Exporters are reducing production and workdays as orders start to decelerate and buyers are asking for postponement of shipments, even as they fear that operations can only be sustained for 3 to 6 months without government support, given skyrocketing fuel prices and logistics costs.
This was reported by Sergio Ortiz-Luis Jr., president of the Philippine Exporters Confederation (PhilExport), during the group’s 2nd Quarter General Membership Meeting on April 14, 2026, where he reported the initial results on the survey they conducted to assess the situation of their members. The initial results had 9 respondents yet from the garments, food, handicrafts and furniture sectors, largely catering to the U.S. market.
These respondents reported that their orders have “decreased slightly to significantly”, with buyers requesting to postpone shipments.
As a result, Ortiz-Luis said, the affected exporters’ actions include reducing production and workdays from 6 days to 5 to 3 days; postponing investments; and adjusting their pricing. These firms, he said, have been unable to pass on additional costs that range from 10 percent to 30 percent. The bulk of these costs are for shipping and logistics, fuel, and raw materials.
As part of the cost reduction measures, these firms are likewise looking at increasing local sourcing and diversifying markets.
At the same time, exporters are also requesting for government support in terms of fuel subsidies, tax relief, export incentives, and streamlined government processes.
Otherwise, Ortiz-Luis said they project that they can only sustain current operations for 3 to 6 months more and may eventually close if there will be no government support.
“The data shared by these members show that the issues and challenges we face have far reaching supply chain implications. One is rising logistics and fuel costs. There is obviously an upward trend in fuel surcharges across air, sea, and land transport, driven largely by global oil price volatility linked to geopolitical tensions particularly in the Middle East,” Ortiz-Luis said.
Logistics cost
The Civil Aeronautics Board (CAB) approved a fuel surcharge increase to Level 8 for April 1 to 15, 2026, doubling the previous Level 4. This translates to higher charges of up to PHP3.80/kg for domestic and PHP31.92/kg for international cargoes.
Major logistics providers have reportedly introduced fuel surcharges of up to 26 percent of trucking rates for import/export container movement, with weekly adjustments tied to diesel price fluctuations.
Carriers have revised emergency fuel surcharges effective late March 2026, with further increases depending on fuel market conditions. There are shipping lines serving Philippine trade that were said to have imposed war risk surcharges of around USD3,000 to USD3,500 per container. This has translated into 15 percent to 20 percent increase in logistics costs. Even shipments not directly passing through conflict zones can be affected because global insurance and reinsurance pricing have been adjusted upward.
While insurers charge shipowners and operators, the cost is passed through the supply chain. The 15 percent to 20 percent increase by shipping lines is however still within the maximum allowable increase of 30 percent on freight and passenger rates, based on the Required Rate Adjustment (RRA) released by the Maritime Industry Authority (MARINA) as of March 27.
This foreboding is feared to erase the gains made last year and the momentum in the first two months this year.
Based on the latest data from the Philippine Statistics Authority (PSA), merchandise exports were thankfully off to a strong start, reaching USD14.47 billion by the end of February or 8.3 percent better than the USD13.36 billion in the same period last year.
The export value for the first two months of the year was the highest level recorded since the PSA started tracking trade data in 1991. This comes after last year’s all-time high of USD84.48 billion in exports of goods which is 15 percent stronger than the previous year’s USD73.27 billion. This performance likewise marked 14 consecutive months of growth for the export industry.
In response to these challenges, Ortiz-Luis said that PhilExport remains proactive and engaged. “We have and continue to advocate for the repeal or review of burdensome regulatory measures, particularly those that increase the cost of doing business without clear value addition,” he concluded.
