Exporters unfazed by US shutdown

CEBU, Philippines - The Cebu export sector downplayed the US Federal government’s partial economic shutdown, saying this development is not a long-drawn battle.

“Off-hand, we are not worried. We feel that there will be a solution in the offing,” said PhilExport-Cebu executive director Fred Escalona said.

Although the US market had been in slack performance in the recent years due to its poor economic growth, it remains to be the major market for the Philippine exporters, including those from Cebu.

In an interview yesterday, Escalona said while the shutdown has alarmed the world’s economy in general, the exporters on the other hand are confident that the US government will be able to come out with a solution on this concern.

Initially, he said what the exporters were worried about was the impact on the foreign exchange (forex). Surprisingly, he said the peso to dollar exchange has further strengthened in favor of the green buck.

“So, we are not really worried about the economic shutdown,” Escalona reiterated.

Escalona is confident that by October 16, the US government will be able to reach a “win-win solution” on the issue.

“Until the agreement is reached there will be one million US government workers who will not be able to get their salary. If that happens, there will be a million consumers in the US who will not be buying,” said Escalona.

Likewise, Cebu Chamber of Commerce and Industry (CCCI) president Lito Maderazo said that what is happening in the US is purely political. Although it could affect the Philippines' stock market, the country is seen to remain strong—economically.

In a report, the Philippine Stock Exchange index was virtually unchanged, rising by a measly 0.10 percent or 6.04 points to 6,197.84 while the broader all shares index added 0.14 percent or 5.26 points to 3,763.49, immediately after the shutdown was announced.

On Monday, the Dow Jones industrial average lost 0.84 percent percent or 128.57 points to 15,129.67 while the broader Standard & Poor’s 500 index slipped 0.6 percent or 10.2 points to 1,681.55 due to the deadlock.

Regional markets were also on their toes but closed mixed. Japan’s Nikkei 225 gained 0.20 percent or 28.92 points to 14,484.72 while Hong Kong’s Hang Seng index dropped 1.5 percent or 347.18 points to 22,859.86.

Meanwhile, the country’s chief economic planner Arsenio Balicasan expects the Philippine economy to expand by over seven percent in the third quarter of 2013, remaining on course to close the year well above seven percent.

Also the National Economic and Development Authority (NEDA) director general, Balisacan expressed confidence on the sustained strong performance of the economy despite the number of natural disasters that occurred in the July to September period.

“For the third quarter, it is likely to be above seven (percent). The typhoon and floods (will have an impact), but maybe marginal,” he said.

The economy, as measured by the gross domestic product (GDP), gained 7. 5 percent in the second quarter, the fourth consecutive quarter of over seven percent growth.

Balisacan also noted that the US Federal government shutdown will make an initial impact on stock markets and global interest rates but pointed out that the bourse would likely move sideways as investors take a wait-and-see stance. /JMD (FREEMAN)