`Special Window’ program proposal deemed unfeasible

The Philippine government is most likely to junk the exporters’ proposal for a “special window” program for foreign exchange as it encourages protectionism.

Financial analyst Wick Veloso believes that the proposal, to be led by the Cebuano exporters through PhilExport-Cebu, is not a feasible proposal.

Instead of putting its attention to the request of “Special Window” foreign exchange program, Veloso suggested that exporters will have to learn more how to hedge.

He said any protectionism act of a government does not encourage competitiveness and this is not a good solution to be looked at by exporters, in an attempt to save the drowning export industry.

One hedges the currency risk by contracting to sell foreign currency in the future, at the current exchange rate. Contracts are typically for periods of up to one year for U.S. Dollars.

Earlier, PhilExport-Cebu board member Michael Basubas said that the organization will have to start inviting other exporters’ organization from all over the country to support an extensive study on how the government can offer more impacting mechanism for the exporters.

“We will invite other export organizations from all over the country, to be one with us in this request,” he emphasized.

For them (exporters) Basubas said a “Special Window” for foreign exchange rate that will be created for the exporters is a more effective program, to save the exporters from losing their businesses.

The proposed “Special Window” program for the exporters is expected to provide a different set of “foreign exchange” rate for the export sector, while the Philippine peso climbing in unpredictable level.

“We want to know where the peso is going. We can not do business, at the same time keep on guessing the level of exchange rate in the next few months. It has to be stable,” said Basubas who is also the president of the Cebu Furniture Industries Foundation Inc. (CFIF).

However, Veloso, who is the treasurer of international banking institution, the Hong Kong and Shanghai Banking Corporation (HSBC), and in-charge of the Global Market operations, suggested that hedging is the only protection of exporters now a days. – Ehda M. Dagooc