Reaction Paper

Topics: Inflation, Economics, Pricing Pages: 3 (989 words) Published: February 20, 2013
`Strong Peso Hurts Food Exports’

Philippines economy nowadays portraits a good start for, as we are lifting our country from the previous economic situation. Not including the whole world economy, we are experiencing a smaller amount of problems in our economy than the recent. The rate of exchange between our Pesos against the Dollar is going stronger from now and as some bank company said that it could reach as high as ₱37.50 in the next year. This is worthy for our country that it could raise the percentage to lessen the financial crisis and issues of our economy here in the Philippines. However, this could also mean that some other Filipinos, who are contributing a lot in our economic growth, will be at an edge of helping themselves to this “firmer peso”.

Strong peso plus the high sugar price, makes local food producers and exporters come to haste to restore the D-Sugar allocation of 2 percent. This will be considered as hedge for the on-going raise of the peso coupled with high sugar price, which cost around ₱40 to ₱44 per kilo without duties and taxes. The D-Sugar allocation is the use of food producers and exporters for local consumption and export of their products. However, the D-Sugar allocation of 2 percent is too small to make a depression on the profits of sugar producers, but its closure will cause a huge percentage on the production costs of food exporters.

One of the factors that affect the Philippine economic growth is price control. Price control defines as governmental imposition on the prices changed for goods and services in a market. It is usually intended to maintain the affordability of staple foods and goods and to prevent price gouging during shortage, or alternately, to insure an income for providers of certain goods. These are two primary forms of price control, a “price ceiling”, the maximum price that can be changed and a “price floor”, the minimum price that can be changed. The Philippines is one of main product that...
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