Export leaders found themselves helpless in stopping the continued appreciation of the Philippine peso this week to its strongest in five years. It hit Php 41.68 to the US dollar in the open market last Thursday.
“The problem is bigger than the exporters. If the Bangko Sentral cannot stop it, nobody can,” said Sergio R. Ortiz-Luis, Jr. president of the Philippine Exporters Confederation said during the board of trustees meeting of the umbrella organization of exporters at the World Trade Center yesterday.
“We cannot help it even if we cry,” he pointed out.
The BSP had admitted it has been losing money buying and keeping excess dollars entering the country to stem the rapid appreciation of the peso. In the past couple of years alone, it had lost Php 107 billion.
A Filipino international banker last week warned that the BSP may go bankrupt in two years if the trend continues.
The PHILEXPORT board was expected to take a position on the erosion of their competitiveness due to the strong peso but the export leaders realized they will only sound like broken records if they do so.
In his report to the board, trustee Oscar Barrera said that a coalition of dollar earners including deployment agencies of overseas Filipino workers and leaders of the Business Process Outsourcing industry have held dialogues with top government officials including the planning chief and members of the Monetary Board.
It was in one of those meetings when a monetary board member revealed that if the BSP had not intervened in the foreign exchange market, the peso would have reached P38 to the US dollar.
Barrera said that the next dialogue will be with the National Treasurer to convince him to borrow funds from the local banking system or from the BSP to cover the budget deficit and to prepay old loans, instead of borrowing dollars abroad.
In an interview with PNF, Barrera said that the worst case scenario is when the BSP stops buying dollars to save itself from going under.
The BSP has indicated its willingness to lend funds to the national government but it is prohibited by law to directly buy government debt papers.
by Abe P. Belena, Reposted from PHILEXPORT News and Features