MANILA, Philippines (Apr 2026) — Rising global oil prices could push around 1.34 million Pinoys into poverty, with those just above the poverty line at the highest risk, according to new research.
A policy note from the Philippine Institute for Development Studies shows that if oil hits $105 per barrel, with about 35 percent passed on to local prices, the country’s poverty rate could climb from 13.2 percent in 2025 to 14.4 percent. That would undo recent progress in reducing poverty.
The impact is not limited to the poorest households. Around 30 percent of Filipino families are already considered vulnerable to falling into poverty, including parts of the middle class. This means even small price shocks can push many households over the edge.
Why oil prices hit harder than expected
The biggest pressure falls on families just above the poverty line, often called the “near poor.” These households spend most of their income on daily needs and have little savings to cushion rising costs.
Jose Ramon G. Albert, senior research fellow at PIDS, said the burden is uneven.
While higher-income households may lose more in peso terms, poorer families feel the impact more sharply because essentials take up most of their budget.
The study estimates that poor households could lose up to 16.2 percent of their annual income in real purchasing power. In comparison, the richest households may see losses of only 3.4 percent.
Even families without cars are affected. Higher fuel prices raise the cost of transporting goods, which then drives up prices of food and other basics.
Albert noted that increases in oil prices quickly ripple through everyday expenses, from rice and fish to meat and vegetables.
Rural areas face bigger risks
The effects are expected to be stronger outside cities. Poverty in rural areas could rise from 18.5 percent to 20 percent under the same scenario, compared to an increase from 8.7 percent to 9.6 percent in urban areas.
Rural households often depend on farming and other fuel-intensive work, have fewer income opportunities, and spend more on food. Regions that are already struggling, including BARMM, Bicol, the Visayas, MIMAROPA, and parts of Mindanao, are likely to be hit hardest.
What happens if oil prices climb higher
The projections become more severe if global prices continue to rise.
At $125 per barrel, up to 2.35 million Filipinos could fall into poverty. At $145, that number could reach 3.5 million, with sharper increases in rural communities.
The longer the price surge lasts, the more it widens inequality and pulls vulnerable households deeper into hardship.
Targeted aid seen as more effective
The study also looked at possible policy responses. It found that broad fuel subsidies tend to benefit higher-income households more, since they consume more fuel.
More targeted support, especially for poor and near-poor families, is seen as more effective. Potential beneficiaries include about 4 million households already in social protection systems, 1.6 million eligible but not yet covered, and around 6.5 million vulnerable households outside existing lists.
These include minimum wage earners, persons with disabilities, and newly identified poor families.
Albert warned that without timely intervention, the long-term effects could be harder to reverse.
The findings highlight a growing risk. As fuel prices rise, poverty does not just increase. It spreads, pulling more families down and making recovery more difficult the longer the pressure continues.
For more details, readers can access the full study through PIDS publications online.
