After more than five years of driving a jeepney around Metro Manila, Bryan Magaling has reached a crossroad of a different kind.
Fuel prices have spiked so high since the start of the US-Israel war with Iran that he’s considering giving up as a driver and moving back to the countryside.
Magaling, 26, told Nikkei Asia his daily earnings driving one of the former US military jeeps used as minibuses in the capital have been more than halved, leaving him with nothing to set aside as savings. “I just might go back to the provinces. Maybe there’s something waiting for me there,” he said, with no assets to tie him to Manila.
The economic hardships facing drivers like Magaling and workers in transport, manufacturing and other energy-intensive sectors across Asia stand in stark contrast to the growth in assets held by the region’s stock market investors.
Japan’s Nikkei Stock Average and South Korea’s benchmark KOSPI both touched record highs earlier this month, buoyed by enthusiasm for companies heavily involved in artificial intelligence technology. The pair joined indexes from Singapore to Taiwan in rebounding from losses tied to the economic fallout of the Iran conflict, a shock the International Energy Agency (IEA) has warned could become the most severe energy crisis in decades.
“The tech cycle is still holding up and AI is booming in the minds of investors,” Priyanka Kishore, founder and principal economist at Singapore-based research company Asia Decoded, told Nikkei Asia. “They don’t see the energy crisis from the Iran conflict dragging on—and it’s not even a crisis in the minds of some people.”
Leading brokerages in Seoul are reporting profits that now rival and in some cases exceed those of major commercial banks, which is a rarity in the country. And brands are leaning into the boom: Airline Cathay Pacific has unveiled a redesigned, high-end flagship lounge in Hong Kong, while sales of luxury goods and premium vehicles across Asia are expected by analysts to grow rapidly in coming years.
In March, Fatih Birol, head of the IEA, said that the world could be facing an energy crisis more severe than the oil shocks of the 1970s and the fallout from the Ukraine war combined. The divergence between buoyant markets and a strained real economy highlights a growing gap that economists warn could tip into stagflation—slower growth and accelerated inflation.
The International Monetary Fund has downgraded growth forecasts for Asia’s emerging economies while raising its global inflation outlook to 4.4%, up 0.6 percentage points from its January projection. The Asian Development Bank (ADB) expects developing Asia to grow 5.1% this year, down from 5.4% in 2025.
In a more severe scenario of oil prices rising to USD 155 per barrel and remaining elevated into 2027, the ADB said the region could lose up to 1.3 percentage points of growth, while inflation could climb more than 3 percentage points above baseline levels.
Central bank governors in Japan and South Korea have warned of mounting inflation risks, while governments across the region are scrambling to respond. The Philippines has gone as far as declaring a national energy emergency.
Asia is more exposed to surging oil prices than Europe or the US for two reasons.
Many regional economies rely heavily on Persian Gulf oil that must pass through the blockaded Strait of Hormuz. At the same time, a large share of the world’s poorer populations live in Asia, where many countries don’t have strong safety nets, so when energy prices rise, people feel the impact more acutely.
Economists warn that the shock is accelerating an already widening divide between those who own assets and those who do not—a trend that could be further intensified by technological change.
“People who start life with capital already in place are operating from an entirely different starting line. This initial advantage, reinforced through inheritance, is a major structural driver of inequality,” said Yuuki Fukumoto, a financial researcher at NLI Research Institute in Tokyo.
“For people who don’t already have assets, life inevitably becomes more difficult,” he said. “Because they depend so heavily on income, the impact of inflation hits them much harder.”
Former US Federal Reserve chair Janet Yellen has warned that technological shifts such as AI could concentrate wealth among a small number of firms and individuals. “I do worry about the shrinking share of income going to workers,” she told investors in Hong Kong.
The region’s small businesses are also feeling the strain.
Jai Prakash Bindal, who runs a footwear factory in New Delhi, said production has dropped to 30–40% of pre-crisis levels, forcing him to temporarily lay off many of his more than 100 workers, some of whom have returned to their villages.
“Raw material prices have increased substantially but our customers still want items at the old prices, so we are not able to keep the same levels of production,” Bindal told Nikkei Asia. “Everyone is facing the same issues.”
The Indian government has moved to heavily subsidize fuel prices, meaning drivers have seen little change in the cost of filling tanks—so far.
