Export companies fear that the target export revenue this year of $80.2 billion will not be met due to the strong peso.
“Even when it was P43 to the dollar, exporters were concerned. Now that it’s around P41 to P42, exporters are hurt, especially those that source materials locally since they cannot benefit from supposedly cheaper imports of raw materials. Even electronics makers that import about 70 percent of raw materials are hurting,” Philippine Exporters Confederation president Sergio R. Ortiz-Luis Jr. said Tuesday in a phone interview.
The electronics sector, which accounts for about half of export revenues, has downgraded its export growth forecast this year to 5-7 percent from the original target of 10-15 percent, due partly to the strong peso.
The peso closed at P41.72 and touched P41.71 on Tuesday. On Monday, it closed at P42.02 and even traded close to the earlier high of P41.925 recorded on Aug. 1, 2011, due to investors’ optimism over eurozone efforts to stabilize banks.
The Semiconductor and Electronics Industries of the Philippines Inc. (Seipi) had been banking on recovery in 2012 after suffering shocks last year that either dampened demand or contributed to higher costs and supply chain difficulties.
However, growth has so far been “anemic,” Seipi president Ernesto B. Santiago said in a text message.
The government should consider measures that cushion the impact of peso appreciation, among them tempering the flow of hot money into the stock market and supporting industries by funding innovations, better packaging, and promotional activities, Luis said.
Trade Secretary Gregory Domingo said that exports, particularly electronics, are a major component of the country’s economic performance as measured by the gross domestic product or GDP.