By Atty. MANUEL M. SERRANO
Founder and chairman, Chamber of Real Estate and Builders Associations Inc.
The country’s overseas Filipino workers (OFWs) whose annual remittances have considerably improved our economy should not be allowed to suffer as the result of the continuing peso appreciation. An import levy on non-essentials of such percentage more or less equivalent to the OFWs’ losses would be an ideal balancing solution that requires a mere Executive Order to happen. Local importers, especially of non-essential items, should not be allowed to rise at the expense of OFWs who are more in need of government assistance than any other sector.
Press reports say that OFWs’ annual losses now approximate 17 percent of what used to be an exchange rate of Philippine peso to $1, while local importers of non-essential items are enjoying a bonanza of sort in view of the peso appreciation. In essence, this is not only tantamount to discouraging dollar inflow while encouraging dollar outflow but also advances a situation that amounts to one’s unjust enrichment at the expense of another which is as illegal as it is immoral.
This can easily be corrected through an Executive Order that would require an import levy on non-essentials of say, 10-15 percent of import price that could be placed into a fund pool from which to source a government policy of assuring OFWs and their remittances a temporary exchange rate of say P48 for every $1.
This proposal is not new for it is no different from the coco levy that was imposed during the Marcos regime which was designed as a financial assistance to farmers and the proposed Executive Order that could be adjusted or lifted at anytime when some sort of normalcy shall have been attained.
Indeed, this benefit may not be limited only to OFWs because it may be extended also to exporters who have not effected adjustments in their export sales.
If this proposed import levy is imposed, this could also translate to additional dollar inflow in terms of OFWs remittances because what is actually being cornered now by Philippine banks is probably only 50 percent of what is being remitted annually through informal channels. And most importantly, the BSP need no longer intervene in the Philippine Dealing System in arresting the peso appreciation which has thus far caused some P73 billion in BSP losses, while government continues to enjoy the savings on debt servicing.
The increase in the OFW remittances that this policy will encourage and the concomitant increase in the purchasing power of the OFW beneficiaries will boost consumption spending that in turn would spur increase production of goods and services.