VItug, Andrea Beatrice, A.

Commentary
GEWORLD A 55 November 6, 2018

The exchange rate from Philippine peso to US dollar was P1.00:$3.00 in November,
1960, but is currently P53.25:$1.00. In 2012, the exchange rate was around P40.00:$1.00 but
the peso has only continued to lose its value since then. On top of that, it is predicted to be
Asia’s weakest currency for 2018.

In 2016, it was believed that a factor in the depreciation of the peso that caused the pull-
outs of investors in the country was lack of faith in the current administration and Duterte’s
politics. However, President Duterte insisted that Filipinos must believe in him and the country
was simply being undermined by the Americans.

While Duterte’s politics are said to be significant in the drop of the peso’s value, it is not
the sole problem of the country. Other causes said to be contributing to the plummet in value of
the peso include supply and demand of foreign currency decreasing and increasing,
respectively and the demand for pesos falls (ie. exchanging pesos for dollars at money
changers).

An effect of these weakening the peso, on the other hand, could be an increase in the
inflation rate, so the products imported into the Philippines could end up being more expensive.
This can be seen in the 7% inflation rate that sparked in August, 2018. This resulted in various
goods, including food & drink, vices, technology, even culture and recreation, drastically
increasing in price.

It is said that the reason behind the surge in inflation rate these past few months is rice,
specifically, the problem of rice supply. It is no secret that Filipinos love rice, and basically live
off of it every day, so there is a high demand for it, however, the supply does not complement
this. Cecil Chavez, Butil party list representative, said, “We have to realize the great folly on
relying on imports to fill our food security requirements… The trinity of delayed imports, natural
calamities, and the failure to fund a viable rice production program caused the acute rice
shortage, and of the three, only the factor of calamities is the one that cannot be reversed.”

With that being said, to address the country’s problem regarding the supply of rice, the
Philippines must stop relying on other countries to satisfy its needs. The government should
focus on selling the rice made within its borders of jurisdiction, not only giving the peso more
value, but empowering the local agriculture industry as well. It must gain a sense of self-help,
because in the end, it must be able to help itself with its own resources, and not rely on others
to save the day.

In addition to this, the Philippines must also evaluate its skills in diplomacy and
negotiation. Other than having a sense of self-help, it must also be able to maintain good
relations with other states and create new alliances as well so others may gain interest in
investing their foreign currencies into our country so the value of the peso may possibly
increase again.

REFERENCES
Currency Calculator Converter US Dollar to Philippine Peso. (n.d.). Retrieved from
https://www.x-rates.com/calculator/?from=USD&to=PHP&amount=1
Leyco, C. (2018, October 12). Rice key culprit for high inflation – DOF. Retrieved from
https://news.mb.com.ph/2018/10/12/rice-key-culprit-for-high-inflation-dof/
Philippine Peso Exchange Rate (USD to PHP) - News & Forecasts. (n.d.). Retrieved from
https://www.focus-economics.com/country-indicator/philippines/exchange-rate
Rivas, R. (2018, September 5). Inflation surges to 6.4% in August 2018, exceeds estimates.
Retrieved from https://www.rappler.com/business/211176-inflation-rate-philippines-
august-2018
The Philippine peso is at a seven-year low, and here's what it means for you. (2016, September
28). Retrieved from https://www.spot.ph/newsfeatures/the-latest-news-
features/67928/10-
things-philippine-peso-a00171-20160928-lfrm
Torres, Y. R. (2016, December 22). Marcos' Regime: The Myth Of 1 Peso To 1 Dollar Exhange
Rate. Retrieved from http://thequintessenceph.wixsite.com/qtnewsph/single-
post/2016/12/20/Marcos’-Regime-The-Myth-Of-1-Peso-To-1-Dollar-Exhange-Rate
World currency exchange rates and currency exchange rate history. (n.d.). Retrieved from
https://www.exchange-rates.org/