The dollar has breached the PhP48 support level and is poised towards PhP47.50. Heavy inflow of OFW remittances as well as weak performance of the dollar vis-a-vis other major currencies like the yen and euro (weaker-than-expected US manufacturing output) have pushed the peso to these levels.
An appreciating currency tempers inflationary pressures since manufacturing inputs are usually dependent heavily on imports, on top of our usual crude oil requirements. In addition, this is the perfect opportunity to pare down our sovereign debt owed to multilateral institutions, which means less pressure on the fiscal deficit as well as a possible credit upgrade.
On the other hand, dollar-earners (ehem, like me and millions of OFWs) and exporters stand to lose much from this. In peso terms, our purchasing power has greatly diminished.
The government has to intervene and find an optimal level for the currency so that those of us who are heavily dependent on foreign currencies won't lose out completely.
An appreciating currency tempers inflationary pressures since manufacturing inputs are usually dependent heavily on imports, on top of our usual crude oil requirements. In addition, this is the perfect opportunity to pare down our sovereign debt owed to multilateral institutions, which means less pressure on the fiscal deficit as well as a possible credit upgrade.
On the other hand, dollar-earners (ehem, like me and millions of OFWs) and exporters stand to lose much from this. In peso terms, our purchasing power has greatly diminished.
The government has to intervene and find an optimal level for the currency so that those of us who are heavily dependent on foreign currencies won't lose out completely.
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