How Businesses in the Philippines Cope with Increasing Fuel Prices
Frequently Asked Questions
Leisure businesses like Splash Island are reducing operational hours and slides to lower energy consumption during peak summer months. By closing earlier and implementing scheduled maintenance days, these companies can manage utility overhead without significantly impacting the customer experience. This strategy allows them to stay operational while preserving margins during periods of extreme price volatility.
Firms like Auro Chocolate are improving operational efficiency by planning shipments further in advance and optimizing delivery lead times. Exploring alternative fuel options and more efficient logistics allows these social enterprises to keep pricing competitive despite rising import costs. This proactive planning helps ensure operational stability and prevents the need for sudden price hikes that might alienate customers.
Medium-sized businesses are front-loading raw material purchases to hedge against future price increases rather than a fear of actual shortages. By locking in current prices, they protect themselves from the "price pressure" of bringing in materials later at potentially higher rates. However, experts advise balancing this with cash preservation, spending only on essential inputs to maintain liquidity.
Under Republic Act No. 12316, the President has the power to temporarily suspend or reduce excise taxes on petroleum products when crude oil prices exceed specific triggers. While groups like SUKI Network advocate for removing the 12% VAT to lower costs immediately, the government remains cautious due to potential revenue losses. These structural levers are designed to provide a "cushion" for both businesses and households during global supply shocks.
Entrepreneurs are advised to rationalize all spending by putting non-essential capital expenditures on hold, even if the budget was previously approved. Deferring major investments for six months allows a business to observe market trends and preserve cash for daily operations. This "spend only what you need" approach ensures that the company remains resilient until the global energy conflict eases and prices stabilize.
