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Contemporary Economics Issues Affecting The Filipino Enteprener: Peso Exchange Rate

The document discusses exchange rates and their impact on Filipino businesses. It begins by explaining that the Philippines uses a free-floating exchange rate system where the peso rises and falls based on supply and demand in the foreign exchange market. It then provides a table showing the exchange rates of various world currencies against the Philippine peso. A depreciation of the peso benefits exporters but hurts importers and consumers, while an appreciation has the opposite effects. The document concludes by thanking the reader.

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LOMIBAO, JC HUBBER P.
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130 views9 pages

Contemporary Economics Issues Affecting The Filipino Enteprener: Peso Exchange Rate

The document discusses exchange rates and their impact on Filipino businesses. It begins by explaining that the Philippines uses a free-floating exchange rate system where the peso rises and falls based on supply and demand in the foreign exchange market. It then provides a table showing the exchange rates of various world currencies against the Philippine peso. A depreciation of the peso benefits exporters but hurts importers and consumers, while an appreciation has the opposite effects. The document concludes by thanking the reader.

Uploaded by

LOMIBAO, JC HUBBER P.
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPTX, PDF, TXT or read online on Scribd
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MODULE 16

CONTEMPORARY ECONOMICS ISSUES


AFFECTING THE FILIPINO ENTEPRENER:
PESO EXCHANGE RATE
PRESENTED BY: HINAY, ANGELIE C.
EXCHANGE RATE
Trading with other countries is also an important economic activity that impacts the
economy. The selling locally made products mean we earn dollars as payment for
these goods bought by foreign buyers.

An exchange rate is the value of one nation’s currency versus the currency of
another nation or economic zone (Chen, 2020). In the Phillipines, we adopt an
exchange rate system cAlled free-floating. A free-floating exchange rate will rise
and fall due to the exchanges in foreign exchange market. It means that the rise
and fall of the currency is based on supply and demand.

The International Orgnization For Standardization (ISO) currency codes are the
three-letter alphabetic codes that represent the various currencies used throughout
th world (Scott, 2019). For Phillipines currency, we used the ISO code “PHP”.
BANKO SENTRAL NG PILIPINAS
FINANCIAL MARKET OPERATORS SUB
SECTOR
REFERENCE EXCHANGE RATE
BULLETIN
COUNTRY UNIT SYMBOL EURO EQUIVALENT USD EQUIVALENT PHP EQUIVALENT

UNITED STATES DOLLAR USD 0.847817 1.000000 49.2170


JAPAN YEN JPY 0.008080 0.009530 0.4690
UNITED KINGDOM POUND GBP 1.102501 1.300400 64.0018
HONGKONG DOLLAR HKD 0.109397 0.129034 6.3507
SWITZERLAND FRANC CHF 0.929624 1.096491 53.9660
CANADA DOLLAR CAD 0,635831 0.749963 36.9109
SINGAPORE DOLLAR SGD 0.617267 0.726067 35.8333
AUSTRALIA DOLLAR AUD 0.609150 0.718900 35.3821
BAHRAIN DINAR BHD 2.249150 2.652872 130.5664
BANKO SENTRAL NG PILIPINAS
FINANCIAL MARKET OPERATORS SUB
SECTOR
REFERENCE EXCHANGE RATE
BULLETIN
COUNTRY UNIT SYMBOL EURO EQUIVALENT USD EQUIVALENT PHP EQUIVALENT

KUWAIT DINAR KWD N/A N/A N/A


SAUDI ARABIA RIYAL SAR 0.226097 0.266681 13.1252
BRUNEI DOLLAR BND 0.615028 0.725426 35.7033
INDONESIA RUPIAH IDR 0.000058 0.000069 0.0034
THAILAND BAHT THB 0.026958 0.031797 1.5650
UNITED ARAB DIRHAM AED 0.230850 0.0272287 13.4011
EUROPE EURO EUR 1.000000 1.179500 58.0515
KOREA WON KRW 0.000712 0.000840 0.0413
CHINA YUAN CNY 0.121095 0.142831 7.0297
The Table before shows the list of various currencies
into which the Phillipine peso is convertible. The most
commonly traded currency is the US dollar. As shown in
the table, we need ₱49 to buy US dollar. The country
needs less local currency to buy foreign currency -
which makes the local currency stroger.
EFFECTS OF THE EXCHANGE RATE
ON BUSSINESS
The exchange rate will play an important role for the firms that are engaged in
exporting goods and importing raw materials. Below are the effects of peso
appreciationa nd depreciation.

• An appreciation makes exports more expensive and reduces the competitiveness of


exporting firms. However, at least raw materials (e.g. oil products) will be cheaper
following an appreciation.

• A depreciation of peso will make exports cheaper and exporting firms will benefit.
However, firms exporting raw materials will face higher cost of imports.
EFFECT OF
DEPRECIATION
WINNERS LOSERS

• Exporters • Consumer who buy imports


• Doestic tourist industry • Firms who buy imported raw
• Workers gaining jobs materials
in export industry • Those on fixed incomes/ wages
• Economic growth who seee inflation rise faster
might increase • Foreign exporter/ tourist industry
YOUTUBE LINK
THANK YOU ! !

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