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The Bangko Sentral ng Pilipinas remains optimistic on economic forecasts despite speculations online
The Internet was perhaps befuddled when the presidential son and House of Representatives senior deputy majority leader, Ferdinand Alexander "Sandro" Araneta Marcos, said on October 11, 2022: "The peso is not weak because the peso is weak. The peso is weak because the dollar is strong.” Confusing as it sounds, Marcos was in earnest when he tried to express his sentiments. Unfortunately for him, the Internet can be fairly unforgiving and so Marcos' words became the target of ridicule. Tweets turned into jokes and the entire context of this now-infamous soundbyte has been turned on its head. But was Marcos' expression correct?
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Above MANILA, PHILIPPINES - JUNE 30: Ferdinand "Bongbong" Marcos Jr. shakes the hand of Supreme Court Chief Justice Alexander Gesmundo after taking his oath as the next Philippine President, at the National Museum of Fine Arts on June 30, 2022 in Manila, Philippines. Ferdinand "Bongbong" Marcos Jr. took his oath as the next Philippine President on Thursday, completing a once unthinkable political revival of his family 36 years after his dictator father, Ferdinand Marcos Sr., was ousted by millions of Filipinos in
MANILA, PHILIPPINES - JUNE 30: Ferdinand "Bongbong" Marcos Jr. shakes the hand of Supreme Court Chief Justice Alexander Gesmundo after taking his oath as the next Philippine President, at the National Museum of Fine Arts on June 30, 2022 in Manila, Philippines. Ferdinand "Bongbong" Marcos Jr. took his oath as the next Philippine President on Thursday, completing a once unthinkable political revival of his family 36 years after his dictator father, Ferdinand Marcos Sr., was ousted by millions of Filipinos in
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Perhaps a philosophy or rhetoric student would be the best person to analyse the kind of fallacy present in Marcos' statement—but the sentiment expresses that the peso is, in itself, not fundamentally weak. Perhaps there's some truth to this statement in the same way that nothing is inherently bad or good, weak or strong. But the peso is weakening, and it's not simply due to a stronger dollar. Many other factors play into the current situation—for example, the aggressive hike in interest rates that the US Federal Reserve imposed to ward off inflation in their own country. As such, many analysts have called the statement overly simplistic.
On the ground, millions of Filipinos are feeling the effects of rising prices with no increase in wages and Marcos' follow-up statement—that there are plenty of OFWs in Ilocos who are bringing in higher remittances due to the higher value of the dollar—is cold comfort. Not everyone may have a relative working overseas to rely on and Marcos' advice to "sit back and hold tight" is difficult for millions of Filipinos living on minimum wage.
Above Residents wearing protective equipment collect free food and other goods at a community pantry in the Maginhawa neighborhood in Quezon City. Despite allegations by law enforcers as communist underground organizations that want to undermine the government, community pantries have sprouted across the country in the past week to help people affected by strict quarantine measures to curb the spread of the coronavirus disease. Metro Manila, Philippines.
Residents wearing protective equipment collect free food and other goods at a community pantry in the Maginhawa neighborhood in Quezon City. Despite allegations by law enforcers as communist underground organizations that want to undermine the government, community pantries have sprouted across the country in the past week to help people affected by strict quarantine measures to curb the spread of the coronavirus disease. Metro Manila, Philippines.
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The president's son, however, did promise that the national government is focusing on food security. "We are a net importer of certain goods and services, we have to make sure that domestically, we are able to produce that,” he had added.
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But now the question becomes: what is the status of the Philippine peso? Our currency has slid to an all-time low, brushing through values between Php59 and Php58. Inflation in October 2022 is forecasted at 7.4 per cent, up from the previous month which was at 6.9 per cent. Despite the high percentages, analysts forecast that it has yet to hit its peak, with some hypothesising that the highest inflation rates would be seen in early 2023. Recent natural calamities such as supertyphoons could also disrupt supply chains, causing prices to rise further. Typhoon Paeng, which devastated parts of the country over the last week of October has already damaged about a billion worth of agriculture and could push inflation up even higher in the coming Christmas months. In this context, it's become even more difficult for families to simply "sit back and hold tight".
Above Philippine peso, a business background
Philippine peso, a business background
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On the other hand, the government is optimistic about economic recovery. Budget Secretary Amenah Pangandaman has assured the public that "businesses, consumers, and the government all agree that the Philippines is on track toward a strong recovery". Bangko Sentral ng Pilipinas Governor Felipe Medalla has assured the public that the local economy is strong enough to absorb rate hikes and that the peso is stabilising. Both also reintroduced the current administration's 8-Point Socioeconomic Agenda which aims to ensure food security, reduce transport costs, and pursue a green economy among many others.
While this is fantastic news to many Filipinos, perhaps what's truly important is whether or not the effects of such programs—through which the 2023 national budget is centred—will be felt on the ground. Rhetoric, semantics, promises, and fallacy put aside altogether, what's truly important is whether the Philippine peso can sustain a family well enough to survive on what they are currently earning.
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