Sunday, September 10, 2006
Export leader suspects speculators behind peso rise
* Ortiz-Luis asks Central Bank to act on matter
MARKET speculators could be behind the continued strengthening of the peso that now threatens to put a brake to robust exports.
The suspicion was raised by Philippine Exporters Confederation Inc. (Philexport) president Sergio R. Ortiz-Luis, Jr. as the reason behind the continued rise of the peso's value against the US dollar.
The export leader said he will ask top officials of the Bangko Sentral ng Pilipinas (BSP) to get at the bottom of the peso's continued strengthening and adopt corrective measures as it often does when the peso is suspected to be under attack.
The peso hovered just above and was threatening to breach the P50 to $1 barrier before the weekend.
"While it is true that a strong peso benefits some segments of the economy, particularly the price of oil and all other imports, it is badly hurting indigenous exports, those that are anchored on local raw materials," he explained.
"These types of exports which include fresh and processed food, handicrafts and furniture, although mostly SMEs (small and medium enterprises), are the country's largest employers. Their closure could mean the loss of hundreds of thousands of jobs," the export leader explained.
"If the strong peso lingers, the overall performance of the export industry of pulling off a 16 percent growth in the first half of the year, may slowdown," he warned.
The export sector, earlier this year, howled over the rise in the peso's value from a stable P56 to the dollar in the past couple of years to P52 to the dollar. Since then, the peso has further appreciated to close to P50 to the dollar in previous weeks.
The peso's strength against the dollar has been traditionally bandied about as good for the country. Its real impact however was that it encouraged the growth of imports and export industries that used imported raw materials like garments, machine parts and electronics.
Domestic manufacturing, agriculture and indigenous exports were stunted by the policy of keeping the peso strong. (Abe P. Belena/Philexport News and Features/Sunnex)
(September 10, 2006 issue)
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