Metro Manila (CNN Philippines, October 13) — Former National Economic and Development Authority (NEDA) chief Winnie Monsod on Thursday explained that the strong dollar and outside forces cannot be the only reasons for why there is the so-called weak Philippine peso.
The economist said that Ilocos Norte 1st District Rep. Sandro Marcos was “partially right” in saying that the peso is weak because the dollar is strong. She, however, said that outside forces are not entirely to blame for what she calls as cheap peso.
“He’s partially correct. But the other part, he cannot blame it all on outside forces. That’s what his grandfather [Ferdinand Marcos Sr.] did when the economy collapsed 50 years ago,” the UP School of Economics professor said.
According to Monsod, other factors like the country’s ballooning trade deficit and how its exports failed to take advantage of the strong dollar are reasons why the peso’s value continues to drop.
“The peso is weaker because, for this year alone, we have been having trade deficits. In other words, our imports have grown so fast and our exports are not growing at all,” Monsod said.
Monsod also agreed with the president’s son when he said other currencies are also weakening against the dollar. She explained, though, that the country’s performance is “relatively poorer.”
Data from the Philippine Statistics Authority (PSA) showed that the deficit, which happens when a country has more imports than exports, soared to 81.3% year-on-year.
The Philippines’ trade gap further widened to $6 billion in August, data from PSA also showed.
In a report released on Oct. 11, PSA said the deficit is also 51.9% higher than in August 2021. The Philippines’ total export sales in the period only reached $6.41 billion, or a negative annual growth of -2%.
Monsod said that the depreciating peso is also a “self-correcting medicine” as the low value makes the Philippines’ goods and products more attractive to foreign countries.
“We should look on this weak peso as an opportunity rather than a cause for moaning and groaning,” Monsod said. “The cheap peso will help correct the situation if the situation does need correcting.”
Monsod was NEDA chief under Corazon Aquino’s presidency from 1986 to 1989.
