MSMEs Brace for Impact as Fuel Prices Climb

Micro, small and medium enterprises (MSMEs) in the Philippines may bear the heaviest burden from the latest surge in fuel prices, according to the Philippine Chamber of Commerce and Industry.

PCCI president Perry Ferrer warned that rising energy costs could quickly squeeze small enterprises, many of which already operate with limited capital and narrow profit margins.

Ferrer noted that even modest increases in fuel costs can ripple through daily operations, particularly for businesses that rely on transportation, deliveries, and supply chains.

Thin Margins, Bigger Risks

Across the country, MSMEs dominate the local business landscape. Industry estimates show that around 1.2 million small businesses operate nationwide, accounting for roughly 90% of enterprises in the Philippines.

Because of their scale, these businesses are more vulnerable to fluctuations in operating expenses. Ferrer said increases in fuel, logistics, and transport costs can easily eat into already limited earnings, potentially forcing some businesses to scale back or shut down operations.

He emphasized that energy costs influence nearly every sector of the economy, from production and retail to services and distribution.

“Energy is the lifeblood of economic activity,” Ferrer said, stressing that stable fuel and electricity prices are crucial to keeping businesses running and maintaining economic momentum.

Business Groups Support Relief Measures

Business leaders are urging the government to pursue policies that could ease the pressure from high fuel prices. The PCCI has expressed support for initiatives that could stabilize or lower energy costs in the near term.

Transport groups and other sectors have also renewed calls to suspend or reduce taxes on petroleum products, including excise tax and value-added tax.

For his part, President Ferdinand Marcos Jr. has indicated that the government is studying possible tax adjustments as global oil supply concerns continue to be influenced by tensions in the Middle East.

Ferrer said stabilizing fuel prices would not only help small businesses survive but also protect the broader economy, noting that MSMEs make up 99.6% of the country’s business sector.

“If the smallest businesses struggle or close, the effects will be felt across the entire economy,” he said.