Commentary: Effects of the strengthening peso
Tacloban City (April 13) -- The national daily broadsheets all bear the same good news—the peso hit a six-year record high of P47.95 to a dollar on Tuesday and remained at the P47 territory on Wednesday. It closed at P47.96 after briefly hitting the new high of 47.90 in early trading.
What does this really mean for the ordinary Filipino? First of all, the strengthening of the Peso means that the government will be able to deliver better social services like health, education and infrastructure development for the Filipino people and lower the fiscal debt.
Every unit appreciation of the peso cuts the national government’s budget deficit by P5.4 billion and reduces the national government’s outstanding debt by P33.1 billion and in turn saves the government P4.2 billion in debt servicing, the experts at the Department of Finance reported.
Furthermore, a stronger peso makes imported goods cheaper, encouraging many companies to increase their importation. This subsequently allows the Bureau of Customs (BoC), a major contributor to the government’s revenue collection, to rack up bigger import duties.
For the ordinary consumer, this will mean easier access to imported goods and products which every Filipino wishes to avail of. That every Filipino wishes a taste of imported products, is after all, undeniable.
The government aims at trimming the budget gap to P63 billion, or 0.9% of the Gross Domestic Product (GDP), this year from an eight-year low of P64.8 billion, or 1% of GDP in 2005. This is getting near to the Administration’s thrust of a balanced budget in the BEAT THE ODDS program.
Still in the eyes of the ordinary Filipino, the strengthening of the Peso against the US dollar is one very important proof of the economic gains of the Philippines under the able stewardship of President Gloria Macapagal Arroyo. (PIA 8) [top]