The Philippine peso has been appreciating significantly since 2006 stepped in. Yesterday, it closed at P52.43 to one US dollar. During the last day of trading in December, it stood at P53.07 to one US dollar.
There are 8 million Filipinos working overseas to earn money to send to their families and relatives here. The timing of the peso appreciation corresponds to the time when most of the overseas workers send money (much money I suspect) as Christmas gifts to their families.
Yesterday, Labor Secretary Patricia Sto. Tomas was quoted saying that the total number of overseas employment contracts processed for OFWs reached 981,337 from January 1 to December 31, 2005.
Hypothetically, if the already existing 8 million overseas workers sent an average of US $1,000 this Christmas, that would mean US $8 billion dollars in remittances, right? The IHT comments that this amount is larger than the value of the top five Philippine export products and the combined amount of foreign aid and foreign direct investment in 2004. Wow.
Our Central Bank predicts that total remittances for 2006 will reach US $ 11 billion dollars. If we consider those overseas workers who got work abroad the illegal way, I think the remittances could reach more than US $ 12 billion dollars.
More dollars coming in means a stronger peso for us. But if this is the only thing that keeps our economy going, is that a good thing too?