Oil Price Doubling Impacts Livelihoods; ADB Downgrades Philippines Growth Forecast
The Asian Development Bank (ADB) has downgraded the Philippines' 2026 GDP growth forecast to 4.4% due to the impact of soaring oil prices on livelihoods. The transportation, agriculture, and fishing sectors are particularly hard hit, with diesel prices more than doubling. While the government provides subsidies to vulnerable groups, businesses and the middle class are absorbing increased costs. The ADB warns that worsening Middle East tensions could affect remittances and further slow private consumption.
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- 📰 Published: April 10, 2026 at 19:02
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The Asian Development Bank (ADB) today released its new "Asian Development Outlook" (ADO) report at its Manila headquarters, forecasting the Philippines' 2026 Gross Domestic Product (GDP) growth rate at 4.4%, lower than the 5.3% predicted in December last year, but expected to rebound to 5.5% in 2027.
The report points out that the Philippines' economic growth will still be supported by domestic demand, and investment is also expected to benefit from the lagged effects of previous interest rate cuts. However, inflationary pressures will offset some of the positive factors, thereby affecting corporate investment decisions and household consumption capacity.
Andrew Jeffries, ADB Country Director for the Philippines, analyzed at the press conference that the Philippines is highly dependent on imported fuel, making it more vulnerable to external risks. He emphasized the need for the government to continue promoting reforms, including strengthening human capital, improving the investment environment, and protecting vulnerable groups.
The report predicts that the Philippines' inflation rate will reach 4.0% in 2026 and fall back to 3.5% in 2027.
The ADB's report reflects the living pressures faced by grassroots people, especially in the transportation, agriculture, and fishing industries.
Since the outbreak of conflict between the United States, Israel, and Iran at the end of February, the price of diesel in the Philippines has doubled, from less than 60 pesos (about NT$32) per liter to the current approximately 153 pesos; gasoline prices have also risen from about 55 pesos to around 101 pesos.
Industry insiders point out that soaring oil prices have forced some drivers to reduce their trips or even suspend operations, while fishermen have switched from deep-sea fishing to inshore fishing; farmers have reduced fertilization due to rising fertilizer prices, and experts have already foreseen a decline in the next season's harvest, impacting food security.
To mitigate the impact, the Philippine government has provided cash subsidies and fuel subsidies to vulnerable groups such as farmers, fishermen, and public transport drivers. However, under these "targeted" measures, businesses, the middle class, and the wealthy must absorb the increased cost of oil prices.
Some Taiwanese businesses in the Philippines have also been affected. A Taiwanese businessman engaged in the ferry industry said that fuel costs have nearly tripled, but the government limits fare increases to only 10%, leading to heavy operating pressure; another Taiwanese businessman also pointed out that logistics partners have repeatedly increased fees, and the company can only absorb them itself.
Overseas Filipino workers' remittances will reach US$35.6 billion in 2025, accounting for 7.3% of GDP, with over 17% coming from the Middle East. The ADB warns that if the conflict continues, it may affect overseas remittances, leading to a further slowdown in private consumption growth.
The ADB points out that increasing infrastructure spending and opening up foreign investment in key industries will help support medium-term growth, but issues such as educational inequality, high youth unemployment, and skills mismatch still threaten the Philippines' long-term development potential. The government must accelerate reforms to achieve more inclusive growth. (Editor: Chen Chenggong) 1150410
The report points out that the Philippines' economic growth will still be supported by domestic demand, and investment is also expected to benefit from the lagged effects of previous interest rate cuts. However, inflationary pressures will offset some of the positive factors, thereby affecting corporate investment decisions and household consumption capacity.
Andrew Jeffries, ADB Country Director for the Philippines, analyzed at the press conference that the Philippines is highly dependent on imported fuel, making it more vulnerable to external risks. He emphasized the need for the government to continue promoting reforms, including strengthening human capital, improving the investment environment, and protecting vulnerable groups.
The report predicts that the Philippines' inflation rate will reach 4.0% in 2026 and fall back to 3.5% in 2027.
The ADB's report reflects the living pressures faced by grassroots people, especially in the transportation, agriculture, and fishing industries.
Since the outbreak of conflict between the United States, Israel, and Iran at the end of February, the price of diesel in the Philippines has doubled, from less than 60 pesos (about NT$32) per liter to the current approximately 153 pesos; gasoline prices have also risen from about 55 pesos to around 101 pesos.
Industry insiders point out that soaring oil prices have forced some drivers to reduce their trips or even suspend operations, while fishermen have switched from deep-sea fishing to inshore fishing; farmers have reduced fertilization due to rising fertilizer prices, and experts have already foreseen a decline in the next season's harvest, impacting food security.
To mitigate the impact, the Philippine government has provided cash subsidies and fuel subsidies to vulnerable groups such as farmers, fishermen, and public transport drivers. However, under these "targeted" measures, businesses, the middle class, and the wealthy must absorb the increased cost of oil prices.
Some Taiwanese businesses in the Philippines have also been affected. A Taiwanese businessman engaged in the ferry industry said that fuel costs have nearly tripled, but the government limits fare increases to only 10%, leading to heavy operating pressure; another Taiwanese businessman also pointed out that logistics partners have repeatedly increased fees, and the company can only absorb them itself.
Overseas Filipino workers' remittances will reach US$35.6 billion in 2025, accounting for 7.3% of GDP, with over 17% coming from the Middle East. The ADB warns that if the conflict continues, it may affect overseas remittances, leading to a further slowdown in private consumption growth.
The ADB points out that increasing infrastructure spending and opening up foreign investment in key industries will help support medium-term growth, but issues such as educational inequality, high youth unemployment, and skills mismatch still threaten the Philippines' long-term development potential. The government must accelerate reforms to achieve more inclusive growth. (Editor: Chen Chenggong) 1150410