Economist-solon explains how the weak peso actually helped PH economy

Nov 11, 2022 09:34 AM

Don't look now, but the peso depreciation these past few months actually had a positive impact on the Philippine economy.

(Mari Gimenez/ Unsplash)

The House of Representatives' resident economist, Albay 2nd district Rep. Joey Salceda, made this argument during a media briefing Thursday, Nov. 10 as the national government sat on cloud nine over the economy's 7.6-percent expansion in terms of gross domestic product or GDP in the third quarter of 2022.

During briefing, a reporter asked Salceda if he was still holding on to his projection that the Philippine would reach P65 to P68 to the United States (US) dollar later this year.

"Depende po yan sa gagawin ng US Fed...Kung hindi hahabulin ng BSP (Bangko Sentral ng Pilipinas), makakapunta pa rin tayo sa P65. Di ko sinasabi na yearend yun eh. Pero sa tingin ko, given yung behavior ng US Fed...(It depends on the actions of the US Federal Government...if the BSP won't do anything, we will still reach P65. I'm not saying that this is by yearend. But I think, given the behavior of the US Fed...)," he said, before stumbling upon his main point.

"Pero nakita mo na rin dito za GDP na lumabas sa third quarter, kitang-kita niyo na dahil po sa pag-angat pag-angat po ng BPO (business process outsourcing) ng OFW (overseas Filipino workers), eh mukhang naging positibo po sa ekonomiya yung paghina ng piso (But you've seen the -GDP for the third quarter, you've clearly seen that due to the boom in the BPO industry and in OFW remittances, it seemed that the weakening of the peso had a positive impact on the economy)," the Bicolano said.

According to Salceda, OFW remittance figures jumped in August, or near the end of third quarter.

"Data from the Bangko Sentral ng Pilipinas (BSP) showed cash remittances sent through banks stood at $2.72 billion in August, higher than the $2.60 billion a year earlier. The growth in remittances was the fastest since 4.4 percent in June," he said.

Salceda had earlier said that a strong dollar in companion to the peso was good for families with OFWs since the remittances would translate to more pesos.

"Likewise, 1.5 million freelancers with foreign employers are not being accounted for in full in the national income accounts," Salceda noted. He refers ro these types of freelancers as the "micro-BPO sector".