Tuesday, December 18, 2007 Cabaero: Have a forex Christmas By Nini B. Cabaero Beyond 30
THE Philippine peso has been strengthening for months now but it is only in recent days that measures to help mitigate the ill effects of the currency appreciation are being seriously pursued.
While hundreds of thousands of families of overseas Filipino workers (OFWs) have been enjoying financial support the past months, the strengthening of the peso against the dollar is making that happy situation short-lived.
Those who have been uplifted into the middle class with the “foreign aid” sent in by loved ones working abroad now face the bleak prospect of returning to the lower economic bracket simply because the same amount of dollars that fed, clothed and educated them are no longer enough.
It has become urgent then for government and policy-makers to step in and look into ways to mitigate the ill effects and correct exploitative foreign currency exchange rates.
Recent announcements have been on two sensitive measures. These are the proposed suspension of the 12 percent value-added tax (VAT) on oil products and the re-computation of the exchange rate imposed on Filipinos leaving for jobs abroad.
The first measure was proposed by Sen. Manuel Roxas II who said the VAT should be suspended on fuel products amid the continued rise in world prices of oil. This would help cushion the effects of spiraling oil prices on ordinary consumers who will be spared the 12 percent tax during these difficult times.
Not only oil prices can be stabilized but also the prices of basic products whose manufacturing costs include fuel charges.
The other measure was something that should have been implemented yesterday or many months ago. It called for the pegging of the peso-dollar exchange rate at prevailing levels when the Overseas Welfare Workers Administration (OWWA) charges departing Filipino workers.
At present, the OWWA requires payment of a $25 membership fee on workers leaving for jobs abroad. The dollar is fixed at the exchange rate of $1:P51 or some P10 more than the prevailing rate of somewhere in the $1:P41 level.
At the peso’s close in last Friday’s trading at 41.21 to a dollar, the $25 membership fee should have cost only P1,030.25, instead of P1,275.
Legislators are at the forefront of the campaign to force OWWA to use prevailing exchange rates and not peg the fee at an artificial currency level. Not only that. Some legislators believe the OWWA should return the excess charges it imposed on workers who had left recently or at the time when the peso started appreciating in value.
“The OWWA should be computing the $25-fee based on prevailing exchange rates, in the same manner that migrant workers and their families here have to cope with market rates when they have to convert their dollars into pesos,” said Rep. Joseph A. Santiago of Catanduanes.
After all, we call our migrant workers as modern-day heroes so the least government can do is to charge them reasonable rates as they leave their homeland to be able to improve the lot of families left behind.
If government wishes for Filipinos to have a merry Christmas, it could prioritize these two measures, among the many that remain pending, to address real-life concerns of OFWs and Filipino families.
