Foreign analysts evade questions that insinuate the Philippine President’s alleged cause for the weak peso, Emilio Neri Jr., vice president and lead economist of the Bank of the Philippine Islands said that it is hard to tell if domestic political factors affect it. The growing certainty of a US Federal rate hike could likely play into the foreign exchange market. The rising import requirements due to higher oil prices is also another factor, he said.
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[VIDEO]: BT: Palitan ng piso kontra dolyar, muling pumalo sa P50 matapos ang 10 taon
US Interest Rate Hike
The dollar held broad gains as the risk of US interest rate hike slugged sovereign bonds and commodities recently. It even manages to sour Wall Street’s party as the reality of rising borrowing costs sinks in.
The Philippine peso dives to more than 10-year low against the US dollar last week. It is mainly blamed on the Hawkish talk by the Federal Reserve with regards to raising interest rates this month in the world’s largest economy. As it closed at P50.40, is is the highest close since Sept. 12, 2006 ” said Neri Jr.
It is a delight for overseas Filipino workers that the US dollar they send to their families back home can go a long way. They actually send little for more peso exchange rates. It is a relief that they can stick to one job abroad and not work too hard for a bigger yield for their loved ones.
Needless to say, it is also opposite to importers of goods for local consumption. Business people have no choice but to increase the prices of their imported commodities. The economy can still be in the balance if most Filipinos learn to patronize local products. Leave the imported stuff to the rich ones. The price of gasoline, however, affects everybody.