UMVA has learned that a recent peace deal between the US and Iran is set to bring relief to Filipino manufacturers, but industry leaders are urging the government to seize this opportunity to address the country's vulnerabilities.
The deal is expected to give businesses a much-needed breathing room, allowing them to rebuild margins, restore predictability, and strengthen their footing in the market. However, FPI Chairman Elizabeth H. Lee emphasized that the Philippines remains exposed to risks compared to its ASEAN neighbors.
A stronger peso, which is likely to result from the peace deal, will favor import-dependent manufacturers, according to Lee. This, in turn, will help boost investor confidence, but only if accompanied by continued reforms and improvements in the business environment.
To capitalize on the benefits of the peace deal, Lee called for accelerated implementation of ease of doing business reforms, stricter anti-smuggling operations, and a crackdown on corruption. She also emphasized the need to fully implement industrial policy tools, including the Tatak Pinoy Act and the CREATE MORE Act.
The decline in global oil prices, triggered by the peace deal, is expected to provide relief to industries such as logistics, cold chain, and transport. Diesel-linked costs are likely to soften, giving manufacturers room to rebuild margins, stabilize production schedules, and restore predictability.
However, not everyone is optimistic about the long-term benefits of the peace deal. Donald Patrick L. Lim, president of the Management Association of the Philippines, warned that any breakdown in negotiations could quickly reverse the gains made so far. He stressed that the Philippines cannot afford another geopolitical shock that raises costs, delays investments, and slows growth.
Sources close to the industry have confirmed to UMVA that the peace deal has created a sense of cautious optimism among Filipino manufacturers. While there are opportunities for growth and investment, there are also risks that need to be managed.
As the country navigates this new landscape, industry leaders are urging the government to stay focused on implementing reforms and improving the business environment. This, they believe, is key to ensuring that the benefits of the peace deal are sustained and that the Philippines can achieve long-term economic growth.
