The Mighty U.S. Dollar @ War vs. Emerging Markets

Financial Times, Robin Wigglesworth, reported the “Economist fear that a strengthening US currency spells calamity once again for emerging Markets.”

It was after the 2008 US- Western Financial crisis and ” Melt Down” in Nations like, Greece , Spain, Portugal and even ICE Land did “melt”. That National Funds, like that of the “Brazilian Model” that turned  in or switch to the Euros. Which, in time proved to be the wrong move.

Ben-Franklin-100-Bill

The US government’s Monetary strategy started “pumping iron” as the Federal Government started printing $ 2.5 Trillion U.S. “mighty” dollars to stabilize the Dollar, and prevent a total Financial Collapse.

In the report, Wigglesworth , wrote; “Moreover , most currencies are now allowed to fluctuate , providing an an additional pressure valve in crises. Further depreciations  would make emerging market exports cheaper and claw back some of the competitiveness  lost in recent years. Central Bank reserves have been bolstered to provide additional insurance.  Emerging countries had a financial war chest of almost U.S.$ 7.5 trillion by mid-2013 up from U.S. $ 1.2 trillion a decade ago. “

I feel that The Philippine PESO, being part of Emerging markets , needs to take necessary “safety nets” since the Ph PESO is vulnerable with Global Economic and Financial forces.

Our concern is how the U.S. – Obama Administration has been capitalizing on their  “Mighty Force” , via the FEDERAL “Dollar Printing Machinery ” and their plans to reduce its monetary stimulus,  resulting to our PESO and other Emerging market currencies dropping in value vs. the Mighty U.S. Dollar.

The bad news here for “developing countries” in need to cover their Dollar Debts or Borrowings , will be forced to devalue, or go “broke” in a “meltdown” Something that we in the Philippines sadly experienced financial turmoil in 1997- 2000.

The Good News for the Philippines is that given our own Strength, is our Resilient and Strong Monetary fundamentals. If the U.S. Dollar is ” High and Mighty ” well, the Philippine PESO, like a ” bamboo” may bend,  but won’t ” give in” . We need once more to give credit to our heroic, patriotic, and hard working OFW’s Remittances. As of November last year, Remittances reached U.S. $ 20.6 Billion U.S. Dollars.

Credit must be given to our Healthy Population Growth. Our “People Power” Demographics, of a strong Labor and Knowledge Working  Professionals that are now in every corner of the ” Global Economy”. This makes the argument that our Aquino Government Administration  to reconsider their “birth control” policy.

Funny how Nations who insisted on a Two Child policy in the 1960’s are now in deep regret, since their Demographic situation is in a very unhealthy, with “inverted pyramid” . This is a phenomena of an “Aging Poppulation” that may lead some nations, (as it is being experienced now)to end up with an ” ” extinct ”  civilization or a Nation dominated by “imported” workforce, dual citizens, and migrants.

Today’s Business World Banking & Finance NEWS by A.R.R.Gregorio and DJBE, wrote that the “Peso yesterday closed at the 45- to- the Dollar lever
for the first time in more than three years as positive retail sales data out of the United States reinforced investor bias for the dollar. “

The BANKO SENTRAL NG PHILIPINAS  to the Rescue?

amando-m-tetangco-jr-of-bspBSP Governor Amando M. Tetangco jr. Said that the BSP will be “present in the market, as warranted, to reduce any excess in rate movement and market behavior “This is also known as “market-determined rate”.

The Monetary authorities are ready to intervene , yet, unfazed by the peso’s weakness. Even if, private companies usually purchase dollars in the middle and at the end of each month to pay for obligations abroad , in turn dragging the peso’s value against the greenback.

“BSP Governor Tetangco noted the country’s strong macroeconomic fundamentals, coupled with a healthy banking system, should enable the local economy  to weather adverse effects of the peso’s weakness. “The BSP Governor added in his statement, and said :

“If you look at the fundamentals, they remain sound. The constructive economic story of the Philippines remains intact”

In conclusion, I would say that we are indeed a very fortunate Blessed Nation, particularly our Beautiful and Stong ” P.E.S.O. ”  Filipino  People , which has more Value and Wealth than the ” Mighty U.S. Dollar” .

P- People Knowledge Power
E- Entrepreneurial  Spirit
S- Service with a Smile
O- Overseas Global Reach and Presence

However, we still have a long way to go , and the need to improve in several  National issues, concerns, problems and obstacles , that our Dear Philippines to be a better place to have a Quality of Life.

"Si MALAKAS at MAGANDA". Filipino is globally known to be strong and beautiful. source: xiaochua.net

“Si MALAKAS at MAGANDA”. Filipino is globally known to be strong and beautiful.
source: xiaochua.net

Graft, Corruption, Crime, Natural Disasters  and Man- Made Environmental destruction, as well as a very poor Social Justice System and the sense of the COMMON GOOD,  are but some very important National Issues that needs to be addressed. What we need is a National Culture of ”  VALUES” . Our “MAGANDA – MALAKAS ”  Global Filipino ! Yes, this will be our Victory , vs. our “War” on Currencies our P.E.S.O vs. the “mighty US dollar”.

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