Before the allegations of election fraud and involvement of the First Family in jueteng operations, the peso has been on an appreciating/strengthening trend. For most of 2004, the exchange rate hovered around US$1:PhP56. For the first half of 2005, this was up to around US$1:PhP54-55 on account of rising OFW inflows, increasing export receipts, credit rating upgrades, and improving fiscal situation as a result of the enactment of the e-VAT law and tightened tax administration/collection. However, we cannot ignore that other factors, aside from demand and supply conditions in the foreign exchange market are going to determine the exchange rate. Rightly put by the other posters, non-economic factors such as the political uncertainties are putting pressures on the exchange rate.

The long-term trend may appear to show a depreciating trend but it does not have to stay that way. If we can just reduce our foreign borrowings, increase our exports, attract more foreign direct and portfolio investments, increase our OFW inflows, reduce our dependence on oil imports, and grow our economy faster, the depreciating trend can be reversed. O nangangarap lang ako.