JAKARTA - The Middle East conflict is threatening the $6.5 billion in annual remittances that 2.5 million Filipinos working across the region send home with the central bank governor warning on March 6 that a prolonged war could shrink demand for Filipino labour and force a reversal of the country’s monetary easing cycle if oil hits $100 a barrel.

BSP Governor Eli Remolona Jr. laid out the remittance risk plainly in an interview with CNBC. 

“There's some downside risk in terms of demand for our labor services. We're a major exporter of labor services. We have 2.5 million Filipinos in the Middle East and they send a lot of money home. About 18% of remittances come from the Middle East. So, that's a concern,” he said.

In 2025, total OFW (Overseas Filipino Workers) remittances hit a record high of $35.634 billion (up 3.3% year on year and equivalent to 7.3% of Philippine GDP) with 18.19%, or $6.481 billion, coming from the Middle East. The BSP had forecast that remittances would grow a further 3% to $36.6 billion in 2026 before the conflict began. 

The largest single source of remittances remains the United States at 39.7%, followed by Singapore at 7.3%, Saudi Arabia at 6.6%, Japan at 5.0%, and the United Kingdom at 4.6%. The Middle East's 18% share is spread across multiple countries in the Gulf and Levant.

The remittance risk is also compounded by the broader economic disruption the conflict is causing. 

Nomura Global Markets Research raised its 2026 Philippine inflation forecast to 3.2% from 2.5%, removed its April rate cut projection, and now expects the BSP to hold its policy rate at 4.25% through year-end, while projecting the current account deficit widening to 4% of GDP. 

Fitch Ratings also warned that if the Strait of Hormuz remains effectively closed for more than a month, emerging markets including the Philippines could face a “substantial impact” on their credit ratings.