Elsewhere, costs have rocketed. For example, data show average gasoline prices were nearly 30% higher in Thailand in late April than before the start of the war, while they were up 17% in South Korea.
In Goyang, north of Seoul, a veteran taxi driver who gave his name as Shim said he’s struggling to make ends meet due to rising fuel costs and high monthly payments for his car.
“I make KRW 200,000 (USD 135.7) per day, but half of it goes to fuel and other costs,” he told Nikkei Asia.
Economists said the Iran crisis is deepening a “K-shaped” recovery from previous crises such as the Covid-19 pandemic and the Ukraine war, where wealthier households and large firms continue to gain, while lower-income groups fall further behind.
“We may start seeing not just inflation but also falling employment and weakening demand alongside rising prices—classic stagflation,” said Jayant Menon, a visiting senior fellow at the ISEAS-Yusof Ishak Institute in Singapore.
“That disconnect is widening, adding to inequality on top of the already disproportionate impact of the fuel crisis on the poor,” he said. “This is a double whammy.”
In financial capitals like Tokyo, record market highs are increasingly treated less as moments of celebration than as part of the regular cycle.
On a rain-soaked evening in the week when the Nikkei Stock Average pushed past 60,000 points for the first time, Hayato Imaizumi was not expecting a rush to the fourth-floor Stock Pickers bar he runs in Ginza, where traders gather to discuss tips over finance-themed signature cocktails with names like “Lehman Shock,” “Margin Call,” and “Sanaenomics”—a recent menu addition honoring Japanese Prime Minister Sanae Takaichi.
“We tend to get more customers when the market crashes,” the 43-year-old said. “Those highs in the Japanese stock market have happened several times already, so it’s no longer something that draws a crowd on its own.”
The normalization of market gains, however, masks a widening divide that remains difficult to capture in real time.
Because economic data typically lags real-time conditions, the widening gap has yet to show up in official statistics. An early signal may be the ASEAN Manufacturing Purchasing Managers’ Index released on April 1, which pointed to the regional manufacturing sector’s weakest performance in six months.
Consumer inflation has also started to accelerate across Southeast Asia, with Persian Gulf oil-reliant countries such as Vietnam and the Philippines seeing their sharpest price hikes in years.
Governments across the region have moved to cushion this double whammy and secure energy supplies.
Japan has released strategic oil reserves, South Korea has approved a KRW 26.2 trillion (USD 17.8 billion) supplementary budget including cash handouts for the 70% of the population that is the least well-off, and China is diversifying imports toward Russia and other non-Persian Gulf suppliers.
In Southeast Asia, the Philippines has announced subsidies for commuters. Indonesia is promoting remote work and expanding biodiesel use, and officials in Bangkok are even planning to recycle plastic water pistols used by revelers during the Songkran festival and turn them into naphtha and other petroleum-based materials.
Meanwhile, India has further raised a windfall tax on fuel exports to protect domestic supply, while Pakistan is bracing for power outages due to constrained liquefied natural gas imports.
The least developed countries in the region, including Cambodia, East Timor, Laos, and Myanmar, are the most exposed, according to Menon at the ISEAS-Yusof Ishak Institute.
“When price increases begin to bite and people feel that mitigation measures are insufficient, public dissatisfaction is likely to grow,” Menon said. “Thailand and the Philippines appear most susceptible to spillover into political unrest, with Indonesia also a possible candidate.”
Back in Manila, relatively high poverty levels and reliance on Persian Gulf oil imports spell trouble for jeepney drivers like Magaling and Eduardo del Rosario, a 62-year-old veteran with more than 20 years behind the wheel.
A stoic del Rosario told Nikkei Asia he keeps driving out of a sense of duty, despite losing money.
“At times, this is a public service of sorts because I know this won’t give me financial comfort,” he said.
“Working as a jeepney driver in our country is a sacrifice,” del Rosario said. “Every day we subject ourselves to the heat coming from the sun, and from these vehicles we drive. This, in a way, is our role in this lifetime.”
This article first appeared on Nikkei Asia. It has been republished here as part of 36Kr’s ongoing partnership with Nikkei.
Note: KRW figures are converted to USD at rates of KRW 1473.42 = USD 1 based on estimates as of April 28, 2026, unless otherwise stated. USD conversions are presented for ease of reference and may not fully match prevailing exchange rates.