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Tuesday, July 26, 2011

Expect peso to appreciate to P41

The peso could appreciate to the P41-per-dollar territory by year-end as investors in search of yields continue to flock to Asian markets including the Philippines(Alegado, 2011).

This a good news and a bad news as well. Let us revisit our micro and macroeconomics. A strong currency is good because:
1. Investment grade status of the Philippines will improved.
2. The debt ratios of the country will improved.
3. Inflation will be controlled.
4. We can buy foreign goods (such as iPAD and laptops )at lower prices.
5. Buy more domestic goods and services.
The strong currency is bad news because:
1. it hurts domestic producers or exporters because it decreases the foreign demand for their goods and services
2. Less money for OFWs and their families.

 If Filipino enterprises increase their domestic sales and Filipinos consume or buy more Filipino made products then the strong currency will positively affect our economy. This is what the Japanese, the Koreans and the Chinese did for them to have a strong economy. Added to that the Philippines should produce more goods and services that are bought and consumed by consumers in order for the economy to have solid growth.

Why is it that President Aquino's 2nd SONA failed to mentioned the concrete goals how to generate or increase employment opportunities and how to increase production and consumption of goods and services. This is the cycle of growth we need and should focus on...

Arnel L. Cadelina
nelcadelina@blogspot.com


Reference:
Alegado,A. (2011, July 25).Peso seen at P41 by yearend, Business World,p.S2/1.

3 comments:

  1. Hi Sir Arnel, thanks po for this post. I read ur post since you started your blog and I greatly learned a lot. Those are good points you had on this entry - and that's 5 positives compare to 2 negatives. I'm happy with the performance of our peso. \(",)/ I am an OFW and am affected by the strengthening of the peso value. But I'm not that totally sad.. With proper financial guidance I got from your site and other financial sites, I've learned that to deal with forex losses, I leverage my remittance to stock markets and mutual funds. Hope all other OFWs, and Filipinos, would continue to do the same. =)

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  2. Thanks Lyn-lyn, I am glad you are working abroad and earning more than your peers here in our country. Though you are busy improving your lot do not forget that 80% of the Filipinos are wallowing in poverty. Help in whatever capacity you can. I always dream that our passport will get the respect from foreigners. You know the feeling.Regards & keep in touch.

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  3. Thanks for this reminder, Sir Arnel. Our Filipino community here organizes a yearly activity to fund specific organizations sa Pinas. I am also connected with an organization in my province who grants assistance to kids who wants to go to school, as well as to the organizations of Bo Sanchez. One of my advocacies is to promote also financial literacy to Filipinos, as well as to OFWs, in order to help generate employment in Pinas by building up businesses and making an entrepreneur in every Filipino. :)

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