The rapid depreciation of the peso against the greenback has both advantages and disadvantages.
THE local currency hit a new record low Wednesday, Sept. 21, 2022, closing at P58 vis-a-vis the US dollar, threatening to increase inflationary pressures and hit consumer sentiment while auguring well for exporters—if they can find buyers for their goods and services.
Steven Yu, immediate past president of the Mandaue Chamber of Commerce and Industry, said, “The weakening of the peso is positive for the exporters and will make their products more competitive, especially that the Chinese yuan also depreciated.” “A strong US dollar would normally be good for exports; however, imports still outpace exports especially with the dramatic rise in fossil fuels... Exporters are experiencing a drop in orders, thus negating the benefits of a strong US dollar,” Escalona said.
An indicator of inflation, the CPI measures the change in prices paid by consumers for goods and services. The Philippine inflation rate was 6.3 percent in August, exceeding the two to four percent target. “What the world is experiencing now is the ‘strong US dollar’ symptom further exacerbated by the series of interest rate hikes of the Fed. More likely than not, the whole world is plunging into recession soon,” he added.
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