PCCI urges aid to exporters in case of US debt default

MANILA, Philippines - The government may have to prepare measures such as providing credit facilities to deal with the possible impact of a US debt default on Philippine businesses particularly on exporters, the Philippine Chamber of Commerce and Industry (PCCI) said.

In a press conference yesterday, PCCI president Miguel Varela said the government has to be prepared to put in place measures to help local businesses that may be affected should the US default on its borrowings.

“Exports are clearly expected to be affected (by a US debt default) since the US is a strong trade partner,” he said.

PCCI vice president Jose Alejandro added exporters would need the support of the government in case a US debt default happens.

“The National Government may have to consider having a credit facility for exporters, otherwise, it will create unemployment here,” he said.

He added that other measures would also have to be in place to assist other sectors including overseas Filipino workers, who may be affected by the US debt default.

The deadline for the US Congress to raise the debt ceiling is Oct. 17.

Failure to raise the US debt ceiling would prevent the US from refinancing its debts, which may lead to a default and in turn drive US long term rates up and weaken the dollar.

PCCI chairman Jess Varela said the PCCI is still hopeful that the US would be able to avoid a debt default.

“I believe that they (US) will fix it,” he said.

University of Asia and the Pacific economist Bernardo Villegas, however, told reporters yesterday that should the US default on its debts, the country’s exporters are not expected to be affected that much as the Philippines has other export markets.

“I don’t think the US is our biggest market,” he said.

American Chamber of Commerce of the Philippines legislative committee chair John Forbes shared the same view yesterday, saying that US firms “don’t buy that much from the Philippines.”

Data from the National Statistics Office showed that for the January to August period, the US was the second biggest destination of Philippine exports valued at $4.776 billion.

Varela said the PCCI intends to come up with other recommendations to President Aquino for the country to sustain its strong economic growth during the 39th Philippine Business Conference to be held from October 22 to 24 at the Manila Hotel.

He noted that among the issues that need to be addressed in the country are high cost of power and energy, preparing for the Association of Southeast Asian Nation’s economic integration in 2015, employment mismatch, reviving industries, improving competitiveness, as well as helping small and medium enterprises to reach international markets.