Press Release
December 11, 2007

LEDAC TAKES UP ROXAS PROPOSALS TO CURB PESO RISE
PRESIDENT INSTRUCTS DOF TO STUDY AND WEIGH IMPLEMENTATION

The Legislative-Executive Development Advisory Council (LEDAC) chaired by President Gloria Macapagal-Arroyo took up this morning the proposal of Senator Mar Roxas to curb the peso's rapid rise by limiting dollar loans to amortize or "roll-over" maturing foreign debt, and instead, borrow in pesos locally and buy dollars from the local currency market to meet the same end.

"We sought urgent action from the executive branch to increase domestic demand for the greenback, and in effect, buffering the peso's steep climb which has been hurting our OFWs, exporters, BPOs and tourism industry, Roxas said.

"I'm thankful that President Arroyo heard us out. She asked the Finance Secretary to study our proposal and consider its implementation," he added.

The Senator noted that under the proposed General Appropriations Act for 2008, the government has programmed to borrow P125.43 billion from foreign sources, P87.67 billion of which would be used to roll-over foreign debt. As per the latest data from the Bureau of Treasury, the government's outstanding foreign debt now stands at P1.7 trillion, or $41 billion using the present exchange rate.

"We have a situation where we are flooded with dollars, yet the government still plans borrow dollars to roll-over our maturing debt. We are just shooting ourselves in the foot by doing this," he said.

Roxas earlier warned that the economy is "in danger of stalling" with OFWs and exporters crying out for months about the peso's continued rise, resulting in the reduction of their incomes by as much as 20%.

"Sa paglakas ng piso nitong taon, halos P10 na ang lugi ng mga OFW at mga exporter sa bawat dolyar na kanilang kinikita. Hindi biro ito, dahil mahigit 70% ng ating ekonomiya ay dulot ng 'personal consumption,' lalo na ng mga pamilya ng mga OFW," he said.

"Ang remittances ngayon ng ating 8 bilyong OFW kada taon ay $12 bilyon, o $1,500 kada OFW. Kung noong nakaraang taon ay P76,500 ang tinatanggap at ginagastos ng mga pamilyang may OFW, ngayon ay P61,500 na lang ito, bawas ng P15,000 na maaaring ipambayad sa matrikula ng isang anak o ng kuryente sa isang buong taon," he stressed.

Roxas also explained that as export revenues are almost $50 billon per year, each of the nearly 5,000 firms in export would earn an average of $10 million per year. If this used to translate to P500 million, then, each exporter has now lost P100 million. The aggregate loss of exporters in peso terms would be equivalent to about 6 million minimum wage workers.

Furthermore, locally-produced goods would be faced with stiffer competition from imported goods that are becoming more competitive in terms of price due to the weaker dollar. He said this could also endanger jobs in local industries.

News Latest News Feed