A man takes pictures of the damage in an apartment building after it was hit by an Israeli airstrike in Dahiyeh, Beirut’s southern suburb, Lebanon, Monday, March 2, 2026. AP PHOTO/HUSSEIN MALLA
Moody’s: War spells inflation, trade problems By Andrea E. San Juan
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WIDENING FRONT: IRANIAN-BACKED MILITIAS DRAWN INTO CONFLICT AS ISRAEL AND US PLANES POUND IRAN
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ISING global commodity prices due to the ongoing conflict in the Middle East pose a “significant” risk to the Philippines, as this could push up both consumer and producer inflation and widen trade gap, according to Moody’s Analytics. In an e-mail sent to the BusinessMirror on Monday, Moody’s Analytics economist Sarah Tan pointed out that the ongoing conflict in the Middle East has introduced “renewed uncertainty” into the Philippines’s economic outlook, particularly through higher oil and energy prices. “For the Philippines, which imports more
than 50 percent of its domestic energy needs, rising global commodity prices pose a significant risk,” Tan told this newspaper. She explained that higher oil and energy prices would likely push up both consumer and producer inflation, increasing import costs and widening the trade deficit. “As imports become more costly, greater financial outflows would weaken the peso as well,” added Tan. While Moody’s Analytics does not expect inflation to “move materially beyond” the Bangko Sentral ng Pilipinas’ (BSP) 2 to 4 percent target range, Tan emphasized that “upside risks have clearly risen.” As such, what she described as “heightened uncertainty” could prompt the Philippines’s central bank to adopt a “more cau-
tious stance.” “For now, we still anticipate at least one more rate cut by the end of the year,” added Tan. In February 2026 alone, however, she said Moody’s expects Philippines’s headline inflation to have likely quickened to 2.3 percent, faster than the 2 percent in January. The uptick, Tan underscored, reflects a “low base” effect as last year’s declaration of a food security emergency on rice, which authorized the release of buffer stocks at subsidized prices, dampened price pressures. As such, she explained that declines in rice prices over the past few months will “lose momentum.” Higher domestic fuel and transport costs
will also contribute to a stronger headline inflation as oil and electricity prices have increased. That said, Tan noted that “softer” domestic demand likely cushioned some of the upward price pressures. In its latest Asia-Pacific Economic Preview, Moody’s Analytics said: “In a week laden with February inflation prints, we also expect to see hotter annual CPI readings for Indonesia, the Philippines, Taiwan [China] and Vietnam. Thailand will be on the outer, with prices there falling year on year for an 11th straight month.” Moody’s AsPac economic preview showed that the Philippines’s Consumer Price Index for February 2026 likely accelerated to 2.3 percent.
BusinessMirror A broader look at today’s business
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LOCAL OIL SUPPLY ‘OKAY,’ BUT PRICE SPIKES SEEN www.businessmirror.com.ph
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Tuesday, March 3, 2026 Vol. 21 No. 142
P25.00 nationwide | 2 sections 26 pages | 7 DAYS A WEEK
By Lenie Lectura
IL firms on Monday assured the Department of Energy (DOE) that they have secured their inventory supplies, with sufficient stocks to last for two months. However, local pump prices are expected to surge amid ongoing attacks by the US and Israel on Iran.
