Exporters scramble to cut costs to sustain operations

Export-oriented manufacturers have been ramping up technology investments and improving operational efficiency to cut down costs amid high fuel expenses and sustain operations to meet rising demand, according to an official of the Philippine Chamber of Commerce and Industry (PCCI).

Ferdinand Ferrer, vice president for industry of PCCI, said on Tuesday in an event in Pasay that the “impact of high fuel charges has significantly increased the cost of manufacturing here in the Philippines.”

High fuel prices, which have exacerbated inflation, stemmed from the disruptions brought about by Russia’s invasion of Ukraine.

Apart from this, Ferrer said that shipping costs had risen as well. Transporting products via sea freight from the Philippines to America costs three times more now prior to the pandemic due to the lack of containers and high oil prices, he noted.

“It is a painful burden to take now. Everybody is trying to look for innovative ways to save,” he said.

For one, Ferrer said companies are leveraging technology as it could “augment shortage of skills [and] workers,” adding it would also optimize the use of power to bring down energy costs.

The employees were also being retooled and upskilled to handle more tasks, he added.

These are necessary steps to keep the operations running as exporters continue to accept orders from clients, Ferrer said.

“The demand is out there. There is a high demand for manufactured products from the Philippines,” he pointed out.

George Barcelon, president of PCCI, meanwhile, stressed that exporters have been dealing with the lack of containers as well to ship their products.

Ferrer estimated shipping delays of up to three weeks as a result.

“The turnaround time is very slow. There is not enough shipping space,” Barcelon said.

Supply Chain Management Association of the Philippines, in an earlier interview with the Inquirer, said that this supply chain constraint was expected to last until next year given the Russia-Ukraine conflict and pandemic-induced restrictions.