MANILA, Philippines – Philippine manufacturers are urgently requesting targeted government assistance to stimulate recovery, as persistently high input and logistics costs continue to burden the sector despite recent geopolitical developments, according to an industry group.
The Federation of Philippine Industries (FPI), representing the nation's leading producers and manufacturers, emphasized that any potential relief from declining global oil prices would not immediately benefit the domestic economy. In a statement, FPI chair Elizabeth Lee explained, "While international oil prices might soften due to recent events, the domestic impact isn't instantaneous. Businesses are still operating with higher-cost inventories, and adjustments in fuel, freight, and supply chains will depend on the stability of the ceasefire."
Lee further noted, "Even under favorable conditions, these adjustments will be gradual. Price transmission in the real economy involves lags, frictions, and contractual rigidities—it doesn't happen in real time."
The manufacturing sector has been severely impacted by the Middle East conflict, with the Philippines' purchasing managers' index dropping to a three-month low of 51.3 in March, down from a nine-year peak of 54.6 in February.
Logistics remains a critical pressure point. Elevated fuel prices have led shipping lines and trucking companies to implement surcharges, increasing transportation and related expenses by up to 20 percent, FPI reported. These rising costs ripple through supply chains, elevating production expenses and ultimately consumer prices.
Beyond fuel, disruptions in the Middle East have also constrained the supply of petrochemical feedstock essential for plastics and packaging. Some manufacturers have declared force majeure or canceled export orders, while others have sought alternative, more expensive sources, keeping input prices high.
Lee observed that both businesses and households have started adapting to sustained high energy costs by reducing operating days and optimizing transport usage, indicating a broader economic slowdown. "The reality is that elevated energy costs suppress consumption, decelerate economic activity, and limit industrial output," she stated. "Normalization will be a gradual process—it won't happen overnight."
In response to these challenges, Lee advocated for "targeted, time-bound support" specifically for manufacturers and micro, small, and medium enterprises to help mitigate the ongoing crisis.