Impact of Mideast war on Central Visayas tackled in RDC meeting

Local

RISING oil prices tied to tensions in the Middle East could spill over to Central Visayas, threatening higher inflation, weaker investments, and possible job losses, economic planners warned.

The Department of Economy, Planning, and Development (DEPDev) presented the outlook during the Regional Development Council-Central Visayas (RDC-7) full council meeting, where officials assessed the economic and social impact of the ongoing crisis involving the United States, Israel, and Iran.

Cebu Gov. Pamela Baricuatro chaired the meeting, attended by Cebu City Mayor Nestor Archival, Mandaue City Mayor Jonkie Ouano, Lapu-Lapu City Congresswoman Emmarie Ouano-Dizon, and Cordova Mayor Cesar Suan.

Engr. Raffy Dave Boyles, senior economic specialist of DEPDev 7, reported that inflation in Central Visayas may reach around 4 percent in the coming months.

He noted that the region already recorded the highest inflation nationwide for two consecutive months.

He said rising fuel prices could increase costs of cement, steel, asphalt, and other materials, affecting both government and private projects.

He added that government infrastructure projects would continue, with variation orders applied to contracts to mitigate the impact of higher construction costs.

DEPDev also projected that domestic retail fuel prices could spike in the short term, with diesel potentially peaking at 120.26 pesos per liter in April before gradually declining to 97.73 pesos per liter by May, while gasoline prices could rise by as much as 133 percent if tensions escalate.

Boyles also warned that geopolitical uncertainty may push foreign investors to adopt a wait-and-see approach, while local investors may pause capital expenditures if interest rates increase.

He said businesses may reduce working hours and implement cost-cutting measures, which could raise unemployment and underemployment levels.

As of January 2026, Central Visayas’ unemployment rate stood at 5.8 percent.

Rising operational costs may also slow manufacturing output, particularly for non-essential goods, while shipping disruptions could increase freight and insurance costs and worsen supply shortages.

“Some shipping companies are already imposing hikes and reducing vessel trips. This might escalate supply crunches, further driving up commodity prices,” Boyles warned.

Officials also noted that consumer confidence may decline as households reduce discretionary spending, placing pressure on micro, small, and medium enterprises facing higher production costs and weaker demand.

The agriculture and fisheries sectors are also expected to feel the impact, with rising fuel prices reducing fishing trips and increasing transport costs for crops.

Livestock and poultry operations may also face higher feed prices due to the stronger dollar, while tourism may slow as higher jet fuel and maritime costs lead to fare hikes and fewer trips.

DEPDev Director of the National Policy and Planning Staff Desiree Joy O. Narvaez presented five possible scenarios if the conflict escalates further, outlining projections on crude oil prices, inflation, GDP growth, and unemployment.

The agency estimated that diesel prices could spike by as much as 160 percent, while gasoline could increase up to 133 percent in April.

They assessed that the Philippine economy has already reached Scenarios 1 and 2 and is nearing Scenario 3.

Under prolonged conflict conditions, diesel prices could peak in April before easing in May, while inflation could range from 5.1 percent to 5.6 percent.

Narvaez also projected that GDP growth could slow to between 4.7 and 4.9 percent, and could fall further under more severe scenarios.

“Now at scenario 5, the worst case scenario, we expect the trimming down of GDP, could be as low as 3.5 percent," she said.

She also outlined more severe projections, including crude oil reaching 150USD per barrel for several months if energy infrastructure in Gulf countries is disrupted, and up to 200USD per barrel if facilities are heavily damaged.(MyTVCebu)