PH industries urged to tighten belts amid rising oil prices, weaker peso

Amid surging petroleum prices, the weakening of the peso against the dollar, and other economic effects of the continuing conflict in the Middle East, businesses in the Philippines need to tighten their belts and become more strategic, according to the Federation of Philippine Industries, Inc. (FPI).

“Part of the business strategy is to really tighten your belts because this was not expected,” FPI chairperson Elizabeth H. Lee said in an interview.

Lee said measures include finding ways to reduce fuel and electricity consumption, and stressed that despite the challenges, the country’s manufacturers are not yet at the point of letting go of workers.

According to Lee, one practical way companies can cut costs without reducing jobs is by improving efficiency.

"Carpooling is actually one of those tightening your belt in terms of efficiency," she said. "We have no choice, we have to do it now, but it’s not letting go of people.”

FPI is also pushing for stronger cooperation between the private sector and the government to accelerate the country’s value chain development and expand higher-value manufacturing, which could create more jobs.

Lee said this could also help absorb returning overseas Filipino workers (OFWs) who may be affected by the conflict in the Middle East.

“The expansion in manufacturing can absorb workers also, for example the ones who are in other countries; if and when they decide to come back, then there would be jobs for them.”

Free trade agreement

The remarks were made on the sidelines of the Federation of Philippine Industries, Inc.’s FPI 2.0 forum, themed “Geopolitics, Peace and Prosperity: Ensuring Business Resilience in Uncertain Times.”

At the same forum, Department of Foreign Affairs Secretary Theresa Lazaro she said an “agreement” between the Philippines and the European Union on a long-negotiated Free Trade Agreement (FTA) could possibly be reached.

“ We are revitalizing trade with Europe through the Philippine-EU Free Trade Agreement,” Lazaro said. “Just to give you a peek we might have this agreement hopefully...within this year probably the start of second half of this year.”

Lazaro said the Philippines considers it important to remain open and to continue strengthening its economic ties with the rest of the world.

This includes China, one of the Philippines’ largest trading partners. But Lazaro stressed that while the Philippines remains open to engaging China in business and economic cooperation, the government will continue to stand firm on its rights in the West Philippine Sea.

“With China, which is our largest trading partner we continue to seek cooperation where possible, particularly in areas where it benefits our people, yet we remain firm and uncompromising in protecting our sovereignty and our rights, our position is clear, we seek peace and we will never be the aggressor but we will not surrender a single square inch of what is ours,” she said.

At the same time, Lazaro said the Philippines is strengthening its economic and security ties with Japan, South Korea, India, and Vietnam as the world faces ongoing crises such as the conflict in the Middle East. — BM, GMA Integrated News