Multilateral lenders including the Asian Development Bank (ADB), the International Monetary Fund (IMF), and the World Bank Group (WBG) are moving to provide immediate financing and coordinated support to countries reeling from the economic fallout of the Middle East war.
In a statement on Wednesday, April 1, the Manila-based ADB said it had approved the Rapid Resource Reprogramming and Deployment Option (3RDO), a financing mechanism that allows developing member countries (DMCs) to quickly repurpose existing funds for emergency response.
“The Middle East conflict is a stark reminder that our region’s exposure to geopolitical and economic shocks can escalate with sudden intensity. Speed is crucial to protect the economy and the most vulnerable during a crisis, and this new tool gives our developing members the means to act in days, not weeks or months, when their people need support the most,” ADB president Masato Kanda said.
The ADB’s 3RDO enables countries to redirect up to 10 percent of their undisbursed sovereign portfolio—or up to 25 percent for small island developing states—through pre-arranged contingent projects that can be activated within 24 hours of a government request. The mechanism is designed to address the most critical period immediately after a crisis, when governments must secure essential goods and stabilize public services.
The ADB said it treats disaster risk management as integral to development and, through 3RDO, offers a “zero-cost” option that countries can activate during crises to support rapid response, strengthen preparedness and governance, and complement existing financing tools.
ADB data showed that from 2020 to 2025, 1,227 disasters were recorded across its member economies, resulting in over 106,000 deaths and about $341 billion in economic losses, underscoring the need for faster-response financing tools.
Also, the heads of Paris-based International Energy Agency (IEA) as well as of both Washington-based IMF and WBG said they have agreed to form a coordination group to align their response to the war’s energy and economic impacts, according to a joint statement they issued also on April 1.
“The Middle East war has caused major disruptions to lives and livelihoods in the region and triggered one of the largest supply shortages in global energy market history. The impact is substantial, global, and highly asymmetric, disproportionately affecting energy importers, in particular low-income countries,” the three institutions said.
They noted that the shock is being transmitted through higher oil, gas, and fertilizer prices, while also raising concerns about food inflation and disrupting global supply chains and tourism flows.
“The resulting market volatility, weakening of currencies in emerging economies, and concerns about inflation expectations raise the prospect of tighter monetary stances and weaker growth,” they added.
In the Philippines, the peso fell to record-low levels against the United States (US) dollar ahead of the Holy Week break
Meanwhile, the Bangko Sentral ng Pilipinas (BSP) is considering interest rate hikes after projecting that headline inflation could exceed the upper end of its two- to four-percent target range, even as economic growth is expected to remain subdued amid prolonged uncertainty from the ongoing war and lingering fallout from last year’s flood-control corruption scandal.
“At these times of high uncertainty, it is paramount that our institutions join forces to monitor developments, align analysis, and coordinate support to policymakers to navigate this crisis. This is especially the case for countries that are most exposed to the downstream impacts from the war and those confronting more limited policy space and higher levels of debt,” they said.
The three institutions said the coordination group will assess cross-country impacts, including energy prices, trade flows, inflation trends, and balance of payments (BOP) pressures, while also mobilizing financial support and risk mitigation tools for the most vulnerable economies.
To ensure a coordinated response, the institutions said they would assess the extent of the crisis across countries and regions, align a response framework that could include targeted policy guidance, evaluation of financing requirements and corresponding financial assistance—including concessional support—and the use of risk mitigation tools, and engage key stakeholders, including multilateral, regional, and bilateral partners, to deliver timely and well-coordinated assistance to countries in need.
Finance Secretary Frederick D. Go earlier told Manila Bulletin that the Philippine government is in ongoing talks with development partners to secure funding support for the country’s power and fuel requirements amid the state of national energy emergency declared by President Ferdinand R. Marcos Jr.