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International banker-economist Victor Barrios contends in an article titled “A strong peso keeps the country poor, the poor poorer and the rich richer” that a “strong” peso dampens Philippine exports as the competitive position of local producers and exporters is eroded.
“At current exchange rates, the country is not exactly a bargain tourist or retirement destination. The cost of living in Manila – housing, food, clothing and essentials – rival those in cosmopolitan cities like San Francisco,” he writes.
Mr Barrios, also a Global Filipino Nation convenor, recommends that policy makers should recognise the welfare implications of foreign exchange poicy by considering policy initiatives which include changes in the management of currency by the Philippine central bank, Bangko Sentral ng Pilipinas.
He also recommends that the Philippine peso should be depreciated for “more vigorous and sustainable growth cum reduced poverty incidence and multiplied jobs generated” and “substantial tax revenue gains”.
“A prohibitive peso mirrors a weak, not strong, Republic,” he concludes adding that a “strong peso keeps the country poor, the poor poorer and the rich richer.”