MANILA, Philippines - With the peso climbing to an exchange rate of 42 to $1, carageenan exporters will have to raise their prices by 11 percent to maintain their profitability.
And, if the peso further appreciates 40 to $1, carageenan exporters said they will have to raise their selling price by as much as 15 percent which will make Philippine carageenan less competitive.
Benson Dakay of Shemberg Corp., who is also the president of the Seaweed Industry Association of the Philippines, said “it is not easy to increase prices by 11 percent to 15 percent while our neighbors – China, Indonesia and India – are maintaining their selling export price.”
To remain competitive, the Philippines should align its currency with that of either China, Indonesia or India, Dakay said, adding that “why do we have to align our currency with the euro, the Australian dollar and the Japanese yen? Can central bank not align our currency with China, Indonesia, India and Vietnam?”
He warned that if the peso improves further to 40 to $1, “it will be difficult for exporters and overseas workers life.”
The SIAP wrote a letter dated Sept. 15 urging President Aquino to follow China’s policy of limiting the appreciation of its currency based on the inflation rate.
For the Philippines, the SIAP suggested that the appreciation of the peso versus the dollar should not exceed the inflation rate which is at around four percent this year.
The SIAP also suggested that forex fluctuation should be kept to no more than half of one percent per trading day.
The BSP explained to SIAP that while it tries to smoothen out daily fluctuations, the forex movement is basically market determined.