January 18, 2018, 4:31 am
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1 Philippine Peso = 0.07263 UAE Dirham
1 Philippine Peso = 2.14992 Albanian Lek
1 Philippine Peso = 0.03521 Neth Antilles Guilder
1 Philippine Peso = 0.37318 Argentine Peso
1 Philippine Peso = 0.02474 Australian Dollar
1 Philippine Peso = 0.03521 Aruba Florin
1 Philippine Peso = 0.03956 Barbados Dollar
1 Philippine Peso = 1.63687 Bangladesh Taka
1 Philippine Peso = 0.03163 Bulgarian Lev
1 Philippine Peso = 0.00745 Bahraini Dinar
1 Philippine Peso = 34.63172 Burundi Franc
1 Philippine Peso = 0.01978 Bermuda Dollar
1 Philippine Peso = 0.02627 Brunei Dollar
1 Philippine Peso = 0.13568 Bolivian Boliviano
1 Philippine Peso = 0.06382 Brazilian Real
1 Philippine Peso = 0.01978 Bahamian Dollar
1 Philippine Peso = 1.25445 Bhutan Ngultrum
1 Philippine Peso = 0.19324 Botswana Pula
1 Philippine Peso = 395.96518 Belarus Ruble
1 Philippine Peso = 0.03951 Belize Dollar
1 Philippine Peso = 0.02456 Canadian Dollar
1 Philippine Peso = 0.01896 Swiss Franc
1 Philippine Peso = 11.96895 Chilean Peso
1 Philippine Peso = 0.12736 Chinese Yuan
1 Philippine Peso = 56.62579 Colombian Peso
1 Philippine Peso = 11.15506 Costa Rica Colon
1 Philippine Peso = 0.01978 Cuban Peso
1 Philippine Peso = 1.77275 Cape Verde Escudo
1 Philippine Peso = 0.40883 Czech Koruna
1 Philippine Peso = 3.49743 Djibouti Franc
1 Philippine Peso = 0.1197 Danish Krone
1 Philippine Peso = 0.95886 Dominican Peso
1 Philippine Peso = 2.24462 Algerian Dinar
1 Philippine Peso = 0.25141 Estonian Kroon
1 Philippine Peso = 0.34978 Egyptian Pound
1 Philippine Peso = 0.53817 Ethiopian Birr
1 Philippine Peso = 0.01607 Euro
1 Philippine Peso = 0.03956 Fiji Dollar
1 Philippine Peso = 0.01433 Falkland Islands Pound
1 Philippine Peso = 0.01431 British Pound
1 Philippine Peso = 0.08957 Ghanaian Cedi
1 Philippine Peso = 0.9371 Gambian Dalasi
1 Philippine Peso = 177.94699 Guinea Franc
1 Philippine Peso = 0.14509 Guatemala Quetzal
1 Philippine Peso = 4.07219 Guyana Dollar
1 Philippine Peso = 0.15475 Hong Kong Dollar
1 Philippine Peso = 0.46509 Honduras Lempira
1 Philippine Peso = 0.11922 Croatian Kuna
1 Philippine Peso = 1.25771 Haiti Gourde
1 Philippine Peso = 4.9644 Hungarian Forint
1 Philippine Peso = 263.35047 Indonesian Rupiah
1 Philippine Peso = 0.06775 Israeli Shekel
1 Philippine Peso = 1.266 Indian Rupee
1 Philippine Peso = 23.41772 Iraqi Dinar
1 Philippine Peso = 723.08147 Iran Rial
1 Philippine Peso = 2.02255 Iceland Krona
1 Philippine Peso = 2.43928 Jamaican Dollar
1 Philippine Peso = 0.01399 Jordanian Dinar
1 Philippine Peso = 2.18216 Japanese Yen
1 Philippine Peso = 2.03224 Kenyan Shilling
1 Philippine Peso = 1.37189 Kyrgyzstan Som
1 Philippine Peso = 79.26622 Cambodia Riel
1 Philippine Peso = 8.12896 Comoros Franc
1 Philippine Peso = 17.80063 North Korean Won
1 Philippine Peso = 21.02452 Korean Won
1 Philippine Peso = 0.00594 Kuwaiti Dinar
1 Philippine Peso = 0.01622 Cayman Islands Dollar
1 Philippine Peso = 6.47765 Kazakhstan Tenge
1 Philippine Peso = 163.7856 Lao Kip
1 Philippine Peso = 29.88528 Lebanese Pound
1 Philippine Peso = 3.04292 Sri Lanka Rupee
1 Philippine Peso = 2.5093 Liberian Dollar
