Cost-of-living pressures, political divisions linked to the impeachment of Vice President Sara Duterte, and concerns over a flood-control corruption scandal risk intensifying social unrest in the Philippines, according to BMI, a unit of Fitch Solutions.
In a report, BMI said the cost-of-living crisis triggered by the conflict in the Middle East has emerged as the “primary driver of rising social and political risk in the Philippines.”
“As a net importer of energy, the Philippines is especially vulnerable to higher global energy prices,” it said, pointing to the conflict’s economic impact, with inflation spiking to 7.2% last month.
It was the fastest since March 2023, when inflation hit 7.6%.
The government said the acceleration was due to record-high oil price hikes, with gasoline prices rising to 59.6% from 27.3% and diesel prices climbing to 122.7% from 59.6% before the conflict that started late February.
This has tightened household budgets and affected the livelihoods of workers in fuel-intensive sectors like transport,” BMI said. While the government declared an energy emergency and introduced initial remedies, it said measures remain constrained by limited fiscal space.
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