Tuesday, July 26, 2011
Expect peso to appreciate to P41
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
Alegado,A. (2011, July 25).Peso seen at P41 by yearend, Business World,p.S2/1.