Tuesday, October 09, 2007

I do not agree with this forecast 30:1 dollar (Part 2)

Ok, 30:1 dollar by 2009. Some say, it could even go up to 25:1 dollar by 2010!!

OK, what are the impacts, and what the government should do. And if you are an OFW what should you do?

1. I said income of our OFWs would be halved in Peso terms from (672 billion pesos a year in 2005, 56:1), to an equivalent of 360 billion pesos by 2009 (30:1), and even less by 2010.

Some quick questions: (a) if you a DH working in KSA earning a thousand Riyal a month, and Riyal, as it is, is pegged to the dollar; would you still be working as DH in KSA? Your income in Peso terms in 2005 was 15K a month, and now down to 7.5K a month. The quick answer I guess, would be NO, if you can find a job somewhere else, preferably in the country, even with just a salary of 5K a month. By then, 5K a month would entirely be possible, if and only if, the economy would continue to improve. How? Will explore this later.

2. The income of manufacturers/exporters in Peso terms would have been halved, by 2009 if the Peso reach 30:1 (even less if it reach 25:1) assuming the same volumes and prices of Philippine products overseas, in dollar terms.

Some quick questions: would they close shop? YES, if they cannot compete, they would. They should survive, by mutating and adapting to current global changes: ASIA as economic epicenter this century. If they watch the trends, for example, the BPO services, where would they be in 2009? Medical tourism, or tourism in general? What are the niche markets that we can be competitive?

For example, Pinoy bloggers like me, is lot more competitive than, say, a blogger in Brussels. For one, cost of living here is cheap, and we are paid the same, at least for paid posting, and for Adsense, provided you target the latter for a US or European visitors. We also have Paypal now, Western Union, and Egold etc.

So? They will survive, if they read the trends carefully and jump. Will there be lay-offs and unemployment? There would be, depending on our entrepreneurs, if they seize the situation, then there might not be, who knows.

3. The national budget, in 2005 we have around a trillion pesos (18 billion dollars, 55:1 dollar) and would have an equivalent of around 36 billion dollars in 2009 (30:1). Double budget in dollar terms.

What are the impacts for these? Quickly I can think that, our politicians can travel more overseas cheaply and lucratively with a much higher budget. Our embassies would have a higher budget, hopely translated into a better service. Capital expenditures that are purchased in dollars would be cheaper, etc. For example, our military can purchase guns and helicopters cheaply. Medical equipments, imported shoes, and perfumes, would be cheaper, hehehe.

So what are my forecasts? (In my dreams!!! hehehe)

1. Focus on our niches: BPOs, Tourism, Semi conductors etc.
2. Ease land documentation, transfer, division, issuance etc. Prices of lands, particularly beach properties in the country will continue to go up. More tourist from Korea, Japan, China, even Russia will invest and pour into the country. Probably, with proper government focus, we will be a center of tourism, at par with Thailand. So, for our OFWs, buy lands now while its cheap.
3. Most of our poorly paid OFWs would be going home.
4. Our skilled OFWs will migrate to high paying countries, or come home.
5. With a flattening world: wire the country now i.e. put broadband or whatever all over the islands.
So, will the Peso reach 25:1?

This is all for now, got busy of something.