Effects of a strong or weak philippine peso currency essay

This paper enumerates the advantages and disadvantages of having a strong Peso. Conversely, the peso appreciated by 1. Meanwhile, the quality of the peso will increase in the world market.

A Stronger Peso: Effects of an Appreciating Currency

While economic system is on the rise. Credit ratings were upgraded, the stock market posted record-breaking highs more than 30 times in this year alone, and tax collections are nearing the trillion-peso mark.

Credit downgrades by international credit rating agencies. For his part, BDO Unibank chief market strategist Jonathan Ravelas said in a separate text message that he is expecting peso levels to reach P Even if the peso appreciates. In the eurozone, concerns over its economic performance linger as the European Commission said the region might barely grow in Get Full Essay Get access to this section to get all help you need with your essay and educational issues.

Net incomes will plunge and mills may shut. The reason why exporters are afraid is that if the powerful peso increases production costs, the competitiveness of the finished products in the global market will decline.

In the first case, we will export only labor. Government and politics can also affect how the Peso will perform in the financial markets where their action immediately affects the strength of the Peso.

Guinigundo said that besides the faster economic growth rates in the region, higher interest rates in Asia also helped entice foreign portfolio investors to put their investment here.

Pros and cons of a weak peso

A credit downgrade by these agencies affects the Peso negatively as it gives of a bad image of the country to interested investors but at the same time a positive rating would help the Peso strengthen.

Instigated by the lower-than-expected government budget deficit of P The other is one who buys or produces the natural stuff locally.

Philippine Peso Essay Sample

In fact, out of its dollar reserves, the Philippines was able to lend 1 billion dollars to the International Monetary Fund IMF for its standby fund. It is the export processing zone that is affected. The first half showed 6.

Currency Risk Protection Program was made this is a program where corporate and foreign exchange investors purchase foreign exchange from banks at predetermined rate in the future through this said CRPP it would diminish pressure on the exchange rate.

Consumers and investors would then be able to buy imported products because of their affordability.

Effects of a Strong or Weak Philippine Peso Currency Essay

The peso continues to struggle in the year but compared to it appreciated by 1. Another sector that could be hit hard by the appreciation of the peso would be the millions of overseas Filipino workers who are earning in U.

Traders said problems confronting the US and eurozone economies led to the decline of some emerging market currencies and dampened what could have been a sharper rise of the peso. For the Philippine Peso to be considered an advantage, first requirement is that the Philippine Peso should be strong against the US dollar.

They could qualify for seed capital to help them launch their company faster and introductions to partner companies within the Globe, Singtel and Ayala networks here and abroad. One announced that exporters are severely hurt by the appreciating peso while the other provinces that the Bangko Sentral ng Pilipinas BSP claims that the billowy currency is good to the Filipino economic system.

Investors consider political stability as a vital cog in decided whether to invest in the country or not because they would want to know if the needed laws that benefits the economy and business as a whole are being looked upon.

And what are the causes that brought the gradual decline of the Philippine Peso? The Bangko Sentral policy largely allows market forces to determine the peso rate of exchange against the dollar, but the central bank can also exercise the option to buy or sell currencies in the market to avoid potentially destabilizing movements of the peso.

In order to cover the external debt with the dollar, less peso will be done. The export industry is weakened by a strong Peso since their good would become more expensive since the Peso appreciates which makes them less competitive in the export market.

The destabilization plot, rallies and the hello Garci scandal are some of the political events wherein such negative events immediately dragged the Peso down the next trading day. For the first 9 months of the year, the government has posted significant amounts of surpluses, meaning income is greater than spending, and at the same time has been consistent with meeting its collection targets.

In the last quarter of the yeardomestic prices of diesel and gasoline were rolled back 6 times which one factor of such decline was the appreciation of the Philippine Peso.

This created an increase in the prices of imported goods, and locally produced goods with imported components. There will be more investors coming because the strong peso earned will counterbalance their attempts.The Effects of a Strong Dollar Without the weak euro, revenues would have grown %.

Unfortunately, although net income rose 3% year over year excluding the effects of currency, McDonald. Dec 01,  · A strong currency, however, has mixed effects on the economy, depending on who you’re talking to. For importers, it is a boon because it would mean import merchandises would be cheaper in the country because the purchasing power of the peso would be stronger.

Effects of a Strong Or Weak Philippine Peso Currency. (BSP) claimed that the rapidly rising currency is beneficial to the Philippine economy. These stories seem to tell Filipinos that we can not eat cake and eat. Whenever there is a good effect, there is a corresponding drawback. Please tell me the first statement.

Philippine Peso Essay Sample. of a strong Philippine Peso which benefits the general welfare of Filipino’s residing in the country is that a strong currency dampens the inflation pressures arising from imported commodities which in most third world countries, there are more imports than exports due to the lack of competitive advantage in.

Effects of Strong and Weak Peso The appreciation of the Philippine peso to its highest level in three years has both good and bad effects on the country's economy and numerous measures have been implied to determine as to the extent of its effects/5(3).

Pros and cons of a weak peso. By. It would be better if everyone would have a basic understanding of the effects of a higher exchange rate. the Philippine peso is still a strong currency.

Effects of a strong or weak philippine peso currency essay
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