MANILA, Philippines —The Department of Trade and Industry (DTI) is studying measures to address the potential impact of supply chain disruptions in the Red Sea as conflict brews in the commercial sea lane where an estimated 12 percent of global trade passes through.
In a chance interview with reporters on Thursday, Trade Secretary Alfred Pascual said there was indeed a possibility that the government might waive some of the fees being collected from local exporters.
“We will look into it,” Pascual said after expressing the commitment to further study the situation and to provide guidance to export enterprises which are affected.
Despite the grim outlook, the trade official said that this might be a good time for overseas companies that are shipping goods to and from places in Europe, to bring their production operations to the Philippines.
READ: Peza, exporters circle wagons on possible Red Sea fallout
Pascual said that a trade delegation has been scheduled in the coming months to explore prospects.
Delayed cargoes
According to a recent survey conducted by the Philippine Economic Zone Authority (Peza), around 24 percent or 84 of the 347 registered business enterprises in the economic zones who responded to their poll cited that they are significantly affected by the situation in the Red Sea.
In contrast, 73 percent of the 252 respondents said they were not affected.
But for those who are affected, the Peza said that the impact includes delays in import shipments of goods ranging from seven to 20 days, as well as the rearrangement of vessels for materials coming from Europe—leading to longer lead times and potential reductions in production capacity.
READ: UN alarmed by global trade disruption
According to the Peza, these goods include electronics, semiconductors, automotive parts, printers and flexible printed circuits, coil transformers, aircraft galley parts, enterprise solid-state drives.
Also included are optical coupled isolators, raw materials of insulation anvil, quick crimp, wire anvil and radiation survey meters, among others.
Last January, the United States vowed retaliation on the Houthis who are attacking commercial vessels passing through the sea lane.
The Iran-backed armed group had said they would continue the attacks on ships passing through the Red Sea until Israel puts a stop to its offensive against Hamas in the Gaza Strip.