The ongoing conflict in the Middle East is beginning to threaten jobs, remittances, and labor markets across the Asia-Pacific region, including the Philippines, according to the Geneva-based International Labor Organization (ILO).

In its latest Employment and Social Trends: May 2026 Update titled “Growing labor market risks of the Middle East crisis,” published on Monday, May 18, ILO warned that higher energy prices, disrupted transport routes, supply-chain pressures, weaker tourism, and migration disruptions are increasingly spilling over into the global economy and the world of work.

ILO said Arab States and Asia-Pacific are the regions most exposed to the economic fallout due to their strong links to Gulf energy flows, trade routes, labor migration, and remittance channels.

Under a scenario in which oil prices rise by about 50 percent above their January-to-February 2026 average, ILO estimated that global working hours could fall by 0.5 percent this year and 1.1 percent in 2027, equivalent to losses of 14 million and 38 million full-time jobs, respectively.

Real labor income globally could decline by 1.1 percent in 2026 and three percent in 2027, translating to losses of around $1.1 trillion and $3 trillion, respectively, while global unemployment could rise by an additional five million people this year and 20 million next year.

For Asia-Pacific, ILO projected working hours could decline by 0.7 percent in 2026 and 1.5 percent in 2027, while real labor income may fall by 1.5 percent and 4.3 percent, respectively.

The agency added that the region could lose the equivalent of 11.3 million full-time jobs this year and 30.7 million in 2027 if the crisis persists.

“Beyond its human toll, the Middle East crisis is not a short-lived disruption. It is a slow-moving and potentially long-lasting shock that will gradually reshape labor markets,” ILO chief economist Sangheon Lee said in a statement.

“The world of work is one of the main channels through which global shocks become human shocks. What begins as an external shock eventually reaches workers and enterprises and can leave deeper scars by weakening the conditions that make work decent, secure and protected,” Lee added.

The report highlighted the Philippines as among the countries already showing signs of labor migration and remittance pressures due to the crisis.

According to ILO, close to 5,000 Filipino workers were repatriated from Gulf countries between early March and late April. At the same time, migrant worker outflows from the Philippines to Gulf states plunged to about 16,000 in March from over 72,000 a year ago.

The report also noted that remittances to the Philippines dropped to $2.79 billion in February from January’s $3.02 billion, warning that prolonged disruptions to overseas employment could place further pressure on remittance flows.

Overseas Filipino workers’ (OFWs) remittances are the Philippines’ top source of United States (US) dollars and a major driver of household consumption, helping support domestic spending and economic growth.

At the same time, ILO pointed out that Philippine inflation accelerated sharply to 7.2 percent in April from 4.1 percent last March and merely 1.4 percent a year ago, increasing pressure on household incomes and purchasing power.

The report warned that migration disruptions could eventually spill over into domestic consumption, poverty, and local employment in labor-sending economies such as the Philippines.

“Migrant worker outflows to Gulf Cooperation Council (GCC) countries have slowed sharply in some countries of origin, while repatriations have increased,” ILO said, citing flight disruptions, security concerns, and weakening labor demand in construction, hospitality, transport, and other services in Gulf economies.

ILO added that around 22 percent of workers in Asia-Pacific are employed in high-exposure sectors, including agriculture, transport, manufacturing, and construction. Tourism-dependent economies are also facing mounting pressure from higher travel costs and weaker demand.

To cushion the impact of the crisis, ILO said governments across Asia-Pacific—including the Philippines—have already implemented various emergency measures.

The report cited Philippine measures such as work-from-home (WFH) arrangements, cooling restrictions, public-sector travel limits, campaigns to reduce energy demand, transport measures aimed at reducing fuel consumption, fuel subsidies, and lower energy taxes.

ILO said policy responses globally remain uneven and constrained by limited fiscal space, warning that more targeted interventions will be needed to prevent the energy shock from causing lasting damage to jobs and incomes.

The agency called for employment-centered crisis responses focused on protecting jobs, incomes, and working conditions, particularly for migrant workers, informal workers, refugees, and small businesses vulnerable to prolonged economic disruption.