The Peso at P42 to the $

The Philippine peso closed at P42.76  to the US$ yesterday, among the “strongest” level of the peso since two a half years ago, mid-May 2008.

When the peso or any other national currency depreciates, the following sectors are the “losers” because they will get lesser peso revenues for every $ that they earn: exporters, families of OFWs, in-bound tourists, borrowers valued at foreign currencies, and so on.

On the other hand, the following sectors are the “gainers” because they will pay lesser pesos for every $ that they need: importers, out-bound Filipino tourists, foreign workers/businessmen/expats working here and remitting their earnings abroad.

Thus, when the peso would further slide to 41 or lower, exporters will receive fewer pesos for every $ they earn, and they have to pay in pesos for many of their operating costs like salaries, rental of building or office, and so on. On the other hand, fuel prices, imported consumer products like cell phones and laptops, will become cheaper.

It is good that the Bangko Sentral ng Pilipinas (BSP) is not intervening much in the exchange rate of the peso. Let the peso find its actual and real value relative to the US$ and other foreign currencies.

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