THE peso will likely soar to fresh multiyear highs against the US dollar once the Federal Reserve—the American central bank—slashes its key rate by either one-fourth or one-half a percentage point this Wednesday, the Trade Union Congress of the Philippines (TUCP) said.

The TUCP’s forecast was contained in a media advisory to overseas Filipino workers (OFWs) and their families, who have been closely watching movements in the peso-dollar exchange rate.

The families in the Philippines of migrant workers have had to cope with significantly reduced purchasing power due to the peso’s steady rise against the US currency.

The peso has gained 21 percent against the dollar since 2004, when the local currency averaged 56 to a greenback, implying that households relying on remittances have since lost as much buying power.

The TUCP has been urging OFWs to dump their dollars and hoard their savings in pesos, warning that the greenback will likely fall to as low as P40 by year-end, should US interest rates drop some more.

The Federal Open Market Committee (FOMC) will meet on October 30 and 31 to decide what to do with its key rate. Wall Street analysts widely expect the FOMC to cut its key rate by at least one-fourth a percentage point, from 4.75 percent to 4.50 percent. But some analysts see the panel boldly cutting its rate by one-half a percentage point, to 4.25 percent.

The FOMC last cut its benchmark rate by one-half a percentage point, from 5.25 percent to 4.75 percent on Septermber 18, in a bid to boost liquidity amid a worsening credit crunch that threatens to plunge the US economy into a recession.

The rate cut then triggered a selloff in the US currency that saw the peso swiftly climbing to almost 44 to a dollar, from 47. The peso closed at 44.06 to a dollar on Friday.

Lower US interest rates tend to drive investors to sell their dollars and dollar-denominated instruments in search of higher yields.

Meanwhile, TUCP spokesman Alex Aguilar said the labor group is “solidly behind” Sen. Loren Legarda’s push for lower money-transfer charges.

Legarda has been batting for reduced remittance fees, calling “excessive” the estimated $1.72 billion that OFWs spend every year on money- transfer charges.

Aguilar urged the state-owned Land Bank of the Philippines (LBP) and the Development Bank of the Philippines (DBP) to do their share in driving down remittance charges by competing fiercely with private banks.

“Both the LBP and the DBP should offer cheaper transfer charges, and endeavor to capture a bigger slice of the remittance market. We find it highly anomalous that, right now, four local private banks control about half of the annual inflow of remittances,” Aguilar said.

The Bank of the Philippine Islands, Metropolitan Bank and Trust Co., Banco de Oro-EPCI Inc. and Philippine National Bank each corner about $1 billion worth remittance inflows annually.

OFWs sent home through banks a record $9.3 billion in the eight months to August, up 15.3 percent from the amount they remitted in the same period last year.

THE president of the French chamber of commerce in the Philippines said businessmen from the European country are now starting to see Cebu not just as a tourism destination, but as a place or investment.

AGGRESSIVELY positioning itself to contribute to the government’s Biofuels Act of 2006, Eastern Petroleum Corp. (EPC) is set to sign a joint-venture agreement with Guanxi Estate Group for its first phase of project development before the end of the month.

AN independent United Nations (UN) human-rights expert warned poor and developing countries, including the Philippines, that converting crops such as maize, wheat and sugar into biofuels would drive up the prices of food, land and water. 

MORE than 4 million foreigners, mostly tourists, have entered the country during the first nine months of the year, up 6 percent from those who arrived in the same period last year, the Bureau of Immigration said.

THE peso will likely soar to fresh multiyear highs against the US dollar once the Federal Reserve—the American central bank—slashes its key rate by either one-fourth or one-half a percentage point this Wednesday, the Trade Union Congress of the Philippines (TUCP) said.

THE National Competitiveness Council (NCC) is conducting its own study to determine if the Philippine economy could generate significant benefits from possible reduction in power costs for industries despite revenue loss.

BOCAUE, Bulacan—After palay prices reached a new high, hitting P17 a kilo early inSeptember, it started to drop after the first week of September as the harvest season started and hit P11 a kilo some 10 days ago.