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A DESPERATE MEASURE
The Philippine Star Desperation calls for desperate measures. This could very well describe the proposed peso stabilization fund that our overseas working countrymen and export-oriented manufacturing firms have recently been pushing for government adoption. In previous months, we had seen the positive effects of a rising peso: the reduced borrowing costs for government and many companies, a tempered rise in consumer prices, and the central bank's monetary policy that is supportive of economic growth. The downside, however, has already a cost that can't be ignored any longer. Overseas Filipino workers, exporters and sectors whose earnings are derived in dollars such as business process outsourcing companies and the tourism industry are hurting because of the peso's sustained rise, a trend that had accelerated this year with the brisk but massive inflows into the stock market. In July, the peso touched a multi-year high of P44.81 against the dollar, up almost 10 percent to the end-2006 level. While the peso's recent weakening has given our exporters and dollar earners some reprieve, the longer term prognosis is something they do not relish. The peso is now at P46.53, down from a seven-year high P44.81, but still way off the P50 level in late 2006. The odds are high that the peso will once again strengthen to – even surpass – the July levels now that Billions in rate losses The spending power of about eight million Filipino families dependent on the dollar remittances of their hard-working kin in other countries has been whittled down by P30 billion during the first half of the year. Simple math will tell us that these families of Filipinos working abroad, our biggest export product and the reason why the country's gross domestic product rose a faster-than-expected 7.5 percent on year, are now receiving a lot less. On the other hand, the Philippine Exporters Confederation estimates that certain industries like food, handicrafts, furniture and garments had incurred P1.5 billion in foreign exchange rate losses during the same period. In fact, PhilExport reports that a total of 75 companies have already closed shop. The BPO sector – a sunrise in the industry that generated $3.5 billion in service exports receipts in 2006 – has also started to complain that margins are being eroded as their dollar-based revenues fall, while costs – such as electricity (a major complaint) – have steadily risen. Doing a OFWs have asked government through Vice President Noli de Castro to establish a preferential foreign exchange rate for legitimate OFWs that would be fixed on a P50:$1 rate instead of the varying daily market price. On the other hand, exporters are clamoring for an exchange rate band – close to what They're also asking government regulators and the stock exchange to create a dollar-denominated bourse that will attract investments without causing foreign exchange distortions. It's on the premise that whenever the stock market rises, the peso will surely follow because of the increased dollar supply from foreign investors. Personally, this proposal here sounds good to me for the simple reason that investors wouldn't have to convert their dollar holdings into peso just to be able to invest in the stock market. One-way subsidy But can we do a I believe exporters and other dollar-earner industries must learn the sophistication of surviving in this global world. And I'm not just referring to adapting to the ups and downs of peso. It is also important to ask if the rising peso is solely to blame for our exporters' woes. Year after year of underinvestment in the manufacturing sector has been partly to blame for our declining competitiveness. So too are the relatively high and continuously rising cost of power at fault. In fact, there are a lot of other reasons why our export industries are not performing as well as they should. Lastly, you should hear central bank chief Say Tetangco's vehement protests. He somewhat provides the closing clincher which goes something like this: If and when the peso weakens in the future, will those who stand to benefit now agree to subsidize the government in turn? Gaining insights about tournament poker play You may know the rudiments of Hold'Em poker but are is not confident about tournament strategy and tactics. If so, join the training sessions being conducted by Philippine Poker Tour (PPT), the leading proponent of non-wager poker skills tournaments. Practice games are regularly being held at THE PLAYER'S DEN, the PPT clubhouse, located at 1786 A. Mabini, Malate, Daily “free-roll” (no tournament fees) competitions are also being conducted to enable poker newcomers and those who wish to continue sharpening their skills to compete and gain seats to the next level of satellite competitions. At stake in the “free-roll” competitions are seat certificates with total value amounting to P100,000. Winners of the “free-roll” are qualified to join for FREE the next level of satellite competitions where Seat Certificates to the Main Event worth P55,000 each are awarded. The Main Event of the 4th PPT Million-Peso Hold'Em Champions competitions, the only locally organized tournament that guarantees the champion a minimum of P1 million as prize, is scheduled to be held on 15th December 2007. For details and schedule of events at THE PLAYER'S DEN, visit www.PhilippinePokerTour.com or call the PPT Secretariat at 812-0153, 524-7254, 0926-6452956, or 0920-9218891. “Pag-usapan Natin” at IBC-TV 13 Watch “Pag-usapan Natin”, a segment in the IBC-TV 13 news program, News Tonite, from Should you wish to share any insights, write me at Link Edge, 25th Floor, 139 Corporate Center,
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