The state of the Philippine peso

By Herbert Vego

AS of yesterday, the exchange rate of the US dollar against the Philippine peso had climbed to P57.80. Good news for the dollar earners?

Unfortunately, inflation is an illusion that has made our peso one of the “worst-performing” currencies in the world today. It means weaker buying power.

The economists interpret it to mean that the peso has come under pressure from rising oil prices, driven by heightened geopolitical tensions, such as the Israel-Iran conflict.

Today, as announced on radio, gas stations will increase prices of gasoline by P1.30 per liter, diesel by P.90. In other words, if you bought your gasoline at P56 yesterday, today it will cost P57.30.

How times have changed! I remember when, in the 1960s, regular gasoline sold at only 30 centavos per liter and one US dollar was worth four pesos.

My first job as a working student in 1967 paid me the minimum wage of six pesos per day.

And yet the Philippines was then known as the second most prosperous nation in Asia — second only to Japan.

China was not yet an economic power; it was known as “the sleeping giant”.

Toward the end of the 1960s, we were still way ahead of Taiwan. One peso at that time was stronger, equivalent to seven Taiwan dollars. The reverse is true today; our peso is weaker at fifty-two centavos against one Taiwan dollar.

President Carlos P. Garcia – whose term covered the 1957-61 period – tried to boost local products through his Filipino First policy, which restricted imports of products that were locally available and encouraged the manufacturing sector to export whenever possible.

An Ilonggo entrepreneur responded to that challenge by embarking on the canning industry. His Lix Products (somewhere in Mandurriao, Iloilo City) canned mouth-watering pork and beef delicacies such as adobo, menudo, sarciado and mechado. Still etched in my mind is the memory of those days when my late mother would wait on the street once a week for the truck selling the said goods around Panay Island on scheduled trips.

After Garcia came President Diosdado Macapagal, who imposed “de-control” – a policy that pegged low price ceilings on basic commodities to minimize monetary inflation.

When President Ferdinand Marcos imposed martial law in 1972, the economy initially resisted external pressure until the subsequent oil crisis which caused sudden price spirals.

The assassination of Senator Benigno “Ninoy” Aquino in 1983 destabilized the peso from seven to 13 per US dollar, triggering a downward trend.

The People Power or EDSA Revolution that restored democracy in 1986 and installed the widowed Cory Aquino to the presidency could have reversed the poverty of the masses, with the United States and almost all other democratic nations offering economic assistance.

Alas, we did not do as well as South Korea had done. While South Korea had also relied heavily on foreign assistance for survival, she realized that prolonged dependence on richer countries was also stalling her growth. And so that country marshaled her technocrats into developing industrial zones. That is why today, she exports motor vehicles and heavy equipment.

Fast  forward to 2016, former President Rodrigo Duterte relied heavily on foreign loans and dole-outs from China.

In his fourth State of the Nation Address (SONA) on July 28, 2025, President Ferdinand Marcos Jr. portrayed the Philippines as a stable investment destination, vaguely citing a reduced unemployment rate of four per cent.

Millions of Filipinos – whether skilled or unskilled – still work on foreign soil. Our women teachers swallow their pride, working as babysitters, domestic helpers and caregivers in Hong Kong, Singapore and Taiwan.

Good for the receiving countries; they free their own women of domestic responsibilities, enabling them to also work and augment their husbands’ income.

Ironically, ours is a country known for natural resources that are largely untapped. For instance, we turn our backs on idle pasture lands where we could have raised sufficient cattle, goats, hogs and other livestock for local and foreign markets.

There used to be the Insular Lumber Company (ILCO) in barangay Fabrica, Sagay, Negros Occidental. It grew trees and produced hardwood lumber (mostly Mahogany) for both the local and export markets, thus bringing in dollars to the Philippine economy.

We used to export rice. But now our poor farmers sell their farms to subdivision developers because they have lost their fortune to natural disasters like typhoons and floods, in effect forcing our country to imported rice.

We have yet to see our government beating that problem.

-oOo-

MORE POWER THROUGH ARTIFICIAL INTELLIGENCE (AI)

IN his speaking engagements, MORE Electric and Power Corporation (MORE Power) president Roel Z. Castro discusses the company’s plan to maximize the use of artificial intelligence (AI) to enhance service reliability and operational efficiency.

He always acknowledges the Iloilo Science and Technology University (ISAT-U) as a partner in this endeavor. But his aim is to empower company employees, not displace them.

The AI system will detect patterns in technical issues and large volumes of operational data often overlooked through traditional methods.

To recall one of his statements, “AI will allow us to see recurring problems, like how many times we’ve returned to the same customer account for repairs, or how frequently a particular feeder experiences issues.”