THE Philippine Chamber of Commerce and Industry (PCCI) has expressed concern over the increase in interest rates as small businessmen are bearing the brunt of the rate hikes.
PCCI President George T. Barcelon said in a televised interview on Friday that “there seems to be a possibility of again another rise in interest rates because this is being discussed by the Federal Reserve in the US.”
With this, the PCCI chief hopes “if there’s an increase, it will not be too much because the interest rate has really gone up and it’s taxing on businessmen, especially for the small ones.”
Barcelon exuded optimism in his outlook for the retail businesses especially in the ’ber months, which signals that Christmas is just around the corner. He said small businesses usually gain from this season.
“With Filipinos, the ’ber months are important months and based on track record, normally they have increase of sales starting September but the peak will increase towards November which is about 30 to 50 percent more than the regular months,” said Barcelon.
The PCCI chief said micro, small and medium enterprises (MSMEs) benefit from this season since “it’s really the masses who are buying and the MSMEs are the ones supplying.”
Still, he said, these micro and small merchants are not spared from the harsh impact brought by economic challenges such as the peso devaluation, higher interest rates, and fuel price hikes and also the lingering effects of the Covid-19 pandemic.
Barcelon noted that the peso devaluation is among the “issues of concern,” noting that everything is slightly more expensive this year “but definitely I think the amount will be better than last year.”
However, in relation to the assistance the business sector will be providing to the local manufacturers and producers after the holiday season or during the first quarter of 2023, Barcelon noted that usually the “1st quarter of a new year would start slowly.”
He said if there would be an increase in the interest rates, he hopes it will not be too much so as not to burden small businessmen.
In August, the Bangko Sentral ng Pilipinas (BSP) chose the more aggressive path to monetary policy tightening as it unleashed a 50-basis-point hike in its main benchmark rates.
BSP Governor Felipe Medalla said at the monetary policy virtual press briefing that the decision came as their baseline forecast for inflation has shifted higher for 2022.
The governor said that while it is “impossible” to hike rates without affecting economic growth, Philippine recovery is “robust enough” to absorb further tightening if necessary.
Medalla also said last month that between inflation and growth, their priority is bringing down the prices of goods and services as one of the BSP’s pillar mandates.
In an earlier televised interview, Go Negosyo founder Jose Maria A. Concepcion III noted, “We cannot control the interest rates because the dollar is also gaining.”
He emphasized that businesses are bearing the brunt of the rate hikes. “Of course, what happens here is that businessmen suffer more; we can’t do anything about that because they want to control inflation.”