DAVAO CITY, 9 July – Filipino expatriates are being eyed again by the government to help shore the slumping economy.
The National Economic Development Authority (NEDA) disclosed this over the weekend amid the continuous weakening of the peso.
Industrialist Raul Concepcion expressed fears that the peso could drop to 57 against the US dollar in aworst case scenario.
The exchange rate is currently over P 52 to the dollar.
Concepcion said the next 30 days would be very crucial to the economy with uncertainties gripping the country.
The unresolved Abu Sayyaf crisis and spates of kidnappings in addition to political troubles inflicted the economy.
Concepcion, an administration ally, told the television program “Tell the People” the next 30 days would determine where the Arroyo administration was headed.
Under a best scenario, the peso could improve to P49 to $1 by the latter part of the year, according NEDA and Socioeconomic Planning Secretary Dante Canlas.
That is if Overseas Filipino Workers (OFWs) would remit the much-needed dollars, he added.
Like Concepcion, Canlas believe the economic recovery will be spurred by the inflow of remittances from OFWs.
The country’s top export, electronic components suffered a major setback in May and dropped by 10 percent as a result of the decline in US economic activity.
OFWs contribute an estimated $10 billion yearly — both those sent home through banks, underground courier services, or brought home personally - through remittances and comprise about one third of the country’s export earnings.
The government remains optimistic the peso would gather strength because of the OFWs.
However, economists say the possibility of the exchange rate to P57 to P 60 to a dollar is possible and Manila would find it difficult to service its debts.
Observers say the expected influx of dollars from abroad would not be possible as thblack market syndicates may try to lure dollar remitters with a higher rate.
A community leader in Jeddah said underground door-to-door remittances once again are becoming attractive by making irresistible three-month cash advance offers.
He said the offer is due to speculations the peso would shrink more before December.
Flor Managase, wife of a Jeddah-based OFW told Arab News the high exchange though means more pesos are still not enough to meet the rising cost of living in the country.
She said the transfer of her family to this city from Bulacan this year is a big help considering the not so expensive farm products available.
Prices of sugar, milk and other basic commodities have all gone up since the increase of petrol prices while fish shot up in the market due to the recent devastation of typhoon Feria.
