Aligned with our current theme, Pilipinas, Now is our Time, we saw a viral video on Breakout Nations that identified the Philippines as one of the few countries on the rise, and it described Philippines, Turkey and Indonesia as the “future’s big growers for big returns”. It suggests that the time to invest in the country is now, before it breaks out.
Good things are really happening to the Philippines. Our GDP numbers for the first quarter grew 2.5%, and are expected to grow to 4-5% for the full year. In the forex rates, we have seen the peso at P43 to the dollar in January. These days, it has appreciated to the levels of P41.75. While we are happy to see these improvements, we hope that we do not see our Philippine peso over appreciate below the 40s-level, as this will not be good for our country’s business model that is relying on overseas service exports, supplying the world with workers in almost every field. Back home, we are now one of the largest business process outsourcing providers, which show that the demand for service is greater than ever.
Jokingly, even with the RH bill not in place, Filipinos had to seek employment overseas because of the existing over population and the lack of jobs to meet the growing population through the years. But then, I ask: Was this providential? If we did not have this problem, would the Filipinos be the largest source of overseas workers? Would we have the kind of dollar reserves that we have today, which also brings about a surge in our economy through the increase in consumer spending? To prove this, our reserves have grown to record levels at $76 Billion, from only $63 Billion level last year. Would we have the real estate boom that we see today, which is driven by OFWs and Filipinos living abroad? Even the increase in interracial marriage is quite obvious, as many Europeans and Americans prefer to marry Filipinas, as they are seen to been more gentle and caring for their families, which manifests our innate advantage in terms of being caring people.
However, the social costs and implication to the family cannot be equated with monetary considerations as spouses get separated, which leads to an increase in the number of broken families, creating a negative impact on their children. Some would say that at least, families would have a better chance to rise above poverty by providing them with better shelter, education, and eventually, a negosyo. It is good that modern technology now offers a solution to families who are far away from each other. Companies like PLDT and Smart are providing cheaper means for OFWs to communicate with their loved ones in the Philippines. Internet connectivity has also allowed this to happen, and applications like Skype let us see and talk to people overseas for free.
Over all, the Philippines have weathered most of the economic crises in the past, and we can weather this European crisis because our business model is not dependent on the export of durable goods that consumers overseas can defer to buy. The export of Filipino services has become a necessity for many companies abroad that aims to lower their operating costs. Economic crises such as this even pushed more companies to outsource their labor, which made them set their eyes on the Philippines.
But a strong peso is also not good for our country, as I mentioned earlier. Recipients of the remittances will get less, and those paying for amortization on real estate purchases will have to pay more in dollars. What should the government do to prevent this from happening? One way is to lower interest rates. Another way is for the government to keep borrowing in pesos, and convert it to dollars. I am sure they have other ways to maintain a favorable exchange rate that will continue to push our country’s growth further.
We are witnesses to this economic surge. We hope that the success that we are currently enjoying will be sustained for a long time.
Pilipinas, Now is our Time!