President Bongbong Marcos can survive the ongoing currency crisis by doing what his father did during the peso’s steep depreciation in the 1970s.
House Ways and Means chairman Joey Sarte Salceda suggested Marcos should focus on dollar-earners and local food producers to survive the imminent plunge of the peso to 65 to 68 against the US dollar in the near term.
“Depreciation in the early 1970s, by 41 percent, even led to an eventual boom in Philippine exported commodities (coconut and sugar) by 1974,” Salceda said in a statement.
With the Bangko Sentral ng Pilipinas virtually helpless in defending the peso, Salceda said the government has no choice but to earn more dollars if the peso continues its slide after falling to an all-time low of P58.49 on September 22.
“We can’t raise rates too aggressively without sacrificing economic recovery because the currency depreciation isn’t primarily our fault. We can’t do much to protect the peso.”
Instead of being hawkish, Salceda said the government should maximize earnings from overseas Filipino workers, business process outsourcing companies, freelancers employed by foreign companies (such as virtual assistants, independent creatives and PR people, and designers), and tourism.
Marcos’ father also initiated the deployment of Filipino workers to the Middle East during the oil boom in 1974 which helped ease the impact of the peso depreciation during the period.
Sacleda said more than ever, Marcos should focus on strengthening the agriculture sector to reduce dependence on imports (24 percent of the country’s food requirements come from abroad).
“Lowering domestic food prices and reducing the need to import will help insulate us from imported food inflation. It’s a security blanket, especially since there are threats to the price of imported rice (due to China droughts),” said Salceda.