Experts: Don’t underestimate Hormuz crisis impact
A GROUP of people stands in shallow water as a cargo ship appears anchored in the Strait of Hormuz off Bandar Abbas, Iran, Tuesday, June 30, 2026. AMIRHOSEIN KHORGOOI/ISNA VIA AP
By Bless Aubrey Ogerio
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WORLD » A7
CONTAINER SHIP RUNS AGROUND IN STRAIT OF HORMUZ, IRANIAN STATE TV REPORTS
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HE biggest economic consequences of the Strait of Hormuz crisis may still lie ahead, with markets likely underestimating the duration of the disruptions to energy supplies and global production, a Washingtonbased geopolitical advisory firm said on Wednesday. Speaking during an online briefing on Wednesday, Dan Kritenbrink, partner at The Asia Group, said markets appear to be pricing in a quicker recovery despite the lasting effects of the conflict around the Strait of Hormuz. “I worry that much of the region
and analysts and markets are really underestimating the long-term impact of this crisis,” Kritenbrink said, who is also the former United States (US) Assistant Secretary of State for East Asian and Pacific Affairs. Although Iran and the US have recently agreed to halt hostilities and resume talks over the Strait of Hormuz, Kritenbrink said the reopening of the shipping lane would not immediately restore global energy markets. Drawing on discussions with energy industry executives, he said oil and gas supply disruptions could continue for at least another year even if maritime traffic returns to normal, while restoring
production to pre-conflict levels may take years because of infrastructure damage and operational constraints. “So, for me, it really comes down to whether we can fully restore the energy flows through the Strait of Hormuz. But I worry that we’re underestimating the long-term impact of these shocks. We’re going to be dealing with this for quite some time,” he said. Kritenbrink said the Philippines is among the economies most exposed to prolonged disruptions because it imports most of its crude oil from the Middle East, maintains limited strategic fuel reserves and has relatively little fiscal space to
cushion external shocks. The country also continues to rely on oil-fired power plants for part of its electricity supply, leaving it vulnerable to sustained increases in fuel prices. “I think on that scale, the Philippines comes out to be one of the most vulnerable countries in the region,” he said. He warned that prolonged supply disruptions could raise production costs and weaken the country’s competitiveness as manufacturers pursue “China+1+1” strategies, in which companies diversify production beyond China to reduce supply-chain risks. See “Crisis,” A2
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‘WAR, OIL SHOCK SLOW PHL GROWTH ENGINES’ www.businessmirror.com.ph
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Thursday, July 2, 2026 Vol. 21 No. 261
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By Justine Xyrah Garcia and Andrea E. San Juan
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HE country’s economic growth may fall below 3 percent in the second quarter of the year due to tepid domestic consumption and sluggish investment inflows, according to economists from the University of Asia and the Pacific (UA&P). “We estimate Q2-2026 gross domestic product [GDP] growth at 2.6 percent, with consumption and investment likely weighed down by recent headwinds,” UA&P economists said in the latest The Market Call report. Philippine GDP expanded by
5.5 percent in the second quarter of 2025, according to data from the Philippine Statistics Authority (PSA). PSA data also showed that the economy expanded by 2.8 percent in the first quarter of 2026, See “Growth,” A2
WAGE HIKE IN METRO MANILA ‘TOO STEEP,’ SAY EMPLOYERS
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HE country’s largest employers’ group maintained that the newly approved P85 daily minimum wage increase in Metro Manila is “excessive,” arguing that the wage board relied on inflation figures “distorted” by temporary economic shocks rather than longer-term conditions. Employers Confederation of the Philippines (ECOP) President Sergio Ortiz-Luis Jr. told BusinessMirror that the employer sector opposed the increase during deliberations before the National Capital Region wage board. The group said, however, that its members would respect and comply with the final decision. “For the first time, the employer sector dissented from the wage board. We will respect the decision and comply with it, but we felt
the increase was too high,” Ortiz-Luis said in an exclusive phone interview on Wednesday morning. He clarified that employers did not object to the wage board’s formula, which considers inflation and other economic indicators, but argued that the current environment is “far from normal.” Data from the Philippine Statistics Authority showed inflation slowed to 6.8 percent in May from a three-year high of 7.2 percent in April, while unemployment stood at 2.41 million in April, higher than a year earlier but lower than the level recorded in January. “We agree with the formula they use, but these are abnormal times. Inflation reached unusually high levels because of temporary See “Wage hike,” A2
RALLYING CALL Members of the Iglesia ni Cristo (INC) continue their protest at the EDSA People Power Monument in Quezon City on Wednesday, July 1, 2026, calling for accountability and denouncing corruption. The Quezon City government granted the religious group a permit to assemble along White Plains Avenue and Temple Drive, subject to conditions that include keeping major roads passable, avoiding total road closures, and ensuring the immediate cleanup of the venue after the rally. Authorities maintained a security presence and traffic management measures in the area as the demonstration entered another day. NONOY LACZA
‘Independent CBs temper impact of supply shocks’
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CONOMIES whose central banks (CBs) are less independent, have low-competitive business environments, more flexible labor markets and weak fiscal policy frameworks may tend to suffer more from second-round effects of global oil price shocks, according to a discussion paper published by the Bangko Sentral ng Pilipinas (BSP).
In a discussion paper titled “Second-round Effects and Asymmetry: Impact of Oil Price Shocks on Emerging Market Inflation,” authors Joan Christine S. Allon-Pineda and Christian Kenneth R. Collado said their findings confirm the presence of “significant and persistent direct” and second-round effects of global oil price shocks, with
generally “greater” response coming from Emerging Market Economies (EMEs). The discussion paper noted that “robust” monetary structures, particularly those characterized by central bank independence and flexible exchange rate regimes, help stabilize inflation by allowing policy to respond effectively to ex-
ternal price fluctuations. “Likewise, enforcing sound fiscal rules on government revenues, expenditures, and the overall fiscal balance also prevents procyclical spending, moderates demand pressures, and promotes not only fiscal stability but also price stability,” the BSP paper pointed out. See “Supply,” A7
UNDER OATH Relatives of school shooting victims Janica Illa Mae Bituin and Rolando Lapidario; Police Staff Sergeant Arla Ray Paciencia, whose gun was used by her nephew, one of the shooters; and other police officers take their oath before testifying during the Senate Committee on Women, Children, Family Relations and Gender Equality hearing chaired by Senator Risa Hontiveros on Wednesday, July 1, 2026. The inquiry seeks to establish the facts surrounding the June 22 shooting at San Jose National High School in Tacloban City, identify possible lapses in school security and law enforcement, and determine accountability. The attack claimed the lives of four students and injured several others, prompting calls for stronger school safety measures. Lawmakers also examined concerns over children’s exposure to violent online content, including Roblox and GoreBox, as authorities continue investigating whether digital influences played any role in the tragedy. Officials emphasized that the investigation remains ongoing and that no direct causal link between the online games and the shooting has been established. ROY DOMINGO
PESO EXCHANGE RATES n US 61.2900 n JAPAN 0.3770 n UK 81.3012 n HK 7.8154 n CHINA 9.0292 n SINGAPORE 47.3758 n AUSTRALIA 42.4066 n EU 70.0054 n KOREA 0.0397 n SAUDI ARABIA 16.3136 Source: BSP (July 1, 2026)