The peso just hit a new record low value of just PHP57 against the US dollar before closing at PHP56.999 yesterday — yet another depressing economic development for the Philippines, especially when coupled with inflation and the rising costs in basic goods such as food and oil.
The peso is even lower now than the PHP56.77 it posted on September 2.
Business reports note that the US dollar’s consistently strong trading is likely due to the Federal Reserve’s aggressive stance as it looks to further hike interest rates to combat inflation in the United States, which reached 8.5 percent in July.
According to the Philippine Daily Inquirer, Rizal Commercial Banking Corp. chief economist Michael Ricafort said the weaker peso was also due to the country’s record-high outstanding national debt, which reached PHP12.89 trillion in July.
But how exactly does a weakened peso affect the country? While families with overseas members remitting their hard-earned dollars may see this as an obvious boon, the high exchange rate will make things harder for many Filipinos who will feel the pinch as the cost of imported commodities continues to rise, and prices for fuel and other staple goods such as sugar and onions continue to skyrocket.
As of September 5, local red onions continue to be sold at public markets for PHP140 a kilo, while refined sugar costs PHP95 a kilogram, according to the Department of Agriculture.