Exports would still grow this year though possibly not at the projected 10% growth rate, warned Trade Secretary Gregory Domingo.
Domingo attributed the strong currency to the Philippines' positive growth story. Over the past 12 months, the peso has appreciated by around 20% against the yen and by 35% against the euro.
He cited as an example that EU€1 million worth of exports used to be valued at about P62 million and is now only P47 million.
Domingo is hoping that the 50% reduction in oil prices, which is significantly cutting production costs for exporters, will offset the lower export earnings in pesos.
As a rule, exporters can easily adjust when the currency appreciates or depreciates by only 5%, Domingo said.
"If the change is higher than that, it would take a year for the exporters to adjust," Domingo added.
He said exporters might still be able to recover their foreign exchange losses if they increase prices, although they run the risk of pricing themselves out of the market by doing so.
Domingo urged exporters to continue pursuing a strategy of exporting higher value-added products in order to generate more earnings. Such as, for example, adopting the geographical indication (GI) model of selling specialized products unique to its areas. – Rappler.com
EU€1 = P 46.57
JP¥1 = P 0.365