MANILA, Philippines - A recruitment leader and a co-convenor of the Competitive Currency Forum (CCF) hailed a recent government move to stabilize the appreciation of the peso that will help OFWS regain the buying power of their dollar remittances.
Lito B. Soriano, a former OFW himself and a member of the CCF said the decision of the government to locally source 100 percent of its borrowing requirements will positively rein in the rise of the peso against the dollar.
This was the consensus among members of the CCF, composed of former finance secretaries several prominent economists, academe, manufacturers, local exporters, and OFWs who have expressed fears that the continued rise of the peso against the dollar will cause serious harm to many Filipinos especially to OFW families.
The rapid appreciation of the peso has dramatically affected the incomes of OFWs who have contributed greatly to the stabilization of the national economy. From P 55 to 1 dollar in 2004, OFWs are now receiving only P 40 pesos to one dollar so that OFW families have to tighten their belts and reduce spending in education, food and utilities.
When the exchange rate was P50 to one dollar, OFW families with $200 were receiving P 10,000 a month for their monthly expenses. Now that the peso has risen to P40 to a dollar, beneficiaries are only getting P 8,000. OFW families have to scrimp on other expenses like education and food with the reduction in their purchasing power per dollar.
The recent announcement of Finance Secretary Cesar Purisima in a forum at the Asian Development Bank headquarters that the government intends to borrow almost a hundred percent of the country’s borrowing requirements from the local market to help the local bond market support the Banko Sentral which has lost over P300-Billion over the past years to shield the Philippine currency and economy from the impact of large inflows of foreign money.
The CCF has advocated for some years now that the government should stop foreign borrowing and instead source funds from the local banks.
“The move to source 100 percent of government borrowings from local sources sends a strong signal that policy makers will adopt whatever measures are necessary to attain a competitive currency†according to finance expert Victor Barrios.
Another sector gravely affected by the rise of the peso are the exporters who have lost their competitiveness in the world market as the reduction in dollar incomes has closed some factories and laid off thousands of workers.