Sunday, June 24, 2007 Exporters hopeful double-digit growth target this year doable
THE export industry has not scaled down its 11 percent growth target for the whole of this year despite the continued decline of the peso value of their dollar earnings that has been hurting most of them.
This was the statement made by Philippine Exporters Confederation Inc. (Philexport) president Sergio R. Ortiz-Luis Jr. in the heels of official reports that exports grew only at 8.1 percent for the first four months of the year.
“We are crossing our fingers a surge will come in the second half of the year,” Ortiz-Luis said. He noted that the yearly pattern is for exports to surge at higher growth rate during the third and fourth quarter of the year when orders for the Christmas season get delivered.
“This can happen this year if the rest of the exporting industries especially those who source their raw materials locally, are helped by the Bangko Sentral ng Pilipinas (BSP) cope with the strengthening peso,” the export leader asserted.
The food industry as a whole had experienced a decline of 7.9 percent in sales in April which indicates that the strong peso has been derailing its growth momentum.
“We accept the stand of BSP not to directly intervene in the foreign exchange market,” Ortiz-Luis explained. “But we know that it can do many other things to stabilize the exchange rate,” he added.
The lower than expected growth in exports in April came in the heels of a press conference called by leaders of indigenous exports where they appealed to government for help before more companies fold up after incurring heavy exchange rate losses on sales closed late last year and early this year but delivered in the second quarter of this year.
The export groups that called the news conference represented the food, handicrafts, furniture, holiday décor and other industries that depend largely on local material suppliers.
They had reported that 75 small and medium-sized exporters in Cebu and Metro Manila have closed shop since January. They estimated monthly losses on the appreciating peso at an average of P1.5 billion a month. The big industries that import their raw materials like electronics and machine parts are not affected by exchange rate fluctuations.
As of this writing, the only help offered to save the SME exporters came from the Development Bank of the Philippines (DBP) which is set to present how the exporters can avail of its exchange rate hedging facility this week. (Abe P. Belena/Philexport News and Features/Sunnex)
