Peso hits highest value in 4 years on news of Obama reelection



MANILA, Philippines—The peso rose to its highest in more than four years on Wednesday as the market reacted positively to the reelection of US President Barack Obama, a development seen to allow the world’s biggest economy to pursue his administration’s reforms aimed at a more substantial recovery.

The local currency closed at 41.06 against the US dollar, up by 15 centavos from the previous day’s finish of 41.21:$1.

Intraday high hit 41.05:$1, while intraday low settled at 41.215:$1.

Volume of trade amounted to $968 million from $750.7 million previously.

Wednesday’s close was the highest in over four years, market data showed. The last time the peso closed stronger than 41.06 against the greenback was on March 7, 2008, when it finished at 40.85:$1.

Traders said the announcement of the results of the US presidential election has somewhat removed the cloud of uncertainty surrounding the supposed implementation of several fiscal reforms to help address the US government’s debt problems.

By the end of this year, taxes related to the Obama administration’s health care law, as well as certain budget cuts and lifting of some tax perks for businesses to help put the fiscal house in order are scheduled for implementation.

Traders said that with the election over, some investors went out of the sidelines and purchased emerging market assets, thereby lifting Asian currencies, including the peso.

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  • George Lapulapu

    the headline is misleading..

    ang ibig sabihin ba ay bumaba ang dollar against peso dahil nanalo si Obama? the headline is overstretched..mapasama lang sa election sa US kung anong headline ang gagawin …

    poor taste..trying hard ang dating ng headline.. why not..”Peso hits highest value in 4 years on news of change in Chinese leadership” .

  • adelpaddemar

    Maging OFW muna kayo tapos mag comment kayo sa balitang ito!!! karamihan  sa OFW, hirap sa trabaho,hirap madagdagan ng sweldo dahil may kontrata, ang bilihin tumataas, dahil sa sinasabing good performance ng peso in effect bumababa ang sweldo ng OFW, hindi na nga nadagdagan nabawasan pa.

  • Hayek_sa_Maynila

    Nagiging complacent nanaman ang BSP. Sayang at maganda na ang momentum ng ekonomiya natin. Patungo na sana tayo sa Investment Grade…

    pero kung magpapatuloy ang paglakas ng piso at pabayaan nating maulit ang mga pagkakamali noong 2006 at 2007 (bago mag Lehman bankruptcy), noong 1994 to 1996 (bago mag Asian Crisis) at maging noong 1980s (debt crisis) mauubusan nanaman tayo ng gasolina, kung baga, at malamak na tumirik nanaman ang Pilipinas. hindi nanaman natin matutugunan ang mga paghihirap ng nakararami sa ating bansa.

    Sa mga taga BSP: ano po ba ang mawawala sa atin kung mamili pa po kayo ng dolyar o Euro o Yen o anupamang foreign currency para mapigilan ang paglakas ng piso? Nakita nyo na po na kahit binagsak ninyo ang poicy rate nyo mula 4.5% patungong 3.5% ay hindi man lang umabot ng 4.0% ang inflation rate natin…Huwag po kayong matakot na palaguin ang pisong umiikot sa sistema…mas delikado po kung utang na dolyar, dahil sa mababang interes sa Amerika ang utanging ng mga Pilipinong negosyante tulad noong 1994 to 1996 at syang gamitin sa pagpapatayo ng mga real estate projects nila…Napakadelikado po noon.

    Pagsisi-sihan po natin ang hindi pag imbak ng dolyar. Mukhang marami lang ang $82 billion dahil hindi pa po umuusad ang mga PPP projects at di pa nakakabangon ang manufacturing….kakailanganin po natin ng $100Bn na dolyar pag nagsimulang bumulusok ang mga proyekttong yan…kaya wag po kayong matakot na mamilil pa nang dolyar sa merkado…

    Babalikan ko po ang komentaryong ito sa isang taon – at kapag pinabayaan ng BSP na tumawid ang palitan ng USD/PHP ng 40 ( ++), hindi po natin makakamit ang investment grade. Uulitin ko, HINDI PO NATIN MAKAKAMIT ANG INVESTMENT GRADE at alam natin kung sino ang may kagagawan nito.

    • It’s No Time To Doubt Now

      You can rest assured that our beloved President PNoy is on top of the situation. He will temper what needs to be tempered and stimulate what needs to be stimulated. He is very much in control of what needs to be controlled and very loose on what needs to be loosened. You can be sure that a year from now your doom and gloom prognosis will prove to be far off.

      • Hayek_sa_Maynila

        Don’t get me wrong. Personally, I’m very hopeful that the administration succeeds. Unfortunately there might be people surrounding PNoy who give him advice to allow the peso to strengthen and that that its ok because they think “our fundamentals are good.”

