Wednesday, May 7, 2008

The OFW Hedge Funds

Philippines is in perpetual danger of facing an economic slowdown that is probably going to cripple the economy at a much faster pace. Being dependant on the US, Philippines is certainly going to weigh and measure every thing that happens in the US because of the strong repercussions that could felt in the South Asian country. The government in particular has had to answer some tough questions on the issue as the country saw a whooping rise in the prices of essential commodities. With the drama unfolding everyday there was a new launch recently to help the situation get better. The hedge funds are dubbed as the shields to protect the Overseas Filippino Workers (OFWs) from the declining value of the peso against the US dollar. Though the effort seemed earnest, the critics have been quick to rubbish it.

Those against it say that the hedging fund is discriminatory as it comes for $10,000. Most OFWs say that they earn anywhere between $500 to $1000 which gives them to opportunity to avail the hedge funds. The average Filipino working abroad looks at the funds as the means to attract businessmen and remittance firms. With the recession looming large, the strengthening peso has seen a sharp cut in the overseas Filipino workers’ incomes. They have had to remit more money back home to make up for the lost value. They are now hoping for lowering prices of essential commodities, state subsidised college education and scrapping of the 12 per cent value added tax to raise their cost of living.

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