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May 29, 2009

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SAVING THE PHILIPPINE ECONOMY

The growing SRP percentage (self-rated poverty) appears to blur the socio-economic landscape in the Philippines, with the political sector clamoring for charter change to correct the aberration. Some are proposing to adopt a federal form of government. Others propose to allow foreigners to own land in the country, as panacea for the economic problem. Little is known that in the first ten months in year 2008, direct foreign investment registered at US$1.4 billion only, and it would take years before the business where the investment is made will have become operational.

Actually, the volume of direct foreign investment is dwarfed by the annual inflow of OFW remittance at US$16 billion. Ironically, the OFW's had to leave the country to land a job overseas, but he finds it disappointing that his annual remittance has not been used for job creation. At 47 pesos to a dollar, OFW remittance amounts to 750 billion pesos a year.

The problem is that the Metro Manila-based monetary system draws this amount away from the provinces where most OFW’s come from. In the end, not a single job awaits them when they come home.

With the country awash with OFW remittance, all that Congress has to do is craft a law on monetary reform preventing capital flight and capital constriction.

In the alternative, the President could issue an executive order directing the Monetary Board to adopt such reforms.

This should unleash the circulation of capital in the provinces to fund economic activities that will generate jobs. With inward OFW remittance of around 750 billion pesos per annum, jobs will be created for the returning OFW's themselves, given the right monetary policy that should do away with capital constriction and capital flight. In time, the exodus of Filipino manpower will be reversed, with as many as ten million workers coming home to work for the growth of the Philippine economy.

I agree with what you said,most poor country are highly dependent on remittances sent home.

~Kaylee

Do you desire a house but you lack enough cash to acquire it?

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