        Unfortunately these pseudo experts do not even listen to the real experts (national scientists who teach and conduct research in Centers of Excellence) who are in the know. Why are they ignoring the plea of Raul Fabella and other seasoned economists to put a stop to the PHP’s appreciation?

        Pnoy has done a great job so far but a wrong move here could squander all his and his cabinets’ achievements…sayang naman. We need the investment grade rating badly as this will improve our still dismal investment (foreign direct, domestic capital formation, PPP, etc.) picture

      • It’s No Time To Doubt Now

        Friedrich, you can rest assured that the debate behind closed doors is a lot livelier, more diverse and more nuanced than some people might think. Your point of view is weighed carefully by those who pull the levers.

  • masternoiyel masternoiyel

    stupiiddddd speculatorsss…..mga ganiiddddd!

  • Tanya Ileto Diaz

    I don’t have a very good grasp of macroeconomics and finance, but I feel a little confused by the headline “Peso hits highest value in 4 years on news of Obama reelection.” As financial jargon, a statement of fact, I think I get it – but taking into consideration the repercussions of said fact in the larger context of our economy, the headline misleads me. If the value of the peso is literally going down against the dollar, doesn’t this pose more negatives than positives for Filipinos? Sure, imports may be cheaper – but OFW dollar remittances, dollar investments abroad, and export prices will be worth less when translated to peso. So how is this a good thing? The phrase “highest value” in this headline makes me confused!!

    • Edward

      dre, ang payo ko sau pag aralan nyo ang basic economics at finance kung may pagkakataon kau para paunti unting mauunawaan nyo ang mga bagay bagay…pero, bilang payo sau, hwag nyo seryusuhin ang balitang ito or else maliligaw ka lng..kasi naman sobrang tamad ng mga business reporters na maghanap ng dahilan sa bawat balitang ibabalita lalo sa ganitong balita…this is purely a product of market or financial trading…trading trading..speculation… pagkagising nyo bukas magbuklat kau ng pahayagan lalo sa business news column and u would find out the reasons behind the movement of an speculative trading…pangkaraniwan lng sa market na maghanap ng dahilan sa isang balita kung wala silang makitang balita to support the movement of the market…

      • Tanya Ileto Diaz

        Tama ka diyan, Edward. :) But my point here is that there are many people (particularly of the younger generation) like me who aren’t seriously interested in/about economics at this point in our lives, don’t necessarily understand financial trading or speculation, and will not pick up an economics book just to find out what these concepts mean. We want to find out what these concepts are without having to flip through 10 more pages in the business section and go through the inconvenience of digesting all the data. Unfortunately, it’s a fact.

        As a reader without any background whatsoever in economics or finance, seeing the headline “Peso hits highest value in 4 years on news of Obama reelection” engages me to read the article – but it stops there. Without context or further explanation, I’m bound to be misinformed about the issue. 

        I honestly think that if reporters expect their audience to find out what financial trading and speculation are on their own, then they have totally failed at their journalistic responsibility to communicate an issue clearly and understandably. If the news is significant, write it significantly. Give the issue meaning by putting facts into context.

      • Mark

        very good … nakuha mo yung proper term. “SPECULATION”. Pababain ang value ng dollar, then maraming bibili, pag gusto ng ibenta yung dollar itatas yung value. Money market baga

      • Tanya Ileto Diaz

        I’d also like to add that the “money market” / “speculative” definition of currency value is completely fine, but complacent. What I mean by the word complacent here is that the definition on its own doesn’t contribute to public understanding – it seriously needs more scope & depth. Everyday readers don’t want the economics behind speculation, they want implications, repercussions – the broader reason why the peso hitting its “highest value in 4 years” is relevant to them and why they should care about it. 

  • RomyLitz

    Since we import a lot for our gasoline consumption and western medicines, the import sectors will be grinning ear to ear while the exporters and the OFWs will either eat more dusts or curse the present administration. Pnoy should now lower the price of our local gasoline prices together with transportation fares .

  • spitfire

    Congrats to Obama and his supporters, the people have spoken. Also, congrats to Romney and his supporters, they fought a very dignified and professional fight. I just can’t help calling “bonehead” as a label for that MNBC reporter named Chris Matthews, f you had watched MSNBC. Immediately after Roney graciously conceded defeat this bonehead Chris Matthews gleefully uttered, “I am very thankful of hurricane Sandy because it helped a lot on Obama’s reelection.” This bonehead did not even think a second of the great damage Sandy had brought to America, more specially the lives that were lost. What a moron and yet MSNBC is allowing this bonehead to spread his venom in mainstream media.

