When presidential son, newbie Rep. Sandro Marcos quipped about the peso not being weak not because it is weak but because the dollar is strong, economists and wisecracks took to social media to make memes that made him sound like a simpleton. They even made deviations of his quote for other facets of life.
But truly, there was one simple truth about what he said. The dollar is so strong and with most of our economy dependent on imports—all paid in the almighty dollar as international trade is denominated in dollars—then yes, that made the peso very weak.
Still there are so many sides to why the peso is weak and economists went out of their way to explain why.
So let us stop making fun of the statement of the gentleman from Ilocos as the economy, which is hugely propelled by the US dollar ain’t no laughing matter. The economy ain’t funny.
1. What with inflation at 6.9 percent in September and could worsen in the coming Christmas season
2. A Balance of Payment deficit widening to $3.6 billion in the second quarter of 2022, reversing a surplus of $905 million in the same quarter 2021.
3. The gap in the balance of trade yawning to $5.84 billion in June, the widest based on data from January 2020. Imports rose 26 ercent to $12.5 billion driven by higher fuel cost while exports increased slightly just 1 percent to $6.64 billion.
4. Gross International Reserves (or the country’s ability to meet its import payments and service debts—stood at $95 billion at the end of September (slipping from $97.4 billion a month earlier). GIR includes gold and foreign currencies to back liabilities.
5. Unemployment in August increased slightly to 5.3 percent (from 5.2 percent in July) meaning 2.68 million Filipinos in the labor force did not have jobs.
6. Underemployment worsened to 14.7 percent in August reaching 7.03 million Filipinos. (Underemployment refers to extra jobs or workloads being sought to augment the family’s income).
7. The Philippine Stock Exchange said that The PSEi decreased 1218 points or 17.10 percent since the beginning of 2022.
8. As of October 15, $1 is equivalent to P59.01045 and this could slip further to P65 to P67 before the year ends if Rep. Joey Salceda’s forecast materializes.
This would be good for exporters and for OFWs sending money here but this is bad for our economy as most of our food products are imported—hence we need more dollars to pay for them.
Foreign visitors and businesses visiting the country, who would spend their foreign currencies here could shore up our fx reserves. But on our own, we can help preserve our dwindling foreign currencies here by buying locally-made products and patronizing the businesses of our small entrepreneurs.