Exporters have expressed concern over the strengthening of the Philippine peso against major currencies, saying the trend may may result in fewer businesses and lower income for those engaged in the sector.
“As a matter of fact, January exports have already felt the exchange rate problem. And coupled with port congestion, exporters have lost repeat orders,” Philippine Exporters Confederation Inc. president Sergio Ortiz-Luiz said over the weekend.
The business group said the two percent-to-three percent inflation target of the Bangko Sentral ng Pilipinas was also too low.
“I don’t think this lower inflation target should be pursued at the expense of exports. Don’t sacrifice exports and dollar earners for slower inflation, otherwise competitiveness will suffer. We should be prudent on controls. The inflation rate should be calibrated so we can leverage with neighboring currencies,” Ortiz-Luis said.
The rollback of crude and oil prices would have little impact on the operations of manufacturers and exporters, he added.
Earlier, the Trade Department said Philippine exports might slow down and would not top the 10 percent growth projection due to a stronger foreign exchange rate in favor of the the Philippine peso.
Trade secretary Gregory Domingo said exports might grow slower than initially anticipated because of the sharp depreciation of the Japanese yen and the European currencies.
Exports to the US, however, are less likely to be affected due to the minimal movement of the dollar against the local currency.
The Philippine peso in the last 12 months appreciated about 30 percent against the euro and 15 percent against the Japanese yen.
In anticipation of the effects of stronger peso, the Trade Department urged exporters to increase value-added to export products to command better prices.
It said February exports were expected to make up for the half a percentage decline in shipments in the month of January 2015.
Exports fell 0.5 percent in January to $4.36 billion from $4.38 billion year-on-year, dragged down by weak demand from manufacturers, data from the Philippine Statistics Authority showed earlier.