Philippines at ‘high risk’ for political instability amid Middle East conflict

By Beatriz Marie D. Cruz, Senior Reporter

THE PHILIPPINES remains at “high risk” for political instability as the widening conflict in the Middle East threatens local supply chains and energy security, according to Washington‑based South Asia Foresight Network (SAFN).

In its 2026 Economic Crime and Geopolitics Index (ECGI), the Philippines’ score rose to 72.6 from 71.65 in November 2025. This score keeps the Philippines at a “high risk” level.

The country first reached the “high risk” level in November last year amid heightened public unrest from the corruption scandal.

The index assesses how a country’s corruption levels, severity of economic crime, public response, and geopolitical pressures shape political stability.

Aside from the Philippines, other Southeast Asian countries considered as “high risk” include Myanmar (73), Indonesia (72.1), Cambodia (71.3), and Thailand (70.2).

On the other hand, Vietnam (68.7), Laos (67.5), and Malaysia (65) were classified as “medium risk” countries, while Singapore (59.5) and Brunei (57.9) were considered “low risk.”

The Philippines obtained a score of 32 in the 2025 Corruption Perceptions Index, 7 in economic crime severity, 7 in public response exposure, and 7.5 in geopolitical influence.

Asanga Abeyagoonasekera, executive director of SAFN at the Millennium Project in Washington, D.C., said the Philippines’ archipelagic geography and maritime connectivity make it highly exposed to trade disruptions.

“The Iran war acts as a direct transmission mechanism of risk: energy shocks translate into fiscal pressure, social unrest, and increased opportunities for economic irregularities, reinforcing the Philippines’ high-risk classification,” he told BusinessWorld in an e-mail.

Conflicts in the Middle East, which drove global oil prices and freight costs higher, pose risks to import-dependent economies like the Philippines, Mr. Abeyagoonasekera said.

“The country’s geography makes it inherently dependent on maritime trade routes for energy, food, and industrial inputs. This structural dependence amplifies the impact of global supply chain shocks,” he noted.

The Philippines is a net importer of oil and relies heavily on Middle East crude, which accounts for 98% of its imports.

“Economic crime risks persist in areas such as procurement, customs, and fuel distribution — sectors that become particularly vulnerable during periods of crisis,” he said.

Geopolitical risks affect the Philippines through economic stress than direct security threat, Mr. Abeyagoonasekera said.

“Economic hardship intensifies public expectations, while government capacity is tested in managing subsidies, price controls, and social protection mechanisms,” he noted.

Vulnerable sectors include food supply, transport and logistics, customs and procurement, and small and medium enterprises, Mr. Abeyagoonasekera said.

Fuel prices and inflation directly affect households, which could trigger protests and political pressures, Mr. Abeyagoonasekera also said.

SAFN noted that economic crime risks are no longer concentrated within national boundaries but are directly affected by external shocks. Geopolitical influence has now shifted to a “shock-sensitive driver of risk,” it added.

“Supply chain centrality has heightened the vulnerability of economies like Vietnam, Bangladesh, and the Philippines, whose integration into global manufacturing networks now exposes them more directly to external shocks,” SAFN said.

It also noted that maritime states like Sri Lanka, Singapore, Indonesia, and Malaysia play a key role as shipping routes are reshaped by tensions in the Middle East.

SAFN said that conflict spillovers have increased the exposure of countries like Myanmar and Afghanistan to instability.

The ECGI showed South and Central Asian countries had the highest risk due to their proximity to the conflict. These include Afghanistan (78.5), followed by Pakistan (76.5), Sri Lanka (76.2), Bangladesh (74.3), India (73.2), and Nepal (73.2).

To cushion geopolitical risks on the Philippines, Mr. Abeyagoonasekera said the country should diversify its energy sources, especially renewables; enhance transparency in Customs, procurement and fuel distribution; stabilize the price of goods; increase subsidies; and leverage cooperation with its regional neighbors.

“Without urgent corrective action — particularly in energy governance, procurement transparency, institutional accountability, and regional coordination mechanisms — these risks will continue to intensify,” SAFN said.