The Philippine Exporters Confederation (Philexport) said most exporters are “nervous” about the volatile peso-dollar rate.
“The concern of exporters is not the United States credit downgrade because we believe that the Obama administration can address its fiscal problem,” Nora Halili Lao, Philexport trustee for gifts and premium sector, said in a document from Philexport.
The US is traditionally the Philippines’ biggest trading partner but this role is now in question.
“Exporters are diversifying into the growing local market amidst financial problems of the US and Europe,” Lao explained, adding that the US has reduced its purchases from the country as evident in the June export data.
For June, the US was only second to Japan as the country’s biggest export market.
For the furniture sector, Philexport believes the sector will post negative growth this year considering the peso-dollar trend and the impact of the US credit downgrade.
Philexport is now tapping the local market and hopes products can compete with cheaper imported ones.
The global recession has also affected the food sector but not as much as the furniture and gifts and premium sector.
As of press time (Aug 26), the peso was trading at P42.43 to a US dollar. The local currency touched the P42 level in July. Its strength has affected competitiveness of the country’s products against those from Thailand, Vietnam and other developing countries in ASEAN.
Photo by glenmcbethlaw
