‘Senior citizen’ Phl peso

If you ask foreign exchange traders and money market dealers, they are quite disturbed on what is being perceived as the “weakening” of the Philippine peso
vis-a-vis the mighty $ greenback. At the close of the market in last Friday’s trading, it improved a bit at P58.52 to $1 from the previous day’s average of P58.66. It hit P58.81 to $1 last June 5 trading.

Lately, they likened their worst fears to the Philippine peso becoming a “senior citizen” sooner than expected. Because when one turns 60 years old, this is the age group categorized as “senior citizen.” 

Being a senior citizen is no joking matter. Ask that of anyone 60 years old and above. They enjoy being one.

Before the 19th Congress winded down its second regular sessions last month, the House of Representatives approved on third and final reading the proposed expanding of benefits to senior citizens under our existing laws. Among other things, the present Senior Citizens Act and Persons with Disabilities (PWDs) granted a 20-percent discount and exemption from paying the 12 percent value added tax (VAT) for limited items of consumer products. 

The House-approved measures are House Bill (HB) No. 10312 or the proposed enhancing the discount on purchases of goods and services of senior citizens and PWDs; HB 10313, or the proposed promotion of senior citizens and PWDs by including services in the eGOV super app; and HB 10423, the proposed granting of a universal social pension to senior citizens, amending Republic Act No. 7432, or the Seniors Citizens Act. 

These House bills were shepherded by Albay Rep. Joey Salceda who chairs the House ways and means committee jointly with the House committee on senior citizens with 72-year-old Senior Citizens Party list Rep. Rodolfo Odanes. While waiting for these to become laws of the land, Salceda prevailed upon the Department of Trade and Industry (DTI) and Department of Agriculture to expand the senior citizen and PWD discount on basic goods from P260 to P500 a month.

I wish this to be true. Because up to now I have yet to be given that P260 discount on my weekly grocery bills. At the most, they just deduct P165 as discount. But this is better than the previous flat rate of P65 less of your total grocery bills.

What are the funding sources to these latest social safety nets? Of course, from us taxpayers again. Our lawmakers are so generous with our hard-earned money. Meanwhile, these House-approved bills need to secure Senate concurrence, if not counterpart measures to get them approved into law by President Ferdinand “Bongbong” Marcos Jr. (PBBM).             

But the allusion to our country’s peso as fast turning into a “senior citizen” soon is just a “very catchy phrase” as far as Bangko Sentral ng Pilipinas (BSP) Governor Eli Remolona is concerned. In his address before us at the Tuesday Club breakfast group at the Edsa Shangrila, Remolona turned the table at the detractors of our country’s currency.

“The market has a culture of, I would say, ‘Marites.’ There are narratives that circulate around the market. And sometimes, these narratives are false,” Remolona argued. “Marites” is the street lingo for “Mare, what’s the latest?” or gossips or loose talks coming out of thin air. “And so we intervene basically to express our own view about where the peso should go,” Remolona riposted.

Remolona is a veteran banker and finance expert himself before he joined the government, first as Monetary Board (MB) member. He became BSP Governor in July last year, with a full term of office for six years. He succeeded from erstwhile BSP Gov. Benjamin Diokno who switched places with him as now MB member. 

As BSP Governor, he chairs the seven-man MB, two members of which recently figured in the controversial “ghost employees” scandal. Last week, the two accused MB members resigned one after the other after being called at Malacañang Palace to explain their side. 

As the head of the country’s chief monetary policy-making body, Remolona acted “decisively” to protect the reputational damage to an institution like the BSP. Since MB members are presidential appointees, PBBM needs to name their respective replacements. So there is now jockeying for the two vacancies that have the highest salary grade in all government posts.

Unlike these peso critics, Remolona cited the BSP relies on credible market intelligence. “The real story is about a strong dollar,” Remolona asserted. He traced this to the phenomenon of the US dollar as a “safe haven” for all money currencies whenever there are uncertainties and global “tension” like wars. 

Vis-a-vis the US dollar, the BSP Governor pointed out, the Philippine peso “weakened” by 5.4 percent. According to him, the Philippine peso is within the middle range along with other currencies against the US dollar.

Thus, the 72-year-old chief banker of the land just sneezes at the market prediction for the peso turning “senior citizen” as not so subtle attempts to pressure the BSP to defend the peso. “We don’t intervene everyday. We intervene only when we have to. When it’s under stress, meaning there is a dysfunction in the market. Maybe liquidity disappears. And then we intervene to provide liquidity,” Remolona explained.

“Sometimes the peso goes to the wrong direction and so we intervene,” Remolona added.

In a period of  the “strong” US dollar phenomenon, Remolona agrees that the Philippines benefits from it to a certain extent, especially on the impact of “investment pledges” secured by PBBM. “We’re hopeful they will come, they’re still coming,” he quipped.

DTI Secretary Alfredo Pascual quoted the BSP report about the $7.6 billion in foreign direct investments (FDIs) that flowed in as of February this year. Pascual credited them as the direct results of PBBM’s presidential trips abroad from day one of his administration.

As of last count, PBBM went into 28 trips abroad, the most recent was in Singapore for a security policy speech last week. Turning 67 years old this year, PBBM certainly would not want to see our currency to turn into a “senior citizen peso.”