Monday, October 09, 2006 Export firms ask gov’t to fulfill promised aid
WITH the continuous appreciation of the peso, exporters in Cebu are asking the government to make true its promise of extending “other” assistance to the sector, in lieu of controlling the value of the peso.
Jenefer Cruz, president of the Cebu-GTH (gifts, toys and houseware) Manufacturers and Exporters, said “now is the time” for the government to fulfill its word and specify what type of assistance it can give to the sector.
“We have not heard specifics. Probably, the government can help us by subsidizing at least 50 percent of the cost we (exporters) incur in participating in sales missions and trade exhibits. We are not asking (that it be made) totally for free,” he said in an interview.
Decline
Cruz said the rising value of the peso has resulted in the streamlining of the labor force of the export industry, as the sector suffers from declining volume of orders due to increasing prices of the country’s exports.
Exporters have been asking the Bangko Sentral ng Pilipinas (BSP) to rein in the the peso’s value, as its continued rise has affected the competitiveness of the country’s exports.
The strengthening of the peso has also resulted in substantial losses to exporters who peg their one-year contract selling price at a specific value.
Cebu-GTH’s Cruz said some exporters are already anticipating the upward movement of the peso using the P48 to the dollar exchange rate in quoting their export prices, making these more expensive.
He said 10 exporters of GTH have already closed shop this year, not only because of the peso-dollar issue, but also due to the softening of the international market resulting in a decline in the volume of orders.
“This (phenomenon), however, is global. The market is soft, especially the United States, as they are also experiencing economic problems due to other factors, such as increasing price of oil,” he said.
Cruz said other companies have streamlined its labor force by an average of 10 percent to cut on cost.
Jobs
“Most exporters are trying hard to operate with lesser manpower but producing the same output. If not, more people will lose their jobs,” he said.
Cruz said the volume of his company’s orders declined 30 percent this year compared to last year.
The company was also forced to trim its work force to 30 from 80 contractual workers in the factory and retrenched eight regular employees.
BSP deputy governor Diwa Guinigundo earlier said the BSP cannot bend the government’s policy to allow the foreign exchange rate to move freely.
“Our foreign exchange is market-driven. The BSP does not set target (as to the value of the peso versus the dollar.) But we are listening to the demands of the exporters,” he said.
The peso, which hit a record low of P56 to the dollar in July 2004, closed at P50.01 against the US currency last Friday.
Rep. Joey Salceda, economic adviser to the President, had said the peso will still go up to P44 due to the increasing remittances of overseas Filipino workers.
Carrageenan exporter Benson Dakay said his company, Shemberg Corp., will have to increase its price by eight percent by the fourth quarter if the peso continues to appreciate, to mitigate the company’s losses. (JBN)
