Central Visayas could face rising costs at every corner—from grocery bills to construction projects—if the Middle East conflict continues to drive up fuel prices, economic planners warned.
During the Regional Development Council in Central Visayas (RDC 7) full council meeting, the Department of Economy, Planning, and Development (DEPDev) presented its assessment of the regional economic outlook.
The session was chaired by Cebu Governor Pamela Baricuatro and attended by Cebu City Mayor Nestor Archival, Mandaue City Mayor Jonkie Ouano, Lapu Lapu City Congresswoman Emmarie Ouano Dizon, and Cordova Mayor Cesar Suan.
Engineer Raffy Dave Boyles, senior economic specialist of DEPDev 7, said the region could see inflation rise to 4 percent in the coming months.
“As of February, the regional inflation is around 6 percent. For January, it was 5.6. For two consecutive months, Region 7 has had the highest inflation of all regions in the country,” Boyles said.
He noted that fuel price increases would push up costs for cement, steel, asphalt, and other construction materials, affecting both private and government projects. Government infrastructure projects will continue, with variation orders applied to contracts to offset rising construction costs.
DEPDev projected that domestic retail fuel prices could spike in the short term. Diesel may peak at 120.26 pesos per liter in April and gradually drop to 97.73 pesos per liter by May, while gasoline could climb as much as 133 percent if tensions worsen.
Boyles added that geopolitical uncertainty might lead foreign investors to adopt a wait and see approach, while local investors could pause capital expenditures if interest rates increase.
Businesses may also reduce working hours and implement cost-cutting measures, which could push up unemployment and underemployment. Central Visayas’ unemployment rate was 5.8 percent in January 2026.
Rising operational costs may slow manufacturing output, especially for non-essential goods, while shipping disruptions could increase freight and insurance costs and worsen supply shortages.
“Some shipping companies are already imposing hikes and reducing vessel trips. This might escalate supply crunches, further driving up commodity prices,” Boyles said.
Consumer confidence is also expected to decline as households reduce discretionary spending, putting additional pressure on micro, small, and medium enterprises.
The agriculture and fisheries sectors are similarly vulnerable. Higher fuel costs have reduced fishing trips and increased transport costs for crops.
Livestock and poultry operations may face higher feed prices due to the stronger dollar. Tourism may also slow, as rising jet fuel and maritime costs lead to fare hikes and fewer trips.
DEPDev Director of the National Policy and Planning Staff, Desiree Joy O. Narvaez, outlined five scenarios should the US-Iran conflict escalate further, projecting impacts on crude oil prices, inflation, GDP growth, and unemployment.
DEPDev estimated diesel could rise as much as 160 percent, while gasoline may increase up to 133 percent in April.
The Philippine economy has already reached Scenarios 1 and 2 and is nearing Scenario 3.
If the conflict continues, diesel could peak at 120.26 pesos per liter in April and ease to 97.73 pesos per liter by May, while inflation could reach 5.1 to 5.6 percent. GDP growth may slow to 4.7 to 4.9 percent.
“Now at scenario 5, the worst case scenario, we expect the trimming down of GDP, could be as low as 3.5 percent,” Narvaez said.
She also projected crude oil could reach 150USD per barrel for several months if Gulf energy infrastructure is disrupted, or up to 200USD per barrel if facilities are heavily damaged.
These scenarios could extend economic pressure through 2027. (SBA)
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