The Philippine peso is Asia's best-performing currency this year, appreciating almost 16 percent against the dollar. While this helps the country pay off its debt, it also means difficulties for those Filipinos who rely on remittances from the eight million who work abroad. Many of the migrants are employed in dollar-based economies such as Hong Kong and the Persian Gulf states, and the dollars they send are buying fewer pesos once they reach home. Douglas Bakshian reports from Manila.
Lourd Ramos, a 28-year-old Manila hairdresser and make-up artist, manages the finances for his two younger brothers and their mother. He says this is going to be a tough Christmas.
His father works in Saudi Arabia doing marketing for a chocolate company. Last year his dad was sending home as much as 35,000 pesos a month, about $840. But that dropped to as little as 25,000, or $600 a month, this year. Higher living costs in Saudi Arabia have taken a bite out of how much the father can send home, and once in the Philippines, each dollar brings fewer pesos.
To cover the shortfall, Ramos now pays the family food bills, ranging from $240 to $340 a month, from his own salary. His father's money now only covers tuition, school supplies and allowances for Ramos's two brothers, aged 21 and 23. This all means less spending for Christmas.
"It's a poorer Christmas, but you have to enjoy Christmas," he said. "Lesser gifts and lesser food on the table. But I still keep on trying to cover up every table with food, so you will still feel the joy of Christmas. Or else you will feel bad about what's going on in the economy."
Ramos himself makes about 50,000 pesos a month, or $1,200 dollars, working at an upscale hair salon in Manila that handles affluent clients. This is a high wage for someone of his experience, but he still feels financial pressure.
An estimated eight million Filipinos, about 10 percent of the population, works abroad. The Philippines is fourth worldwide in terms of foreign remittances, after India, Mexico, and China.
In 2006, remittances totaled almost $13 billion, or 11 percent of gross domestic product. This year, the Philippine government expects to take in about 15 billion dollars.
December is the biggest month for currency flows, because overseas workers pour in money for Christmas. But the dollar, which was bringing 49 pesos last January, has only been buying around 41 in recent trading.
Meanwhile, in the Ermita section of Manila, where there are many moneychangers and recruitment centers for overseas workers, a trend has appeared. Some moneychangers say over the last four or five months, Filipinos have been holding onto their dollars, hoping for a better rate in the new year.
The peso is Asia's strongest currency this year against the dollar, appreciating by almost 16 percent. By comparison, the peso has risen only about five percent against the euro and 12 percent against the British pound.