Cebu exporters: Peso rise may cause shutdowns

CEBU CITY — Exporters here have warned of shutdowns unless the government acts to arrest the peso’s appreciation. The Confederation of Philippine Exporters Foundation (Cebu), Inc. and seven organizations under it have issued position papers calling for currency intervention and continued state aid. "The additional pressure brought on the industry by the appreciating peso could put more exporters out of business. It is time for [the] government to act decisively. Hence, we humbly appeal for [the] government’s firm support again," the exporters said. The peso rose to a fresh 20-month high on Monday, gaining 21 centavos to close at P44.74 per dollar. Traders said the rise was due to news of a bailout for Greece. Ramir Bonghanoy, president of the Cebu Gifts, Toys and Houseware Manufacturers and Exporters (Cebu-GTH), said Philippine firms were losing out to Asian counterparts that get state subsidies. All that is provided in the Philippines, he added, is trade promotion assistance from the Department of Trade and Industry. "We’re used to being left on our own. But right now, with the crisis, we need all the help that we can get. The peso should stay at P46 [per dollar]," he said. Bonghanoy claimed majority of the GTH’s 98 members — down from 106 due to last year’s global downturn — were "on the verge of collapse, with very fragile operations." Reports of a US economic recovery have yet to translate into orders, he said. European buyers, meanwhile, continue to feel the pinch and it would take another year for the situation to normalize, Bonghanoy said. The appreciation of the peso, he said, was making the sale situation worse. He cited losses an exporter would have to shoulder by the time he gets paid for deliveries manufactured at an exchange rate of P46-$1. Benson U. Dakay, president of the Seaweed Industry Association of the Philippines, said carrageenan prices have to be raised by at least 7 percent because of the stronger peso, raising the risk of losing customers to manufacturers in China. "The Philippines should follow the example of China, which has kept the yuan stable for three to five years already," he said. China’s seaweed processors, who also enjoy a government subsidy, have been obtaining part of their raw material requirements from the Philippines and selling at a lower price than local processors, he added. Former Philexport Cebu president and jewelry exporter Apolinar G. Suarez Jr. said his company remained "in the safety zone" but would need to raise prices if silver became more expensive and the peso continued to rise. The exporters also urged the Development Bank of the Philippines to promote a P1-billion foreign exchange hedge fund and for the Finance department to address fiscal and export performance issues. They also said the Foreign Affairs department and Philippine Overseas Employment Administration should craft investment portfolios for Filipino workers abroad. Cebu exporters earlier called for state subsidies in another position paper signed last week. They urged Trade officials to continue releasing funds for approved projects and drop a plan to divert the balance of a P1-billion export support fund. The fund, put up by the government to help exporters ride out the crisis, has barely been tapped. Fund releases reached only P37.5 million as of last March 15, less than a fifth of the P192 million cleared for disbursement, said Suarez, who represents the Visayas in the Export Development Council. Other export organizations involved in the appeal were the Cebu Furniture Industries Foundation, Cebu Fashion Accessories Manufacturers and Exporters, Mactan Export Processing Zone, Chamber of Exporters and Manufacturers and the Association of Food Industries.