Philippines feels the pinch of dollar's decline
Many here rely on remittances from overseas relatives, and the dollar's slide against the peso has forced some people to cut back, with private education the first to go.
MANILA — The U.S. dollar has always been king down by the docks on Manila Bay, where Philippine seamen congregate to swap stories and look for work.
On the swarm of recruitment booths outside the Luneta Seafarers Center, photocopied fliers advertise jobs that pay in dollars: $2,300 a month for a welder on a natural gas tanker or $3,900 for a second mate on a passenger liner.
But lately, the dollar has lost some of its luster with the highly sought-after crews.
"Almost everyone is asking for more money because they know the foreign exchange is not to their advantage," says James Estrada, a marine engineer who recruits crews for 300 ships operated by Wallem Maritime Services. "You get fewer pesos for your dollar. So we've had to make salaries higher."
The dollar's slide against other currencies is rippling across the globe: It is keeping more American tourists at home, raising prices on imports and creating bargains for foreigners swooping down on U.S. assets. It is also causing financial pain in less obvious places, such as the Philippines, where millions of people have come to rely on the purchasing power of dollars sent home by relatives working abroad.
An estimated 10 million overseas Philippine workers provide money for an even greater multiple of dependents at home. A year ago, one dollar bought 49 Philippine pesos. Today, it brings about 41 pesos, a sharp depreciation that has coincided with rising commodity prices to create an economic crunch in this archipelago of 92 million.
"The biggest losers are overseas workers because the peso value of their remittances to their families has shrunk," says Benjamin Diokno, an economics professor at the University of the Philippines and a policy advisor to the previous Philippine government.
Filipinos working overseas have been a pillar of the Philippines' economy since the 1970s, when some of the country's hardest-working and best-educated people left to take up service jobs in other parts of Asia, in the West and the Persian Gulf states: nurses and domestic helpers, hospital technicians, sailors and nightclub entertainers.
The money they send home each year accounts for more than 12% of the Philippine economy, often sustaining several extended-family members, some of whom don't work. For years, these dollars have paid private school fees for younger siblings and bought small condos for aging parents.
