From the looks of it, Gnoysa is likely to win the forex trading game with a P41.56 forecast for end of December!
The peso on Wednesday breached the P41 level, hitting P41.99 before closing at P42.03 against the dollar. When the forex market opened this morning, the peso was at P41.90 again and the weighted average as of 10.44 a.m. today was P41.887 to the dollar.
Both inflows from overseas Filipino workers sending money home for the holidays and investors taking positions in the stock market lifted the peso further. And because we all expect the money to continue to come in, this only means you gotta get ready to see the peso rising even more in the next weeks.
Former Socioeconomic Planning Secretary Felipe Medalla sees a P38 to a dollar scenario as a very likely one in the coming months, unless the government adopts the right policy mix to keep the peso from appreciating.
Medalla thinks that if the national government decides to become a big buyer of dollars and use these to prepay its dollar-denominated debt, the local currency might slow down its appreciation enough to keep exporters and OFWs from suffering more.
He tells me that this, of course, should be closely coordinated with the Bangko Sentral ng Pilipinas, so that there are no surprises, I suppose in terms of volatility.
The monetary police have an unviable job. Can you imagine how hard it would be to manage everyone’s expectations on the currency? On the one hand, the spike in global oil prices would fry us all if the peso has not appreciated. Imports are also cheaper, and this might make our Christmas expenses a lot lower. On the other hand, as everyone has been saying, OFWs are really feeling the pinch and so are dollar-earning industries like the call center business.
Medalla, with his usual wit and candor, says the government could try two more options. Peg the peso to two or three currencies like the euro and yen, or use capital controls – that’s economist-speak for controlling the inflow and outflow of short-term money. These two other options, of course, carry with them their own difficulties. Like who chooses which foreign money should come in and which should stay out? Or which currencies should the peso be pegged to? I don’t know about you, but I think these two options are radical to begin with and would most like turn off the conservative guys up there in Bangko Sentral.
In the meantime, enjoy the day and focus on simple things to enjoy like family, the upcoming holidays and friends.
December 8th, 2007 at 1:27 am
I’m a very bad politician,’ Arroyo tells UK investors
**************
This is another lie! She’s very good on politic. Because the people who speak against her bogus regime they’re getting rotten in jail, Missing, If not they’re getting kill., Very bad on economic. And its already proven with 75% of filipino people are starving. Belat ni Gloria
******************
[Note from editor: Rest of comment edited out. Sorry, we cant post articles from other sites due to copyright issues.]
December 8th, 2007 at 12:41 am
as an ofw myself, we are indeed affected considering all my investments are in the country, but I didn’t agree with the fact to stop sending remittance as a form of protest, my purpose of sending money back home is for my family to sustain a living and to pay partly my investments, it had an effect as others say, but am still hoping that in the long run, it will be for the benefit for all, considering I have no plans of being an OFW forever, but yet looking forward on going back to the country for good in the future…..
December 7th, 2007 at 11:50 pm
It’s already hard to swallow the fact that our hard-earned money in USD is going down in peso value.
But what really irks me is when my Bank here in the Philippines stretches the remmitting time to 5 days - siempre, the longer my dollars are held, the more likely it is an advantage for the bank, di ba.
I have been sending money from Vietnam since Jan ‘07 - the remitting time is max 3 days (except once when the bank made an error in details).
But since last month, when obviously the peso was improving to the dollar, my bank coincidentally also takes 5 days to allow the remmitance to be credited. We remitted Dec 3 from Vietnam, if it had been credited to my Philippine Bank on the 3rd banking day, the exchagne rate would still be around 42.30PhP. But until now wala pa - baka bukas daw sabi nung phone banker - so swerte nung Philippine bank ko if the exchange rate is only 41.00PhP by then.
I didn’t expect to be suspecting Bank Of The Philippine Islands to be seemingly going this route.
Hay buhay!
December 7th, 2007 at 10:35 pm
i am an ofw also. on a personal note it hurts as peso appreciate so fast. but for the benefit of our fellow countrymen working and earn their living in our country, it doesnt matter anymore whatever personal losses i incurred due to strong peso. ahmed is right if the peso is at 55 level and oil price skyrocketed to $90, i could not imagine but for sure the local pump price of petrol maybe between 60-80 pesos per liter. imagine the ripple effect of the that to the prices of basic commodities in our country and to our economy in general.
yes, the effect of strong peso not yet feel or trickled down to the masses. it takes time as for how many decades that we have a boom and bust economic cycle. this is for the first time that our economy experienced sustain growth for so many years. patience please..
about the action of bsp and the government, i preferred that they should not intervened as it is useless. the dollar is very weak which is beyond the control of our government or of our monetary authority. should they intervened expect that at the end of the day they will incurred heavy losses. i think what the bsp is doing now is in right direction i.e, they just tempering the steep appreciation of peso thru other means not by intervention or pegging our currency exchange rate. just let the peso fluctuate as the market dictates.
December 7th, 2007 at 6:23 pm
@ahmed cortes,
well said bro, hopefully our fellow ofw’s complaining about the rise of peso and fall of their currency will read your comment. Their idea of not sending remittance money back home for a day soundz like being a brat who keeps on whining without understanding the real issue.