Forex at P55:$1 to help RP through crisis - economist

MANILA, Philippines - An economist said Friday that pegging the peso at P55
to a US dollar could encourage overseas Filipino workers' families to spend,
and in the long run help the country sail through troubled global economy.

Benjamin Diokno, an economist and former Budget secretary, told a labor
forum in Makati City that by fixing the dollar exchange rate, Filipinos
holding a powerful dollar are likely to spend more than they used to when
the green buck was weak.

Diokno also said that investors won't expand their businesses if consumers
keep their hard-earned cash rather than spend or splurge.

"OFWs and their relatives are the biggest consumers with the most purchasing
power," Diokno said.

He also said that strong dollar could encourage growth of the export
industry.

However, he said, a weak peso means the cost of importing petroleum products
is high, resulting in increases in the prices of other commodities and
services.

Recruitment leader Lito Soriano, president of LBS-E Recruitment Solutions
Corp., agreed with Diokno, saying that the current drop in the prices of oil
would have minimal effect to the country should the exchange rate become
fixed at $1: P55.

Echoing Diokno's statement, Soriano said a fixed exchange rate not only
enables OFWs to maintain consumption and investment levels and allow their
children to continue with their education, but also revive the export
industry.

Diokno has proposed a fixed dollar rate at least for two years or until the
US recovers from economic "depression." - Mark Joseph Ubalde, GMANews.TV

For comments and suggestions please contact or email Lito:
[email protected], [email protected]