Okay, I may not be an economist to give a detailed analysis about the country's economy, but I am a FIlipino, a consumer, who directly feels the economic situation and I have common sense, enough to make my perspective on the real score of the Philippine Economy stand.
Lately, I have been hearing news that the Philippine Peso had increased in value and strengthened against the US Dollars (or other foreign currencies) and according to the president it is just an evidence of a strengthening economy. But is this really good news and an indication of a better economy?
Surely it is good news for the politicians, since they can foolishly brag on how great they handled the country deceiving millions of people as a result, but it is actually bad news in disguise. Also it is not an indication of a strengthening economy, rather we should be worried if this trend continues. It is worrisome the fact that the purchasing power of the Philippine Peso still remains weak and prices are soaring high despite its strengthening status in terms of exchange rate, creating an imbalance. A lot of industries and individuals will surely be affected with this like the OFWs, exporters, and other businesses that are dependent on foreign currencies like call centers. The situation is a cancer in the economy.
Lately, I have been hearing news that the Philippine Peso had increased in value and strengthened against the US Dollars (or other foreign currencies) and according to the president it is just an evidence of a strengthening economy. But is this really good news and an indication of a better economy?
Surely it is good news for the politicians, since they can foolishly brag on how great they handled the country deceiving millions of people as a result, but it is actually bad news in disguise. Also it is not an indication of a strengthening economy, rather we should be worried if this trend continues. It is worrisome the fact that the purchasing power of the Philippine Peso still remains weak and prices are soaring high despite its strengthening status in terms of exchange rate, creating an imbalance. A lot of industries and individuals will surely be affected with this like the OFWs, exporters, and other businesses that are dependent on foreign currencies like call centers. The situation is a cancer in the economy.
In order to make my point clear, let's consider this case. Let us say before the exchange rate between US$ to PhP is 1:48 and with it an individual can buy 2 kilos of rice (considering that the rate is 24 per kilo). Presently in the economy with the "strengthened peso" let us assume that the exchange rate between US$ to PhP is 1:42 but since the latter still has the same purchasing power or worse if the prices soared up, it is not enough anymore to buy the 2 kilos of rice.
If this will continue it will surely lead to currency collapse. The real strength of an economy is not measured in the currency's value against other foreign currency, rather it is measured on the amount of commodities that a currency can buy; on its purchasing power.
If this will continue it will surely lead to currency collapse. The real strength of an economy is not measured in the currency's value against other foreign currency, rather it is measured on the amount of commodities that a currency can buy; on its purchasing power.
1 comment:
Great post! Very well said. :)
Anah of whatsdabuzz.com
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