BAGUIO CITY, Philippines — Concluding that the economic fallout from the escalating war in the Middle East could be more severe than the COVID-19 pandemic, Mayor Benjamin Magalong and the Baguio City Council have adopted a massive ₱1.1-billion annual economic continuity program. The resiliency plan, announced on Saturday, April 25, 2026, is designed to shield the summer capital from global supply chain disruptions and stabilize local commodity prices.
The initiative follows a sharp decline in tourism and a significant slowdown in the city’s service-driven economy as fuel prices and regional instability weigh on domestic travel.
The ₱1.1-billion annual budget will be managed under a strict prioritization framework to ensure the city remains functional during the global crisis:
- Fuel Stability: A primary portion of the funds will be used to manage and secure fuel supplies. This is critical for ferrying food supplies into the mountain city and guaranteeing the continuity of mass transport for residents and workers.
- Food Security: The plan involves identifying and tapping into additional food sources to prevent shortages and price gouging.
- Small Business Protection: With an estimated 25,000 businesses affected by the downturn, the LGU will implement measures to support the retail sector, which employs over 20,000 Baguio residents.
Mayor Magalong reported that the “summer capital” status of the city has not been enough to offset the impact of the war on Iran:
- Tourism Slump: Data from the Baguio Tourism Council shows that tourist traffic is down by 40 to 50 percent.
- Zero Occupancy: For the first time in recent history, several low-budget hotels and alternative accommodation facilities have registered zero occupancy rates.
- Traffic Relief: Ironically, the economic slowdown has resulted in light-to-moderate traffic within the city, providing a temporary reprieve for local commuters but signaling a deeper crisis for the 1,800 workers in the hotel industry.
Mayor Magalong warned that economic activity will likely remain sluggish even after active military engagements conclude.
“The Baguio economy is driven largely by service industries which are vulnerable to any manner of supply chain disruptions. We must prioritize the management of fuel to ferry food supplies and to guarantee mass transport.”
The plan also seeks to tap into new revenue streams for the LGU to ensure the ₱1.1-billion commitment remains sustainable over the coming years.
The local response in Baguio mirrors growing concerns across the Philippines regarding the Middle East war’s impact on fuel and energy costs. While national agencies prepare for potential rollbacks or subsidies, Baguio’s proactive allocation of local funds marks one of the most significant municipal-level interventions in the country.
As part of the broader rehabilitation of the city, iconic tourist spots like Burnham Park remain under renovation, further complicating the tourism recovery efforts. The LGU’s focus on “resilience” aims to bridge the gap until global markets stabilize and visitors return to the highlands.