NEDA Director General and Socio-economic Planning Secretary Felipe Medalla said the last two months of the year will see the inflow of dollars from exports to help stabilize the currency and stave off recession.
"Also, our overseas workers traditionally come home for the holidays and bring in the bulk of their dollar earnings," Medalla said.
The Philippines receives some $6 billion in annual remittances, which are coursed through the financial system. This, plus an estimated $3 billion through the "padala," or the underground system.
The peso hit 51.08 to the dollar at the close of Friday’s trading. Anti-Estrada groups predict the currency to sink even further unless the President steps down from office.
NEDA Deputy Director General Raphael Lotilla said there is no reason for the government to revise its gross domestic product (GDP) target of four percent since the country’s economic fundamentals remained stable, and "the economy performed well in the first half of 2000."
"That (economic performance) is something you don’t just ignore," Lotilla said on the President’s weekly radio/TV program.
He said a recession does not appear likely, although he stressed the need for a quick resolution of the controversies hounding the leadership.
Meanwhile, a member of the united opposition warned of a "runaway" scenario that could result in the peso plunging to as low as 700 to a dollar if the President continues to stay in power.
Former Cebu Gov.Lito Osmeña said the scenario could take place in a matter of 30 days if the leadership crisis is not resolved.
"It’s no joke that the peso could hit 600-700 to a dollar if a runaway takes place," Osmeña said. "Everybody is holding back. People are buying dollars because they think the peso will soon become worthless."
He said the Indonesian and Argentine experience should serve as proof that such a scenario was possible.
Recently, Osmeña said, the Indonesian rupiah was devalued to as much as 14,000 to a dollar while Argentina’s currency fell from 50 to 350 to a dollar.
He noted that similar occurrences happened in Brazil and Mexico, where the runaway was a hundred fold.
Osmeña expressed concern that even "good people" may become desperate and resort to irregularities to save their fortunes. "My fear is that some people may lose hope and even start printing money themselves."
The former governor said the country cannot keep on depending solely on remittances from overseas contract workers.
He reiterated his call for the immediate resignation of Mr. Estrada to arrest an impending collapse of the economy, saying the man still has a chance for a graceful exit.
"It is no longer a matter of whether he is proven guilty or not. He should get out of Malacañang now," Osmeña said. – With Liberty Dones