Oil shock unlikely to hit Philippines as hard as COVID – ADB

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May 8, 2026 | 12:00am

SAMARKAND, Uzbekistan – Oil price disruptions triggered by the Middle East conflict are likely to have a less severe impact on the Philippine economy than the COVID-19 pandemic, according to the Asian Development Bank (ADB).

“At the economy-wide level, we don’t think it will be the same level of shock,” ADB chief economist Albert Park said in a media briefing here.

He said that the COVID-19 pandemic affected both supply and demand, with people not spending and staying at home.

“So it was hugely disruptive. And I don’t think we’re seeing that here,” he said.

He also said that robust domestic demand is still seen in many countries in the region.

Even under a more severe scenario, ADB deputy chief economist Abdul Abiad said that the Philippine economy is unlikely to see a contraction similar to that during the pandemic.

In 2020, the Philippines posted a 9.5-percent contraction, its worst economic performance on record, due to severe lockdowns to prevent the spread of the virus.

“It’s hard to say how this Middle East conflict will evolve. So it could get worse, but it’s difficult to compare. But definitely, in terms of just the shock to real activity, you’re not going to get something as big as that COVID shock in 2020,” Abiad said.

Even so, the ADB expects higher oil prices to affect the economy and pose challenges to both consumers and businesses.

“This is certainly a headwind because if the oil prices are high and later food prices are higher, then that’s more money that households have to spend on those things,” Park said.

As households spend more on food, they will have less money available for other things.

Park said that a reduction in overall demand would pose challenges for businesses.

At the same time, higher oil prices affect businesses because imported fuel is an input to production.

“So it certainly will be challenging for some private firms,” Park said.