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When the
peso strengthened from P56 to P53, there was much
rejoicing, with exporters willing to reset their
planning targets within that range.
When the
peso continued its surge to the P50 level, there was
much backslapping once again, but with the exporters
sporting that worrisome look.
Now that
the peso has gone up to the P45 level and even below,
there was still that glowing look from government
officials, but the exporters are now up in arms,
pointing to a “national disaster” in the making.
To
arrest this impending disaster that could tow in an
economic catastrophe, the exporters, on whose viability
rests much of the hiring power of small and medium
enterprises, are now talking among themselves to set up
a “coalition of strong-peso victims” that would dwell on
the dynamics of a strong peso on the many exporters who
are about to call it quits.
Right
now, the exporters are about ready to launch an advocacy
on the demerits of a strong peso on their continued
operations.
What the
victims of the rapid appreciation of the peso want is a
broad coalition that would convene a meeting to redress
their grievances. They want a quick and decisive action
on the rapid surge in the value of the peso vis-à-vis
the dollar, the trading currency of the exporters.
For
them, they see a time when they are morphed from that of
being dollar earners to being government mendicants. The
exporters’ groups now talk in loud voices about the
looming national disaster.
The
surge in the peso—a source of breast-thumping among
government officials and one of the showcases of the
trumpeted strength of the economy—has claimed its first
victim: the exporters. Those who had their contracts
drawn out nine months before are now hurting. They have
nowhere to go, as they can neither cancel their orders
and risk incurring the ire of their business partners,
nor simply absorb the losses.
We
understand that many of the small and medium exporters
have simply closed shop, unable to weather their
continued losses on the sharp rise in the peso’s value
against the dollar.
Catching
a falling knife, so to speak, when the peso went up from
P56 to P53 and then from P50 to P45, many of the
exporters simply abandoned their operations, leaving in
their wake many families in the countryside who are now
part of the unemployment statistics.
What
aggravates the situation is that the members of these
families, who used to earn from being employed by
exporters, cannot get a lifeline from the families of
overseas Filipino workers (OFWs) who are similarly in a
tight financial bind as a result of the peso’s strength.
The
exporters of fruits are hurting. And so are the
vegetable exporters. Even the handicraft manufacturers,
whose dollar contracts for their orders have meant lower
peso units, are being led to oblivion.
The
joke, in fact, from among exporters’ groups is that
these handicraft companies may not be able to join the
coalition, as they would not be in a position to
articulate their views, as their mounting losses could
no longer afford tickets to the coalition’s meeting.
“First
hit were those producing from domestic inputs—the
exporters of fruits, vegetables and their processed
products—who were squeezed between their peso-supply
contracts and fixed-dollar export prices.
“Hit,
too, were the handicraft exporters, who could not pin
down peso returns on their dollar-denominated sales.
These exporters adjusted to the strong peso by cutting
down on orders to minimize losses and survive for better
times. Others have absorbed their losses and closed
shop,” said a preparatory statement meant to draw
attention to the problem of a strong peso.
Big
players in the export sector are now also hurting,
especially when the peso breached the P44-to-the-dollar
mark. It is cutting down margins even in
business-process outsourcing and electronics exports,
not to mention the tourism industry.
The
damage has expanded to domestic producers, as imports
become cheaper with the attendant problem on smuggling
further hitting market supply. The coalition is expected
to further draw attention to the unbridled surge in
smuggling that has exacerbated the problems of the
domestic industry.
The only
clear gainers in the strong peso are the importers and
the currency traders, according to the exporters’ group.
The
group is about to demand from the government the
addressing of bigger cost burdens, such as government
royalties from natural gas, cargo-handling charges, and
fees and penalties for doing business with government
offices.
The
budding coalition is talking of a tipping point, a flash
point to the national disaster the exporters are
pointing to, as they see the retail and real-estate
sectors also being affected by the rapid appreciation of
the peso.
Sooner,
not later, the strong peso will mean a loss for the
government, as the OFW families get to scrimp on their
consumption expenditures for the need for more
remittances for the same amount of pesos they get. Sure,
the remittances zoom, but their purchases would have to
stagnate.
Where
does this lead to, but to lower sales and lower
revenues? We understand that the exporters bewail, too,
the fact that while our Asian neighbors have been
proactive in responding to the threat of strong
currencies, the government has neither displayed the
political will nor the clout to do something for the
export sector.
For the
exporters, they have reached the tipping point, are
angry, and want to ventilate their grievances to draw
attention to the looming national disaster which could
be arrested, but which the government did not do
anything about.
The
coalition is seeking to convene its own summit of
exporters to protest the “extrajudicial killing” of the
export sector with the untrammeled march of the peso
from P56 to P45. The exporters want to dramatize their
plight.
E-mail: hugagni@yahoo.com |
