MANILA, Philippines–Exporters were urged not to rely on a weak peso for competitiveness and to look instead for other ways to make Philippine-made products cheaper to produce and more attractive to foreign buyers.
A weaker peso helps local exporters because it makes their products cheaper overseas. However, the peso in recent months has been one of the few currencies in the region that have performed better than the US dollar, eroding locals’ foreign exchange advantage.
But Bangko Sentral ng Pilipinas (BSP) Governor Amando M. Tetangco Jr. said local firms should look for other ways to do better in the international market.
Local policymakers should also work harder to provide a conducive environment for companies to do well.
“The exchange rate is not the only determinant of competitiveness,” Tetangco told reporters.
This comes amid pressure from exporters for the BSP to intervene in the foreign exchange market to stem the peso’s rise against the greenback. Earlier this month, Trade and Industry Secretary Gregory Domingo said exports of goods may grow slower than the official projection of 10 percent for 2015.
Aside from the strong peso, another factor that may affect exports is the high cost of power.
The country also suffers from inadequate infrastructure relative to its neighbors.
Tetangco said that if these issues were addressed, then the export sector would thrive regardless of the peso’s value.
“We have to look at other ways to bolster the competitiveness of the export sector to make it sustainable,” he stressed.
Last year, shipments rose by 9 percent despite poor infrastructure, congestion at Manila’s ports and volatility in the country’s power supply.
Compared to other economies in the region, the Philippines’ full-year exports growth performance was strong, Socioeconomic Planning Secretary Arsenio Balisacan said.
Total sales receipts for the full-year 2014 rose to $61.8 billion from $56.7 billion the previous year.
Japan remains the top destination of Philippine-made goods, accounting for 21.2 percent of total revenues from merchandise exports during the period.
Trailing behind were the United States with a 14.1-percent share, and China with 11.4 percent.