Impact of yuan slide minimal
THE DEPARTMENT of Trade and Industry and a local exporters group have downplayed the potential impact of a weakening Chinese currency, noting that this would likely have a marginal effect on the economy on the back of the country’s strong fundamentals.
“The devaluation [of the Chinese yuan], for one, is not that big since it’s just about 2 percent, while our peso devalued also about that much already. There could be some marginal impact on us to the extent their currency will be cheaper than ours,” Trade Secretary Gregory L. Domingo said in an interview last Friday.
“The thing is, China is one of the country’s biggest markets. But for me, I am not too concerned as it was only about 2 percent. If the Chinese currency drops by about 10 percent, then I’ll have reason to be concerned,” he added.
Data from the Philippine Exporters Confederation Inc. (Philexport) showed that in June this year, China was the Philippines’ third-largest overseas market with an 11.4-percent share of total exports and shipments valued at $600.92 million. Japan and the United States remained as the country’s top export destinations.
Local exporters remained similarly optimistic that the slide of the Chinese yuan would have a minimal impact on their operations, said Philexport president Sergio Ortiz-Luis Jr.
Ortiz-Luis noted that “our competitiveness will not suffer” as long as the Philippine government allowed the peso to track the natural movements of currencies in the region.
“Provided that the Bangko Sentral ng Pilipinas (BSP) allows the peso to devaluate and track the yuan and other currencies especially of our competitors in Asia, it will not affect our exports so much,” Ortiz-Luis said.
He added that what would be a bigger concern for many Filipinos would be the dollar movements since majority or about 80 percent of the population depended largely on the greenback. This percentage, which would prefer to see a strong dollar, comprised largely of the local exporter-companies and the families of overseas Filipino workers (OFWs).
