The Philippine Peso
The local monetary currency used in the Philippines is the Philippine Peso. In the national language, this currency is referred to as "Piso".
In the Philippine, the official currency symbol is denoted by the English letter "P", crossed by 2 horizontal lines on the upper part of the letter "P".
Sometimes, this symbol is printed with a single crossing line. However, for typesetting purposes, this currency symbol is usually printed as a simple capital "P" before the numeric figure.
For example, one hundred pesos is usually denoted with P100, or using the ISO 4217 code of PHP. Hence, one hundred pesos can be written as 100 PHP in ISO 4217 notation.
The Philippine peso bills and coins are issued for circulation by the Bangko Sentral ng Pilipinas (Central Bank of the Philippine). For the bills, the smallest amount of legal tender is twenty pesos and the largest is 1000 pesos. The front side of each bill features prominent people in the country's history while the reverse side depicts landmarks and events in history. While the 5- and 10-peso denominations have been concurrently offered in coins in recent years, the 5- and 10-peso bills have not yet been demonetized. [wikipiedia] For the coins, the smallest amount of legal tender is 5 centavos (5/100 or 0.05 pesos). There are also 0.10 centavo (a tenth of a peso), 0.25 centavo (a quarter of a peso) and 1 peso coins.
In 2006, the Philippine peso has been constantly strengthening against the US dollar. Within the last 4 years, the currency weakened to as much as P56.00 against the US dollar. In 2006 however, the currency has actually surged into its highest levels in 4 years, climbing to P49.73 against the US dollar.
The reason for the strengthening of the Philippine peso is the optimistic expectation on the growth in the economy. In 2006, there have been several fiscal reforms implemented by the government, including the important imposition of a higher Value added Tax (VAT). This was met by a lot of protest from the business sector but its results made the economy stronger.
Assessing the Philippine economy this year, the Asian Development Bank (ADB) has described 2006 as a "very good year" for the country. Ifzal Ali, ADB chief economist, projected that the Philippine economic growth, boosted by the agricultural sector, would hit 5.4 percent this year.
"Agriculture production was strong in the first half and industry performed better than expected. This dampened inflation pressures," the ADB economist said. [Philippine Information Agency]
The Philippine peso is a strong currency, but based on the Economist magazine's Big Mac index of 2006, the currency is 50 percent undervalued against the US dollar. The Big Mac index for the Philippine peso was 1.56 US dollars as compared to 4.93 in Switzerland (most overvalued) and 1.30 in China (most undervalued). The peso's continued growth would probably increase its valuation during the next few years.
The continued increase of the Peso gave strong impact into the growing economy of the Philippine. Present stock market prices have reached their highest levels in 9 years. The continued appreciation of the Philippine Peso and the growth in stock market trade makes the Philippine an attractive place for investment.
In 2005, the Philippine peso was rated as the best performing currency in Asia and the 5th strongest currency in the world. The peso gained six percent year-on-year against the dollar to close at 53.09 at the end of 2005 from 56.28 at the end of 2004 [newsflash.org, 2 Jan 2006]. In the last quarter of 2006, the peso has been moving around the 49.0 level against the US dollar.
To further strengthen the peso, the Philippine government must continue to push through its fiscal reforms. The government must also divest itself of control from corporations that are better managed privately. As example, the Philippine government has set up the Power Sector Assets & Liabilities Management Corporation (PSALM) with a mandate to privatize the multi-billion dollar power generation businesses operated by the government. The setting up of PSALM would encourage free and fair competition in the power sector and enhance the inflow of private capital, while broadening the ownership base of power generation, transmission and distribution. This truly reflects the commitment of the Philippine's fiscal managers to further strengthen the economy that would eventually result to a stable and attractive Philippine peso to investors.
Additional Readings :
http://www.pia.gov.ph/
http://en.wikipedia.org/wiki/Philippine_peso
http://www.iamu-edu.org/
http://www.newsflash.org/
http://www.psalm.gov.ph
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