A growing number of companies across Southeast Asia are warning of rising energy costs and weakening consumer demand as the conflict in the Middle East stretches into its third month, with inflation pressures and supply chain disruptions beginning to weigh on corporate earnings across the region.
Earnings revisions have been most pronounced in the Philippines and Thailand, according to Bloomberg Intelligence analyst Sufianti. The Philippines has seen inflation climb to a three-year high, reflecting its heavy reliance on imported fuel, while Thailand’s tourism-dependent economy is facing softer demand conditions. In contrast, Indonesia and Malaysia have been relatively more resilient, supported by stronger commodity prices, while Singapore and Vietnam are contending with higher logistics costs due to disrupted trade routes.
Companies across multiple sectors have begun adjusting operations through price increases, cost controls and supply chain shifts.
Aviation and tourism
The aviation sector has been among the hardest hit as rising jet fuel costs and higher ticket prices weigh on demand. AirAsia X Bhd, Singapore Airlines Ltd and Thai Airways International Pcl have introduced fare increases, fuel surcharges, route adjustments and tighter cost controls. Vietnam Airlines JSC has implemented contingency measures to maintain operations amid ongoing disruption.
Airports of Thailand Pcl said higher airfares and cancellations have already begun to affect passenger traffic, prompting the operator to introduce incentives and discounts to support recovery.
Consumer, food and retail
Higher transport and fuel costs have reduced household purchasing power across the region. Jollibee Foods Corp reported a 39% decline in profit due to elevated commodity and supply chain costs, leading to a review of expansion plans.
Charoen Pokphand Foods Pcl warned that freight and raw material costs may continue to rise as disruptions affect feed supply chains. Genting Singapore Ltd flagged weaker tourism demand and softer consumer sentiment as living costs and airfares increase, while Globe Telecom Inc expects household budgets to remain under pressure.
Energy and petrochemicals
Industrial and petrochemical firms are facing supply chain strain linked to disruptions around the Strait of Hormuz, which is affecting the movement of key raw materials.
PTT Pcl said it is facing higher financing and procurement costs tied to crude purchases and has secured additional supplies from alternative sources. Siam Cement Pcl has suspended part of its chemical operations due to feedstock shortages, while other firms are increasing inventories and diversifying suppliers.
Healthcare and financial services
Second-round effects are now emerging in healthcare and banking. Bangkok Dusit Medical Services Pcl reported a decline in Middle Eastern patients due to travel disruptions and warned that higher living costs could delay non-essential medical procedures.
In Malaysia, Karex Bhd, a major condom manufacturer supplying global brands including Durex and Trojan, is raising prices by up to 30% due to higher input costs linked to oil-based chemicals. Top Glove Corp Bhd has also increased prices amid raw material shortages.
In the financial sector, SCB X Pcl and BDO Unibank Inc have raised loan-loss provisions as banks prepare for higher default risks amid slower growth and weaker consumer demand.
Tyres and manufacturing
Rising oil prices and logistics disruptions are also pushing up tyre manufacturing costs, with ripple effects across transport, logistics and agriculture sectors.
Michelin warned that a prolonged conflict could add more than €400 million in raw material, energy and logistics costs. Sumitomo Rubber Industries Ltd, maker of Dunlop and Falken tyres, said higher input costs are already compressing margins and driving price increases in some markets.
Bloomberg