The agency, according to Oil Industry Management Bureau Director Atty. Rino Abad, met with representatives of oil companies to discuss supply inventory and ways
to cushion the impact of soaring oil prices. “Their existing inventory is good for two months,” said Abad in an online news briefing. See “Oil,” A2
NO DBCC RECAST, FOR NOW, DESPITE EXTERNAL RISKS By Justine Xyrah Garcia
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ISING domestic pump prices since January, fueled by escalating Middle East tensions, are posing fresh risks to the Philippines’s near-term economic growth. However, Department of Economy, Planning, and Development (DepDev) Secretary Arsenio M. Balisacan said the Cabinet-level Development Budget Coordination Committee (DBCC) has no scheduled meeting to revisit its macroeconomic assumptions despite mounting external risks. “No meeting planned at the moment, but we’re closely monitoring the market and economic situation,” Balisacan, who
also serves as the DBCC’s cochairperson, told the BusinessMirror. Even as the government holds off on adjusting its targets, economists warned on Monday that prolonged conflict could transmit to the domestic economy through higher fuel costs, rising inflation and, ultimately, slower gross domestic product (GDP) growth. Former Socioeconomic Planning Secretary Dante B. Canlas warned that the outbreak of the US-Israel war on Iran carries “far too many negative spillover effects” for the Philippines, citing immediate oil price shocks and other external vulnerabilities. See “DBCC,” A2
GAS PAINS, AGAIN A gasoline attendant prepares to refuel a tricycle along Naga Road in Las Piñas City. Motorists are set to face another round of fuel price hikes this week, marking the eighth consecutive increase for gasoline and the 10th for diesel and kerosene, amid escalating tensions between the United States and Iran. NONIE REYES
Biz groups pitch economic contingencies By Bless Aubrey Ogerio
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HILIPPINE business groups on Monday laid out the challenges the face amid a worsening fonlict in the Middle East, and cited possible options for both the government and the private sector. The Philippine Chamber of Commerce and Industry (PCCI) warned that logistics, higher fuel costs and uncertainty for Filipino workers loom as Middle East tensions escalate. On the other hand, the conflict could deliver an inflationary jolt to the country’s economy if tensions drag on, with higher energy and logistics costs likely to spill over to households and industries, the Federation of Philippine Industries (FPI) said in a statement. The PCCI urged authorities to deploy monetary tools to protect the
peso, maintain financial stability, and safeguard investor confidence. “The safety of every Filipino abroad and the economic well-being of every Filipino at home must remain at the center of our national response,” the chamber said in a statement. The organization highlighted the Philippines’ full reliance on Middle East crude oil imports. With global oil prices spiking amid fears of supply disruptions through the Strait of Hormuz, the PCCI called for the exploration of alternative fuel sources and accelerated development of renewable and domestic energy options as a long-term solution to energy vulnerability. The group also underscored the immediate risks to over 2 million Overseas Filipino Workers in the region. It urged the Department of Mi-
grant Workers, the Department of Foreign Affairs and the Overseas Workers Welfare Administration to activate emergency protocols, maintain communication with Filipinos on the ground, and expedite evacuation and repatriation plans as needed. The PCCI also emphasized the importance of providing livelihood and reintegration support to repatriated workers. It noted that remittances, which reached a record $38.3 billion in 2024, remain a critical source of income for millions of households. Domestically, the chamber warned that this conflict could reignite inflation and weaken the purchasing power of ordinary Filipinos, with micro, small, and medium enterprises (MSMEs) expected to be particularly vulnerable. On Sunday, the Philippine Exporters Confederation Inc. (Philexport)
echoed these concerns in a statement, noting that weekend attacks by the United States and Israel on Iran, and Iran’s countermeasures targeting countries hosting US military bases and restricting the Strait of Hormuz, have already disrupted airspace and logistics routes, creating volatility in energy markets. In a separate report by BusinessMirror, economists flagged rising global oil prices as an upside risk to domestic inflation, which could further strain businesses across the country. (See: https://businessmirror.com.ph/2026/02/27/ world-oil-prices-pose-risk-tolocal-inflation/) As a net energy importer, the Philippines is exposed to swings in global crude prices, which feed into pump prices, power generation costs and transport fares, the FPI underscored. See “Contingencies,” A13
PESO EXCHANGE RATES n US 57.6390 n JAPAN 0.3695 n UK 77.7377 n HK 7.3680 n CHINA 8.3985 n SINGAPORE 45.5824 n AUSTRALIA 40.5548 n EU 67.7835 n KOREA 0.0399 n SAUDI ARABIA 15.3671 Source: BSP (March 2, 2026)