Rise in Peso against dollar hurts Philippine exporters

[ken hanly <northsunm@xxxxxxxxx>]

8M Filipinos to lose jobs if peso stays at 51




04/01/2006

The peso at the current level of 51 per dollar will
lead to massive bankruptcy among small export firms
that would result in the layoff of a total of eight
million Filipinos directly and indirectly dependent on
export enterprises.

This was the common fear expressed by leaders of 37
industry associations surveyed when they met last week
to map out their survival plan under an environment
getting more difficult for export enterprises.

The peso has gained 3.8 percent since the start of the
year after a 6-percent gain in 2005 due to record
remittances of $10.7 billion from Filipino overseas
workers and a reduction in the government?s budget
deficit.

After the dollar lost its value by 8 percent in the
first three months of the year from P55 to P51 per
dollar, the exporters have incurred losses averaging
$4 on orders booked before the yearend.

It closed stronger yesterday at 51.125 per dollar from
the previous day?s 51.25.

It is ironic that the exporters and overseas workers
who are the ones bringing home the dollars are now the
victims of its abundance, Sergio Ortiz-Luis Jr.
president of the Philippine Exporters Confederation
(Philexport) said.

Philexport sponsored the meeting among the export
industry leaders.

The food sector alone accounts for 3.4 million direct
and indirect workers, revealed Bobby Amores, head of
the Philippine Food Processors and Exporters
Confederation (Philfoodex).

The marine industry which includes commercial fishing
fleets, aquaculture workers, seaweed farmers and tuna
and sardines factories, employ 1.37 million, industry
leaders from General Santos City and Zamboanga said.

It is next to impossible to renegotiate pre-booked
orders at prices when the dollar was still strong.
Otherwise, you may lose your buyer, Amores told the
PNF.

Third largest employer among the industry groups is
the furniture industry that employs 1 million workers,
added Ricardo Locsin, national president of the
Chamber of Furniture Industries of the Philippines
(FPIP).

The strengthening peso, he said, is only the latest
among the woes of furniture makers in the country
after prices of wood products shot up following the
imposition of a nationwide logging ban after the
flooding in Aurora and Quezon in December 2004. Wood
remains the primary raw material of the furniture
industry.

Fourth largest industry reeling from the strong peso
is the handicrafts group that employs 700,000 both
directly by the exporters and their sub-contractors.

The four biggest employer groups consider themselves
the hardest hit because of their almost total
dependence on local raw materials for their exports.

Making up the rest of the big industry employers were
resource-based sector that employs 650,000, the
electronics industry which has 476,000 workers, and
the garments industry which employs 223,000 people.

In a supplemental Manifesto addressed to President
Arroyo, the Davao Chapter of the Philippine Exporters
Confederation, Inc. (Philexport) has sought the
immediately implementation of the necessary measures
to help exporters cope with the appreciating peso.

Led by Anne Pamintuan, the Davao-based exporters, who
are mostly in the handicrafts and food sectors, highly
recommended the suspension of all increases in
government fees from the Philippine Quarantine
Control, Philippine Ports Authority, Bureau of
Customs, National Irrigation Authority and other
agencies. Rediscounting windows to lower interest
rates should also be provided, as there is also an
urgent need to reduce power costs.

The eight million workers daependent on exports make
up about 25 for every 100 persons with jobs in the
country today. Added to a similar number of OFWs on
whose reduced earnings their families survive, the two
sectors contribute over half of the value of goods and
services produced in the country and earned abroad.
Philexport News and Features