MANILA – Local recruitment industry leaders have reiterated their demand for the government to allow a fixed exchange rate for the Philippine peso currency with the US dollar to encourage overseas Filipino workers (OFWs) to increase their remittances to their families.
Through Loreto Soriano, one of the industry leaders, they pointed out that allowing the peso to depreciate to 55 per $1 would lure the OFWs into sending more money to their families and help prop up the country’s economy amid the worsening global economic crunch.
Today, the exchange rate fluctuates almost daily between 47 and 48 pesos to $1.
Due to the crisis, Soriano stressed that the OFWs now have the tendency to hold back from sending more remittances in order to help their families cope with the rising prices of basic items, like rice, the staple food of the 90 million Filipinos.
“As in the past financial crisis, most OFWs are likely to cut down on the amount of money they are sending to their loved ones and this will lead to lower remittances which have long been fuelling our economy,” he emphasized.
Estimates are that are less than eight million OFWs are now working abroad, mostly in the Middle East, like Saudi Arabia and the United Arab Emirates, as well as in the US, Europe and neighboring countries like Singapore, Taiwan, Hong Kong and Japan.
For 2008, the Central Bank of the Philippines projected an increase of OFW remittances to a staggering $16 billion.
Despite the ongoing crisis which led to the retrenchment of thousands of OFWs from the jobs, the Philippine Overseas Employment Administration revealed that about 2,000 Filipinos continue to leave for abroad everyday in search of the proverbial “greener pasture.”
According to Soriano, the country may not immediately feel the adverse impact of the crisis but this will eventually lead to a decline in the remittances of Filipino workers abroad.
He noted that during the 1997 Asian financial and economic crunch, the dollar remittances from OFWs only posted a decline after 12 months.
The decline reached 17.5 percent through the formal bank channels and it took five years for the OFWs to get back to the previous remittance level, Soriano noted.
He warned that as the financial turmoil deepens, this could lead to a similar drop in remittances in the next three years until the government undertakes appropriate and timely measures.
And his reckoning, fixing the exchange rate to a maximum of 55 pesos and a minimum of 53 pesos to $1 would encourage overseas Filipinos to continuously send money to their families back home.
This would benefit, in particular, the children of OFWs who are studying in private schools and also enable the exporters to revive their business which has been dampened by the crisis, Soriano argued.
For some years, local recruiters and other sectors have proposed the imposition of a fixed exchange rate to protect the OFWs from the depreciation of the US dollar.
But Soriano pointed out that the government suggested the lowering of bank service charges instead of imposing a fixed exchange rate.
Loading ...
Reader’s Views