Noli to endorse OFW petition for special forex rate - report

Vice President Manuel "Noli" De Castro Jr. will endorse to President Arroyo a petition by overseas Filipino workers (OFWs) to establish a preferential foreign exchange fund for them.
Online news site Arab News (arabnews.com) reported Tuesday that De Castro agreed to endorse the letter seeking a fixed P50:$1 rate instead of the varying daily market price.
The website of De Castro posted a press release regarding the matter, which said that, "For his part, De Castro explained to the (OFW) group that he would endorse their letter to the President and will monitor the progress of their request."
"De Castro said that the government should reciprocate OFWs sacrifices with more incentives and protection," De Castro's website said.It said the petitioners Center for Migrants Advocacy (CMA) and the V-Team – Advocacy and Community Service sought "a fixed 10% premium above the exchange rate prevailing in the market or a flat rate" of P50 pesos to a dollar to be given to "legitimate OFWs."Arab News quoted De Castro as saying that he would look into the possibility of the group's proposal for a government agreement with financial institutions.
The viability of the proposal depends on the volume of the transactions and the ability of OFWs to organize themselves, he said.De Castro said that as early as last year, he has been pushing for plans to alleviate the plight of OFWs by urging the Bangko Sentral ng Pilipinas to lower bank charges on OFW remittances.Primary signatories in the letter were Riyadh-based Ronnie Abeto and former overseas financial analyst Miguel Bolos. The two said 15,000 OFWs worldwide also signed the petition.The petition was also circulated in the Internet for maximum exposure.Abeto said his group is proposing that the Philippine government put up a stabilization fund to address the peso-dollar exchange rate fluctuation.It added that the government should also enter into a collective "Forward Contract or Currency Options" with financial institutions to peg the peso-dollar exchange rate at 50:1.
However, Bangko Sentral Gov. Amando Tetangco Jr thumbed down the proposal as "costly and impossible to implement.""That proposal is fraught with difficult questions and issues," he said, explaining that such a program would require huge amounts of public funds because the difference between the market-determined foreign exchange rate and the fixed exchange rate would have to be subsidized."Who would bear the cost of that subsidy?" Tetangco asked, adding that if the current exchange rate of P45.7 to the dollar is offered to OFWs at P50:$1, someone will have to shoulder the difference of P4."If you offer such a facility to one sector, why not open it to all the other sectors that also contribute to the economy and are just as affected by the appreciation of the peso," he added.
With OFW remittances expected to reach at least $14 billion this year, such a program would cost over P60 billion annually, assuming a market rate of P45.7 to the dollar and the fixed rate of P50:$1.The amount would be over 85 percent of the total national government budget deficit for 2007 alone.Tetangco also said access to such a program would be administratively impossible to implement.
The OFWs had earlier failed to secure an audience with President Gloria Macapagal Arroyo in Malacanang which prompted the Jeddah-based group to turn to de Castro for help.- GMANews.TV

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