HSBC: Weak peso could fuel Philippine manufacturing revival
The peso’s sharp depreciation against the dollar could help revive Philippine manufacturing after years of stagnation, potentially boosting exports and narrowing the country’s persistent trade deficit, according to HSBC Global Investment Research.
HSBC's Global Investment Research reports that the sharp decline in the Philippine peso could potentially stimulate a revival of the country's manufacturing sector after years of sluggish growth. Senior ASEAN economist Aris Dacanay explained the stronger peso has created a significant competitive disadvantage for local manufacturers, but the recent depreciation could create a more favorable landscape for domestic production.
The weaker peso has made Philippine-made goods more affordable to foreign buyers and has reduced the appeal of expensive imported products for local consumers. As a result, Philippine manufacturing experienced its first sustained expansion since 2018, with exports growing by around 14 percent year-to-date. However, HSBC cautions that while the weaker peso presents an opportunity for manufacturing revival, other policy measures may be necessary to ensure the benefits are sustained in the long run.
Written by urgent.news from Philippine Star Business's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
