1. THE PHILIPPINE PESO
"In Mexico, Cuba, Puerto Rico (and the Philippines), Americans imitated the imperial tactics of the British, the French and the Germans. The US-led International Monetary Fund (IMF) and the World Bank (WB) compelled its member nations to peg their currency to the American dollar or to gold - most of which was held by the United States. Soon a third component was added to the system: the General Agreement on Tariff and Trade (GATT) setting out to liberalize trade, which had the effect of making it difficult for the poorer, less technologically advanced countries to protect their fledgling industries. The IMF-WB-GATT system were wired together by a rule that prohibited the World Bank from making loans to any country that refused to join the IMF or to abide by the GATT. This system made it difficult for debtors of the United States to reduce their obligations through currency or tariff manipulation." ALVIN TOFFLER, The Third Wave, August 1982. The Philippine Peso, as the country's medium of exchange has gradually diminished in value. From P 2.00 to the US dollar in 1935, it had dwindled down to P 55.65 in 2005. Through the years and various administrations, we can see its dramatic decline. | PERIOD | ADMINISTRATION | RATE / US$ | | 1935 - 1943 | Manuel L. Quezon | P 2.00 | | 1943 - 1945 | Jose P. Laurel | P 2.00 | | 1945 - 1946 | Sergio Osmena Sr. | P 2.00 | | 1946 - 1948 | Manuel Roxas | P 2.00 | | 1948 - 1953 | Elpidio Quirino | P 2.00 | | 1953 - 1957 | Ramon Magsaysay | P 2.00 | | 1957 - 1961 | Carlos P. Garcia | P 2.00 | | 1961 - 1965 | Diosdado Macapagal | P 3.95 | | 1965 - 1969 | Ferdinand E. Marcos | P 3.95 | | 1969 - 1983 | Ferdinand E. Marcos | P 11.00 | | 1983 - 1986 | Ferdinand E. Marcos | P 14.00 | | 1986 - 1992 | Corazon C. Aquino | P 25.75 | | 1992 - 1998 | Fidel V. Ramos | P 28.00 | | 1998 - 2000 | Joseph E. Estrada | P 50.00 | | 2000 - 2004 | Gloria M. Arroyo | P 56.65 | | 2004 - 2006 | Gloria M. Arroyo | P 51.65 |
Compared to the Thai Baht, whose value was approximately equal to the Philippine Peso before 1980, now, its exchange rate had likewise diminished, but only up to Bh 35.00 to the US dollar, as against our P51.65 per dollar. On the other hand, another Asian neighbor, Japan, had shown gradual appreciation of its currency from P 0.03 twenty years ago to P 0.54 at present. What are the factors for these discrepancies? And what are the causes that brought the gradual decline of the Philippine Peso? CAUSES OF PESO DEVALUATION
In the beginning, the Philippine...
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