ESPRESSO MORNINGS
By Joe Zaldarriaga
He was the architect behind Meralco’s most celebrated milestones in the field of communications— steering the company to five-time Company of the Year honors at the Philippine Quill Awards and leading the only PR team ever named Team of the Year in the history of the Anvil Awards.
Manong Joe’s leadership also extends as a respected member of the Board of Trustees for the Public Relations Society of the Philippines (PRSP), concurrent with his role as Chairman of the International Association of Business Communicators Philippines (IABC Philippines) where he also served as its President.
Manong Joe is a distinguished awardee of the medallion of honor and scroll of commendation from the University of Manila, owing to his years in public service as a communications professional. He shares his insights through columns in renowned publications, including The Philippine Star’s The Z Factor, and Philippine News Agency’s ESPRESSO MORNINGS.
The Philippine peso is hovering at historic lows in recent days—nearing PHP63 against the U.S. dollar — as persistent geopolitical risks and domestic economic challenges continue to drive down the value of our local currency.
While currency fluctuations are normal, the peso’s persistent slide magnifies deeper structural weaknesses in our economy, particularly our continued heavy dependence on imports and the underdevelopment or sluggish development of local industries.
For the Filipino consumer, the depreciation of the peso against the greenback is expected to hurt pockets further, as it increases the cost of bringing in goods from overseas and puts upward pressure on domestic consumer prices.
For example, oil companies must pay more for fuel purchased overseas, which translates to higher pump prices for motorists, and pressure to increase local transport fares. Power generation companies that source fuel from overseas will have to pay more since these are dollar-denominated, which can translate to higher electricity bills. The same effect is expected for other imported products, be it rice, produce, or other essentials.
The impact of a weak peso is felt most directly in the rising cost of living. We feel it in grocery trips and in small luxuries such as dining out, which suddenly feel heavier on the wallet than before. If restaurants do keep their prices the same, chances are serving sizes will be smaller to cope with rising costs of raw materials.
While overseas Filipino workers may benefit from remittances converted into more pesos, this is offset by the reality that their families here in the Philippines have to pay more for goods and face higher expenses.
It must be noted that this is happening in the context of persistently elevated prices of goods, as the inflation rate remained barely unchanged in August. While the Philippine Statistics Authority reported a minimal easing in inflation to 6.1 percent from the 6.2 percent recorded in July, the rate remains well above the Bangko Sentral ng Pilipinas’ 3-percent target. This means that households are already grappling with high prices, and the peso’s depreciation only adds fuel to the fire.
Further, the depreciation of the peso influences investor confidence and even the country’s credit ratings. Currency weakness discourages foreign investment and raises questions about the country’s ability to manage its economy. It also inflates the cost of servicing foreign debt, further straining government finances.
The problem is not simply about foreign exchange rates but about our fragile economic infrastructure. Without strong domestic industries to fall back on, the Philippines remains highly vulnerable to external shocks. Our manufacturing sector remains lagging behind other countries while agriculture continues to struggle with lack of support and remains highly vulnerable to climate risks. Innovation and technology remain underdeveloped, leaving us unable to compete globally.
What our economy needs is not another round of band-aid solutions, but structural reforms that strengthen our domestic industries as a cushion to global shocks. The government must invest in agriculture to support the growing local demand and reduce dependence on imported food. Manufacturing should be strengthened so that Filipino products can compete globally. Energy independence, through renewable sources, must be pursued to reduce reliance on imported fuel.
Unless we invest in structural reforms, the peso will remain fragile to external shocks.
If we continue to rely on imports while neglecting local industries, the peso will remain at the mercy of global risks, and Filipino households will continue to bear the brunt of depreciation. The challenge is to invest in building a resilient, self-sufficient economy that does not only strengthens the value of the peso but also safeguards the purchasing power of Filipinos—the people whom the currency is meant to serve.
