Soaring fuel, energy, and commodity prices are placing renewed strain on Philippine manufacturers, with industry groups warning that prolonged cost pressures are beginning to test firms’ ability to sustain operations and protect jobs.

The Federation of Philippine Industries (FPI) said businesses are facing higher production and logistics expenses, driven by global disruptions that continue to ripple through local supply chains and push input costs upward across key sectors such as food processing, plastics, fertilizers, and general manufacturing.

FPI Chairperson Elizabeth H. Lee said companies are now operating in a more defensive environment as external shocks continue to weigh on margins and demand.

“These are compounding shocks — the direct consequence of a Middle East crisis that continues to squeeze margins and push firms into defensive operations: cutting back where possible, conserving what we can, and doing whatever it takes to continue to keep the lights on, while we weather this current storm,” Lee said.

She said many manufacturers are temporarily absorbing higher costs to avoid immediate workforce reductions, but warned that this approach is becoming increasingly difficult, particularly for small and medium-sized enterprises.

“Manufacturers are absorbing these pressures to the best of their ability—and with it, safeguarding jobs—even as demand softens precisely because of the same crisis weighing on businesses. But absorption has its limits, more so for MSMEs who may have a shorter runway to withstand prolonged shocks,” she said.

Lee emphasized that both employers and workers are now sharing the burden of global economic instability, underscoring the need for balanced policy interventions that avoid deepening pressure on either side.

She pointed to the Tripartite Wage Board as a key venue for aligning labor protection with business sustainability, particularly at a time when inflationary pressures remain elevated.

The Philippines, she noted, has been more exposed to external shocks compared to some of its regional peers, making coordinated government and private sector responses more critical.

Lee said the immediate priority is to keep the economy stable enough to prevent disruptions in employment and business continuity.

“The challenge before all of us now is to hold the economy steady — to protect employment, sustain business operations, and prevent the kind of economic instability that would ultimately harm the very workers we all seek to protect. That balance is difficult. But it is achievable,” she said.