A new study by the Philippine Institute for Development Studies (PIDS) warns that soaring global oil prices could push 1.34 million Filipinos into poverty, with poor households suffering the most severe impact due to their limited income and high dependence on essentials like food and fuel.

The PIDS policy note, released on April 17, 2026, simulated the effects of crude oil prices reaching $105 per barrel with a 35 percent pass-through to domestic prices. Under this scenario, the national poverty rate is projected to rise from 13.2 percent to 14.4 percent, reversing recent gains in poverty reduction.

Researchers highlighted that poor households lose 16.2 percent of their annual income in real purchasing power due to oil price hikes, compared to only 3.4 percent among the richest households. 

The disparity stems from the fact that low-income families allocate more than 57 percent of their spending to food, and food supply chains are highly energy-intensive. As oil prices climb, food costs rise sharply, disproportionately hurting the poor.

The study also noted that households just above the poverty line—the so-called “near poor”—are at high risk of slipping into poverty as daily expenses surge. These families often lack savings or financial buffers, making them vulnerable to economic shocks.

The findings come amid ongoing instability in the Middle East, which has driven global oil prices upward. Analysts warn that without targeted government interventions, the poorest Filipinos will bear the brunt of the crisis, while middle-income households will also feel the squeeze through higher transportation and living costs.

PIDS emphasized the need for policy measures to cushion vulnerable households, including subsidies, targeted cash transfers, and energy price stabilization mechanisms. Without such interventions, the oil price surge could erase progress in poverty reduction and widen inequality across the country.