By Katherine K. Chan, Reporter
WASHINGTON, D.C. — The Philippines is facing a difficult situation as its heavy reliance on oil imports tests its economic resilience amid the continuing energy crisis from the Middle East war, the International Monetary Fund (IMF) said.
At a press briefing throughout the IMF-World Bank Spring Meetings on Wednesday, IMF Managing Director Kristalina Georgieva said the war’s impact on Association of Southeast Asian Nations (ASEAN) member economies is unequal, with energy importers just like the Philippines taking more toll.
“For the energy importers, those who have little or no to none energy reserves of oil and gas, the situation is way more difficult,” Ms. Georgieva said. “And I very much sympathize with the people within the Philippines because I do know that your country does face that difficulty.”
In its latest World Economic Outlook (WEO), the IMF slashed its 2026 gross domestic product (GDP) growth forecast for the Philippines to 4.1% from 5.6% in January, reflecting weaker-than-expected growth in 2025 and the impact of the war within the Middle East.
The IMF also expects 4.1% growth for the ASEAN-5 region, which is comprised of Indonesia, Malaysia, the Philippines, Singapore and Thailand, this yr. It was marginally slower than its 4.2% estimate in January.
Ms. Georgieva noted that the region is “in a vivid spot by way of growth and economic dynamism” but must still strengthen its regional integration to higher weather shocks from the war.
“Actually, ASEAN is a vivid spot by way of growth and by way of economic dynamism,” she said. “Once you have a look at the impact of this shock, for this reason strong buildup over time, ASEAN is definitely weathering the shock as a gaggle of nations relatively well.”
Several ASEAN energy exporters could also be higher positioned to weather these shocks, in contrast to the heavier impact experienced by energy importers within the region, the IMF chief said.
Within the Philippines, oil prices have soared for the reason that United States and Israel’s attacks on Iran on Feb. 28. This week saw the primary rollback in pump prices, as global oil prices fell amid the temporary ceasefire within the Middle East.
The Philippines is currently under a national state of energy emergency, which President Ferdinand R. Marcos, Jr. announced last month after noting the threats to the country’s energy supply because the war drags on.
PAUSE
In a separate blog published on Thursday, the IMF said the Philippine central bank can stand pat for now to preserve easing space.
“In economies where inflation stays below goal, similar to Thailand and the Philippines, further rate cuts will be paused to preserve room for relieving later,” IMF Asia and Pacific Department Deputy Division Chief Andrea Pescatori and Director Krishna Srinivasan said.
Philippine inflation accelerated to 4.1% in March, breaking the nearly two-year streak of it settling below the Bangko Sentral ng Pilipinas’ (BSP) 2%-4% goal.
Before this, the BSP had held its rates regular in an off-cycle meeting although it raised its full-year inflation projection to five.1% from 3.6%, because it noted that immediate tightening risks delaying the economy’s rebound.
This paused the central bank’s easing cycle, which began in August 2024, where it delivered a complete of 225 basis points in cuts to bring the policy rate to 4.25%.
BSP Governor Eli M. Remolona, Jr. on Tuesday told BusinessWorld that the expected economic relief from the federal government’s ongoing fiscal reforms has opened space for monetary policy tightening.
Nevertheless, he noted that the central bank remains to be monitoring incoming data, particularly inflation, for clearer guidance for its upcoming policy review on April 23.
REGIONAL SHOCKS
Meanwhile, Asia’s resilience against last yr’s US tariff policies and global trade uncertainty will probably be shaken because the Middle East conflict stokes inflation, weakens external balances and limits policy options, Mr. Pescatori and Mr. Srinivasan said within the IMF blog.
“Asia entered 2026 on a robust footing,” they said. “Despite the region bearing the brunt of US tariffs last April and chronic trade policy uncertainty, growth was resilient in 2025 and trade remained robust.”
“Now, the war within the Middle East and the following energy supply shock are raising inflation, weakening external balances, and narrowing policy options, underscoring the region’s dependence on imported oil and gas,” they added.
The multilateral lender sees Asia expanding slower at 4.4% this yr and 4.2% next yr from 5% in 2025.
“Should the shock persist or intensify, as within the WEO’s antagonistic and severe scenarios, growth through 2027 may very well be reduced cumulatively by 1% to 2%,” Mr. Pescatori and Mr. Srinivasan added.
Inflation within the region can be expected to quicken to 2.6% by yearend, before easing to 2.4% in 2027. Still, this is quicker than the 1.4% clip recorded last yr.
“The war introduced a brand new and more immediate headwind clouding the near-term outlook for Asia, where net oil and gas imports equal about 2.5% of economic output,” the blog read.
Amid this, Ms. Georgieva said the crisis calls for a stronger regional integration amongst ASEAN countries because it faces shared economic woes.
“The Philippines is now leading the ASEAN. I’m going to be there when the meeting takes place,” she said. “And I do consider that this may be very essential for regions which have the potential to trade more throughout the countries of the region.”
“Construct that integration. You’ll profit from it in a more shock-prone world,” Ms. Georgieva added.