    Indeed, the Americans opted for a drastic change yet, I am not sure if these changes will bring prosperity. Take a hard look on the following changes:

    1. While there might be no immediate wars, the security of America and democratic nations are seriously threatened by terrorists now; they might as well supporgt the Koran;

    2. Gay marriages has become a fad and more states are espousing it based on the results of the elections; they might as well ban the Bible;

    3. Two states have legalized Marijuana for any use. What’s next legalize illegal drugs?

    4. Rising unemployment, foreign debts, and unbriddled budget deficits are now considered welcome development for a robust economy; and finally

    5. Abortion seems to be a morally righteous practice now for an open-minded mankind.

    Alas, these are the welcome changes that America is facing in the near future. Obama is definitely correct after all. America has to suffer it’s previous excesses to level the global playing field. Indeed, “Voting for revenge is the best answer.”

  • The Truth

    Maybe 4 years is wrong.. please check.

  • Emie

    The Philippines should not tolerate this intentional depreciation of the dollar by the US.  Asia is the major source of global export.  China pegged the RMB value to about 6.3 for several years now because it would doomed their export manufacturing industry if they let the market dictate its value.  Most of the manufacturing in Asia are labor intensive.  Asian manufacturers are paid in dollar for their exported goods and then pay local currency for workers salary.  Thailand is losing its manufacturing already due to fast appreciation of Baht. Thailand’s garment industry is one of the casualty.  Vietnam’s manufacturing industry is getting stronger but the Dong even depreciated.  With highest electricity cost in Asia and the strong peso to dollar exchange rate, export manufacturing will not return to the Philippines.  Without the strong manufacturing sector, major source of employment for low skilled and lower education labor force, the Philippines can’t sustain it’s economic growth.  The Philippine economy is relying too much on portfolio investment, meaning paper or imaginary money, and anytime portfolio investors withdraw their paper money, the economy may plummet to ground zero.  The lack of manufacturing is also the reason why ordinary Filipinos don’t feel those claimed economic gains.  Unemployment remains high and increasing by the day.

    • robrano

      The big problem is just coming. The ending ofthe laws which made several taxes and other duties like insurances cheaper for the americans will cause a trillion financial burden to them and lessen their purchase spending. Which then could cost jobs and less tax income for the government. Only a low dollar can boost exports and create or at least stabilize jobs. Only the super intelligent RP economists in the admin think that an overvalued local currency is good for the country. They think if goods can not be exported, we just export OFWs who then send remittances home.

      • Saint Luci

        One of the reasons why a lot of First world countries are in economic trouble is because they have been manipulating economics factors, one of which is currency. That is just kicking the can down the road. What if the road ends? And we all know it will end. And when it ends it will be a bigger catastrophe.

        The monetary board’s decision not to intentionally devalue the peso due to influx of foreign money and devaluation of the dollar is correct. Yes there is a risk to exporters. That’s just the way it is. They either get out of their situation or suffer together with the countries they are selling to. That includes OFWs.

        Two sides to a coin. Above is one side. Below is the other side.

        To counter the risks to exporters/OFWs/BPOs, they must diversify their portfolio and sell to currencies not being devalued. That is what a wise business man will do. Even local market is an option.

        As an effect of stronger peso, we will have increased purchasing power on goods reliant on imported components, which translate to increased extra money – jeepney drivers are perfect examples. Once people have increased extra money, they either splurge thereby generating further economic activities, or they save or even invest (say buy houses), which again also increases economic activities. Not to mention, the influx of foreign investments since they want to ‘ride’ the currency bandwagon, and increased investments will, again, result to increase economic activities.

        Net-net, a stronger currency will be beneficial for us. 

        This is the reason why the US created the petrodollar system in the 70’s, and they prospered. The reason that they are going down is because the next generation had entitlement issues as a result of the progress.

        So for those in 20’s/30’s/40’s age group, if ever the Philippines becomes a boom, please teach your children good work ethics / they should love work. Wag aasa sa gubyerno kagaya ng mga bansang pababa na ngayon. Last word, end all governemnt subsidies!

    • Emie

      By the way, I failed to mention that GMA violated the Philippine Mining Law and signed many mineral exploration and extracting agreement with foreign mining companies in order to increase the dollar inflows.  Despite the protests of environmentalists, displacement of indigenous people, land slides and massive flooding resulting from the evils of mining activity, wide spread mining and excavation and flattening of mountains in the provinces continue and PNoy is not stopping it because he has to obliged to instruction of the IMF and other financial institution otherwise they will force the Philippines to expedite the payment of our 5 trillion foreign debt. PNoy is running after GMA’s loot but he is not correcting her mistakes.  PNoy even adopted those Senators who violated the laws they themselves created in the first place.  As long as the Philippines allow the US to dictate on our economic policies, we are not going anywhere.  Look at China, Malaysia and Vietnam telling the US to mind their own business.  While the western economies demand the Asian and emerging economies to remove trade barriers, they continue to implement their protectionists policy like strict product safety law and customs inspection and certification requirements.  Alas China has the power to do the same with all of its trillions of money.  I hope Lito Lapid understand this.

