Seaweed exporters present issues, concerns to PNoy

CEBU, Philippines – The Seaweed Industry of the Philippines (SIAP) has brought its concerns to higher levels of the government to get the promised support it got from the latter on strengthening the processed seaweed exports of the Philippines.

SIAP president Benson U. Dakay personally handed a position letter addressed to President Benigno C. Aquino III, through Department of Finance (DOF) secretary Cesar Purisima, and Bangko Sentral Ng Pilipinas (BSP) governor Amado Tetangco.

Verbally, Dakay said Purisima has promised to look into the carrageenan exports problem in the Philippines, and would provide help the soonest.

The SIAP position paper emphasized the earlier promised made by Department of Agriculture secretary Proceso Alcala of allocating a budget to establish seaweed nurseries in seaweed-fertile locations in the country such as Bohol.

The letter also highlighted the industry's concern on the deterioration of the European and US market since the financial meltdown and the aggressive competition from China.

Aside from the immediate implementation of the seaweed nurseries, SIAP requested the Aquino government to carefully manage the foreign exchange volatility as its move-ment has severely affected the seaweed sector-one of the biggest countryside job-creator and highest value exporter.

The association asked "for the competitively managed Peso-Dollar exchange rate by limiting the exchange band fluctuation to no more than .5 percent or one percent per trad-ing day."

Also, SIAP asked the government, especially BSP for "the appreciation of the Peso to the Dollar not to exceed the annual inflation rate with is four percent at this year, as China is doing to maintain export competitiveness."

This request, according to Dakay will not only benefit the exporters, but also the dollar-earner sectors such as OFW (Overseas Filipino Workers), Business Process Outsourc-ing (BPO), and the entire economy in terms of increasing investment and consumption in the country.

On the other hand, Tetangco said that the Philippine peso appreciation is in the middle of the range compared to the fluctuations of other currencies in the Asian region.

"I think, we have to remember that exchange rate only one of the factors that affect competitiveness, although it is the most visible," Tetangco said referring to Dakay's query on managing well the foreign exchange movement to protect exporters and promote competitiveness of the players.

Aside from committing to look into the requested matters on foreign exchange management, Tetangco has challenged exporters to seriously impose efficiency in their opera-tions in order to compete.

Defending BSP's supervision on the foreign exchange fluctuation, Tetangco added that "we maintained our appreciation in line with currencies in the region, even not as much as Malaysia and Singapore."

Earlier, economist Nicolas Kwan, Standard Chartered Bank's head for research-East, said that the Philippines has to find effective alternative to effectively manage the move-ment of foreign exchange.

Kwan said the Philippines does not need to appreciate the Peso too much, and the market forces' unpredictable and abrupt fluctuations could disrupt businesses, especially the export sector.

The BSP which follows a system that gives freedom to the Peso value versus the US dollar based on the market forces, could in other way manipulate the up and down swings, other ways such as controlling the management of equity market, and bank inflows.

In some economies, like Australia, New Zealand, including the Chinese Central Banks, they were able to control the movement of their foreign exchange, in order to minimize the fluctuations and protect businesses, and the economy as a whole.

"There are ways to manage the foreign exchange effectively. The exchange rate fluctuation should be given a serious attention by Central Banks in the region," he said.

Kwan said although BSP is following different policies as other countries, "it does not mean they can't manipulate the movement of the Peso." (FREEMAN)