The year 2007 started with some good news about the country’s economic performance.

Among other economic accomplishments, government reported that:

First, the exchange rate of the peso against the US dollar closed at 49.03 in 2006, the highest in nearly six years.  And the peso continues to show sustainable strength.

Second, the Bangko Sentral reasonably expects foreign exchange remittance of overseas Filipino workers to post a staggering new record of almost US$12 billion for the year 2006 as soon as all the data are in. And government anticipates a 10 percent increase in such remittances this year. By the way, the figure only reflects remittances coursed through the banking system and formal channels.

Third, the Department of Labor and Employment reported that as early as November 2006, the country had already breached the one million mark in terms of documented deployment of Filipino workers abroad. It represents an increase of no less than 12 percent compared with the previous year.

One need not be an economist to understand that the first was the result of the second and third accomplishments.

There is no dispute that a peso getting stronger each day is music to the ears of government not only because it strengthens the country’s gross international reserves.  More importantly, it significantly eases the pressure brought about by the country’s huge foreign debt. It also means lesser peso spent for the import of essential commodities like crude oil.

As of 2004, the Commission on Filipino Overseas estimated at least 8 million Filipinos already staying abroad. By adding the number of Filipinos leaving the country for greener pastures in another land two years after, it is fair to say that there are at least 10 million Filipinos away from home as of the year 2006.

Using conservative and basic mathematical assumptions, if all the 10 million Filipinos abroad had put in the US$12 billion foreign remittance in 2006, it means that each of them remitted only US$1,200 for the year, or US$100 per month. What does this mean then?

First, it could be that Filipinos overseas do not trust the country’s economy enough, or perhaps the way the government manages it, that they would rather have rather leave behind in the country where they stay a substantial part of their foreign earnings. In which case, the receiving country becomes the real beneficiary of the diaspora.

Second, it could also mean that the so-called record breaking foreign remittances in 2006 is just a tip of the iceberg because overseas Filipinos would rather remit their earnings through underground channels than the usual banking system that is perceived to take advantage of the workers’ money to earn more money for the banks.

If these first and second assumptions are not correct, then it is possible that no less than 10 percent of the country’s population are unfortunately toiling abroad with their sweat and blood but chose to just close their eyes as they earn pitiful and meager salaries simply to keep the economy of their respective families afloat.

If from the extrapolation earlier shown that each overseas Filipinos only remit US$100 per month, it may be too much to assume that on the average each of them earns at least US$500.  But even the amount of US$500 is only about P25,000 per month.

Meanwhile, the continuing appreciation of the peso also diminishes the purchasing power of the families of the country’s overseas Filipinos.

The current situation of the Philippine economy therefore is a great contradiction.  Behind the good news is the bad news that the country has a ‘camouflage’ economy, with the harsh realities waiting to unfold in the future.