LOREN COMMITTEE TO LOOK INTO PESO VALUE

The Senate Committee on Economic Affairs headed by Sen. Loren Legarda will conduct public hearings on the rising value of the peso and its impact on the life of the Filipino people and the national economy.

Senator Legarda scheduled the public hearings after the Social Weather Stations released a survey showing that at least five million Filipinos have been adversely affected by the increase in value of the peso vis-�-vis the US dollar.

Loren based her action on the approval by the Senate of a resolution which she filed last August calling for an investigation in aid of legislation into the effects of the increase in the peso exchange rate.

In her resolution, Loren said, "while a strong peso benefits the economy, there is also a need to look into the legitimate concerns on the effects of the surging peso to the overall performance of the financial market."

Loren said that exporters and Overseas Filipino Workers who are adversely affected by the peso surge also contribute to the national economy because they bring in dollars which boost the economy. However, with the dollar weakening against the peso, dollar remittances earn less pesos, proportionally lowering the income of exporters and OFW recipients in the Philippines in peso terms.

"The results of the recent SWS survey reinforces the need to study the impact of a surging peso not only on the financial markets but on the lives of about five million families who said they were adversely affected by the strengthening of the peso against the US dollar," Loren stressed.

According to a survey of the SWS, 57percent of Filipino families said the rising value of the peso had not changed their economic condition, while 30 percent said they were better off before the peso started rising. Only about 13 percent said they were better off after the surge of the peso.

The Senate committee on economic affairs has jurisdiction over matters relating to economic planning and programming, the planning of domestic and foreign public indebtedness, general economic development, and coordination, regulation and diversification of industry and investments.

The Philippine peso is now currently on a floating rate regime which determines its value according to developments in the global financial market. On the other hand some countries have placed their currencies on a fixed rate, so that official currency values are not affected by market demand. This supposedly prevents speculation in the currency market. Malaysia and China are among the countries that fix their exchange rates.

Up to 1962, the Philippines has been following a fixed currency rate of P2.00 to $1.00. But in 1962, with the election of President Diosdado Macapagal, father of President Arroyo, the peso was devalued 100 percent from P2.00 to P4.00 to the dollar, and later placed on a floating exchange rate.