State of RP Economy a Picture of Mixed Images

In the Manila Times, Godofredo Roperos has mixed feelings of satisfaction and apprehension for 2007. Satisfied with surprising economic growth but apprehensive over sharp rise of peso against dollar.

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Indeed, the unusual rise in the value of the peso against the US dollar has generated undue implication not only for the OFW remittances but also for the exporters, further producing mixed images of the nation’s economy in 2007. The increase in the dollar value should improve the overall economic prospects of the country over the coming months. But instead it produced problems for OFW beneficiaries in the rural areas.

Many OFW families have contracted indebtedness through the purchase of residential lots, the construction of houses and the buying on installment of household appliances. When the peso started appreciating, the OFWs fixed remittances to their families with budgetary estimates anchored on the earlier peso-dollar exchange rate, begun to play havoc on their budget. While the remittance remained the same, peso amount diminished.

The same problem emerged in the export sector. “Exports grew by only 4.9 percent to $37.2 billion in the first three quarters from a year ago, prompting economic officials to admit that the official export growth target of 11 percent for the year was no longer attainable.” The official foreign exchange projection for the year was conservatively estimated to settle at an average of P47-P49 to a dollar, but this did not materialize."