THE local currency’s fluctuations in recent months have alarmed businessmen, but authorities see no immediate need to adjust key policy rates.
While a weaker peso is favorable for the export sector, recipients of overseas remittances and foreign investors, it is hurting firms that need to import raw materials.
For example, consumer companies rely heavily on imports of raw material, which hikes their production costs.
Softdrinks bottler Macay Holdings Inc. Chairman Alfredo Yao said a price increase is in the offing as importation costs have been on the rise.
“[The price increase] will not just impact our direct importation but also affects our local suppliers, who need to import as well. A lot of importers are already anticipating the price hike,” Yao said.
The company operates the Yao family’s beverage businesses through wholly owned subsidiary ARC Refreshments Corp.
ARC Refreshments operates and maintains the business of bottling, distribution, marketing and sales of the RC Cola brand, Fruit Soda Orange and Juicy Lemon, among others.
Yao said the price hike will kick in before the year ends.
For Philippine Chamber of Commerce and Industry Chairman George T. Barcelon, there’s no need to ring the alarm bells.
“I don’t see the movement [of the peso] as leading to any drastic impact,” Barcelon said.
The Central Bank earlier assuaged fears, saying the weakening of the peso can be considered as a normalization of past appreciation of domestic currencies, and the peso is expected to remain broadly stable over the medium term.
On the last day of July the peso-dollar exchange rate stood at 50.46 to 1.