Jinggoy urges banks to copy DBP's hedging facility

Senate President Pro Tempore Jinggoy Estrada on Thursday called on banks to offer a special hedging facility similar to the initiative of the Development Bank of the Philippines in order to help overseas Filipino workers cope with the shrinking of the peso equivalent of the money they send to their relatives.

Estrada, who chairs the Senate labor committee, lauded the efforts of DBP chairman Patricia Sto. Tomas, who used to be a secretary of labor and employment, in giving an option to OFWs whose remittances were effectively reduced by 20 percent as a consequence of the strengthening of the peso against the US dollar.

“One of my committee's efforts is aimed at helping OFWs cushion the fall of the US dollar in its peso equivalent, and its adverse effects on the millions of Filipino families depending on our OFWs' remittances," the senator said.

The government-owned DBP launched a special hedging facility last weekend in Hong Kong and in Dubai. Land Bank of the Philippines, also a state-run financial institution, is offering a similar high-yield deposit instrument.

Under the hedging program, OFWs will get the peso equivalent of their foreign currency earnings set at the signing of their contract, making the peso equivalent of their dollar earnings fixed for a certain period of time. The US dollar remains the benchmark of the OFW earnings.

"Our overseas Filipino workers who contribute billions of dollars yearly into our economy deserve all the help and support from our government," Estrada said.

He noted that from P56 to a dollar in September 2005, the peso now averages at 42:$1. This translates to the usual $400 remittance which then amounted to more than P22,000 before now valued to only less than P17,000.

"Our government must come up with innovative measures like this hedging facility to serve as protection to remittances against adverse economic occurrences - as both an immediate response to their current problem, and, as an institutionalized strategic response to concerns like this. We should not just leave our 'modern-day heroes' at the mercy of market forces," the senator said. - GMANews.TV

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