On the heels of a record-high performance in 2025, the country’s merchandise exports may post flat growth this year as the ongoing war in the Middle East drives up fuel costs and disrupts supply chains, according to the Department of Trade and Industry (DTI).

“To be honest, it's hard to see any growth now, so it's hard to speculate,” Trade Secretary Cristina Roque told Manila Bulletin last week when asked if the country could sustain the growth momentum from last year.

Still, Roque said the DTI will wait for the release of export figures for March and April before determining whether this year will meet or surpass last year’s trade growth, to avoid mere speculation or even “panic.”

Since the United States (US) and Israel mounted attacks against Iran in late February, the impact of the conflict on the country’s exports will likely be seen in the succeeding months.

Based on the latest data from the Philippine Statistics Authority (PSA), merchandise exports are already off to a strong start, reaching $14.47 billion by the end of February, an improvement of 8.3 percent from $13.36 billion in the same period last year.

The export value for the first two months of the year was the highest level recorded since the PSA started tracking trade data in 1991.

This follows last year’s all-time high of $84.48 billion in exports of goods, which rose by more than 15 percent compared to the previous year’s $73.27 billion.

As the war in the Middle East shows no sign of easing anytime soon, Roque said the DTI is coordinating with governments in the region to ensure the safe entry of outbound shipments from domestic exporters.

“We're still really trying to get their goods to those respective countries,” she said.

Roque noted that shipments to countries outside the Middle East remain “business as usual” for now.

As in other sectors, the most urgent concern for the country’s exporters is the continued rise in oil prices, which has also pushed up freight, trucking, power, and production costs.

Philippine Exporters Confederation Inc. (Philexport) President Sergio Ortiz-Luis Jr. said some of the industry group’s members are considering reducing work hours due to higher input costs.

Ortiz-Luis earlier told Manila Bulletin that the value of the country’s merchandise exports may be affected this year as the country’s limited oil supply threatens to ground planes, disrupting air freight in the process.

Ahead of the declaration of a state of national energy emergency, President Ferdinand Marcos Jr. said in an interview with Bloomberg that there is a distinct possibility that planes may be grounded due to a jet fuel shortage.

In response, Semiconductor and Electronics Industries in the Philippines Foundation Inc. (SEIPI) President Danilo Lachica told Manila Bulletin that such a scenario would be “disastrous” for electronic exports, particularly semiconductors that rely on just-in-time (JIT) deliveries.

Electronic products are the country’s top export commodity, accounting for more than half of the total export value last year at $45.96 billion.

DTI-Export Marketing Bureau (EMB) Director Bianca Pearl Sykimte said the government is validating with exporters and logistics companies the potential impact of this on the country’s exports.

“Offhand, roughly half (based on value) of our merchandise exports are shipped through air. These are largely high-value electronic products,” she told Manila Bulletin.

To ensure that the country’s exports remain shielded from these uncertainties, Roque said the DTI is set to launch an industry-specific trade show that would enable local exporters to directly meet and engage with potential foreign buyers.

This would be complemented by the government’s efforts to pursue free trade agreements (FTAs) to widen market access for exporters, especially as many of the country’s exports remain subject to the US’ reciprocal tariffs, currently set at 10 percent but expected to increase to 15 percent.

In addition, Roque said there are ongoing efforts to help companies that primarily export their products gain a stronger foothold in the local market.

To provide financial support, the DTI launched a ₱3-billion loan facility through the Small Business (SB) Corp. last month to provide exporters with capital to expand production, upgrade equipment, and capture more opportunities in the global market.