The Losing Power of the Pinoy Peso-- Again!

[uls]

i'm not really observing the present time bec. as you can see Mcdo is investing a lot of money on burger joints that's worth more than 20M to build and that's excluding the investment on the lot that they are build upon. hindi naman siguro nila mababawi ito in 3-5 years.

businesses make bets

nothing's for sure

[jpdm]

The government should stop intervening in the Philippine Dealing System and let the peso seek its own value...

[SIZE=2]Manila Times[/SIZE]
[SIZE=2]December 5, 2008[/SIZE]
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[SIZE=2]Forex Rate at 55 pesos per Dollar Sought[/SIZE]
[SIZE=2]By Ben Arnord O. De Vera[/SIZE]
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[SIZE=2][SIZE=4]The peso should be allowed to depreciate to about P55 to the dollar to boost local consumer spending and to improve the country’s export competitiveness,[/SIZE] an economist said at an exporters’ forum on Thursday.
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[SIZE=2]According to economist and former Budget Secretary Benjamin Diokno, a foreign exchange (forex) rate of around P55 a dollar would create a fiscal stimulus that would pump-prime the Philippine economy amid an ongoing economic downturn.[/SIZE]
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[SIZE=2]Now an economics professor at the University of the Philippines in Quezon City, Diokno explained that the depreciation of the peso would encourage more overseas Filipino workers to send more money back home. With a bigger value for their money here, he said, recipients of the remittances would get to spend more. The Philippine economy is still mainly driven by consumption, Diokno added.[/SIZE]
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[SIZE=2]“Then, when the local business sector sees that consumers are willing to spend, they would be more confident to invest in and drive our economy,” he told reporters at the sidelines of the forum.[/SIZE]
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[SIZE=2]Diokno said that the Bangko Sentral ng Pilipinas should refrain from defending the peso from further depreciation. “We should never allow the exchange rate to reach P40 to a dollar.”[/SIZE]


[SIZE=2]He suggested that the central bank leave the foreign exchange on its own, or to fix the exchange rate at P55 per dollar. [/SIZE] [SIZE=2]Diokno said that such rate can be maintained just momentarily until the global economy stabilizes.[/SIZE]
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[SIZE=2]He added that the government’s focus on infrastructure spending would not get moving the effort to shield the economy from the crisis.[/SIZE]
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[SIZE=2]“Most infrastructure projects take a lot of time before they are finished and utilized,” Diokno said. “We need to pump-prime the economy now.”[/SIZE]
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[SIZE=2]Added businessman Aurelio Angeles, also a speaker at the forum, “Let the peso seek its own level, at P55 or beyond to a dollar. Such would benefit exporters as we could lessen the prices of our exports to foreign markets.” [/SIZE]
[SIZE=2]He said the strong peso makes Philippine export products more expensive, hence less competitive in terms of pricing, in global trade wherein the dollar is still the main currency used for transactions.[/SIZE]

[uls]

wow...

kaw ba yan jpdm?

diba you are the ultimate advocate of govt intervention?

[tidus1203]

By the way just today the government said that inflation dropped to 9.8% or something near that figure. And they were happy about it. Ano kaya nakain nila? 9.8% is still so high!

[uls]

kaya nga e

i guess they are happy coz it's now single digit

[jpdm]

wow...

kaw ba yan jpdm?

diba you are the ultimate advocate of govt intervention?

I am. Im definitely an advocate of government intervention.

The problem is BSP is sacrificing our GIR just to defend the peso..

This time no.

Let it slide to 55 pesos.

And I agree with Prof Diokno regarding his justifications.

I love to see the peso to go down to 55 pesos so that imports will become expensive (less trade deficits, more local procurement) and our exports will become more competitive.

I would like to see the income of OFWs to increase also.

Although will increase our debt load which is denominated in US dollars, Euro and yen

[uls]

The problem is BSP is sacrificing our GIR just to defend the peso..

That's what Tidus has been explaining to you in this thread

the BSP doesnt have an infinite supply of dollars

But if the peso depreciates too much, lalaki ang external debt ng Pinas

Yan naman ang ayaw mangyari ng govt

[tidus1203]

And moreover inflation. Pahirap nanaman yan sa mahihirap. While I respect the OFW's and their sacrifices, ultimately people who are living here should be the outmost beneficiary of any government policy. Weighing everyhting, I think a stronger peso is in fact more beneficial for the majority of Filipinos.

[jpdm]

That's what Tidus has been explaining to you in this thread

the BSP doesnt have an infinite supply of dollars

But if the peso depreciates too much, lalaki ang external debt ng Pinas

Yan naman ang ayaw mangyari ng govt

ha???

anyway, Prof Diokno is correct.

2009 is a bloody year according to many economists. An international think tank just recently pegged the growth rate of the country at around 1.8-2.3% next year.

So I agree with Prof. Diokno to stimulate consumption, OFWs, domestic firms (engaged in exports) should get some help via a depreciated peso.

On the debt load, the government should limit its foreign borrowings and focus on harnessing unused ODA loans (according to NEDA).

Focus also on reducing government budget deficits, BOP and trade deficits...

[uls]

jpdm:

ha???

if you would backread this thread (the early posts), and read your own posts, you would see what your stand was and what Tidus has been explaining to you