The Philippine peso has become the second strongest currency in Southeast Asia this year, thanks in part to wages sent home by the more than eight million overseas Filipino workers. But those workers are suffering because the dollars and other currencies they earn are worth less, and that means fewer pesos to help their families. Douglas Bakshian reports from Manila.
The U.S. dollar has dropped about 18 percent in less than two years against the Philippine peso. In September of 2005 one dollar got 56 pesos, but now it buys about 46.
That is a big blow to overseas Philippine workers, many of whom take jobs as domestic helpers. Vicky Cabantac, 53, has held such a job in Hong Kong for 14 years. She makes the equivalent of about $435 a month.
In peso terms, she now earns 20,000 pesos, down from about 24,000 two years ago. She used to send 15,000 pesos a month home, but the weaker dollar and higher living costs in Hong Kong have cut that to 7,000. Cabantac helps support three nephews, while also financially aiding her three adult children, and things are getting tough.
"I am outraged because the value of our salary is not enough anymore to sustain [our lives]," she said. "The reason why we come here is to be able to earn something to improve the economic conditions of our families. But the problem is, under this present condition … I am suffocated with all these financial difficulties."
Cabantac left the Philippines 14 years ago. She was a teacher, and at the time a teacher's salary was one-third of what she could make as a maid in Hong Kong. She sacrificed her family life to make a decent living for her loved ones, but now that living is shrinking.
"The aspiration that we had before we came here, was to improve our economic condition, but this is not happening. Instead we are suffering financially, we have to incur loans … I am really helpless, hopeless sometimes," she said.
The peso is not the only Asian currency that has risen in value. Robust economic growth, increasing exports and rising foreign investment in the region have pushed up most currencies at the same time that the U.S. economy is slowing.
The Thai baht is up more than 8 percent this year against the dollar, the Malaysian ringgit has risen 3 percent and the Indian rupee is up 9 percent. This means that not only do overseas workers from these countries send home less money, the countries' exports are more expensive on the world market.
The Philippines relies heavily on money sent from overseas workers - which last year totaled almost $13 billion, or 11 percent of gross domestic product. Those remittances contribute to the strength of the peso - workers buy more pesos with dollars earned overseas, sending the price of the peso higher.
But the strong peso hurts the very people who help prop it up. Cynthia Telles heads the Mission for Migrant Workers Hong Kong, where more than 100,000 Filipinos work, most as maids.
"People are being punished twice," she said. "First that you are forced into leaving your family behind. Second is that while you work so hard, the amount of money that you get seems to be getting smaller and smaller, while you work harder and harder overseas."
The government acknowledges that overseas workers suffer from the strong peso. But Finance Secretary Margarito Teves says that overall, the strong currency helps the economy.
"The government still has a large stock of debt. For every peso of appreciation the government saves about 4.5 to 5 billion pesos ($100 million) in interest payments. …. I would say that a strong peso would generally have a net favorable effect on the Philippines because by and large the stack of debt has really a tremendous effect on the Philippines' situation."
No immediate relief from the strong peso appears in sight for the overseas workers.
Experts at Banco De Oro in Manila say they expect the peso to still be around 46 at the end of the year. Foreign remittances are expected to total about $14 billion this year, up more than $1 billion from 2006.