Government urged to bring benefits of market gains to small folk

Government urged to bring benefits of market gains to small folk

By Christina M. Mendez
The Philippine Star 01/05/2006
http://www.philstar.com/philstar/NEWS200601050714.htm

A pro-administration senator urged the government yesterday to translate the country’s positive gains in the financial markets into tangible benefits by implementing programs that will uplift the living conditions of the people.

Sen. Manuel Roxas III, chairman of the committee on trade and industry, said Filipinos should feel the gains from the appreciation of the peso against the dollar.

To be able to achieve this, manufacturers – particularly those who import raw materials – should roll back their prices.

"Manufacturers often cite the increasing costs in importing raw materials brought about by the weakening Philippine peso as the reason to justify price increase of basic goods, but they have yet to roll back their prices," he said.

Roxas also cited that the continued drop in interest rates which should be a major reason in reducing the high interests paid by ordinary consumers in their car and appliance loans, and credit cards.

The 91-day benchmark Treasury bill fetched a rate of 4.961 percent or almost 300 basis points lower than 7.870 percent in January 2005. Banks and financial institutions price their loans based on 91-day T-bill rates.

Roxas, who was a former trade secretary, said the strong growth in the financial economy is not matched by the growth in the real economy. "Even if people have more money as indicated in the increasing OFW remittances, he said Filipinos are neither spending it nor investing their savings," Roxas said.

Meanwhile, Sen. Manuel Villar said the government should take advantage of the continued strong demand for OFWs worldwide.

"We are doing the country as well as the OFWs and their families a huge favor by channeling their hard-earned money into profitable ventures," Villar said.

According to Villar, the remittances of overseas Filipino workers (OFWs), as in previous years, will continue to be the saving grace of the Philippine economy this year.

"It is no secret that the $12 billion or so OFW remittances were the main driver of the country’s economy in 2005. This year, OFWs would still play an indispensable role in our economic performance. We really have a lot to thank the OFWs for," said Villar, chairman of the Senate committee on finance.

The Bangko Sentral forecasts that bank remittances from OFWs are likely to reach $10.3 billion by the end 2005, or 20 percent higher than 2004’s level. This excludes transactions coursed outside the banks, thus total remittances are expected to reach $12 billion.