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Saturday, May 27, 2006
OFWs' families lose P8.78-B buying power from strong peso
THE families of overseas Filipino workers (OFWs) lost some P8.78 billion in buying power in the first quarter this year owing to the peso's steep rise against the US dollar, the Trade Union Congress of the Philippines (TUCP) said.
Citing Bangko Sentral ng Pilipinas statistics, TUCP general secretary Ernesto Herrera said the peso averaged 51.88 to a dollar from January to March this year compared to exactly 55 to a dollar in the same period in 2005.
The figures meant that dependents of OFWs lost P3.12 for every dollar, or a total of P7.94 billion, for the same aggregate amount of remittances -- $2.545 billion -- they received in the first quarter, Herrera said.
On top of the P7.94 billion, Herrera said the families of OFWs lost another P842 million in purchasing power as a result of the fewer pesos they got for $270 million in additional remittances sent to them in the first quarter.
Thus, households that subsist on remittances forfeited a total of P8.78 billion in buying power, which they would enjoyed had the peso stayed at the average of 55 to a dollar.
OFWs remitted a total of $2.815 billion from January to March this year -- $270 million or 10.6 percent higher than the $2.545 billion they wired home in the same quarter of 2005.
"In absolute terms, P8.78 billion is a lot of foregone buying power in a single quarter," Herrera said, adding that the money would have been enough to purchase up to 17,560 house and lot units at P500,000 each.
"What is even more lamentable is that while the families of OFWs are getting fewer pesos for every dollar, the peso's strength has not provided them any tangible economic relief whatsoever," Herrera said.
Three global financial institutions earlier projected that the peso would further appreciate to 45 to 48 against the dollar either within the year, or by 2007.
Amsterdam-based ING Group N.V. sees the peso strengthening to 45:$1.
London-based HSBC Holdings plc expects the local currency to hit 47.50:$1.
New York-based Goldman Sachs Group Inc. is counting on the peso rising to 48:$1. (Press release)
For Bisaya stories from Davao. Click here. (May 27, 2006 issue)
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