WARNING AIRED ON STRONG PESO
MANILA, DECEMBER 9, 2007 (STAR) By Aurea Calica - As the Arroyo administration revels in the peso’s robust growth, Sen. Manuel Roxas II is calling for a comprehensive government aid program for overseas Filipino workers (OFWs) and domestic industries hurt by the local currency’s upsurge.
Roxas, chairman of the Senate committee on trade and commerce, warned that the situation – if not promptly addressed – would result in the displacement of thousands of workers in the export and production sectors.
“Walk the talk. Where’s the ‘social payback’ due our people?” he asked. “OFWs and exporters have been complaining for months about decreased incomes, and have been demanding action from their government to ease their plight,” Roxas said.
“The government could not afford to be oblivious not just to the immediate hardships of our eight million OFWs and 3.5 million exporters but also to the real threat of lost incomes and jobs in local industries due to this continuing trend,” he said.
The peso closed at 41.74 to the dollar last Friday, or 16 percent stronger than the P49.13 level as of end-2006. The peso is at its strongest since May 2000, when the exchange rate was 41.73 against the dollar.
The local currency is expected to strengthen further in the coming days as OFWs continue to remit earnings ahead of the Christmas season and as the US dollar continues to soften. Administration officials called the strengthening of the peso a sign of a stable local economy.
President Arroyo had said she would not intervene to arrest the peso’s advance.
Roxas, however, pointed out that it’s the government’s duty to regularly assess economic situations and shape its policy accordingly.
On the positive side, a stronger peso means lower interest and principal payments for foreign debts, which comprise roughly half of the country’s total obligations.
It can also mean lower borrowing cost for companies, as well as cheaper import component for locally produced goods. Roxas himself said the strong peso tempered the rise in oil prices.
But he decried the smaller profits of exporters as well as the influx of cheaper imported goods, which threaten to edge local products out of the market and leave countless without jobs.
“I’d like to see a concrete, workable plan on how to deal with possible shutting down of firms, plants and factories, or even massive layoffs, in case of a further strengthening of the peso that would put local goods at a disadvantage to those from abroad,” he said.
Meanwhile, Migrante International assailed the Arroyo administration for its alleged failure to provide security nets for OFWs and their families in the face of the rising peso.
Migrante chairman Connie Bragas-Regalado bewailed that the value of the dollars earned by OFWs continues to decline even as the prices of basic goods and services continue to rise.
“It’s the height of inutility for her to stand idly by while OFWs and their families are in a state of calamity from the blows of the rising peso to their stomachs,” she said.
“This is like an intensifying wage cut for OFWs because the value of their remittances keeps dwindling,” she added.
She also called a “big lie” Mrs. Arroyo’s claim that a strong peso was a sign of a strong economy.
“If that were the case, why aren’t the prices of food and other items going down? The real problem here is the fact that while their earnings are dwindling, the prices of goods and services keep increasing,” she added.
Migrante estimates that OFWs are losing about 20 percent of their earnings monthly. This means that a $200 monthly remittance now only costs P8,000 from P10,000.
“The P2,000 difference is equivalent to one cavan of rice or maybe even the utility bill for an entire month,” Regalado said.
She added that OFWs have already been forced to take loans at high interest rates, work overtime, or find a second job to compensate for their diminishing remittances. – With Sheila Crisostomo
Chief News Editor: Sol Jose Vanzi
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