Philippine Peso is the currency of the Philippines. The Central Bank of the Philippines, the Bangko Sentral ny Pilipinas (BSP) administers foreign exchange controls and all other currency problems in the Philippines.
The former Marcos government of Philippines, known for its corruption, always aimed at retaining the foreign exchange earnings from traditional exporters. From 1970 to 1984, the Philippines had an intermittent history of multiple rate structure with different rates to foreign exchange transactions for exports, imports and foreign debts, on the basis of a daily "Guided Rate". From 1970 till 1973, traditional exporters were required to surrender 80% of the foreign exchange earning at a "Official Rate" fixed at 3.9, which is more disadvantageous to exporters than other rates. This requirement was later replaced by a stabilization tax on traditional exports, which also worked to siphon off the gains of traditional exports. (Bautista, 1987)
In mid 1980s, with the economic takeoff of the neighbouring Asia-Pacific area, the Philippines witnessed the importance of removing distortions in its economic regimes and opening up the highly protected economy. Also partly due to the 1983 financial crisis, in 1984 the multiple rate structure was abolished. Ever since then, the Philippines has maintained a floating exchange rate regime. An Inter-bank Rate, determined on the basis of supply and demand in the exchange market, has governed all transactions. The authorities intervene in the medium to maintain orderly market conditions and the political objectives. In addition, the Bankers Association maintains a Reference Rate as the Peso-U.S. Dollar convention rate for customs valuation purposes and for computation of import duties/taxies.
Major sources of reference include:
1. World Currency Yearbook. (WCY)
2. Annual Report on Exchange Arrangement and Exchange Restriction. (IMF) 3. Romeo M. Bautista (1987): Production Incentives in Philippine...
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