The 2026 conflict in the Middle East, and the disruption it caused to shipping through the Strait of Hormuz, through which around one fifth of the world's oil and gas normally transits, has produced a supply shock with far-reaching consequences for energy-importing economies. UNDP's Regional Assessment, titled “Military Escalation in the Middle East: Human Development Impacts Across Asia and the Pacific”, estimates that 8.8 million people are at risk of falling into poverty in the Asia-Pacific region. Output losses could range from USD 97 billion to USD 299 billion, equivalent to between 0.3 and 0.8 per cent of regional GDP (UNDP, 2026).

The Philippines is among the more exposed economies in Asia and the Pacific, and among the harder hit. It depends on the Middle East for majority of its crude oil, it is a net importer of food and fertilizer, and the region is the source of close to a fifth of its overseas remittances. The shock has reached households through three reinforcing channels: energy imports, agricultural inputs, and labour migration and remittances.