Business and Economy
Shutdown of Red Sea route to hike shipping fees by 15%
A number of shipping lines have announced suspension of travel along the Red Sea due to attacks by the Houthis in the vital trade route.
(Pexels Photo)
MANILA – The suspension of shipping routes through the Red Sea will hike shipping fees and delay the trade of goods which may affect exporters from ecozones in the future, Philippine Economic Zone Authority (PEZA) Director General Tereso Panga said Friday.
“The closure and shutdown of the Red Sea to trade will make shipping costs 15 percent more expensive and add 10 days for the exchange of goods between Europe and Asia,” Panga told reporters in a Viber message.
A number of shipping lines have announced suspension of travel along the Red Sea due to attacks by the Houthis in the vital trade route.
About 10 percent of the world’s seaborne trade volume is passing through the Red Sea.
Panga said the Red Sea woes would affect global trade, leading to the delay of production and deliveries of products and resources, which will add to inflationary pressure in different parts of the world.
“At PEZA, we are already preparing for this by collaborating with the affected RBEs (registered business enterprises) sourcing or importing and exporting to and from the EU (European Union) and the Mediterranean to ensure that the least possible effects would be felt as contingencies are set in place in advance major conflict,” Panga said.
Although the impacts of the tension in the Red Sea have yet to be felt by ecozone locators, Panga assured that PEZA is working with other concerned agencies to de-risk the global supply chains that may affect locators and the Philippine economy.
The Philippine government targets gross domestic product growth to increase by 6.
5 percent to 7.5 percent and inflation rate to settle between 2 percent to 4 percent.
