By: Daxim L. Lucas - Reporter / @daxinq - Inquirer.net
Published: September 21,2020 - 04:37 PM
Full Article: cebudailynews.inquirer.net/341237/strong-peso-foreshadows-bad-economic-news-says-ing-economistStrong peso foreshadows bad economic news, says ING economist
Snippets: MANILA, Philippines — The strong peso may be a portent of bad economic news because it is being caused primarily by a steep drop in imports that were needed for the Philippines to maintain its growth trajectory, according to an economist.
At the same time, ING Bank Manila senior economist Nicholas Mapa warned that a rebound in the country’s gross domestic product next year will be aided in no small measure by the so-called base effect — the phenomenon where even a slight increase in absolute terms will reflect as a large percentage hike when coming from a low number.
“The peso remains the best performing currency in the region in 2020 but the relative strength may actually reflect a fast-fading investment boom with the economic outlook turning even darker on the horizon,” he said in a note to reporters.
He explained that the country’s high growth rate in recent years was attributable to the resurgence in capital formation with the economy hitting a high gear, as both corporates and households doubled down on investing in the then bright economic future.