Why is the currency war bad for the Philippine economy?
The ongoing currency war is bad for the economy because it will cause the Philippine economy, as well as the economy of other developing countries, to be unstable. When the value of the Philippine peso appreciates, the prices of imports become cheaper, the domestic market, local firms will be affected. We can say that although the value of the Philippine peso seems to have become stronger, it does not mean that we are attaining economic development. The competitiveness of the Philippine pesos in the export market also becomes weaker, therefore forcing the Bangko Central of the Philippines to manipulate the Philippine currency to become lower. But because there are many nations in the world who do the same act of manipulating their currency to lower so that the demand of their export products will increase, the countries cannot attain the intended result. Instead of a positive outcome, the different countries may experience shortage of money supply. Right now, the onset of a worldwide currency war may push the world economy to another recession. People will definitely suffer consequences such as poverty, unemployment, low income, etc.
If you were the president of the Philippines, what would you do to solve it?
I think that as president of the Philippines, I should try to find alternative ways to make the Philippine pesos more competitive on the foreign market. Instead of concentrating on making the value of the peso to lower, I will push on laws to make the economy more efficient so that Philippine manufacturing firms will be motivated to produce more at lower cost and domestic prices can be lower. With lower production cost, there is a tendency for outputs or products to be cheaper or lower. It is also an advantage if the country would be able to purchase better technology to increase efficiency. For example, so transportation of goods will be more convenient from remote places, I will build...
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