Exchange rate implications of strengthening peso

[Spoon]

The total amount they receive already in peso has fluctuated +/-2 pesos only for the past 24 months. Yet the prices of basic goods have sky rocketed during the same period.

the stregthening of the peso is good but overall with the increase in consumer goods it kinda negates the initial benefit of currency appreciation.

 

[Twomixdiver]

No cause for celebration....coming from an OFW. The Philippine Peso as well as other currencies in the region are appreciating against the dollar. I regularly remit a fixed (local currency) amount to my folks back there. The total amount they receive already in peso has fluctuated +/-2 pesos only for the past 24 months. Yet the prices of basic goods have sky rocketed during the same period.

Any politician who says/claims that our economy is taking off as seen by the dollar exchange rate is a big liar! They can tell that to the marines!

The appreciation of the peso goes a long way in balancing the national budget. Less funds are needed to service foreign debt, and therefore making more funds available for other national priorities.

In the private sector, there will be an increase in the importation of consumer or luxury goods. However, it is also hoped that money can be invested in new factory equipment to help make the country more globally competitive. Unfortunately during boom times, as history shows, most investments goes into consumer goods and into real estate development.

 

[Babydamulag]

Great article!!
http://www.wjla.com/headlines/0705/242940.html

 

[chip104]

Unfortunately during boom times, as history shows, most investments goes into consumer goods and into real estate development.

too true about the real estate - I swear with all the condos going up, there's gonna be a bubble burst. This is my take on it: To me a real estate bubble burst is good cause it will create more affordable housing that were once only for the elitists. Couple that with the increasing amount of call center workers and OFWs who will most likely be the most potential customers, there'll be a bigger market for the once overvalued real estate.

FYI: I'm no economist or no businessman.

 

[Xizang]

too true about the real estate - I swear with all the condos going up, there's gonna be a bubble burst. This is my take on it: To me a real estate bubble burst is good cause it will create more affordable housing that were once only for the elitists. Couple that with the increasing amount of call center workers and OFWs who will most likely be the most potential customers, there'll be a bigger market for the once overvalued real estate.

FYI: I'm no economist or no businessman.

Chip,
The real estate glut already happened a couple of years ago right before the currency crisis. Noticed the number of unfinished buildings in Ortigas? A couple of business buildings in the makati cbd have also remain to be unoccupied with rents already going down to as low as -30% .

 

[gaudencio]

Yep it has implications alright.
just last sunday in puerto. The dive shop where i'm in prefer to charge me in peso and not in dollars . P xxx.xx last price for that week. next time he is increasing me P 50.00 additional. per dive.

 

[Babydamulag]

Dive operators have a narrow profit margin. The risk is high and the liability associated with that risk even raises the bar higher.....apply reason and vote with your feet if the operator raises rates and their gear is not up-to-date or worn out looking.