“The peso is not weak, because the peso is weak. The peso is weak because the dollar is strong,” will go down in history as one of the most famous quotes uttered by Senior Deputy Majority Leader and Ilocos Norte 1st District Representative Ferdinand Alexander “Sandro” Marcos. The interview held with the local media in Ilocos Norte is also posted on various social media platforms from hundreds of memes and posts, shares on Facebook, Twitter and Instagram as well as videos on YouTube and Tiktok.
The Ilocos Norte Interview details
Said interview had Marcos try to explain in the most simple terms that would have the common folk get a grasp and understanding of how major economic movements influence and impact their lives. Especially, when there are global events like the pandemic and other emergencies — the Russian invasion of Ukraine as the strongest riptide — have a ripple effect felt at the local grassroots economy
To quote Marcos, “The peso is not weak, because the peso is weak. The peso is weak because the dollar is strong,” he said. “The dollar is strong for two reasons: kapag may krisis po sa ating […] mundo (when we have worldwide crisis) the impression that investors, consumers, and shareholders get is that the dollar is the safest currency to get against all other currencies.
“So, ang nangyayari ay lahat ng mga tao kapag may krisis ay bumibili ng dollar. Kapag binibili ‘yong dollar, ang demanda ng dollar tumataas, which means against other currencies it becomes stronger,” he added.
(So what happens is a lot of people during crises buy dollar currencies. If it is being sought after, the demand for the dollar increases, which means against other currencies it becomes stronger.)
In Marcos’s effort to further digress albeit having complicated economic news, terms and wordplay confuse his immediate audience, he stuck to his guns and pushed through with what can be his best effort to carry out good intentions to have everyone on the same page.
“Ngayon kung nakikita mo ang trend ng USD sa trend ng mga iba’t ibang currency — ang British pound, ang euro, ang yen, ang yuan, ang trend po […] ay ang dollar gumagano’n (tumataas). Lahat ng ibang currency lalo na sa Asya, lalo na sa Europa, lalo na sa UK, ay gumagano’n (bumababa),” he said.
(If you’ll see the trend of the USD compared to other currencies — the British pound, the euro, yen, and yuan, the trend is that the USD rises. All the other currencies, especially in Asia, Europa, and even the United Kingdom are plummeting.)
“So there’s an inverse relationship, it is not because there is anything wrong with the peso domestically, it’s just internationally, dahil sa lahat ng nangyayari, dahil sa giyera, ang peso ay humihina against the (US) dollar. Pero kung ang pag-aaralan ho ay ang peso against the yuan, peso against the yen, peso against the British pound, makikita mo medyo stabilized,” he explained.
(So there’s an inverse relationship, it is not because there is anything wrong with the peso domestically, it’s just internationally, because of everything that has been happening, the peso is weaker than the US dollar. But if you compare the peso against the yuan against the British Pound, it is quite stabilized.)
Further iterations on why the US dollar is strong
Carrying on his message on why the US dollar is strong right now is that the US printed more dollars during the pandemic — thereby increasing the supply. While the higher supply should have triggered prices down, the globally higher demand for the US dollar only pushed prices to rise up.
Marcos tried to also bring in some good news about having a weak peso. In this interview, he cited that OFWs will get to send more money to the Philippines, especially this coming holiday season when remittances spike up highest. He countered that the weak peso also spells an unfortunate effect on the country being a high-volume importer of goods. This will mean that there would be fewer imported goods that the Philippine currency can buy as well.
“On the other hand alam naman natin tayo ay net importer, so temporarily the prices of goods would be more expensive, it’s partly due to Russia and Ukraine, another explanation about it, pero no’ng pandemya, the FED — the US government, nag-print sila ng US dollar, so medyo dumami ang supply ng dollar, eh ngayon ang daming bumibili. So ‘yong ang daming supply, it became worth more,” he added.
(On the other hand, we know that since we are a net importer, so temporarily, the prices of goods would be higher, it’s partly due to Russia and Ukraine, another explanation about it, but during the pandemic, the FED — the US government, they printed dollars, so supply increased. But now many are buying it, so the worth increased too.)
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Winding things down
It is important to mention that the prices of imported goods and other basic commodities — most significantly — oil and its byproducts have reached record-high price increases in recent months. The peso-dollar exchange rate is not the only cause of inflation but this can still create a spike. Economic experts do agree that we need to be cautious about how the exchange rate will be to prevent a major downturn in growth.
Another suggestion from Sandro Marcos was that the country could ease the depreciating value of the peso by selling the country’s dollar reserves while still at a high price. But this would only have a short-term effect that might also have negative repercussions on the economy.
The younger Marcos was very transparent in his intention to have the audience of the said interview be brought on the same page as he was. He tried to relay how bad news can be seen as good news with a little twist on how perception is directed. To quote a Sesame Street song, “That’s about the size, where you put your eyes, that’s about the size of it.” The only hiccup to this was that it was way too simplistic and created even more confusion on things.
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