Economist Lauds Sandro Marcos Over Knowledge in Foreign Exchange Market
An economist has lauded the Presidential son Sandro Marcos for his ‘weak peso’ statement and knowledge of the foreign exchange market.
Sandro Marcos, the first district representative for Ilocos Norte and the son of President Ferdinand Marcos Jr., has recently gained attention. This came after he was asked by regional media in his province to comment on the effects of the peso’s decline against the dollar.
The peso is presently trading at about PHP58.93 to one dollar, having consistently dropped to new record lows as a result of rising inflation rates. Sandro, a London School of Economics graduate with a degree in development studies, provided a response to the issue that led some to doubt his economic background.
“The peso is not weak, because the peso is weak. The peso is weak because the dollar is strong,” he said in a video that has been making the rounds online.
Dr. Michael Batu, an economist, praised Sandro’s expertise in the foreign exchange markets while others made light of it and stood there scratching their heads. He also emphasized that if Sandro were one of his students studying international economics, he would give him a flawless grade on his answer.
“Noong una ko kaagad narining sabi ko tama ‘yung sinabi ni Sandro, kaya nga nilagay ko sa Facebook ko. Sabi ko, alam mo kung itong si Sandro estudyante ko sa international economics ay bibigyan ko ito ng perfect score, based doon sa kanyang paliwanag doon sa recent depreciation ng peso,” he explained based on the post of SMNI News.
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Just ask the governor of BSP and his expert staff why the peso is weaker relative to the U.S. dollar. They would know better why the peso is weak or strong, or If the U.S. dollar is really stronger than the peso and why. There are so many factors affecting why one currency is stronger than others. If most of the contracts made by importers and exporters in the Philippines are denominated in U.S. dollars then the basis for payments are also in dollars; not yen, not euro, not yuan and not other currencies and the U.S. ; the strength of the peso depends on the surplus or deficit in the balance of international trade.If the BSP collects more dollars due to more exports made than imports then Philippines has a surplus and favorable to making the peso stronger; otherwise it’s weaker. That’s probably the biggest factor affecting the value of peso. Remittances by OFW is another factor influencing the strength or weakness of the peso. During lockdown OFW remittances were down significantly. Another factor is the expected obligations of the Philippine Government for payment of loans acquired from various countries like China, Japan, Canada, Europe, UK, the U.S. and if the loans are denominated in each creditor’s currency and each of their currency is stronger than the U.S. dollar the more the peso becomes weaker, not stronger. So the bottom line really is how strong or weak is the Philippine economy. Higher employment plus higher production means higher Gross Domestic Product (GDP). The peso can be competitive in the global economy if the Philippine political and economic policies are conducive to local businesses and entrepreneurs, and can also attract more foreign investors and businesses to operate in the Philippines.
Oh come on! Every students taking up business courses, specifically Accountancy and Economics courses already know the rationale behind the relationship of peso and dollars.