Pinoy in Singapore

It seems I was on to something when I blogged about my problem with the strengthening peso last month. 

According to this article in the Inquirer: The Philippines may now be afflicted with the Dutch Disease.  

What is the Dutch disease, you ask? 

Here’s a definition from www.investopedia.com:

An economic condition that, in its broadest sense, refers to negative consequences arising from large increases to a country’s income. Dutch disease is primarily associated with a natural resource discovery, but it can result from any large increase in foreign currency, including foreign direct investment, foreign aid or a substantial increase in natural resource prices.
This condition arises when foreign currency inflows cause an increase in the affected country’s currency. This has two main effects for the country with Dutch disease:
1. A decrease in the price competitiveness, and thus the exports, of its manufactured goods
2. An increase in imports
In the long run, both these factors can contribute to manufacturing jobs being moved to lower-cost countries. The end result is that non-resource industries are hurt by the increase in wealth generated by the resource-based industries.

One of the most obvious symptoms of the Dutch disease is the continuing strengthening of the Philippine Peso even if the local economy is barely growing.   This I definitely can feel as I keep track of the Peso Exchange rate regularly.

According to Lito Soriano, who issued the warning on this phenomenon, the bloated dollar supply, not earned with private and government investments, would tend to lure decision makers to squander public funds and go into foreign borrowing sprees, confident the country has enough reserves to pay for the foreign loans.

This is why I think it’s important that the next President should recognize what is happening and address the issue before it hurts our economy even more.  I tend to think most politicians – incumbents and wannabe’s are complacent that OFW remittances will keep our country afloat. 

I think instead of encouraging Filipinos to work abroad, they should concentrate on improving job creation and employment in the Philippines.  We all know from the news, and even movies that OFW life is not healthy for the family when one parent has to work abroad.  It entails problems like children growing up in single parent environments, loneliness and infidelity among others.  I would think family moral values are also at risk.

The next President should effect changes so that working abroad would be reduced to a choice and not a necessity.  

He might also want to reinitiate the Buy Filipino campaign to help local industries.

Addendum:

Here’s a link to What the Presidential Candidates have planned for OFW’s.  Incidentally, and not on purpose (as I wrote this post before finding this link), Noynoy’s vision of “working abroad will be a choice rather than a necessity” is exactly the same as my vision for the Philippines.   Of the leading candidates, Manny Villar also has a similar vision.  Gibo Teodoro has no specific platform addressing the labor export.