IN our previous issue, we highlighted the report by the Bank of America (BofA) Global Research that the our currency, the Peso, is seen on a downward spiral this year, sinking to P62:$ (US dollar) between the second and third quarter before “stabilizing” at P61:$ by the last quarter.
We are no monetary or financial expert and those claiming to be such can easily wave off such dire prediction citing as many arguments and contrary data that they have as basis.
But like the proverbial fly stuck in the ointment, the specter of our Peso being devalued yet again cannot simply be brushed away and its impact on the lives of ordinary people be passed off as actually “good” because it increased the money holdings (in Peso terms) of families and dependents of our overseas workers (OFWs) and that a weak Peso makes our exports “more competitive” abroad.
Those days of large-scale hoodwinking operation by our government, of making people accept the fallacy of devaluation as a “force for good” is gone.
Today, Filipinos need only to be street smart and not a graduate of economics and finance to know that a weak Peso translates to constant high inflation, high prices of goods and services, and joblessness on a massive scale.
Our modern political history teaches us that a government unable to control the downward slide of the Peso is pushing its negative consequences into a platform towards active political opposition that needs only one credible political issue to make the people turn against the government.
Indeed, while there have been sporadic protest actions during martial law instigated by the Communists and their allies in the Liberal Party, the continued slide of the Peso from an average of P7:$ in 1981, the year martial law was lifted to over P11:$ when former senator Ninoy Aquino was killed in 1983, fueled the people’s discontent against President Marcos Senior.
The sorry state of the Peso was even used by Corazon Aquino into an effective campaign slogan during the February 1986 “snap election” against Marcos by citing the sudden high price of a kilo of ‘Galunggong,’ a staple of Filipinos at the time. Some two weeks after the election, the Maros family had to flee for the safety of Hawaii.
We saw the same thing happened during the uncompleted term of President Joseph Estrada when aside from his political troubles, the Peso sliding down to P44:$ before he was forced to stepped down in 2001, was also turned into a political weapon against him by his opponents.
On the other hand, US President Bill Clinton was re-elected overwhelmingly in 1996 with over 70 percent of the American votes despite his character defects such as the ‘Monica Lewinsky Affair’ because the US economy is booming and the US dollar is as mighty as ever.
This is one lesson in governance: the public tends to ignore misgovernance for as long as their stomach is full and they have jobs because the currency is on stable ground.
Today we are seeing that instead of addressing the weakening of the Peso to avert social unrest, the administration seems eager to head towards that direction by resorting to political expediency, the impeachment of Vice President Sara Duterte, probably on the false belief that political propaganda can help stabilize the Peso?
This thinking is false, of course. A public already grumbling and groaning due to their decreasing purchasing power cannot be regaled by political hat tricks.
On the contrary, they tend to further add to the creation of a “political dynamite” that is just waiting to be lit before it explodes on the face of the sitting administration.