MANILA, Philippines - Chemical manufacturers are putting on hold plans to expand its operations in the country amid concerns on the continued strengthening of the peso against the dollar, the Philippine Exporters Confederation Inc. (Philexport) said.
In a statement, Oscar Barrera, Philexport trustee for the chemicals sector said while the performance of the chemicals sector has been steady, the strong peso is a major concern for them.
“The exchange rate is always a problem, it is getting harder and harder...Naturally, if you realize that your income is going to get lower and lower in the future, why invest in the future? It is simple as that,†he said.
Citing an internal survey conducted by the group, he said the peso should be at the level of 43 or 44 to a dollar for chemical manufacturers to be able to invest and expand operations.
The local currency closed at 41.160: $1 on Friday, its weakest finish for the year.
Even as chemical manufacturers are setting aside expansion plans with the peso still seen to be strong, Barrera said the local chemical sector might still grow by five percent this year.
Data from the National Statistics Office (NSO) showed the country’s chemical exports were valued at $1.932 billion last year, up slightly from $1.924 billion in 2011.
“We are surviving,†he said noting that the sector’s biggest export markets are companies in the Middle East.
“Chemicals and plastics are still acceptable there,†he added.
Still, he said the government should extend support to chemical manufacturers and other exporters affected by the peso appreciation.
He said lowering of value-added taxes would be beneficial to the sector.
Providing subsidy for trade fairs, he said, would help them find new markets.