It took time before tens of thousands of Filipino overseas workers and immigrants have experienced the severe impacts of the weakening dollar, wherein the peso exchange rate dipped to the 42-level thus appreciating the purchasing power of the peso in a couple of weeks.
Bankers and financial analysts have claimed that the sagging dollar exchange rate was attributed in part to the inflow of huge volume of dollar remittances from the OFWs worldwide in time for the Christmas holidays. In Southern Caifornia alone, where the big concentration of Filipino-Americans are, remittance centers like the PNB, RCBC, BPI and the Western Union are in a mad scramble to accommodate the huge volume of remittances intended for the Philippines.
But the administration is reaping much of the credit for posting a never expected GDP growth in many years since President Arroyo took the rein of power from former president Erap Estrada. For how long this will last, nobody knows for sure except that remittances continue to flood the local currency market thereby boosting the financial system in general.
But economists have criticized the government for taking the credit. Afterall, there’s nothing we can do about it because Filipinos abroad will have no option but to send money back home this Christmas", says a Fil-Am immigrant who frequents the Western Union in Carson, California.
However, the only to bring back the acceptable value of the greenback to its former strength is to reduce the flow of dollars into the Philippine economy. This suggestion has been going on in the financial market for quite a while as a means to convincing remitters to do the same. They believed that once the dollar flow is controlled, supply of the currency is constricted and the demand for dollars will surely go up. But unloading dollars into the financial system will only come into effect by dictating the exchange rate of the peso against the greenback. Comparatively, the dollar value has become weaker against the Canadian dollar and the euro. In fact, a Canadian dollar now is worth about 44 pesos in the exchange market while the euro is more than 50 cents stronger than the U.S. dollar.
But some economists are optimistic that the peso will start to shed off comes early next year when the holidays are over. By that time, the strength of the dollar will again surge back.
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