GMA VOWS RELIEF FOR OFWs IN THE FACE OF STRONG PESO AGAINST US$
MANILA, JUNE 26, 2007 (STAR) By Des Ferriols – President Arroyo promised relief yesterday to overseas Filipino workers who have been hit hard by the appreciation of the peso against the US dollar.
Mrs. Arroyo, in a meeting with the Filipino community here, said her administration is eyeing the creation of a special pension fund for OFWs similar to the Social Security System (SSS).
A special group under the Overseas Workers Welfare Authority (OWWA) will study the proposal.
She said she has directed the National Economic and Development Authority (NEDA) to come up with a relief program for OFWs affected by the peso’s steady appreciation.
The President arrived in Singapore on Saturday evening and after addressing the World Economic Forum for East Asia, she met with the Filipino community yesterday, along with members of her economic team.
Mrs. Arroyo acknowledged that OFWs are earning less due to the sharp appreciation of the peso.
The peso has appreciated to a seven-year high this year from a low of P56 to the dollar.
Unlike dollar-earning exporters whose losses from peso rise could be offset by factors such as the appreciation of currencies competing against the dollar and the exchange-related decline in import costs, OFWs have no shield against the sharp peso upswing.
“We understand that the strength of the peso means that you have to work more to be able to send more money to support the pesos that your families need to spend,” she said.
“But you also have to understand that it is because the peso is strong that prices have not gone up as they should have considering that oil prices have also gone up, as well as milk, flour and meat in the world market,” she explained.
Government’s favorable fiscal position has ushered in more investments and, combined with bigger remittances from overseas workers, pushed the peso to record highs.
Moreover, the influx of foreign exchange has created liquidity problems for the central bank.
As a result, Mrs. Arroyo said export earnings have greatly suffered. She said the government is already addressing the exporters’ problems.
“I have directed Economic (Planning) Secretary Romulo Neri to study how to provide OFWs the same relief against the appreciating peso,” Mrs. Arroyo said.
She said measures were already in place to lower remittance costs but she indicated that other measures could be considered.
For exporters, the Bangko Sentral ng Pilipinas (BSP) has created a special rediscounting window where exporters could borrow from banks which could then rediscount the loans from the BSP.
Mrs. Arroyo gave no details on how a similar program could work for OFWs but according to Trade Secretary Peter Favila, one possible option was to create a mutual fund that would mobilize OFW dollars.
“If we can mobilize these funds, invest them and generate returns, that could easily offset the effects of peso appreciation,” Favilla said. “But that would take a deep study, we have to calibrate it so that it could be tailor-suited to the diverse nature of workers overseas.”
Mrs. Arroyo said the government was also studying the creation of a pension fund for OFWs, possibly separate from the OWWA Fund which is funded out of OFW contributions.
“We are trying to find out what we have to do to make this possible,” she said.
Mrs. Arroyo said the country’s macroeconomic gains would translate to growth and eventually generate jobs for the country’s unemployed.
“Working abroad should be a career option, not a necessity,” Mrs. Arroyo said.
OFW remittances were estimated to reach $14.7 billion this year despite the decline in the deployment of new workers abroad. Labor officials said the country was deploying fewer but more skilled and highly paid workers.
The President assured investors here that her administration would stamp out corruption and continue its economic reforms.
Meeting with top Singaporean executives, the President also assured them of legislative unity in carrying out the economic reforms set in place by the previous Congress.
“We are making sure to use the gains to invest in vital social and economic need,” she said. “We will not sacrifice long term gains for political expediency.”
Mrs. Arroyo made these pronouncements in a meeting with top Philippine and Singaporean businesses organized by the Philippine-Singapore Business Council.
Chief News Editor: Sol Jose Vanzi
© Copyright, 2007
by PHILIPPINE HEADLINE NEWS ONLINE
All rights reserved
PHILIPPINE HEADLINE NEWS ONLINE [PHNO] WEBSITE