Feeling the pinch of the strong peso, exporters including small and medium enterprises will not be able to achieve Government's full-year export target of $50 billion set under the Medium Term Philippine Development Plan.
Exporters are currently looking at an exchange rate of 51 to the dollar although many will still be losing money at that level and there is no help from Government.
The obvious reason is that exporters, who peg their prices at P51 to P52 to the dollar level, have six months to deliver and they will incur losses. Another reason is input costs are not declining although the cost of fuel has gone down a bit.
Not surprisingly, some of the exporters have already declined new orders because they were sure they would get a smaller amount for their products in peso terms.
The garment sectors may not be affected much after managing the fluctuations of the peso against the dollar, whereas the indigenous exports and the SMEs will be the worst affected.
The Government needs to recognize the impact of the stronger peso and come up with measures for cushioning its impact on sectors that make use of foreign currencies.
marketing@alchempro.com
