UMVA has learned that a sense of caution has settled over the Philippines, as the US-Israel war on Iran begins to ripple through the economy, affecting everything from travel plans to daily routines.
At Dreams & Destination Travel Services, a small travel agency in Cavite province, clients are no longer walking in to book dream vacations on impulse. Instead, they're quietly comparing airfare prices on their smartphones, while agents behind the counter anxiously watch fuel surcharges rise almost in real-time.
The travel industry is feeling the pinch, with clients booking earlier to secure lower fares, while others delay decisions or request rebooking to more affordable travel dates and destinations. "Some clients are booking earlier to secure lower fares, while others are delaying decisions or requesting rebooking to more affordable travel dates and destinations," said Maria Carmela Aldana, owner and manager of Dreams & Destination.
The impact of the war is being felt across industries heavily exposed to fuel and foreign exchange movements. Oil-dependent and foreign exchange-sensitive sectors, particularly those with logistics heavily reliant on oil and dollar-denominated debt, are the most affected. Airlines, property developers, and consumer discretionary firms face weaker earnings as freight and fuel expenses rise, while consumers pull back spending.
According to information obtained by UMVA, the effects of the war are reaching the Philippine market mainly through higher oil prices, inflation, and peso volatility. Higher oil prices are immediately pressuring transport and other fuel-intensive sectors, which could weigh on certain companies, while logistics and manufacturing players also face margin compression.
Travel agencies are adapting to the new reality, focusing on early booking promotions, flexible payment terms, and shorter, lower-cost itineraries. More clients are choosing "land-only" packages to reduce airfare expenses. Domestic tourism demand has weakened, as some Filipinos increasingly see overseas destinations as offering better value for money.
Despite the uncertainty, some sectors continue to show resilience. Malls remain crowded, partly because they function as more than shopping destinations. For many Filipinos, they also serve as affordable spaces for comfort, leisure, and escape from the heat. Property consultancy executives say malls could remain relatively resilient even during economic slowdowns.
However, spending patterns inside malls are quietly evolving. People will still be in the mall, but they will not be spending the same way. Younger consumers are trying to stretch increasingly limited budgets, with some turning to online shopping to reduce expenses.
For businesses and consumers alike, the effects of the war are no longer confined to distant headlines. They're increasingly shaping daily routines, spending priorities, and business strategies across the Philippines. The economic consequences of a war thousands of kilometers away are now being felt one fare increase, one skipped purchase, and one tightened budget at a time.