1 Philippine Peso = 0.24248 Lesotho Loti
1 Philippine Peso = 0.0603 Lithuanian Lita
1 Philippine Peso = 0.01227 Latvian Lat
1 Philippine Peso = 0.02646 Libyan Dinar
1 Philippine Peso = 0.18183 Moroccan Dirham
1 Philippine Peso = 0.33356 Moldovan Leu
1 Philippine Peso = 0.98418 Macedonian Denar
1 Philippine Peso = 26.46361 Myanmar Kyat
1 Philippine Peso = 47.8837 Mongolian Tugrik
1 Philippine Peso = 0.1593 Macau Pataca
1 Philippine Peso = 6.96203 Mauritania Ougulya
1 Philippine Peso = 0.64676 Mauritius Rupee
1 Philippine Peso = 0.30795 Maldives Rufiyaa
1 Philippine Peso = 14.11195 Malawi Kwacha
1 Philippine Peso = 0.37086 Mexican Peso
1 Philippine Peso = 0.07803 Malaysian Ringgit
1 Philippine Peso = 0.24161 Namibian Dollar
1 Philippine Peso = 7.0807 Nigerian Naira
1 Philippine Peso = 0.6072 Nicaragua Cordoba
1 Philippine Peso = 0.15518 Norwegian Krone
1 Philippine Peso = 2.0265 Nepalese Rupee
1 Philippine Peso = 0.02715 New Zealand Dollar
1 Philippine Peso = 0.0076 Omani Rial
1 Philippine Peso = 0.01978 Panama Balboa
1 Philippine Peso = 0.06341 Peruvian Nuevo Sol
1 Philippine Peso = 0.0624 Papua New Guinea Kina
1 Philippine Peso = 1 Philippine Peso
1 Philippine Peso = 2.18473 Pakistani Rupee
1 Philippine Peso = 0.06706 Polish Zloty
1 Philippine Peso = 110.52215 Paraguayan Guarani
1 Philippine Peso = 0.07202 Qatar Rial
1 Philippine Peso = 0.07488 Romanian New Leu
1 Philippine Peso = 1.11739 Russian Rouble
1 Philippine Peso = 16.52987 Rwanda Franc
1 Philippine Peso = 0.07417 Saudi Arabian Riyal
1 Philippine Peso = 0.15387 Solomon Islands Dollar
1 Philippine Peso = 0.26503 Seychelles Rupee
1 Philippine Peso = 0.13841 Sudanese Pound
1 Philippine Peso = 0.15847 Swedish Krona
1 Philippine Peso = 0.02609 Singapore Dollar
1 Philippine Peso = 0.01433 St Helena Pound
1 Philippine Peso = 0.4392 Slovak Koruna
1 Philippine Peso = 150.90981 Sierra Leone Leone
1 Philippine Peso = 10.85839 Somali Shilling
1 Philippine Peso = 393.89636 Sao Tome Dobra
1 Philippine Peso = 0.17306 El Salvador Colon
1 Philippine Peso = 10.18552 Syrian Pound
1 Philippine Peso = 0.24175 Swaziland Lilageni
1 Philippine Peso = 0.63054 Thai Baht
1 Philippine Peso = 0.04769 Tunisian Dinar
1 Philippine Peso = 0.04409 Tongan paʻanga
1 Philippine Peso = 0.07507 Turkish Lira
1 Philippine Peso = 0.13281 Trinidad Tobago Dollar
1 Philippine Peso = 0.5839 Taiwan Dollar
1 Philippine Peso = 44.34335 Tanzanian Shilling
1 Philippine Peso = 0.56547 Ukraine Hryvnia
1 Philippine Peso = 71.79588 Ugandan Shilling
1 Philippine Peso = 0.01978 United States Dollar
1 Philippine Peso = 0.56468 Uruguayan New Peso
1 Philippine Peso = 160.81883 Uzbekistan Sum
1 Philippine Peso = 0.19729 Venezuelan Bolivar
1 Philippine Peso = 449.14952 Vietnam Dong
1 Philippine Peso = 2.0449 Vanuatu Vatu
1 Philippine Peso = 0.04966 Samoa Tala
1 Philippine Peso = 10.5352 CFA Franc (BEAC)
1 Philippine Peso = 0.0534 East Caribbean Dollar
1 Philippine Peso = 10.5352 CFA Franc (BCEAO)
1 Philippine Peso = 1.90645 Pacific Franc
1 Philippine Peso = 4.94363 Yemen Riyal
1 Philippine Peso = 0.24183 South African Rand
1 Philippine Peso = 102.64043 Zambian Kwacha
1 Philippine Peso = 7.15783 Zimbabwe dollar

