SENATOR Miriam Defensor-Santiago asked the Aquino administration to lessen its dependence on foreign loans as this will have negative effect on the remittances of overseas Filipino workers that keep the economy afloat.
Santiago said the government should instead borrow from the Bangko Sentral ng Pilipinas (BSP) to finance its deficit and service its debt.
“The Bangko Sentral ng Pilipinas (BSP) has offered to accommodate the government’s foreign exchange needs. It has $80 billion gross international reserves. I advise the government to take on BSP’s offer. It’s a win-win situation for both,” she said.
If foreign borrowing continues, Santiago said the effect would be an increase in dollar supply in the Philippines which, in turn, makes the peso stronger. This will dilute the value of dollar remittances being used by OFW families to pay for basic commodities and cover educational and health needs.
From January to September 2012, BSP data show remittances grew 5.4 percent, but the peso appreciated by 5.8 percent.
“For OFW workers, if the peso is strong, the value of their remittances goes down so they have to send more dollars to their families who live on a peso budget. Either they draw on their savings from abroad or they borrow. Either way, their response is not sustainable and poses more hardship for them and their families,” Santiago said.
While the government continues to trumpet the economy’s growth, the more important question is whether this growth is inclusive and sustained, the senator said. This means that economic growth must benefit the majority of Filipinos.
Santiago cited statistics showing that as of July 2012, 2.8 million Filipinos remain unemployed and 8.5 million are underemployed or those who are still looking for additional income sources.
Overall hunger, meanwhile, rose by three points to 21 percent or 4.3 million families based on the August 24-27 survey of the Social Weather Stations.
The Philippine economy expanded by 6.1 percent in the first half of 2012. (Virgil Lopez/Sunnex)