International banker-economist Victor Barrios contends in an article titled “A strong peso keeps the country poor, the poor poorer and the rich richer” that a “strong” peso dampens Philippine exports as the competitive position of local producers and exporters is eroded.
“At current exchange rates, the country is not exactly a bargain tourist or retirement destination. The cost of living in Manila – housing, food, clothing and essentials – rival those in cosmopolitan cities like San Francisco,” he writes.
Mr Barrios, also a Global Filipino Nation convenor, recommends that policy makers should recognise the welfare implications of foreign exchange poicy by considering policy initiatives which include changes in the management of currency by the Philippine central bank, Bangko Sentral ng Pilipinas.
He also recommends that the Philippine peso should be depreciated for “more vigorous and sustainable growth cum reduced poverty incidence and multiplied jobs generated” and “substantial tax revenue gains”.
“A prohibitive peso mirrors a weak, not strong, Republic,” he concludes adding that a “strong peso keeps the country poor, the poor poorer and the rich richer.”
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Putting the economic lingo and other technicalities aside, what tangible benefits does an OFW get from a stronger peso? Do we get cheaper price on basic commodities over here? Do we have a cheaper petroleum products and power rates?
Despite the strong peso, property developers who are making huge sales and profits from overseas Filipino migrants do not even consider restructuring the amortization or reducing the interest rates every time the dollar to peso exchange rate dips. This is hurting the sector as they are forced to consistently pay their monthly dues at old levels.
Despite the strong peso, the tuition fees in almost all private schools are going up by at least 10% every year (particularly those run by the so called religious schools and those named after SAINTS). Most OFWs are having children studying in those institutions.
The people who are happy to have a stronger peso are those who make a killing on their big businesses, ie. oil companies, power producers, importers etc.
I challenge all those who are for a stronger peso (particularly the affluent) to go to the public market and see for themselves what life is like for Mr Juan Dela Cruz. Let them live with the average OFW families, so they can experience the difficulties in making both ends meet.
Jun S. Aguilar
President & CEO
FMW Group Holdings Inc.
You are certainly right!
I
OFW