07 December 2007

A Different Headache

Here's a recent development that is causing some Filipinos a different kind of headache:

The last time this happened was in May 2000. At this point, the Philippine peso is already Asia's best performing currency.

I think it has something to do with saturation. The country is already getting saturated with US dollars from remittances from overseas Filipino workers (OFWs). How saturated? According to the Central Bank, remittances will easily surpass US$14 billion this year, more than 10 percent of the total last year. Add to this the fact that the US dollar is weakening, and we can expect an even stronger Philippine peso in the months to come.

A CB board member even commented that: "If we had allowed the market to really work, the exchange rate would have been Php35 to a dollar."

Php 35 = 1 US dollar?

Outrageous! That will really mean more anti-headache prescriptions. I've even heard of patients remark that their OFW relatives are planning to sell their newly-acquired lots and newly-built residential houses just to soften the blow of the currency exchange woes.

How about the exporters? I think they're also expecting an unpleasant Christmas ahead of them.

Healthwise, this means fewer financial strength for those sick relatives who are also depending on foreign US dollars sent by working relatives abroad to sustain their daily medical needs.

What's the forecast?
Not too good.

My proposal to solve this is to ask OFWs to stop sending US dollars for at least a month. Why? You know why --- law of supply and demand. That's how it all works. Limit the supply, increase the demand. High demand means a higher value. Of course, this is just me and my weird ideas, which I know will never happen. OFWs not sending money to their relatives on Christmas time? That's too unreal to contemplate. And so, we all just have to sit and wait until the peso strengthens to P35 to one US dollar. I wonder how many more headaches will ensue by then.

1 reactions:

rolly said...

yang headache na dulot ng problema sa pera eh matagal ko nang nadadama. me gamot ba jan?