Persistently high fuel prices are putting increasing financial pressure on construction firms, with one contractor saying it continues to absorb higher operating costs to keep government infrastructure projects on track while seeking relief through existing government mechanisms.

Ericson Garcia, authorized managing officer of IGWT-JAV Construction & Development Corp., said the company has been affected by diesel and gasoline prices, which remain at around Php70 to Php80 per liter.

"There is a big impact, but for now we are absorbing it," Garcia said in an interview.

Garcia said the company is seeking price escalation for eligible government contracts, a provision that allows contract cost adjustments when fuel, construction materials, or other input costs rise due to circumstances beyond the contractor's control.

He said factors such as geopolitical conflicts affecting global oil prices and natural disasters may qualify projects for price escalation, subject to evaluation and approval by the implementing agency, including the Department of Public Works and Highways (DPWH).

Despite rising operating costs, Garcia said the company remains committed to completing its ongoing projects, with contractors continuing to shoulder higher fuel expenses to sustain government infrastructure works.

He added that the company has requested time extensions for some projects, with the applications still under review.

Garcia said some projects have also been temporarily suspended due to technical issues unrelated to fuel costs. In one project, soil integrity problems were discovered during construction that were not identified during the design stage. Even during the suspension, work has continued on portions of the projects that can still proceed.

The company has not reduced its workforce despite higher expenses, Garcia said, adding that it has maintained—and in some cases increased—its manpower to sustain project implementation.

However, he warned that prolonged fuel price increases could eventually slow the construction sector.

"If fuel prices continue to rise and remain unstable, infrastructure projects will definitely be affected," Garcia said.

He said the company is exploring ways to offset losses but acknowledged that sustained fuel price hikes could force contractors to be more selective in taking on new projects.

"If fuel prices continue to increase, we may have to reduce the number of projects we undertake," he said, adding that fewer projects could eventually lead to workforce reductions if operating costs become unsustainable.

Garcia urged the government to consider measures to ease the burden on contractors and consumers, including possible adjustments to taxes on fuel. He specifically cited the value-added tax (VAT) on fuel, saying lower taxes would help reduce business operating costs while providing relief to consumers.