Domestic manufacturers expressed hope that the deal between the U.S. and Iran to reopen the Strait of Hormuz will enable the local currency to sustain its recovery from its loses during the war.
Elizabeth H. Lee, chairperson of the Federation of Philippine Industries (FPI), said that the peace deal is good news for import dependent manufacturers who are reeling from the peso depreciation, making their imports of raw materials more expensive.
“Importers of raw materials — particularly in chemicals, metals, packaging — will feel cost relief as the peso recovers,” said Lee.
Already, the peso recently strengthened to the PHP60.40s level following news of a tentative peace deal.
The domestic currency depreciated significantly, hovering in the PHP60-to-PHP61 per dollar range, as the US-Iran conflict triggered a surge in global oil prices and drove up demand for safe-haven currencies like the U.S. dollar.
Lee noted that when Hormuz shut down, diesel hit PHP100/liter, the peso slid to PHP61, and we entered our first ever national energy emergency.
With global oil prices now falling after the peace deal, Lee said the pressure that cascaded through logistics, cold chain, and transport will start to unwind.
She, however, noted that the easing won’t be instantaneous, but the direction is clear and constructive. “Diesel linked costs will soften gradually, giving manufacturers room to rebuild margins, stabilize production schedules, and restore predictability,” she said.
“Relief is coming — as long as the peace holds and supply routes stay open. This stability gives businesses the space we need to rebuild margins, restore predictability, and strengthen our footing,” Lee concluded.
