By BERNIE CAHILES–MAGKILAT
Exporters yesterday said that the ideal level of the local currency should be between P53 to P54 to the U.S. greenback to maintain its competitiveness even as it said the likelihood of not meeting the 10 percent exports growth target this year largely to the strong appreciation of the peso.
Sergio Ortiz-Luis, president of the Philippine Exporters Confederation Inc. (Philexport), said that indigenous exporters or those using domestic raw materials said they are comfortable at P53 to the dollar but are already losing money at P51 and if the rates appreciate further to P50, they would be totally wiped out.
"That is why we want the government to come up with a policy that would manage but not really intervene the exchange but ensure a rate that would benefit all sectors," he said.
Ortiz-Luis pointed out that indigenous exports composed primarily of agri and forest-based products account for between 20 to 30 percent in terms of value of the country’s total exports but they account for 80 percent of the total number of export enterprises and 90 percent of total employment in the export business.
"This is the sector that are hurting the most now. The electronics sector is even shielded from the rise in the peso because 70 percent of their raw materials are imported but the 30 percent local value added suffers," he said.
According to Ortiz-Luis, the peso appreciation, which started in November last year, has, in fact, started to impact in the January exports this year which registered a negative .78 percent growth when normally the January or the first quarter exports is high.
"We expected the January exports to register at least 4 percent increase but this time it was negative. Definitely, the exchange rate has contributed to that decline," he said.
Electronics exports in January this year was down by 2 percent from a 5 percent increase in December last year.
Ortiz-Luis stressed that if the country must meet the 10 percent exports growth target under the Medium Term Philippine Development Plan (MTPDP), growth must be consistent and sustainable.
"But it is up for the government up to what level they want the peso to go," he said.
While he admitted that the continued strengthening of the peso is largely due to the improving domestic economy, he said that it is only the government that is benefiting from the rise in the peso.
This is so because the impact on consumers under a strong local currency regime normally takes between 12 months to a year because producers cannot change prices immediately.
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