Friday, July 27, 2007
Uncomfortably Strong Philippine Peso
Anyone who's business transactions are in dollars and to the vast majority of us who has a relative working abroad as an OFW who rely heavily on dollar remittances for daily expense must be really feeling the pinch of the peso's spectacular rise due to an improving economy and a weak dollar. As of writing, the peso this week has already breached the 44 peso to a dollar exchange level but is now comfortably back at 45.72 pesos amid the cheers of thousands of exporters, OFW's and their families. While I am happy that my peso is worth more internationally, I can't help but wonder why my pesos is worth considerably less in my own country where it really matters. Prices of basic commodities and utilities are on the rise again. Gasoline prices has gone up in recent weeks, Jeepney fares will go back to being 7.50, brownouts are now occurring to condition the minds of the public that there is a shortage of electricity to justify another one of those darn price increases.
Business owners have no choice but to increase the prices of their products and services which of course will hurt our pockets. Amid all these things, it's still politics as usual for the so called honorable (a word that never fails to illicit giggles from the Filipino people when used in conjunction with our politicians) public servants in congress. It really baffles the mind that prices are now higher compared to the time the peso dollar exchange rate was 54 pesos to a dollar. A 10 peso reduction overtime is extremely significant for a country who greatly relies on oil and petroleum imports and who's international debt is in dollars. Some businessmen who are in the exporting business have warned that they are already in danger of closing due to the pesos continued appreciation. Looking ahead, if the strength of the peso will continue to rise, it must also be accompanied by the drop in prices of basic commodities to even things out. It is ironic that the ones who are helping our country the most by their dollar remittances and are called bagong bayani (new heroes) are the ones suffering the most due to the peso's appreciation.