This policy note presents simulation results examining the impact on the Philippine economy of global oil and petroleum price shocks triggered by geopolitical tensions stemming from U.S.–Israel military actions (unprovoked bombing) against the Islamic Republic of Iran. These developments have contributed to significant disruptions in global energy markets, including sharp increases in oil prices and heightened risks to key supply routes such as the Strait of Hormuz.
The analysis considers multiple scenarios, comparing outcomes with and without government intervention to assess the effectiveness of different policy responses under such external shocks.