Despite being cautious exporters benefit from weak peso

CEBU, Philippines -  Cebu exporters remain cautious of the movement of the peso’s value against the greenback despite the fact that a weak peso actually benefits the export industry.

PhilExport-Cebu executive director Fred Escalona said that the change-over of the US Central Bank could give a strong impact of the foreign exchange performance in the Philippines, and that exporters are closely watching its movement.

Escalona said while exporters are happy of the strengthening dollar, the US’ QE (Quantitative Easing) which is now on level three, could have great effects to the Philippine export industry and the value of peso to the dollar.

However, even if the right foreign exchange for exporters will happen during the year, what is important he said is still the size of market.

He said the growth of the market still remains uncertain, while there is no clearer outlook for the anticipated recovery.

Meantime, despite the stronger dollar, exporters are very cautious of its fate in the next few months within the year hoping that the market will improve.

In general, exporters welcome the weakening of the Philippine peso, as this makes their products cheaper abroad and thus more competitive in the global market.

In a statement, Chamber of Furniture Industries of the Philippines (CFIP) executive director Salvio Valenzuela, said that this development is good news for the industry and this will give enough cushion to the players.

Valenzuela hopes that the government will be able to maintain this level to avoid abrupt strengthening of the peso in the future, saying “this will protect price points set by exporters.”

Likewise, Dennis Orlina, director of the Philippine Chamber of Handicraft Industries (PCHI) said the sector generally welcomes the weakening of the peso, howver keeping their fingers crossed and hope that this does not have adverse effects on local prices.

The peso had been weakening slightly beyond P45 per one dollar in the last few weeks, first time since 2010.

In a separate interview earlier with PhilExport president Sergio Ortiz-Luis Jr., he said that a stronger peso is generally bad for majority of Filipinos, while its not only the exporters who will be affected but also the growing number of families depending their daily survival to OFWs (Overseas Filipino Workers).

The increasing count of BPO workers are also seen to benefit the weakening peso, he said as their salaries depend on the foreign exchange rate.

International banker and economist Victor S. Barrios, said that the strong peso, has been behind what he called a distorted growth crisis inflicted on the country. “The crisis’ main feature is growth that is consumption driven, not growth as a result of investments and robust exports.”

In his report, Barrios explained that the biggest single loser is the Central Bank that lost no less than P109 billion in 2010 which is half its total assets, and more in 2011 to keep the dollar from diving in value against the peso. (FREEMAN)