The Fed and the falling peso

The United States Federal Reserve (the Fed) is the equivalent of the Bangko Sentral ng Pilipinas ( BSP) Monetary Board where it is the primary regulatory authority for American banks and financial institutions. As both a bank regulator and the foremost economic policy making body in a free market economy it has perhaps the most influence in crafting US macroeconomic policies. 

The Fed meets regularly. In those meetings one of the most anticipated topics that the American public and the world at large anxiously await is the matter of interest rates. These are so termed policy rates because they not only have systemic impacts on the rates charged on debt as well as those paid on deposit liabilities but also because these are critical determinants of an economy’s currency.

While the value of a currency results from a number of other factors, one of the most important is the interest rates determined during those meetings.  There indeed are other determinants however. One is the volume of trade between the American economy and a trading partner such as the Philippines, including the balance of payments that result from that relationship, the debts incurred in the trade and others, each coming together to create values based on the bilateral exchange.

Another determinant is money supply, whether in cash or other forms, and whether these are kept inside bank vaults, in circulation, a combination of both or inclusive of other variants like checks, drafts, even novel forms that substitute as media of exchange.

And then there is the value of money based on that crusted law of economics every college sophomore knows by heart -- the law of supply and demand. Money after all is a commodity just like pork bellies and beans. It is tradable. It can be hoarded. And there are circumstances under which it is demanded more than at any other time.

Note how the law of supply and demand influences the value of the peso during an election year when money supply increases should the mint print out more and the resulting supply circulates to fund campaign materials, posters, even vote buying. Election periods witness a rise in inflation where the peso falls as its supply increases.

Most of these determinants are locally confined. This is not the case with the US dollar, the decisions of the Fed and the impact of both on our side of the Pacific.

Recently the Fed had met amid the highest spike in the American manufacturing index in the last 13 years. Never mind that most of those 13 years saw downshifted outputs, ironically during wars aggressively fought despite increasingly aging and depleted military hardware. Not only had the war machine practically jammed under the Obama administration but both jobs and remnant manufacturing migrated outside the Union. 

In contrast, in the few months since the Trump presidency took office inbound foreign direct investments (FDI) increased, manufacturing churned back on and domestic employment ramped up exponentially.

The foregoing helps us to understand what economic conditions underlie and preempt interest rate deliberations that found the dollar’s value.

In considering rate policies the Fed looks at several economic indices that indicate domestic capacities to absorb increased rates. Among the bellwether indices are productivity, employment and the manufacturing index. 

FDI flowing to the United States in the second quarter of 2017 under the Trump presidency had increased by as much as US$ 46,200 million -- double  the average FDI increase of US$ 23,860 million from 1994 to 2017.

For productivity, surpassing expectations, the US gross domestic productivity (GDP), expanded on an annualized basis by 3.1 percent
 its strongest since 2015.

As of the middle of the year the US unemployment rate had fallen to 4.1 percent the lowest in 10 to 16 sixteen years. Not only are jobs catalysts for the strengthening of the dollar but these reflect the financial resilience of the American worker in coping with increased debt costs following rate hikes.

Finally, as previously mentioned, the US manufacturing index  hit a 13-year high at 60.8. When these set of economic indices chorus, the music produced is a song of praise as investments flow in or return home as Americans troop back to work, and their jobs, specifically in the manufacturing sector, produce unprecedented growth.

These conditions compel the Fed to raise rates before the year ends regardless of further adjustments. A rate hike is a virtual certainty this December pushing the peso lower somewhere around $1: P52. Elliot Wave forecasters see it weakening further in the medium term.

These do not augur well for the Filipino public, courtesy of a rubber-stamp congress, likely to be hit hard by higher excise and value-added taxes in 2018 as a stronger dollar weakens an already fallen peso and aggregate prices rise, while investment capital flies to the US where higher interest rates yield higher returns.
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