Philippine President Ferdinand Marcos Jr. is grappling with the nation's most severe economic downturn since the pandemic, triggered by the energy shock from the Iran war, which is depleting consumer spending and fueling inflation. The economy grew by a mere 2.8% last quarter, the slowest pace outside the pandemic since late 2009, with household spending hitting its lowest point since 2010. The peso has become Asia's worst performer since the war began, and the stock market ranks second-worst globally. Inflation is at a three-year high, leaving Marcos and the central bank with limited options: either increase spending to protect citizens or further tighten monetary policy after a recent rate hike. The country also faces the potential for rising food costs due to an impending El Nino and is missing out on the AI-driven export boom benefiting other Asian nations. The Philippines imports over 90% of its oil from the Middle East, making it particularly vulnerable to supply disruptions.