Stable commodity prices support the competitiveness of Philippine exporters in a weak global environment, a Bangko Sentral ng Pilipinas official said Monday.
“If we can maintain inflation at three percent to five percent that can translate easily and quickly into higher level of competitiveness,” Bangko Sentral Deputy Governor Diwa Guinigundo said in an interview with reporters.
A steady cost of labor will help them be more competitive in the global market.
“In other words, if they source their raw materials from here including labor… and when your inflation rate is very modest and labor does not demand higher wage adjustment, our exporters should be more competitive,” Guinigundo added.
Merchandise export receipts fell 6.9 percent to $51.498 billion last year from $47.967 billion a year earlier on weak global demand.
National Statistics Office (NSO) data showed that merchandise exports contracted by 6.9 percent to $51.498 billion from $47.967 billion.
Government should continue to help develop alternative sources of cheaper energy as the cost of power in the Philippines is one of the highest in the Asia Pacific region, said Guinigundo.
“Being able to develop new sources of energy will also give [exporters] some headway in terms of competitiveness. Remember that the price of power in the Philippines is quite prohibitive compared to other countries,” he added.
But exporters mainly see the strong peso against the US dollar keeps them uncompetitive in the global market.
However, Guinigundo said that government should help exporters with market and product research and in putting up trade exhibits and fairs to showcase their products.
The Philippines can expand its trade with China, Japan, and other Southeast Asian countries to boost exports, he noted.
“Europe is now going into a very difficult situation that one can describe to be recessionary… If some of these issues can be addressed then our exporters can be more competitive without them asking for a significant depreciation of the peso,” Guinigundo added. — VS