Biz groups: No layoffs for now despite crisis
Local businesses are not yet considering cutting jobs despite rising costs linked to the Middle East crisis, with industry groups saying firms are holding the line on employment while assessing how long disruptions will last.
“It’s really too soon,” said Elizabeth Lee, chair of the Federation of Philippine Industries, an umbrella group of leading producers and manufacturers in the country. “Not letting go of people. Not yet.”
“It’s not like if there is a spike in oil prices, you’re going to shut down your factory,” she added. “There are some mitigating factors that we can do.”
For now, Lee said manufacturers remain operational and able to absorb rising costs, supported by existing inventories and long-term production cycles. The immediate pressure, she said, is not demand but cost.
“It’s not cancellation; it’s an increase of costs,” she said, citing rising fuel, transport and electricity expenses driven by global oil supply uncertainty, particularly disruptions linked to the Strait of Hormuz.
Companies may also need to renegotiate contracts and adjust prices to reflect higher input and logistics costs, she added.
Donald Lim, president of the Management Association of the Philippines, echoed Lee’s cautious stance, saying companies are in a “wait-and-see” mode as the situation remains beyond their control.
To manage rising costs, firms are tightening spending and adjusting operations rather than downsizing.
Belt-tightening measures
Lee said manufacturers are cutting nonessential travel, conserving electricity and fuel and encouraging carpooling to reduce transport expenses.
Some factories are also considering shorter workweeks, scaling down from six days to four or five.
“The immediate thing that we need to do really is to tighten our belts, be more efficient,” she said.
Lim said similar adjustments are being discussed across the corporate sector, including reduced on-site workdays.
“We might consider that,” he said of a shorter workweek, similar to that adopted by government agencies. “We’re going to see more discussions there—maybe three or four days onsite, so one or two days work from home.”
Yet with the war now in its third week, Lee and Lim warned that risks are mounting.
“Business will always operate on a certain level of certainty. So, if it’s a lot of uncertainty, it will be difficult to plan ahead),” Lim said.
Prolonged increases in fuel prices could push up food costs and dampen consumer spending, particularly in retail, he added.
Lee said the duration of the crisis will be critical as sustained cost pressures could eventually force tougher decisions.
“If it’s going to be a year, we might be in trouble already,” she said.
