Exporters decry the government for allowing the peso to further strengthen against the US greenback even warning that this policy could revert the industry back to a negative growth this year.

Sergio Ortiz-Luis, President of the Philippine Exporters Confederation (PhilExport), said the export sector is expected to post a 10 percent increase this year but the strong peso regime is undermining this growth path.

“The 10 percent projected exports growth this year could not even take us back to the 2007 export level but would pave the way towards a full recovery in two years,” Ortiz-Luis said.

“With the strong peso plus higher inflation in the offing, exports might just go the other way,” he said.
As such, PhilExport expects that a full recovery of the exports sector would take longer or at least in the next three years instead of only two years.

“The SMEs are already complaining. They will soon cease taking export orders,” said Ortiz-Luis.
Exporters have been saying that a peso-dollar exchange rate of P46.50 to P47 to a US dollar, is something they can live with.

“But not beyond this range,” Ortiz-Luis pointed out.

Exporters have blamed the government’s huge foreign borrowings as the cause for the continued rise of the peso versus the US dollar.

“The cause of the pesos strength is the government’s foreign denominated loans, why won’t they borrow from the local banks when our banks are very liquid,” Ortiz-Luis said.

The inflow of dollars into the country from these loans has bolstered the peso’s strength, Ortiz-Luis added.