Exporters feel pinch of strengthening peso

Cebuano exporters are currently plotting an advocacy plan to call the government's attention to intervene with the fast strengthening of peso against the US dollar.

An insider source said a meeting attended by key players in the export industry in Cebu was held early this week in the hope that peso strengthening will be properly intervened by the government or the Bangko Sentral Ng Pilipinas (BSP) in a way that it will not badly hurt the exporters.

Earlier exporters openly expressed their apprehensions that the further strengthening of peso to the US is seen to threaten the "already" struggling export industry in the country.

According to the source, although the recovering peso value signals good economic landscape in the Philippine economy, abrupt upward development is not good for the export-led economy like Cebu.

He said that Cebu's export industry is planning to invite top executives of the BSP, Department of Trade and Industry, and other concerned government agencies to come to Cebu in a forum for in order for exporters to directly air their deep concern over the gaining peso value against the dollar.

Already, when the peso bounced back to P52 to a dollar sometime this year, from a high of almost P56, the exporters were already feeling a pinch of the effect.

""Anything below P54 [to one dollar] is dangerous and 'below the belt' already," said furniture exporter Eric N. Mendoza in an earlier interview.

Worst, if the peso will settle below P50 to a dollar, it would already hint an "alarming" situation for the exporters.

On the other hand, in an interview with BSP governor Diwa C. Guinigundo in his visit to Cebu last week he said that the BSP cannot manipulate the peso value against the dollar as it is a primarily driven by the market.

But, exporters maintained that the government especially BSP has the power to maneuver the foreign exchange rate, especially whenever there is a sudden and abrupt movement.

However, when Guinigundo was asked whether the BSP has something to do in controlling the value of peso to the dollar, he said the BSP's role is only to smoothen the fluctuation of exchange rate and avoid sharp movement.

In an economic briefing conducted by economist and chairman of the Institute for Development and Economic Analysis Inc. (IDEA) Cayetano Paderanga Jr., he said that if the government will be able to manage well the improving economic picture in the country, boosted by the recent implementation of the Reformed Value Added Tax (RVAT), there is a big possibility that the peso could gain stronger hold against the dollar to as high as P45 per one dollar anytime this year.

Despite the current political troubles in the country, the peso value has remained to show good performance, as it is trying to settle at P50 to a dollar level in the past few days.

"P45 per one dollar is too much for us already. We will see a lot of [export] companies folding up if this will happen," said Mendoza, who is also the president of the Mandaue Chamber of Commerce and Industry (MCCI) and board of director of the Cebu Furniture Industries Foundation Inc. (CFIF).