Exporters urged to look past weak peso to boost trade

Posted on March 20, 2017

EXPORTERS should be more creative in the products they develop with innovation expected to be a more important driver of shipments than the weak peso, according to the Philippine Chamber of Commerce and Industry (PCCI).

The weakening peso is only a part of exports. Exports should be more about innovation, uniqueness. -- PCCI President George T. Barcelon
“The weakening peso is only a part of exports. Exports should be more about innovation, uniqueness,” PCCI President George T. Barcelon told BusinessWorld after a general membership meeting in Makati last week.

He further added that exporters must not rely on currency factors to boost sales, although he noted that the weaker peso has in fact helped improve exports at the beginning of the year.

“I must admit, with the peso weakening, it helps us also... But it’s not the factor for us to increase our exports,” he said.

The peso on Friday closed at P50.18 against the dollar on Friday, from Thursday’s finish of P50.12.

According to Mr. Barcelon, businessmen must not be “greedy” and instead make sure their products are cost-competitive.

On the other hand, the government could help Philippine businesses grow exports by lowering power costs in manufacturing.

Outward shipments of manufactured goods were valued at $4.505 billion, accounting for 87.8% of the total export receipts in January 2017, up by 23.1% from $3.659 billion recorded in January 2016.

This brought total export sales to $5.130 billion in January 2017, up 22.5% from $4.187 billion recorded in January 2016.

Meanwhile, Ganeshan Wignaraja, advisor of the Asian Development Bank’s (ADB’s) Office of the Chief Economist, said that electricity costs is “very high” in the Philippines “and that’s an issue of production here.”

According to Mr. Wignaraja, the Philippines would benefit if it focuses on trade in services and that services would “make a big difference” in exports.

But in order to improve the country’s trade in services, there must be a liberalization of services as regulations make it difficult for people to move across countries.

“Services liberalization (can help exports). Regulations are affecting movement of people, mutual recognition of skills, etc. So services are investment areas we’ve got to open up,” said. Mr. Wignaraja.

Based on the Philippine Development Plan 2017-2022, the government targets the gross value added (GVA) of the services sector to range within 6.9-7.9% by 2022 from a baseline of 7.5% in 2016.

GVA of manufacturing as a proportion of the gross domestic product, on the other hand, has yet to be determined. -- Danica M. Uy