Economist-solon Marikina City 2nd district Rep. Stella Quimbo has explained in layman's terms how the headline-grabbing weakening of the peso can produce both "winners" and "losers" in the Philippine setting.
"Yung exchange rate depreciation, may winners, may losers (There are winners and losers amid the exchange rate depreciation)," Quimbo said during Tuesday's Ugnayan sa Batasan News Forum
"Yung mga OFWs natin na kumikita in dollars, sila yung mga winners kasi mas malaki ang pag-convert ng kanilang remittances (The OFWs who earn US dollars are the winners because the conversion of their remittances become bigger)," she sad.
"And number two, exporters also gain and at the same time, pwedemg tumaas ang ating domestic production (our domestic production may increase) and also, that can be a reason for why we might be more attractive to foreign direct investors."
The Committee on Appropriations senior vice chairperson said that Philippine tourism will also get a boost under the current peso to US dollar exchange rate.
"In this situation, mas naeengganyo ang ating mga turista na pumunta sa Pilipinas dahil yung kanilang dollars, pag kino-convert to pesos, mas marami silang mabibili. So may mga sectors that actually gain from the depreciation of a weaker peso (tourists will be get more encouraged to visit the Philippines since their dollars will have more purchasing power. So there are really sectors that gain from the depreciation of a weaker peso)," she said.
"But of course may losers kasi we are very import-dependent (there are losers because we are very import-depedent)," Quimbo quickly added.
"So ibig sabihin yung mga imported raw materials natin, nagiging mas mahal, kasama dyan ang langis. In which case ang magiging effect is inflation, so yun ang binabantayan ng ating BSP (Bangko Sentral ng Pilipinas) (That means the imported raw materials that we import becomes more expensive, and that jncludes fuel. In which case, the effect will be inflation, and that's what the BSP is watching out for)," she noted.
"On one hand, nakikita nila na may sectors na magge-gain but on the other hand, binabantayan nila na may inflationary effect (they can see that there are sectors that gain advantages, but on the other hand, they're watching for the inflationary effect)," Quimbo said of BSP.
Inflation is observed in the increase of prices of basic goods.