This paper assesses the impact of the depreciation of the Philippine peso on employment and workers’ incomes, and explores ways to maximize the country’s net benefits form the crisis.  It includes the discovery of ways to support likely gainers form the depreciation, and extend assistance or safety nets to those who will be adversely affected.

Among the so-called winners include major exporters, small and medium enterprises, and the tourism sector.  The losers, on the other hand, are importers, import-dependents sectors, and duty-free shops.  The study notes that the most serious problem in realizing the gains from currency depreciation is the relationship between wages and prices in the short term.  Accordingly, labor will most certainly refuse to witness the erosion of their purchasing power without trying to avert or moderate it.

Business establishments imperiled by the depreciation would. Likewise, demand for “out-of-proportion” wage increases.  In this situation, the study submits that it is best to establish, in the short term, a balance between the demand for competitiveness of the enterprise, and the need to protect workers’ real wages.

The study is not aimed at tackling the long-term issues of economic development, although they are also of fundamental importance in understanding the origins of the crisis.  Nevertheless, the measures proposed in the paper are consistent with long-term policies and programs of government.