This was the conclusion made by the multi-billion dollar business process and call center industry, services exporters, and families of Overseas Filipino Workers (OFWs), who have joined forces to urge government to take more concrete actions to stop the peso from further strengthening.
In a meeting held this week at the World Trade Center in Pasay City, the concerned groups came to the conclusion that the windfall of interest payment savings that the government got from the peso's appreciation in the first half of this year was a massive transfer of funds from the dollar-earning sectors to the government.
Economic managers of the government have been claiming that for every peso that is gained in the exchange rate against the US dollar, the government saves P20 billion from lower interest payments on dollar denominated loans.
"The strong peso has eroded the margins of the call center and business process outsourcing industry," said Oscar R. Sañez, chief executive officer of the Business Processing Association Philippines.
Threatened are the jobs of 239,000 knowledge workers in call centers and BPOs, he added.
Sañez said the sunrise industry earned for the country about US$3.5 billion last year but they are now made to suffer because all their expenses are made in pesos while their service contracts signed when the peso was still at the P50 to the dollar, is now equivalent to P45 to the dollar.
The impact of the rapid rise in the peso's value on OFWs is worse, according to Victor Fernandez Jr., president of the Philippine Association of Service Exporters.
"A domestic helper that used to send US$200 a month to her family has lost P1,000 in equivalent peso compared to the end of last year" he said.
That is a big amount in the provinces, Fernandez added.
He also said the continued increase in dollar remittances in the wake of the peso's rapid rise is driven by the need for OFWs to make up for the lost value of their dollar earnings this year.
Recruitment agencies have likewise suffered from the situation. They buy airline tickets at the exchange rate when groups of new OFWs get deployed. When they get paid by their principals two or three months later, the value of the dollar has gone down and they have to shoulder the losses.
Philippine Food Processors and Exporters Organization (Philfoodex) president Bobby Amores, on the other hand, said his buyer of mango in Japan has just trimmed down by 30 percent its latest order after he increased his price by 10 percent to recover losses under the new exchange rate.
On the whole, the dollar-earning groups agreed to embark on a campaign to prod the government to bring about a stable and more reasonable exchange rate. When asked what rate can they live with, the OFWs wanted over P50 to the dollar but the rest said they could live within a stable range of P48 to P50 to the dollar.
They suggested that the country's money managers may now build up the government's dollar reserves in the same manner that other East Asian nations have built up their reserves to hundreds of million of dollars and for the national treasurer to start paying in advance its dollar loans. (Abe P. Belena/Philexport News and Features/Sunnex)
