CLARK FIELD, Pampanga — The peso hit 45.50 to the US dollar here as efforts focused on further bridging the gap between the two currencies to as low as P43 to the dollar.
Struggling for survival following the crash of the peso not long after they established huge shopping malls at the Clark special economic zone, duty-free shops are now attempting to make ends meet by offering consumers lower dollar rates.
Puregold, the biggest duty free shop here, has installed streamers along Clark’s main Roxas highway offering its rate of P45.50 to the dollar, while Best Buy shop is offering P49 to the dollar.
Noni Laluces, chief of the enterprises, operations and monitoring department of the Clark Development Corp. (CDC), told The STAR that of the 21 duty free shops that opened here since 1994, at least four have shut down after the 1997 regional crisis. At the time most of the duty free stores set up shop, the peso was at 27 to the dollar.
"Most of them are losing heavily and the only thing that makes their owners persist is speculation," she said, referring to the expected boost as soon as the 2,500-hectare Diosdado Macapagal International Airport becomes fully operational.
In a recent visit to rename the airport here after her late father, President Arroyo asked the Bases Conversion Development Authority to install a radar at the airport.
She also directed the Department of Transportation and Communications to invite the CDC to be present in all its transactions for international flights into the country.
Laluces said that the CDC is studying proposals of duty free shop owners for the restructuring of their rental arrears. Most shops here have incurred arrears worth millions of pesos due to losses, although Laluces could not immediately say how exactly much they owe the CDC.
"Somehow the duty free shops have served the economic zone well at a time when the zone was still in its first years by providing an invigorated atmosphere," she said.
"We don’t want to be rude by just terminating their contracts with the CDC and we are adopting maximum liberty in helping them at least recoup their investments," she added.
The duty free shops have 25-year contracts with the CDC. Only about three of them are reportedly earning.
"I don’t think that the shops would be losing heavily by bringing down the peso rate, because some of their stocks were imported at a time when the dollar rate was much lower," she said.
Now their importations have also decreased in volume, often limited to daily household needs such as coffee and canned goods.
But Laluces stressed that despite old stocks, the CDC and the Department of Trade and Industry have been monitoring the duty free shops for the expiry dates of their goods.
She said shop owners have arrangements with the Department of Environment and Natural Resources on the disposition of goods which have already expired.
Goods are still safe to consume three months after their expiry dates, she said.
The STAR however noted that some goods, such as potato chips and canned corned beef, do not have expiry dates indicated on their labels in some duty free shops.
Shop sources said owners are studying moves to bring down the rate further to P43 to the dollar to lure customers back.