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Paul

I would be happy it if hung around Php 50 / $1.00 USD, honestly, as it did for some time, in the past.

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smokey
I would be happy it if hung around Php 50 / $1.00 USD, honestly, as it did for some time, in the past.

 

 

 

 

 

well in todays news the chinese are wanting to pull out of the northrail project.. they say they have already bribed officals to the tune of $$$$$$$$$ 150,000,000 and the project is not even started yet... they say one offical received 500.000,000 peso ... gee i used to think the people who went to school and left for jobs overseas were smart... better to stay here and vigilante yourself into public service now this will help the peso... ha ha

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Exchange Rate USD 1.00 = PHP 44.2643 on Xoom

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poby

45.40 at Elizabeth Mall

 

I am worried the exchange rate might keep heading south. Many people here don't seem to realise that a rapidly depreciating peso is not all beer and skittles! The worst disease an economy can have is inflation. It is a cancer that once started is hard to stop. Let me explain: A rapidly depreciating currency directly causes rapidly rising prices on all imported goods. Of course it helps exporters but RP has a negative balance of trade and imports far more than it exports. These skyrocketing prices inevitably result in big wage demands which if granted increase the cost of goods sold so up the prices go again but this time for locally made stuff as well. This in turn leads to more wage demands which leads to higher prices and around and around it goes. It continues long after the currency has stopped depreciating and it becomes a self perpetuating spiral with nasty side effects like increasing unemployment which itself has serious economic side affects.

 

The result of all this inflation will be that the net buying power of your foreign currency will be no better than it was when the peso was at 40 to the dollar or maybe even worse! Been to jollybees lately? Prices are up this week around 5% and I'm sure there will be another price rise before xmas. I expect to see at least one more transport increase in all forms in the next 6 months. Hotels and apartment rentals will go up too. So yeah you might have more pesos in your hand after exchanging your dollars but the prices will go up at least as much as the currency has gone down.

 

The best thing for everybody but especially for those of us who get the bulk of our income from overseas, is if the peso stays where it is. God help us if it cracks 50:1 and keeps going!!

 

The above economic explanation is extremely simplistic and there are a multitude of factors not mentioned that can make things better or worse. The point I'm making however is that a rapidly changing exchange rate is bad for everybody which is why central banks do their darndest to smooth things out. Once the inflation genie is out of the bottle it's very hard to stuff her back in again.

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poby
Peso is 45.5 to $1 now. http://finance.yahoo.com/currency/convert?...;amt=1&t=5y

 

If the peso falls to 50:1 won't Jack Daniels be cheaper for expats?

 

Mike in Cebu

 

I'm not much of a drinker but assuming JD is manufactured here, it might initially be cheaper but within a few months the price will rise as the increased costs of manufacture caused by the ongoing local affects of a weak currency will kick in.

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Bob Ward
Peso is 45.5 to $1 now. http://finance.yahoo.com/currency/convert?...;amt=1&t=5y

 

If the peso falls to 50:1 won't Jack Daniels be cheaper for expats?

 

Mike in Cebu

 

I'm not much of a drinker but assuming JD is manufactured here, it might initially be cheaper but within a few months the price will rise as the increased costs of manufacture caused by the ongoing local affects of a weak currency will kick in.

 

Iffin I aint mistaken, Jack Daniels is only distilled (nair did here bout whiskey being manyefactured) in Lynchburgh, Tn.

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poby
Peso is 45.5 to $1 now. http://finance.yahoo.com/currency/convert?...;amt=1&t=5y

 

If the peso falls to 50:1 won't Jack Daniels be cheaper for expats?

 

Mike in Cebu

 

I'm not much of a drinker but assuming JD is manufactured here, it might initially be cheaper but within a few months the price will rise as the increased costs of manufacture caused by the ongoing local affects of a weak currency will kick in.

 

Iffin I aint mistaken, Jack Daniels is only distilled (nair did here bout whiskey being manyefactured) in Lynchburgh, Tn.

 

In that case, it would certainly not be any cheaper if the currency falls! Imported goods will initially rise by the same amount the currency falls but will soon rise even more as the follow on affects of the resulting inflation kick in. This depreciating currency is NOT good news for anyone!

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The best thing for everybody but especially for those of us who get the bulk of our income from overseas, is if the peso stays where it is. God help us if it cracks 50:1 and keeps going!!!

 

A short 2 years ago today the rate was 52.9:1 and back then the inflation rate was low and the economy supposedly was booming.

 

So I don't buy it...

 

http://finance.yahoo.com/echarts?s=USDPHP=...DPHP=X;range=2y

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poby
The best thing for everybody but especially for those of us who get the bulk of our income from overseas, is if the peso stays where it is. God help us if it cracks 50:1 and keeps going!!!

 

A short 2 years ago today the rate was 52.9:1 and back then the inflation rate was low and the economy supposedly was booming.

 

So I don't buy it...

 

http://finance.yahoo.com/echarts?s=USDPHP=...DPHP=X;range=2y

 

It's not the actual exchange rate that matters but the rate and direction of change! Go back a few posts and read my explanation which might make it a little clearer. One of the very few things economists can predict with any accuracy is that a rapidly depreciating exchange rate WILL result in higher inflation. Conversely an appreciating exchange rate can depress inflation (though there are a multitude of factors than can offset this) however the danger is if the currency turns around and rapidly heads back to where it was (as seems to be happening now), inflation will result.

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Like JD, it will be interesting to see if they rise the cost of imports sighting exchange rate, Funny I didn't see a drastic drop when the peso was strong. :rolleyes:

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poby
Like JD, it will be interesting to see if they rise the cost of imports sighting exchange rate, Funny I didn't see a drastic drop when the peso was strong. :rolleyes:

 

An appreciating currency can mask and offset inflationary pressures but the chickens come home to roost with a vengeance when it goes the other way!

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smokey
Like JD, it will be interesting to see if they rise the cost of imports sighting exchange rate, Funny I didn't see a drastic drop when the peso was strong. :as-if:

 

 

 

 

 

 

I noticed that also the price of things remained the same... especially auto... Chevy from the US sold for 1, 2 million p when the rate was 52=1 and its still the same price at 40=1 even the companies that purchased their stuff in the US did not drop the prices they just made more money... like the oil companies... this country needs competition that is what makes company

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mattwilkie
Like JD, it will be interesting to see if they rise the cost of imports sighting exchange rate, Funny I didn't see a drastic drop when the peso was strong. :as-if:

 

 

 

 

 

 

I noticed that also the price of things remained the same... especially auto... Chevy from the US sold for 1, 2 million p when the rate was 52=1 and its still the same price at 40=1 even the companies that purchased their stuff in the US did not drop the prices they just made more money... like the oil companies... this country needs competition that is what makes company

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The best thing for everybody but especially for those of us who get the bulk of our income from overseas, is if the peso stays where it is. God help us if it cracks 50:1 and keeps going!!

 

The above economic explanation is extremely simplistic and there are a multitude of factors not mentioned that can make things better or worse. The point I'm making however is that a rapidly changing exchange rate is bad for everybody which is why central banks do their darndest to smooth things out. Once the inflation genie is out of the bottle it's very hard to stuff her back in again.

 

Dude, you obviously weren't here when it was rapidly appreciating. Year on year, the peso is still up. Long term, the peso has been above 50:1. The runup in the peso to 40:1 was out of character and without fundamentals. Most of us agree that the peso needs to be stable....and we were saying that when it was stable......

 

There is no problem(and a lot of good) when a currency returns to its longer term average. You are not suggesting that it shouldn't, are you? Do you want the currency to stay artificially inflated?

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