MALAYA EDITORIAL: WHY BLAME FPJ?
MANILA, NOVEMBER 28, 2003 (MALAYA) WHAT Fernando Poe Jr. has got to do with a weakening peso beats us. He is not a dollar speculator. He is not the finance secretary or the central bank governor. He is definitely not the president, although many hope he will be one next June.
His announcement on Wednesday that he is running for the presidency might have tipped the peso into plunging below the all-time low posted during the time of his friend, Joseph Estrada. But the country's chronic balance of payments deficits has been there for a long, long time. And when the country's dollar earnings are not even enough to pay for maturing obligations, could one reasonably expect the currency to appreciate?
Anyway, now that we are talking about foreign exchange rates and Poe's candidacy, perhaps it's about time we took the contrarian view.
Imagine this scenario: Poe, in keeping with his pledge that he would champion the interest of all Filipinos and not only the few, takes responsibility for the peso's drop and announces that, if elected president, he would further drive down the peso's value.
Utterly irresponsible? Who says so? Gloria Arroyo, were she still teaching economics and not pandering to vested interests, would know what we are talking about.
An over-valued peso robs a significant proportion of our people, the dollar earners, of additional buying power. For whose benefit? For that less than 10 percent of the population who corner 90 percent of national income and spend their money on imported items, mostly luxury goods.
An over-valued peso also benefits importers and penalizes exporters, the biggest structural flaw responsible for making the Philippines the basket case in a region of vibrant economies.
Certainly a devaluation is more sensible than Gloria's recent decision to raise tariffs on selected items. Devaluation offers uniform protection. There is no administrative cost incurred. But if benefits are generalized, from whom will Gloria exact campaign contributions?
No need to answer that one.
Reported by: Sol Jose Vanzi
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