By Herbert Vego
YESTERDAY, the wife of a seafarer phoned me the “good news” that the US dollar had climbed to ₱55.60 and expected me to rejoice.
That seemed logical because in 2021, I bought green bucks from her at ₱51 per dollar in preparation for a flight to New York City. But I still have not flown, and one of the reasons is the prohibitive increase in the price of plane fare.
Looking back to that purchase, it appears that my ₱51 in 2021 has gone up to ₱55.60 for a profit of ₱5.60 per dollar. Hooray!?
Being a non-economist, I would rather not attempt a “scientific” reaction to the new dollar rate. Suffice it to say that the rise of the dollar means the fall of the peso. Dollar earners may salivate, but it’s crying time for the minimum wage earners in the Philippines who now find it hard to cope with galloping prices of food.
If truth be told, our rich neighbors are not getting richer. Imagine yourself awash with pesos in bank deposits. When you withdraw some to buy your favorite brand of imported shoes, you would be surprised to discover it’s no longer enough.
There is currently a Facebook ad aimed at luring the moneyed to attend a “free training” on foreign exchange trading or “forex” for short. I once attended the same orientation in a prestigious hotel.
The lecturer started with a correct observation that keeping money in the bank was a “losing way” to thrive because the interest earned on a savings account could not compensate with inflation. But with forex – which means buying and selling currencies pooled through a licensed broker with the aim of making a profit – there are winning chances.
Forex trading refers to buying and selling currencies pooled through a licensed broker with the aim of making a profit. The difference in price is where an investor may profit or lose.
He ended his lecture by inviting us to attend full-blown classes – no longer for free but for a fee payable by installment. I did not enroll, interpreting it to mean losing money at the starting point. I would be better off in “buy-and-sell,” which I have been doing with second-hand books.
Having hit 73 years old, I am a living witness to the erosion of the value of Philippine currency. You see, I was a small child in the 1950s when the US dollar was valued at only two pesos. But I could buy a piece of candy for one centavo.
In contrast, one hundred centavos (one peso) today could not even buy one candy; it’s now three for five pesos.
Indeed, in the 1950s, the Philippines was second only to Japan among the most prosperous nations in Asia. Although the minimum wage was only P120 per month, it was worth much more than today’s P15,000.
Unfortunately, it’s no good news in the long run. In reality, the gradual “increase” of the dollar from only two pesos in the 1950s to P51 today has greatly diminished the buying power of our local currency.
In the 1950s when the dollar was worth only two pesos, the Philippines was the second most prosperous nation in Asia – second only to Japan. The minimum wage was only ₱4 per day, but it was worth much more than today’s maximum minimum wage of ₱570 per day.
Even in the 1960s, the Philippines was still way ahead of Taiwan. One peso at that time was worth seven new Taiwan dollars (NTD). Today, the latter is stronger — one NTD equals ₱1.80.
South Korea was heavily dependent on foreign assistance for survival. However, realizing that dependence on richer countries was also stalling its growth, her technocrats marshalled the development of industrial zones. Today, South Korea no longer imports but exports locally-built cars and heavy equipment.
The late President Carlos P. Garcia – whose term covered the 1957-61 period – had also attempted to solve our dwindling economy by implementing his “Filipino First policy” which restricted imports while encouraging exports, but to no avail.
The imposition of martial rule by President Ferdinand Marcos in 1972 coincided with the global oil crisis which, coupled with the scarcity of rice, caused sudden increases in prices.
The assassination of Senator Benigno “Ninoy” Aquino in 1983 further drove the peso weaker from ₱7 to ₱13 against the dollar, triggering a downward spiral.
Today, millions of thousands of Filipinos – whether skilled or unskilled – need to work abroad to ensure comfortable lives for their loved ones.
It is ironic because our country is known for rich agricultural resources. What could be more ironic than selling fertile rice farms to subdivision developers?
Is that not against the law, Madam Cynthia?