MANILA — The depreciation of the Philippine peso against the US dollar benefits exporters but also increases the cost of imported materials, highlighting the need for programs to enhance productivity and competitiveness, a manufacturing sector executive said Friday.

Elizabeth Lee said the local currency fell to the 60-level this week amid investor caution over the ongoing Middle East conflict.

A weaker peso, Lee noted, raises the value of foreign revenues for exporters. However, it also increases the cost of imported materials, reducing manufacturers’ competitiveness and creating “pressures that may gradually be reflected in consumer prices.”

“Over time, these dynamics could shape inflation trends and weigh on household purchasing power. Small and medium-sized enterprises, with more limited capacity to manage currency volatility, remain especially sensitive to these shifts,” she added.

Lee said the economy faces a balancing challenge, as exporters may gain from a weaker peso, but reliance on imported inputs limits the benefits. Sustained cost pressures on import-dependent sectors, she said, could temporarily affect consumption and investment.

“Mitigating measures are underway, including calibrated monetary policy to anchor inflation expectations, and efforts to strengthen energy security and supply diversification,” she said.

She added that these interventions are crucial to cushioning cost pressures and supporting domestic demand amid external volatility. “These conditions underscore the need to strengthen domestic industrial capacity, improve supply chain resilience, and manage external risks. Close monitoring of foreign exchange movements, alongside measures to support productivity and competitiveness, will be key to sustaining stable and inclusive growth,” Lee said.