Make OFWs' Christmas merry, cushion impact of strong peso -- Angara

Senator Edgardo Angara today urged the government to implement a two-tiered exchange rate, with a lower preferential rate for Overseas Filipino Workers (OFWs) earning in US dollars[i].

This comes in light of an even stronger peso brought about by the influx of remittances from OFWs sent in time for the Christmas season.

According to Senator Angara, "the strong peso has been decreasing the real value of OFW income while its nominal value remains the same."

The peso yesterday finished at 41.85 to the dollar, its strongest close in seven and a half years.

"This holiday season, we should let the Filipinos feel the fruits of their hard work that contributed to our stronger economy," said Senator Angara.

"But according to a recent SWS survey, only 13% of the Filipinos are happy with the strong peso, while 30% claim they are adversely affected by it," he pointed out.

"Those 30%, perhaps, are composed of the Filipino families with fathers, mothers, sisters, and other family members working abroad. They may be separated from their families this Christmas, and should not suffer any more than that," Senator Angara said.

"It is high time we show a gesture of concern to our OFWs, whose remittances power our economy, and amount to more than double our Official Development Aids (ODAs) from other countries," Senator Angara said.

"Perhaps, as a temporary mitigating measure, we can apply a two-tiered exchange rate, with an additional peso or so rate of exchange for OFWs earning in dollars," suggested Senator Angara.

"But of course this should be applied without grossly distorting our exchange rate system," said Senator Angara.

Senator Angara, Chair of the Senate Committee on Banks and Financial Institutions, said that "We must look at the social implications of a strong peso, such as its impact on the families of OFWs, and at the same time take into account its impact on our economy."

The senator also suggested placing the remittance firms in the country under the supervision of the Central Bank, to regulate and lower the cost of remittances.

"The cost of transmitting remittances in the Philippines is relatively high, compared to other countries like India and those in Latin America ," said Senator Angara.

Sending $100 through Moneygram and Western Union to the Philippines from the US exacts above 14 percent in fees, while the average remittance fee of remittance firms ranges at 10% of the remittance.