Aboitiz Equity Ventures Inc. is warning that the biggest risk from the ongoing Middle East conflict is not direct business disruption, but how sharply rising oil prices could affect consumers and demand.
Company CFO Jose Emmanuel Hilado said the group is already feeling the pressure of higher logistics, packaging, and material costs. While many of these increases can be passed on, he cautioned that weaker consumer spending could quickly squeeze sales volumes and profit margins.
He stressed that the situation remains uncertain and highly dependent on how long geopolitical tensions persist.
In the power sector, Aboitiz Power Corp. reported no operational disruptions, but acknowledged a sharp rise in fuel costs due to its reliance on imported coal.
CFO Sandro Aboitiz said supply contracts provide significant protection by allowing fuel cost pass-throughs, helping cushion the impact on earnings. Still, the company continues to closely monitor markets, stress-test fuel plans, and coordinate with industry partners to avoid supply risks.
He warned that higher electricity prices could eventually dampen demand, though he said the crisis also reinforces the company’s long-term strategy to invest in renewable energy.
Meanwhile, Union Bank of the Philippines said it is moving to strengthen its financial buffers amid rising uncertainty in global markets.
CFO Manuel Lozano said Philippine banks remain well-capitalized but are boosting liquidity reserves and tightening lending standards as a precaution.
He cautioned that the full impact of the conflict—particularly on borrowers’ credit quality—may take time to emerge, prompting banks to remain disciplined and avoid aggressive growth while volatility persists.
