Global Tensions and Its Local Impact to Filipinos and the Economy

How the Israel-Iran Conflict Affects the Philippines?

The ongoing conflict between the Israel and Iran is sending shockwaves across the globe. While the Philippines may seem geographically distant, the economic and social ripple effects are real and may affect Filipinos. As oil prices rise and investor confidence wavers, we are once again reminded of how global wars can affect Filipino lives, the national economy, and even the real estate industry.

The military tension in the Middle East, particularly the Iran-Israel conflict, has raised fears of a wider regional war. Iran’s strategic position along the Strait of Hormuz, makes any disruption a global concern because it’s the key passage for one-fifth of the world’s oil. This has already caused oil prices to hike, now being felt by Filipinos nationwide. For oil-importing countries like the Philippines, this translates to higher fuel prices, increased transportation and power costs, and eventually leading to an upward pressure on inflation.

Impact of Global Tensions on the Philippine Economy

​The rising cost of oil is likely to contribute to inflationary pressure, affecting household expenses and reducing consumer spending power. Although the Bangko Sentral ng Pilipinas has maintained a cautious monetary stance, prolonged global tension could force policymakers to delay rate cuts or even consider interest hikes. Key sectors such as logistics, manufacturing, and transportation will also face higher operating costs, which could affect overall economic growth. Additionally, a stronger U.S. dollar driven by global uncertainty may weaken the Philippine peso, making imports even more expensive.

Effects on Real Estate and Construction

The real estate industry is not immune to these global tensions. Higher oil and material costs such as cement and steel could delay ongoing infrastructure and property developments. Construction expenses may rise, forcing developers to pass on the cost to homebuyers. At the same time, potential interest rate adjustments could make home financing less attractive for average Filipinos. Overseas Filipino Workers in the Middle East may also face risks if tension escalate, potentially affecting remittance flows which are significant for Philippine real estate demand.

What to Do During These Uncertain Times?

You can take several steps to weather these global uncertainties. First, fuel conservation must be practiced or switch to more efficient energy sources at home to manage household expenses. Stay updated on government advisories and policies, especially if you are an OFW or dependent on remittances. For investors and homebuyers, consider locking in fixed mortgage rates early to avoid future increases. Developers should explore local sourcing and lean construction methods to manage rising input costs.

Final Thoughts

While the Philippines is far from the epicenter of the Israel-Iran conflict, the economic consequences are unavoidable. Global wars have local impacts, from increased inflation and volatile markets to a cautious real estate sector. But by staying informed and adaptable, Filipinos can navigate through this period of uncertainty. You may check REALS.PH's official website, if you want to sell a property, click the List a Property button on the home page to get started.