Cebu exporters press for action in face of peso’s continued surge

CEBU CITY -- The Export Development Council’s (EDC) executive committee will discuss today exporters’ request for a clearer action plan in the face of an appreciating peso. The Cebu chapter of the Philippine Exporters Confederation Inc. (Philexport-Cebu) will lead these discussions during the EDC committee’s regular monthly meeting scheduled in Manila today, the regional leader here of the main national exporter group said in an interview last Wednesday. The peso ended trading yesterday at P44.65 to the dollar, 15 centavos stronger than the previous day’s end and 3% stronger than the P46.20 closing on Dec. 29 last year. Other requests have also been lined up for discussion, particularly for the Development Bank of the Philippines to promote the P1-billion foreign exchange hedge fund and for the Trade department to continue disbursing the P1-billion export support fund which, however, has been realigned to support sectors badly hit by the prolonged dry spell. The executive committee is expected to come up with recommendations to the council, which is scheduled to meet after the May 10 elections, said Apolinar G. Suarez, Jr., Visayas representative to the council and Philexport-Cebu chairman. Results wanted Cebu exporters welcomed the inclusion of their petition in the committee’s agenda. Federico T. Escalona, executive director of the Confederation of Philippine Exporters Foundation (Cebu), Inc., said exporters were hopeful that the meeting would yield concrete results. He said exporters, who are just now starting to recover from the economic crisis, were worried that the peso level will breach the P44 level, thus, replacing one crisis with another. "It’s a scary situation. We’re seeing a steady appreciation now," he said. Exporters are batting for an exchange rate of P46 to $1 in order for their businesses to survive. Mr. Escalona said that while the impact of the peso’s appreciation is not as bad this year as it was in 2007, having a strong peso hurts the export sector’s competitiveness by making Philippine products abroad more expensive in dollar terms. Philexport had also admitted that small- to medium-sized exporters, many of whom cannot benefit from the stronger peso because they do not use imported production inputs which are thus made cheaper, have particularly been feeling the brunt of the peso’s surge. Philexport-Cebu and seven other organizations here earlier warned that more companies would shut down unless ways are found to cushion the impact of the peso appreciation, if not slow it down. The exporters said most have not recovered from the low sales and cancelled orders last year. For instance, reports that the US economy is on the rebound has not yet translated into orders, said houseware exporter Ramir Bonghanoy. - BusinessWorld