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The US
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: keeping more American tourists at home, raising
prices on imports and creating bargains for foreigners
swooping down on US 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 P49. Today, it brings about
P41, a sharp depreciation that has coincided with rising
commodity prices to create an economic crunch in this
archipelago of 92 million people.
“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 adviser 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 percent
of the Philippine economy, often sustaining several
extended-family members. For years, these dollars have
paid private school fees for younger siblings and bought
small condos for aging parents.
“We used
to pity people who didn’t have someone in their family
making dollars,” says Estrella Gonzaga, 55, sitting in her
small but comfortable Manila house that is plastered with
family photos, including a high-school graduation picture
of her daughter Hasmine, a nurse who moved to New York
nine years ago.
Over the
years, money sent by their daughter allowed Gonzaga and
her husband, Jose, 62, a retired X-ray technician who
spent five years abroad himself in the 1980s, to build a
nest egg of dollars in their Manila bank account. But in
December, needing an operation for a herniated disk and
with no health insurance to cover the $3,700 cost, Gonzaga
had to ask her daughter for more money. And she
underestimated the gap between the dollar and the peso.
“She sent
me money, but I had to go back and ask for more,” Gonzaga
says. “The dollar just seems to be falling so fast.”
Economists
say the drop so far has merely crimped lifestyles, not
crippled the economy. The dollar’s decline is only part of
a mix of wider economic problems the Philippines faces,
from an ominous decline in salaried jobs to sharply rising
food and gasoline prices. Analysts also note that overseas
workers living in
Europe who are paid in the rising euro are doing better than ever.
The issue is not a strong peso, they point out. It is a
weak dollar.
But many
people here worry that the subtle effects of dollar
weakness today might have a deeper impact in the
Philippines down the road. They point in particular to
families that can no longer count on dollar remittances to
fund private education for children and siblings.
“The
patterns of expenditure show that a big part of the money
sent home by overseas workers is spent on private
education, and this was a significant investment in human
capital,” Diokno says. “Now I’m talking to private school
owners who say their enrollments are off for next year
because families are pulling children out and putting then
into the public system.”
Manila’s
public schools report being swamped with new admissions.
Some of the increase is attributable to the rising
Philippine birthrate. But Jose Gonzaga, the retired X-ray
technician, says he knows several people who can no longer
afford to send their children to private school because of
the dollar’s drop.
Not every
Filipino is obsessed with the exchange rate, says Pedrito
Villaflor, a marine engineer who has shifted careers and
is writing a master’s thesis on why Philippine seamen are
so widely coveted by shipping companies.
“Seamen
are loyal to the US dollar,” he says, contesting the
recruiter’s claims of demands for higher salaries. “Most
of them don’t understand exchange rates. As long as they
are getting paid in US dollars, they are happy.”
Others are
less sanguine.
The
Gonzagas are loath to touch the money in their dollar
account, stocked over the years with irregular
contributions from their daughter. “When we need it badly,
I take a little bit out,” Estrella Gonzaga says. “But the
rate is too low.
“We’re
still hoping that if we leave it there for a while, the
dollar will go back up.” |