      • John

         If US is as protectionist as China, Japan and Korea, US economy will be in a much better shape.

    • RomyLitz

      Securities? What about the US$28 Billion dollars remitted annualy by the OFWs and the almost equal amount by the BPOs?

  • robrano

    To It’s No Time To Doubt Now

    Hello Yellow, 
    and may I suggest that you start to think before you
    post? The high pso has nothing to do with Noy or anything in RP, it is
    plain manipulation.
    What should be good if RP becomes too expensive
    for exports and tourism? The high peso will not and has never effected
    any lower price in pesos even for dollar-imported goods. The profit only
    goes to big business and to BSP which pays less pesos to OFW families
    for their foreign remittances.
    The administration wants to tell that a
    high peso is a sign of good government. They do not even care that even
    booming China has to lower the Yuan value for being able to export and
    to attract investors or that Germany is booming in exports due to the
    Euro which is now 1.28 dollar compared to 1.54 prior to the crisis. Or
    that Japan has an export and a job problem due to its high Yen. Local RP
    prices for common goods are already often the same or even higher than
    in countries with 10 and 20 times higher salaries. Thanks to the beloved
    super economist in Malacanang? Then, better the school dropout Erap or
    GMA, duringtheir time the peso was lower but had a much higher local
    purchase power, and that is the only what counts to the people.

    • It’s No Time To Doubt Now

      Sorry to disappoint you robrano. The rational choice is clear. Every rational Filipino will choose PNoy’s good governance over GMA’s economics of bitterness. Even Adam Smith will have to agree.

      • Emie

        GMA as well use the peso exchange rate and the stock exchange index as key economic performance indicator that is only applicable to developed economies instead of per capita income and unemployment index that applies to underdeveloped economy like the Philippines.  Before being elected, PNoy also agreed that it was not correct.  Now he has nothing to do but follow GMA’s mindset, after all he is her student.  He is only better than GMA because he is not corrupt or so it seems. The general population has yet to experience the economic gains that PNoy is boasting of.  But most of the Filipinos are also aware that it is the money of the OFWs, the real money, that keeps the economy afloat.  OFW money fuels the retail industry especially the basic commodity but as well the real state industry. Of course we also have the BPO’s or the call centers. 

      • It’s No Time To Doubt Now

        To be sure, there’s always a lag time between macroeconomic numbers and when it trickles down to everybody else. But by paving Daang Matuwid, our beloved President PNoy is expediting the trickle down process so that every Filipino will benefit from his better governance. In a country of 90+ million people and more than 50% informal economy, trickle down does take time. Moreover, relying on OFW remittances is now a recognized economic model which is being replicated by Bangladesh and other African countries. Nothing wrong with relying on remittances to buoy up domestic economy. The BPO industry under PNoy’s administration has seen growth with the entry of Wells Fargo, Bank of America, expansion of JP Morgan Chase, expansion of Citigroup Shared Services, expansion of healthcare backoffice and many more.

        Our dear leader PNoy’s contribution to all this is clear.

      • Emie

        PNoy has no right of claim to a single cent of OFW money, yes, he too forcefully dispatched Filipinos abroad because he has not yet created local employment. 

        Pnoy has yet to earn his bragging rights… until now it is only rhetorics that separate him from Erap and GMA

      • It’s No Time To Doubt Now

        Let’s give him more time na lang. He’s already done a lot to right this ship. Malapit na po.

      • Saint Luci

        “Let’s give him more time na lang. He’s already done a lot to right this ship. Malapit na po.”

        Nasasabi mo yan kasi mag kinakain ka pa. Pumunta ka sa isang depressed area at ipagsiagawan mo yang sinulat mo. Sabayan mo na rin ng takbo dahil pihado uupakan ka nila at tatawaging sinungaling.

      • RomyLitz

        Agree 100%. Its the OFWs and the Call Center employees that generate more dollars than our export revenues.

      • George Lapulapu

        am not sure of the figure, but what percent nga ng GDP natin is from OFW?

      • Edward

        But not us who are students, teachers, guru, economists, market disciple, market participants…lokohin mo ang lolonyong p..not..hayyy…nakakalungkot ang kagaya honest dre sa sarili nyo…I am not pro Pnoy nor GMA but Pnoy good governance (kung meron)…wla akong nakikitang governance governance dre…

      • It’s No Time To Doubt Now

        Just bear with us some more. I know you mean well Edward. But not the others in this forum. Just go with the flow. Go with Daang Matuwid. Give it some more time.

      • John

         It’s been 2 years and Pnoy has not done an iota, all he does is blame the previous administration for woes he himself created. Most previous administrations were one way or another corrupt, including Cory’s administration. Its time to accept responsibility and take action. Baka matapos lang term ni Pnoy walang pa ring nagawa kundi blame game

      • It’s No Time To Doubt Now

        hoy, gising.

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