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INVESTORS watch with bated breath as the diplomatic rift between Saudi Arabia and Iran triggered fresh geopolitical tension in the oil-rich Middle East, home to a big number of overseas Filipino workers.
“The Saudi-Iran tension is like a ticking time bomb. The line has been drawn between the two countries and hence it is difficult to ascertain whether an amicable resolution is in sight,” said Michaelangelo Oyson, chief executive at stockbrokerage BPI Securities.
After Saudi Arabia severed diplomatic relations with Iran, allies Bahrain and Sudan followed suit while UAE scaled down its diplomatic contingent in Iran.
“lt’s too early to conclude anything with the situation between (Saudi Arabia) and Iran at this stage,” said Jose Mari Lacson, head of research at Campos Lanuza & Co. “The worst-case scenario is obviously war, which would have an impact on both employment opportunities in the Middle East as well as our own fiscal preparedness to take care of the security of our nearly 900,000 countrymen working in that region.”
Closure of embassies may not necessarily translate to armed conflict. However, Lacson said this could lead to some form of a Cold War in the Middle East. This “should not present an immediate risk to OFWs, their remittances and oil production—the factors that matter to the Philippines the most. However, we need to monitor any escalation of the situation,” he added.
The Bangko Sentral ng Pilipinas (BSP) sees minimal impact of the tension between Saudi Arabia and Iran on oil prices but warned of a temporary slowdown in remittances from Filipino workers in the two countries.
“Analysts’ initial assessment is that the impact of the tensions on international oil prices at this time would be limited because the oil markets remain oversupplied,” BSP Governor Amando M. Tetangco said in a text message to reporters Tuesday.
“As for overseas Filipinos’ remittances, we may see some temporary setback because of logistical difficulties and deployment may slow,” Tetangco said.
There are about 800,000 Filipinos employed in Saudi Arabia and more than 4,000 in Iran.