The continued depreciation of the Philippine peso is presenting mixed prospects for local manufacturers by offering export gains while simultaneously raising cost pressures for import-dependent firms, the Federation of Philippine Industries (FPI) said.
FPI chairman Elizabeth Lee said a weaker currency can benefit exporters by increasing the peso value of foreign-denominated revenues. However, she said this advantage is partly offset for manufacturers that rely heavily on imported raw materials and inputs, as costs rise alongside the currency’s decline.
“While some exporters may benefit, reliance on imported inputs limits the upside. At the same time, sustained cost pressures on import-dependent sectors could weigh on consumption and investment, albeit temporarily,” Lee said.
For companies serving the domestic market, the impact is more immediate. Higher prices for imported fuel and materials are pushing up production costs, creating pressure that may eventually be passed on to consumers.
“Higher input costs are likely to feed into consumer prices over time, shaping inflation trends and weighing on household purchasing power,” Lee said.
She said that small and medium-sized enterprises are particularly vulnerable due to a limited capacity to absorb or manage currency volatility.
At the macroeconomic level, Lee described the situation as a balancing act and noted that the outlook will largely depend on external factors, particularly geopolitical tensions in the Middle East and their effect on global oil prices and shipping costs.
She said that mitigating measures are being implemented, including calibrated monetary policy to help anchor inflation expectations as well as initiatives to strengthen energy security and diversify supply sources.
“These interventions will be critical in cushioning cost pressures and supporting domestic demand amid external volatility,” Lee said.
The FPI cited the need to strengthen domestic industrial capacity and improve supply chain resilience to better withstand currency fluctuations and external shocks.
Lee said close monitoring of foreign exchange movements, alongside efforts to boost productivity and competitiveness, will be essential to sustaining stable and inclusive economic growth.
