The Philippine Chamber of Commerce and Industry (PCCI) sees the economy growing by as fast as 8 percent this year following a 6 to 6.5 percent expected growth in the second half of 2022.
Ferdinand Ferrer, PCCI chair for industry made this robust projection on assumption that face to face classes will resume 100 percent.
Ferrer, however, said PCCI remains concerned about the peso depreciation, rising fuel costs, inflation and the Russia-Ukraine crisis.
Ferrer said manufacturers, especially exporters, are adjusting to the supply chain and logistical disruptions as well as high transportation costs while saving on costs internally by sourcing locally to meet orders from abroad.
“It’s very taxing, very challenging for exporters… but the demand is there ,” Ferrer said, adding “the Philippines has not had a full-blown localization program.”
George Barcelon, PCCI president, said one of the constraints that exporters are facing is the freight cost going to North America which has gone up 200 to 300 percent due to lack of space and slow turnaround time.
Ferrer said another concern is the peso which has breached 56 to the dollar mark or a 7.4 percent depreciation.
He said while this would lift the value of exports, the fact is manufacturing depends on imported raw materials which could only offset the increase.
Ferrer said extremely high fuel surcharges would affect public and private transport, including airline and shipping industries, among others.
The third factor cited by PCCI is inflation which has reached an all-time high of 6.1 percent resulting in a spike on non-oil commodities such as food and agricultural products and energy. “The power supply shortages and high electricity rates… disrupt daily economic activities as the world gradually recovers from COVID 19 pandemic, “ he said.
The fourth challenge is the Russia- Ukraine conflict which disrupt supply chains and weaken conditions of the global commodity markets.
“There seems to be no end with the social and economic unrest that we as a society has experienced.
But he said PCCI remains hopeful especially because of the appointment of an economic team that would steer the economy to full recovery.
“The increasing employability of workers is continually improving the Philippine labor market and the Philippine exports are seen to sustain growth on a much better position than pre-pandemic levels,” Ferrer said. – Irma Isip
