Impact of Iran war on Filipinos: What happens now?

It’s been a month since the US and Israel waged war on Iran. It’s also been a month of unprecedented uncertainty.

Last February 28, a joint US-Israeli airstrike killed Supreme Leader Ayatollah Ali Khamenei. US President Donald Trump made it appear like an incursion and not a full blown war — but all indications say it is.  

Iran retaliated with drone and missile attacks on Israel and US military bases in Bahrain, Jordan, Kuwait, Qatar, Saudi Arabia, the United Arab Emirates and Turkey.

But the economic stranglehold that caused economies across the globe to gasp for air was Iran’s closure of the Strait of Hormuz.

Analysts describe the aftermath of the closure as the most severe economic disruption since the 1973 OPEC oil crisis. This war is causing surges in oil and gas prices, air travel and sealane disruptions, and financial volatility not seen in decades.

In the Philippines, that volatility has translated into skyrocketing pump prices, an electricity rate hike, food inflation, and a dialdown on spending and economic activity reminiscent of the pandemic.

Asian market analysts say if the situation doesn’t improve, the region that imports 80% of its liquefied natural gas from Qatar may soon suffer economic contractions if not recession in a couple of months.

For the Philippines — a lower-middle-income economy aiming for upper-middle-income status — it’s been two jugular hits. People staying at home and working from home hobbles its service sector. The plunge in the value of the peso hurts its import-dependent economy. That’s coming off a year when construction is down due to a massive public works corruption scandal.

Watch JC Gotinga lay down the impact of this so far, yet so near war. 

With our systemic corruption and lackadaisical leadership — what are the prospects of the Philippines navigating this crisis as smartly as possible? – Rappler.com