strongpeso

Lower proceeds from fixed remittances

BETING LAYGO DOLOR MANILA

Overseas Filipino workers and small exporters are
reeling from an overly strong peso.
So says a paper issued this month by the Global
Filipinos Coalition comprised of major overseas
Filipino organizations and leaders.

“The progressive drop of the peso/US dollar rate
from roughly P55:$1 to the current level will reduce,
on an annualized basis, the net remittances
received from OFWs by about P10.5 billion, or
about one-eighth of their previous take home
receipts,” the coalition said.

In the most basic terms, their families back home
are making do with less. The family of an OFW who
remitted, say, US$1,000 a month would now be
receiving only P48,000 compared with P55,000 five
years ago.

It is not just individual Filipino families which are
hurt by the government’s fiscal policies that
strengthen the local currency.

Exporters are also feeling the crunch as they are
now earning less for the same volume they
exported five to six years ago.

While the big exporters have the strength to wait for
better days, their small and medium-sized
counterparts do not.

“Policymakers reason out that small and medium
entrepreneurs do not have a competitive advantage
vis-à-vis producers in China and even
Bangladesh,” the group said.

They suggest that Philippine producers “need to
scale up their products to higher levels not currently
reached by competing countries.”

The tourism industry will also suffer, as leisure and
business travelers would be drawn more to
destinations where the greenback can get more in
terms of goods and services paid for.

In effect, the losers in having a too strong currency
are an estimated 50 million Filipinos who are
directly or indirectly dependent on the remittances
of the 11 million to 12 million OFWs spread
throughout the world.

The big winners would be the oil companies and
utility firms such as the National Power Corp,
Meralco, PLDT and the cellular companies due to
the “reduction in the peso cost of imported units.”
One measure recommended to alleviate the lost
value is for all OFWs to increase their remittances
to their families by US$20 per month.