The Philippine Exporters Confederation Inc. (PHILEXPORT) said exporters are heavily dependent on transport and logistics networks to move goods from factories to ports and ultimately to global markets, making fuel costs a direct factor in export competitiveness.

PHILEXPORT President Sergio R. Ortiz-Luis Jr. said elevated fuel prices are cascading across the entire value chain, increasing logistics expenses, squeezing margins, and weakening the ability of Philippine exporters—especially micro, small, and medium enterprises (MSMEs)—to compete internationally.

“Fuel is a fundamental input not only in production but in the movement of goods. Every increase in transport and logistics cost directly affects exporters’ competitiveness. Reducing the tax burden on fuel will help stabilize operational costs and ease pressure across supply chains,” Ortiz-Luis said.

He reiterated the group’s support for the proposed suspension of VAT on fuel products, particularly backing the legislative initiative of Senator Loren Legarda, which seeks to provide temporary relief amid persistent inflationary pressures.

Ortiz-Luis described the measure as a timely intervention that would help ease transportation bottlenecks, stabilize prices of goods, and support both business continuity and consumer welfare.

Recent government and economic data indicate that suspending fuel taxes, including VAT, could deliver immediate relief across sectors:
• Fuel price reductions of up to ₱6 per liter for diesel and ₱10 per liter for gasoline, easing transport and logistics costs.
• Household impact: Previous suspensions led to cuts of about ₱5.60 per liter for kerosene and ₱3.36 per kilogram for LPG, or roughly ₱37 savings per household tank.
• Inflation management: Economic projections suggest inflation could be contained at 3.6% to 4.2% with the measure, compared to potential spikes of up to 7.5% without intervention.

Ortiz-Luis warned that sustained high fuel prices ripple through the economy, as transport costs are passed on to food, medicine, and other essential goods, disproportionately affecting low- and middle-income households.

While acknowledging fiscal concerns, including estimated revenue losses of around ₱136 billion from excise tax and VAT adjustments, he stressed that improved economic activity, preserved jobs, and stronger consumption could help offset long-term impacts.

“Targeted and time-bound relief measures such as suspending VAT on fuel are critical to sustaining economic momentum, supporting exporters who rely heavily on transport systems, and shielding consumers from further price shocks,” Ortiz-Luis added.

He urged policymakers to act swiftly on the proposal and adopt balanced measures that safeguard both fiscal stability and economic resilience while keeping goods moving efficiently across the supply chain.

Preliminary data from the Philippine Statistics Authority (PSA) showed exports expanding by more than 20% for three consecutive months in the last quarter of the year. The sustained rise reflects stronger global demand for Philippine-made goods and a broader recovery in domestic production, with higher export orders supporting factory operations, agricultural output, and employment across key sectors.

Trade and Industry Secretary Cristina A. Roque said the strong export performance highlights the resilience and competitiveness of Filipino workers and enterprises in global markets.

“When our products reach international shores, the benefits flow directly back to our communities,” Roque said. “Building on this strong finish, the DTI will intensify efforts to help exporters access more markets and simplify the export process, so the gains from global trade translate into more jobs and better opportunities for Filipino families.”

Exports reached $6.99 billion in December 2025, a 23.3% increase year on year and the third straight month of expansion. For the full year, total exports climbed to $84.41 billion, up 15.2% from $73.27 billion in 2024, marking a clear rebound in external trade.

Electronics remained the country’s largest export driver, accounting for $4.04 billion or 57.8% of total exports in December. Demand for components used in artificial intelligence, electric vehicles, and smart devices sustained production in economic zones and supported high-value technical and manufacturing jobs.

Manufactured goods totaled $5.59 billion, driven by industrial chemicals and advanced components, while agro-based exports reached $732 million, led by bananas and coconut products. Mineral products contributed $515 million, with nickel shipments reinforcing the country’s role in the global clean energy supply chain.

The export upturn has had ripple effects across multiple sectors. In manufacturing and technology, steady electronics demand has helped maintain operations and employment in export-oriented hubs. In agriculture, increased banana shipments to Japan and South Korea, alongside growing global demand for coconut products, have boosted incomes for farmers in rural areas. Meanwhile, rising nickel exports have attracted renewed interest in mining-related investments and infrastructure linked to clean energy production.

The United States remained the Philippines’ top export market in December, accounting for $1.10 billion or 15.7% of total exports, followed by Hong Kong, Japan, China, and Singapore.

The Department of Trade and Industry said the latest figures show Philippine exporters are well-positioned to benefit from improving global market conditions. To sustain momentum, the agency said it is closely monitoring global trade developments and potential tariff changes, particularly affecting specialty electronics.

The DTI added that continued reforms under the Ease of Doing Business program, along with expanded market access initiatives, underpin its optimistic outlook for 2026, as the government seeks to sustain export growth and ensure that the “Tatak Pinoy” brand delivers tangible gains for workers, industries, and local communities.