THE peso’s continued slide against the US dollar is producing both winners and losers, benefiting exporters, tourism firms and families of overseas Filipino workers (OFWs) while raising the cost of government foreign debt, business leader Sergio R. Ortiz-Luis Jr. said.
In an October 22 interview with Super Radyo DZBB, Ortiz-Luis, president of the Philippine Exporters Confederation Inc. and the Employers Confederation of the Philippines, said the depreciation was no longer as catastrophic as in the past.
Exporters and tourism-related businesses gain because dollar earnings translate into more pesos. Agriculture may also benefit, though farmers and food producers that rely on imported fertilizer, fuel and machinery could face higher costs. Families receiving OFW remittances also get more pesos per dollar.
The government, however, must spend more pesos to service dollar-denominated debt. Importers and manufacturers that depend on foreign materials and equipment but earn little from exports are also exposed to higher costs.
Ortiz-Luis cautioned against blaming inflation solely on the peso, citing rising fuel prices amid the Middle East conflict, which lift transport and production costs that businesses may pass on to consumers.
He said depreciation could stay beneficial to some sectors as long as the peso does not weaken too sharply or quickly, giving firms time to adjust. Asked whether employers might cut jobs or close, he said the exchange rate would not necessarily be the main driver, and that high electricity costs were a bigger concern.
He also cited US economic and policy decisions as influencers on the exchange rate and declined to predict the peso’s direction, as factors such as fuel prices remain volatile. / PHILEXPORT