Domestic manufacturers are tightening operations to weather the current crisis and preserve jobs, while urging the government to accelerate infrastructure spending to support the economy and generate employment.
Elizabeth H. Lee, chairperson of the Federation of Philippine Industries (FPI) Forum 2.0 on Thursday, said belt-tightening is a standard response to crises but does not involve layoffs. Instead, firms are focusing on efficiency measures such as energy conservation and compressed workweeks.
She said these steps aim to sustain operations and protect jobs for as long as the crisis persists.
“The war was not expected so the immediate thing businesses need to do is to tighten our belts, be more efficient. We have no choice. We have to do it right now. But it’s not letting go of people,” she stressed.
Lee said the manufacturing sector would remain stable if the conflict is short-lived, but warned that a prolonged crisis could strain firms. “You might be in trouble already, if it (war) is going to be a year,” she said, expressing hope that the Middle East conflict ends soon.
She added that the Philippines has buffers, including remittances from overseas Filipino workers, to help cushion the peso’s depreciation, which has breached PHP60 to the US dollar. However, she said the situation highlights the need to strengthen domestic manufacturing to reduce vulnerability to global shocks.
Infrastructure push
Lee urged the government to ramp up infrastructure spending to sustain economic activity, noting that such investments would benefit key industries and create jobs. She said project implementation has picked up after a slowdown in the latter half of last year and early this year.
“In order for us to have a lot of this job that’s going on, infrastructure, expenditure, needs still needs to be done. That can help the steel industry. That can help the cement industry. That creates jobs also for a lot of Filipinos. So that’s very important. That’s the assistance that we can see. Not so much like, you know, deduction of taxes, but more of that (infrastructure projects),” she added.
Lee said manufacturers have yet to see signs of a slowdown, with no cancellations or cutbacks in orders so far. However, she warned that rising fuel costs could lead to contract renegotiations due to higher logistics expenses.
“Actually very serious now because of the cost of fuel that’s going up … that affects logistics, etcetera. So it really is, it’s concerning. But still having said that, at least the government is doing something about it,” she said.
“I think the government itself is, thank God, doing what it needs to do, in order to safeguard us, the citizens, from higher prices,” she added.
