Philippine Unemployment Rises, Prolonged Mideast Conflict Hits Tourism In Southeast Asia

2026-05-03 11:16:30

(MENAFN- Khaleej Times) More than 8,500 overseas Filipino workers (OFW) have been repatriated from the Middle East since the start of the US-Israel-Iran war, according to the Philippine Department of Migrant Workers (DMW). Many of them attended the various job fairs organised by DMW on Labor Day, hoping to land another job abroad.

Becky, a former domestic worker in Dubai, went to the DMW job fair in Quezon City, seeking another overseas contract. She said she has to work two more years abroad as her younger daughter is still in her third year of college studying computer science.

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“I could not handle those emergency alerts. That was why I asked to be repatriated last March,” she said.“But I still need a job and I could not find one in the Philippines,” she said.

Becky was among the thousands who might be hired for the 3,400 overseas job vacancies offered across the United States, Europe, Japan, and Australia. DMW secretary Hans Leo Cacdac said that jobs in healthcare, medical, engineering, technical trades, construction, and manufacturing were also offered. He added 12 land- and sea-based recruitment agencies have participated.

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Undersecretary Dominique Rubia-Tutay said they designed the recruitment activity as an alternative employment option for OFWs affected by the tension in the Middle East. But even as authorities like Tutay noted that many returning workers continue to experience psychological strain after being caught in recent regional conflicts, they still choose to look for overseas jobs due to the persisting lack of job opportunities at home.

Rising unemployment across Southeast Asia

The ongoing Middle East tensions had been cited as the main cost of rising unemployment rate not just in the Philippines but in most of Southeast Asia. It is not just repatriated workers from the Middle East that contribute to the worsening numbers. The economic impacts of the war are in fact the biggest contributors to the downslide.

The ongoing hostilities in the Middle East began to immediately place significant pressure on labor markets across Southeast Asia. Rising energy prices and disruptions to shipping routes, such as the 98 per cent collapse in tanker traffic through the Strait of Hormuz since March, are triggering inflationary strains, causing manufacturing and logistical slowdowns that directly impact employment.

In the Philippines, the unemployment rate rose to 5.1 per cent up from 3.8 per cent a year earlier. The country is facing high underemployment (11.8 per cent), with significant concerns that the Middle East conflict will trigger further job losses in agriculture and retail due to high fuel costs.

Indonesia is also heavily affected with more than 2,000 Middle East workers repatriated since the war started. It is now looking at a minus 4.85 per cent downslide in its employment performance.

The Middle East war has also emerged as a significant risk to Thailand's economic stability and labour market. The crisis is driving up energy costs and disrupting global supply chains, leading to a downward revision of GDP growth and a rise in manufacturing layoffs.

As repatriation of Southeast Asian workers from the Middle East persists and new hiring in the GCC has stalled, reductions in remittances pose a risk to household incomes and local consumption.

Tourism jobs taking a hit

Soaring fuel costs and plane ticket prices are reducing tourism arrivals in Southeast Asia by nearly half at 48 per cent. If no de-escalation happens within the 2nd quarter, analysts predict the numbers might even worsen to 62 per cent as cancellations from Middle Eastern travelers mount.

Several Southeast Asian countries depend on tourism for millions of jobs. In the first week of the conflict, some luxury travel firms saw a 50 per cent drop in total bookings. Almost 75 per cent of travel businesses reported cancellations or postponements.

Thailand specifically expects 3 million fewer tourist arrivals, with a 25 per cent "worst-case scenario" drop within the year. Thailand's tourism -critical for regional growth -is experiencing significant disruption in connectivity, particularly with long-haul flights using Middle Eastern carriers.

While many Southeast Asian countries have initiated support programs, such as cash assistance and job fairs in the Philippines, the protracted conflict is expected to make 2026 a challenging year for employment and tourism growth in the region.