‘SE Asia to suffer most from Mideast conflict’

Upgrade to High-Speed Internet for only ₱1499/month!

Enjoy up to 100 Mbps fiber broadband, perfect for browsing, streaming, and gaming.

Visit Suniway.ph to learn

March 29, 2026 | 12:00am

MANILA, Philippines — The Middle East conflict is expected to hit Southeast Asian economies, including the Philippines, the hardest if energy market disruptions last for more than a year, according to the Asian Development Bank (ADB).

“Economies in developing Southeast Asia and the Pacific are likely to see the most negative growth impacts,” ADB said in a report released on Thursday.

Under the long-lasting tensions scenario, it said the two sub-regions are expected to have the largest cumulative growth losses over 2026 to 2027.

In particular, it estimates gross domestic product growth in Southeast Asia to decline by 2.3 percentage points and growth in the Pacific to be cut by 2.2 percentage points.

The estimates are based on the scenario of severe tensions in the Middle East persisting for one year.

The scenario also assumes oil prices reaching over $155 per barrel in the second quarter and slowly declining to about $140 between the third quarter of this year and first quarter of 2027.

The report looked into the impact of the conflict on Asia-Pacific economies.

It said the conflict is affecting the region through prices, supply chain and trade disruptions as well as tighter financial conditions.

The ADB also expects the crisis to affect the region’s tourism and remittances.

“Prolonged energy disruptions could force economies in developing Asia and the Pacific to navigate a difficult trade-off between weaker growth and higher inflation,” ADB chief economist Albert Park said.

Park said governments should focus on containing market stress and protecting the most vulnerable, while adopting policies to improve longer-term resilience.

In particular, ADB said policies should focus on stabilization rather than suppression of price signals.

In terms of fiscal support, ADB said priority should be given to vulnerable households and the most affected industries.

In addition, it said central banks should focus on limiting excessive market volatility, while keeping a close watch on inflation expectations.

“The priority should be to provide targeted liquidity support to preserve orderly market functioning. Tightening policy too aggressively risks amplifying growth headwinds and exacerbating financial volatility,” it said.

It also cited the need to curb energy demand where feasible.

It said measures could include limiting air-conditioning, reducing non-essential lighting, implementing peak-hour electricity-saving campaigns and work-from-home or staggered schedules.

“Incentivizing public transport use and car-free days in urban areas on public holidays can also help reduce transport fuel use,” ADB said.