CEBU, Philippines – While the Bangko Sentral Ng Pilipinas (BSP) is doing a good job in managing the country’s foreign exchange, exporters are told to “adjust accordingly” and stop lamenting on the peso’s improving strength versus the US dollar.
There is nothing exporters could do in the strengthening of the Philippine currency as the current level is already a result of brilliant manipulative strategy by the BSP, said economist and market analyst Wilfred Son Keng Po.
If it were not for BSP’s wise manipulation, the Peso could have already settled on its stronger level (comparable to Thai Baht) at P29 per US dollar.
Today’s lower P40 to a green buck is already a good manipulation made by BSP to protect several sectors in the society, such as the families of the Overseas Filipino Workers (OFWs), and other dollar earning sectors, he said.
The Philippines’ situation in terms of managing the foreign exchange said Son Keng Po is in fact, one of the best among the region, and even better compared to the countries in Europe.
“BSP has done a good job [managing the foreign exchange]. The reason why our central bank is considered as one of the best central banks in the world,” he said.
The P43 to a dollar level is already a good manipulative move by the BSP, and exporters should be thankful for this, otherwise, if the real value will be permitted, the Peso could now be in the P29 to a dollar level.
The strong Philippine currency is not only fueled by the good economic state in the Philippines, and the increasing OFW remittances, but it is mainly because of the external factors, such as the oil prices, and the still fragile US economy.
According to Son Keng Po exporters who are mainly complaining of the current Peso level are those low value added exporters, who also import.
He said there are a lot of alternatives in order to adjust the situation, and the foreign exchange factor can not be directly intervened.
Son Keng Po suggested that exporters should start to employ strategies that will keep them competitive, despite the movement of the foreign exchange, while BSP is also offering several programs and strategies for exporters to maintain competitiveness amid the volatile foreign exchange movement.
Besides, he said the volatility of foreign exchange is not only felt in the Philippines, but “it is a global phenomenon.”
On the other hand, during the recent discussion of exporters in Cebu hosted by the PhilExport-Cebu, they concluded that currency hedging should be one of the competencies exporters should look in the resumes of their finance managers or to broaden it further, risk management as a whole.
According to PhilExport-Cebu executive director Fred Escalona the present monetary system such as the floating exchange rate, is in a turmoil and could eventually collapse if the group of wealthy nations do not anything about it.
“We feel it is time for a major revamp of the monetary system. In the case of the Philippines, competitiveness is no longer the key issue, as other neighboring countries [our competitors] are also in the same situation,” Escalona said. (FREEMAN)