Philippine traders brace for Israel conflict fallout
MANILA -Two major local business groups on Monday said they expected trading between the Philippines and Israel to be affected by the escalating violence in the Jewish state, noting in particular the adverse impact on the country’s export of electronic goods and garments.
Philippine Chamber of Commerce and Industry (PCCI), the country’s biggest business organization, said that while the main concern was the safety of overseas Filipino workers (OFWs) and Filipino students in Israel, they were likewise concerned about how the conflict would affect the country’s exports.
“Our export products there are semiconductors, basically the components produced here that are made by US and Japanese firms and others,” PCCI president George Barcelon told the Inquirer in a phone interview.
The PCCI official said he was optimistic that the violence would not escalate further to wreak havoc on global supply chains, hoping that the armed conflict would be contained and settled in a reasonable amount of time.
“The Israelis are more than capable of handling it. They are way advanced in defense technologies,” Barcelon said.
READ: Middle East conflict adds new risks to global economic outlook
According to data from the Israel Embassy in Manila, the Philippines exported $193 million worth of goods in 2022, marking an annual growth of 39 percent from year-ago level.
Israel’s top import from the Philippines is machinery and electronic equipment, comprising 83 percent of total. These include electronic integrated circuits, engine and motors, and printing machinery.
READ: Oil prices jump more than $4 as Middle East violence rattles markets
Meanwhile, the Foreign Buyers Association of the Philippines (FOBAP) expressed concern about the impact of the war on the garment trade between the Philippines and Israel.
“It is heartbreaking to note that our relationship with Israel has just started to improve substantially in the last two years in terms of trade, including textile and apparel,” said FOBAP president Robert Young, whose trade group exports about $1.5 billion worth garments annually in different parts of the globe.
“Unfortunately, challenges and bumps are expected to happen in our mutual trade. Worse, this will definitely have far-reaching consequences in trade and business in the neighboring countries as well,” he added.
The FOCAP official said the implication could turn out to be the same as the Russian and Ukraine conflict, noting how it impacted the global supply chain.
“As preparation for the coming events, FOBAP is now discussing among its members a contingency plan, such as tapping other markets,” he said.
In 2022, textile and footwear accounted for 5.3 percent of the $193 million worth of goods imported by Israel from the Philippines. These include bags, footwear, clothing and clothing accessories.
