Exporters adopt ‘wait-and-see’ attitude

MANILA, Philippines – Exporters are adopting a “wait-and-see” strategy as the unstable peso-dollar exchange rate continues to impact on their revenues and competitiveness.

Nora Halili Lao, Philippine Exporters Confederation Inc. (PHILEXPORT) Trustee for gifts and premium sector, said several of them have temporarily stopped exporting, while others opted to ship a minimal volume of goods.

“The concern of the exporters is not the United States (US) credit downgrade because we believe that the Obama administration could address its (fiscal) problem. All the exporters are nervous about the exchange rate. Even they have no big orders, they are not very, very particular with it,” Lao said.

She said the US has reduced its purchases in the country. June export data showed that the US was only the second biggest market of local products next to Japan, comprising 14 percent of Philippine total exports.

Lao said many exporters are diversifying into the growing local market amidst the financial problems of the US and Europe.

PHILEXPORT Trustee for furniture Myrna Bituin believes that her sector will post a negative growth this year considering the peso-dollar trend and the impact of the US credit downgrade.

“We are in the furniture sector, we are not into food. When you cut costs at home, furniture would be the least (priority item),” she reasoned.

“Before, you already knew your production cost in one year. Today, it is becoming difficult, you don’t know if there might be an order coming in,” she added.

As they tap the local market, Bituin expressed hope that their products would be able to compete with cheaper imported goods.

For his part, Trustee for the food sector Roberto Amores said the global recession has affected the competitiveness particularly of the food companies.

“The food sector would always there, it would not disappear but it’s the question of whether we could sustain its projected sales revenues and output because of the global recession,” he said.

Amores stressed they are having problems with very unstable exchange rate and cost of raw materials, including power.

The peso remained at 42 to a dollar territory, closing at 42.52 on Thursday. The local currency started touching the 42 level in July from 43 level in February to June this year.

“We are affected in terms of competitiveness if we benchmark ourselves like with Thailand, Vietnam and other developing countries in the Asean region. Our costs are really high that’s why it is difficult to compete,” he said.

Amores earlier cited the need to develop an export-oriented economic policy, noting this could boost the economies of newly-industrialized countries like the Philippines and other Asian nations.

“The policymakers have also realized that the Philippines cannot achieve its aim of becoming an economic tiger of Asia without shifting to an export-oriented program,” he noted. –Philexport News and Features (The Philippine Star)