The Philippines has always been a country that is heavily reliant on trade and logistics. This is especially true in the face of international crises, which have had a significant impact on both industries. In this article, we will take a look at some of the most significant crises and events in recent history and their impact on Philippine trade and logistics. We will also explore how businesses have adapted to these challenges and what lessons can be learned from them.
1. COVID-19 Pandemic
The still ongoing international health crisis is the COVID-19 pandemic. The pandemic caused widespread disruptions in global supply chains and led to a decrease in global trade. In the Philippines, the pandemic had a major impact on the country’s import and export activities. According to the Philippine Statistics Authority, the value of Philippine exports fell by 16.0% in 2020 while imports declined by 19.0%. This decline in trade activity led to a decrease in demand for logistics services, resulting in job losses and lower incomes for workers in the sector.
Regional trade and logistics are also heavily affected due to lockdowns. Changing alert levels and health protocols confused many consumers and companies, causing transactions to be frequently delayed.
2. Russia-Ukraine War
The recent Russia-Ukraine war created a significant impact on the Philippine logistics industry, one salient example is oil price hikes. The crisis has led to an increase in global oil prices, which in turn has resulted in higher transport and logistics costs for businesses operating in the Philippines.
This is because the country is heavily reliant on oil imports, with most of its supply coming from Asia. As a result, many businesses have been forced to raise their prices, making it more difficult for consumers to afford basic goods and services while the country recovers from the effects of COVID19.
3. Suez Canal Blockage
The 2021 Suez Canal crisis had a significant impact on logistics in Asia-Pacific. It holds 10% of the world’s global trade and its obvious impact was the disruption of maritime trade routes. This led to a shortage of goods and increased prices of imported goods. There were also delays in the delivery of goods, which resulted in lost opportunities for businesses.
The canal connects the Philippine Sea to the Mediterranean Sea and is used by ships carrying goods from Europe to Asia. The Philippine trade was hit by headwinds caused by a large ship that got stuck in the Suez Canal, delaying imports and exports while increasing shipping costs.
4. Climate Change
Climate change is one of the most pressing issues of our time, and its effects are already being felt by countries all over the world. The Philippines is no exception. In recent years, the country has been hit by a number of devastating typhoons, which have caused widespread damage and disruption.
This has had a major impact on trade and logistics in the Philippines. Typhoon-related disruptions have led to delays in shipments and higher costs for businesses. In some cases, businesses have even been forced to close down due to the damage caused by storms.
Climate change is, therefore, a serious challenge for the Philippine trade and logistics sector. However, it is also an opportunity for the country to build resilience into its supply chains. By investing in disaster preparedness and mitigation measures, businesses can protect themselves from the worst effects of climate change.
Being Adaptable Can Help You Fight Unpredictability
It’s no secret that international crises happen. They’re often unpredictable and can have a significant impact on businesses, particularly when it comes to trade and logistics. The key for businesses is to be adaptable and have contingency plans in place so that they can minimize the disruption to their operations.
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