Could the Iran crisis reshape global supply chains again? When distant conflicts reach the Philippine economy

THE STRAIT OF HORMUZ is only one of several maritime chokepoints that sustain the modern global economy.

- Cesar Polvorosa, Jr.

The Babel-Mandeb linking the Red Sea and Gulf of Aden is also of urgent concern.Energy shipments moving from the Middle East to East Asia must also pass through the Strait of Malacca and the South China Sea before reaching major manufacturing hubs and consumer markets. The Suez Canal is the vital channel between Europe and Asia while the Panama Canal provides the critical link between the Pacific and the Atlantic Oceans. Container ships carrying electronics, industrial components, and consumer goods follow similar routes.

‘These narrow waterways form a critical infrastructure network for global trade. A disruption in any one of them can reverberate through supply chains that stretch across continents.

The 2026 Iran crisis therefore highlights a broader vulnerability in the architecture of globalization. Modern trade depends not only on efficient markets but also on the stability of a small number of maritime corridors that carry a disproportionate share of the world’s commerce.

If the US-Iran War escalates further, the Philippine economy could experience magnified effects through several channels.

OIL PRICES AND INFLATION

The most immediate impact would be higher oil prices. Because the Philippines imports nearly all its crude oil requirements, global price increases quickly feed into domestic fuel costs.

Higher energy prices affect transport, utilities, and industrial production. Over time, these costs pass through to consumers in the form of higher food and transportation prices. From just about $69.41 per barrel on Feb. 28, the benchmark Brent crude rose to $109-$111 as of April 6. Subsequently, inflation forecast for 2026 is significantly up to 3.9% from a mere 1.7% in 2025. There had already been substantial local fuel price hikes.

OVERSEAS WORKERS AND REMITTANCES