LAPU-LAPU CITY, Cebu - The Philippine exports have room to further expand in the coming months as the nation's major markets improve, the Bangko Sentral ng Pilipinas (BSP) said after the country's shipments abroad rose 7.8 percent in July.
On the sidelines of the Asian Seminar on Financial Literacy and Inclusion, BSP Governor Amando M. Tetangco Jr., said yesterday that the country's improved exports figure in July was a positive development amid global difficulties.
"A growth of 7.8 percent can be considered a respectable growth given the difficulties we are experiencing now. Of course, we would want to see higher growth, [but] we also need to see some improvements in our major markets to be able to realize that," Tetangco told reporters.
"At this point in time, the markets are basically weak," he added.
The National Statistics Office reported that the Philippine exports rose year-on-year for a fourth straight month in July to $4.8 billion as sales of manufactured goods and forest products rose.
While resilient exports may support growth and ease pressure on the BSP to add to three interest-rate cuts this year, the peso's appreciation of more than 5 percent in 2012 is making Philippine goods more expensive, eroding manufacturers' profits.
"The assessment remains," Tetangco said when asked if its policy on foreign exchange has changed after the local currency reached its four-year high on Monday.
"We are getting mixed signals from different markets. Sometimes we get good numbers, followed by not-so-good numbers. If you are looking at Europe, for instance, you still have this risk-on, risk-off mode," Tetangco said.
"Yesterday, the peso appreciated in the morning then depreciated in the afternoon. Today, because of what is happening to the euro, we also opened weaker. So we are affected by developments over [Europe and US]," he added.
Tetangco said the central bank will stick to its basic policy on foreign exchange which allows market forces to determine the rate with scope for official participation of market to smoothen sharp fluctuations.
"We are looking at the volatility of the exchange rate. Last year and year to date the volatility of the peso has been at the middle of the range. This would imply that we have maintained in general export competitiveness," the central bank chief said.