Weak peso is good for Cebu economy

CEBU, Philippines - Cebu’s economy is seen to enjoy the benefits of a weakening peso, as its economic dynamism is led by dollar-earning industries such as Business Process Outsourcing, tourism, and exports.

While the fragility of the peso currency against the US dollar is now considered as “good news” to the Philippine economy in general, Cebu in particular is seen to largely gain from this development.

In an economic briefing, Michael G. Manuel, managing director for Asia Investment of Sun Life Company of Canada, said that unlike in the past that a weaker peso is a mirror of a pathetic economy, today this paradigm has shifted, and the weaker the peso, the better for the Philippine economy in general.

Although the export sector is still affected by the unrecovered demand from the global market, its competitiveness however, is expected to get stronger while peso continues to weaken, said Manuel. Cebu’s export sector especially the furniture could expect a relaxing environment while the foreign exchange will favor the strengthening US dollar versus the Philippine peso.

In tourism, where Cebu is known as the center of this sector in the country, will expect a favorable development, as the weakening peso will also make the Philippines in general as a cheaper destination.

“Contrary to the previous thinking, the peso’s weakness is good for the Philippine economy,” said Manuel.

Families of OFWs will have increasing purchasing power due to cheap peso, thereby fueling the demand for commodities, including lifestyle products, and travel, among others.

“If consumption is happening, companies will have to manufacture more to meet the demand,” said Manuel.

Earlier, exporters welcome the weakening of the Philippine peso, saying this will make their products cheaper abroad and thus more competitive in the global market.

Chamber of Furniture Industries of the Philippines (CFIP) executive director Salvio Valenzuela was quoted in a recent report saying that the weakening peso is good news for the industry. “This will give enough cushion for our industry.”

Likewise, economist Bernardo  Villegas, has been urging the government to continue in making ways in allowing the peso to weaken further, as it brings good to majority of Filipinos, and the economy in general. (FREEMAN)