MANILA, Philippines - Cebu exporters are urging the Bangko Sentral ng Pilipinas (BSP) to stabilize the movement of the peso against the dollar, complaining that the wide fluctuation of the local currency is hurting exports.
Benson Dakay, president of the Seaweed Industry Association of the Philippines (SIAP), specifically cited the broad exchange rate fluctuation over the past two weeks.
Last week, the local currency weakened to 45.50 against the dollar but this week, the peso strengthened to 44.20 wreaking havoc on all Philippine exporters with a wide exchange differential of P1.30 in just a span of one week, Dakay said.
Since almost all export contracts are denominated in US dollars, volatile fluctuations hurt exporters depending on when they transact their contract and when they actually get paid.
Dakay has repeatedly complained that the BSP should take a firmer hand in preventing such wide foreign exchange swings, not only because it impacts on exporters but also because it affects overseas Filipino workers (OFWs) who remit most of their earnings to support their families in the Philippines.
According to Dakay, the BSP could take the cue from China and Indonesia, both of which depend on exports to create jobs.
China pegs its yuan at 6.8 yuan to $1 while Indonesia maintains an exchange band of between 8,900 to 9,000 rupiah to a dollar.
Unfortunately for the Philippines, the BSP allows free market forces to dictate the movement of the peso against the dollar and only steps in occasionally to “moderate wild gyrations,” Dakay said.