity in the country.

"Higher fuel costs typically lead to increased transportation and production expenses, which can drive up the prices of goods and services. This could worsen inflation, which has already been a concern in recent years," Ravelas said.