MANILA – Filipinos should not worry about the peso’s depreciation against the US currency as the competitive exchange rate is actually beneficial to the Philippines, Socioeconomic Planning secretary Ernesto Pernia recently said in an interview.
“In fact, it’s oscillating between P53.3 and P53.5. As long as it doesn’t go beyond that, it’s fine because there are many benefits from competitive exchange rate. Not a weak exchange rate, but a competitive exchange rate,” Pernia said.
Pernia pointed out a competitive exchange rate is good for exports, tourism, business process outsourcing (BPO) industry, families receiving remittances, and import-substituting industries.
He said higher exports and tourism spending can narrow the country’s trade deficit.
“Our services exports, there is no deficit, there is a surplus. It’s the goods exports that are weak. Perhaps we need to ramp up tourism and other service exports to make up for the slow movement of our exports in the global market,” he added.
Pernia said the country imports capital goods it needs especially for the “Build, Build, Build” infrastructure program and for the improvement of information communications technology (ICT), as well as raw materials for manufacturing.
He attributed the rising trade deficit to protectionism and trade tension which was “not a good environment for exports.”
“So I think our manufacturing sector did well in May, including manufacturing industries, for exports so i think exports performance will improve in the coming months,” he said.
“Our trade deficit will improve over the coming months, before the end of the year, as inflation will also taper off towards the end of the year,” he added. (PNA)
