Why is nobody talking about the Philippine peso's slide? It's now at a record low of ₱62.62 to the dollar.
The Philippine peso has lost 6% of its value against the dollar this year alone.
It's now ₱62.62 to $1, a record low, and it's at record lows against other major currencies like the pound too.
If you had $10,000 in the Philippines at the start of this year, you'd have lost $590 in purchasing power.
Why is this happening? Is it a good thing or a bad thing? And where do you see it going?
Local economist here. Exchange rates are like prices — set by supply and demand. Demand for the Philippine peso is relatively low because we don't export many goods. Our biggest sources of dollars are BPOs and overseas Filipino workers (OFWs). And that income isn't growing as fast as the prices of imported goods.
You've got it backwards.. $10,000 is worth more now than at the start of the year, not less
Short answer: they need to buy dollars. Oil is a nasty problem for the Philippines. It imports most of it along with other goods, so when the war drives prices up, it has to buy more dollars to pay for it. On top of that, there's a big budget deficit. It's bad news for ordinary Filipinos, because most goods are imported and get more expensive. The winners are OFWs and expats (woohoo), who can arbitrage and get more pesos for their money. I don't think we're anywhere near the bottom yet.
IMHO the peso should be at 80. It's just not worth it. What does the Philippines do better than anyone? It has no services or goods worth exporting or importing. The only reason the Philippines isn't completely collapsing is the money overseas workers send home
Bad for the locals, good for me. I'm spending money here, so technically that's good for them too. Honestly, I hope it hits 65 to 1. Just last month they said it would never reach 61, then they said the same about 62. You never know — here comes 65!
I don't know, but everyone's talking about it. Do you even follow this sub?
Does tourist demand have anything to do with it? Over the last 30 years Vietnam has improved enormously, while the Philippines is still poor and falling behind other Asian countries like Thailand, India and Korea — even though it's been open to the world for as long as I can remember. I'm not an economist. I'm just wondering why the Philippines is still poor and struggling compared to other Asian countries.
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