The Philippines has signed a $1.5-billion financing agreement with the Manila-based Asian Development Bank (ADB) to help cushion the economic impact of the Middle East conflict, the Department of Finance (DoF) said.

In a statement issued on Tuesday, the DoF said Finance Secretary Frederick D. Go signed the agreement on Oct. 6 as a 236.64 billion-yen package — the yen-denominated equivalent of the $1.5-billion agreement — for the Assistance for Greater Resilience and Alleviation of Poverty (AGAPAY) program.

“AGAPAY will help the government sustain its response to the economic impact of the Middle East crisis and fund measures that support vulnerable sectors, protect livelihoods, and help Filipino families cope with these challenges,” Mr. Go said.

The package, approved by the ADB on Sept. 24, will provide budgetary support — lending channeled through the national budget to finance policy-based programs rather than stand-alone projects — for the government’s response to economic shocks and oil supply disruptions arising from the conflict, particularly through its Unified Package for Livelihoods, Industry, Food, and Transport (UPLIFT).

President Ferdinand R. Marcos, Jr. declared a one-year state of energy emergency in March through Executive Order (EO) No. 110, citing threats to the availability and stability of the energy supply. The order also adopted UPLIFT as a whole-of-government response framework covering measures to ensure sufficient fuel and electricity supplies, keep public and commercial transport affordable, provide targeted financial assistance to vulnerable groups, and support the repatriation and reintegration of overseas Filipino workers affected by the conflict.

“These interventions aim to ease pressure on household budgets, sustain livelihoods, and protect vulnerable Filipinos from the effects of global economic disruptions,” the DoF said.

According to the DoF, the package forms part of the government’s 2026 external financing program. The funds will be channeled through the ADB’s Countercyclical Support Facility, which supports countries in responding to economic crises.

Under the program, the ADB said, funding will go toward fare discounts, fuel and fertilizer subsidies, assistance to small electric cooperatives, as well as medical relief and cash assistance for vulnerable households.

The ADB noted that the Philippines imports nearly all of its fuel and relies heavily on imported fertilizer, leaving the country exposed to global price increases and supply disruptions. It also said about 1.1 million Filipino workers were deployed to the Middle East in 2025, with remittances from the region accounting for roughly 18% of the country’s $35.6 billion in overall remittances last year. Remittances from overseas workers have long been a pillar of the Philippine economy, which is why the region’s share figures prominently in how the conflict touches household finances.

The new financing comes as the National Government’s (NG) outstanding debt stood at a record P19.61 trillion at the end of August, up 1.12% from a month earlier. For 2026, the NG projects its outstanding debt to reach P19.77 trillion, comprising P13.23 trillion in domestic debt and P6.54 trillion in external debt.

— Justine Irish D. Tabile