THE export sector, a significant catalyst for sustainable economic growth, stands to benefit if the Bangko Sentral ng Pilipinas (BSP) promotes a competitive exchange rate to weather the export slump and help push inclusive growth.
Sergio R. Ortiz-Luis Jr., president of the Philippine Exporters Confederation Inc. (Philexport), said exports have declined for 16 months in a row until July this year amid the bearish global trade growth.
To moderate the decline in exports, Ortiz-Luis proposed that the BSP adopt a monetary policy to allow the Philippine peso to be competitive, at the same time, generate more employment.
He said this will also benefit other dollar-generating sectors, including the business-process outsourcing (BPO), overseas Filipino workers (OFWs) and tourism.
The export group chief cited an economist partner in the competitive foreign-exchange advocacy, Dr. Vic Abola, who concluded that “any peso depreciation has a very tiny effect on inflation” based on economic theories and empirical studies.
Ortiz-Luis said Budget Secretary Benjamin E. Diokno is also vocal about a “pro-weak or competitive peso policy.”
“What we are, therefore, aiming now is the institutionalization of this policy that can push inclusive growth by incorporating the words ‘inclusive growth’ and ‘full employment’ as one other important objective of the BSP’s monetary policy, along with maintaining price stability,” he noted.
Philexport