how come philippine peso gains value but products soar higher as well?

Question

i cant feel the economic progress i nthe philippines, it is said that a strong economy can ease the people's burden finacially but ironically, as i can see it, no filipino ever feel the comfort of it.the administration says its because of their effort but i think its because of the ofw's remittance which genarally makes the economy strong,i hate the government! i want them to go to raging furnace of hell.

Answer 1

Some economies export goods, the Philippines is doing great because of exports of services. The OFW are one of the backbones of the economy. I think it's to their credit that they send so much of their salaries back home. Not many societies are that family oriented.

However these remittances are one of the reasons why the peso appreciatess. WHen say a Filipino working in Singapore sends money home, he sells the Sing Dollar in which he is paid to buy the Peso. Hence demand for peso rises, and the peso appreciates.

The important thing for the Philippines is to use these remittances as an engine for growth. I used to work for a large American MNC, and I know for fact that more and more services were outsourced to the Philippines. So there also is endemic growth in the Philippines.

I was in the Manila last year, and I found some construction and some new buildings. I'd say the Philippines is on the verge of a good spurt in development. WHat the government needs to do is manage the growth to ensure it spreads beyond Manila. Tourism for example is one very effective method for this, and having good internal flights and infrastructure on top of good marketing campaigns would be a great way to promote the different facets of the Philippines. Wowphilippines is a good campaign.

Answer 2

A strong economy mostly helps the rich and does very little for the poor and middleclass. For example, a Philippino worker who works for a company that does business with America. The worker is exploited by the business, that is, paid very small wages and given no benefits, whereas, the owners of the business, reap all the profits for themselves. Another example, the Peso has gained about 15% against the dollar in the last year, if you are an average Philippino all this has done is caused inflation for you, you are now paying more for food and shelter than you did last year, but aren't making anymore money. Finally, the stock market (and other investments within the Philippines), with foreign capital coming into the country, that helps the stock market and other investments within the country, say real estate investments, however, if you are middleclass or poor you have no money to invest to begin with, so the fact that the Philippine stock market goes from 1000 to 3500 does not help you at all, again, it only helped those who had money to invest: the rich.

Unfortunately, the rich anywhere, rather it be the US or the Philippines only care about fast and easy money. If the rich cared about the country, they would build long-term businesses, share profits with the workers, and would pay their fair share of taxes vs buying off the politicians who make laws to minimize the wealthy's taxes.

There for awhile (from 1945 to 1980 or so) in most western countries this was happening: investing in long-term businesses, sharing profits with the workers, and paying a fair share of the taxes. However, since the Eighties, rather it be in the US or somewhere else, e.g., the Philippines, the rich simply care about maximizing their profits in the short-term. Not a good thing for the future of planet.

Answer 3

there is truth to what you are saying that ofw remittances is the one fueling the economy. however, one factor is that the budget deficit is lower due to the newly implemented increase in value added tax.

hopefully, whatever they are claiming about the economy would trickle down to the people.

Answer 4

one of the things that prosperity brings is inflation. the law of supply and demand says that when someone has enough money to purchase an item that the number of items for sale will go down as the demand for the item goes up. this is called inflation and the result is that enough money to purchase an item loses value due to the rise in price of all the items for sale in that particular economy.