This is just a pictorial of what I discussed at my earlier post see Not Just A Bear Market Rally For Philippine Phisix or Asia
Here is what I wrote,
``The Peso’s woes can’t be about deficits (US has bigger deficits-nominally or as a % to GDP), or economic growth (we didn’t fall into recession, the US did), remittances (still net positive) or current account balances (forex reserves have topped $40 billion historic highs) or interest rates differentials (Philippines has higher rates)."
courtesy of Deutsche Bank: EM Anti-Crisis Measures
I would say that caution should be exercised when listening to experts oversimplistically pin the blame on fiscal stimulus deficit spending.
That would be a function of available bias...looking for data to retrofit into an explanation.
If deficits have indeed been the sole determinant of a currency's price direction then Malaysia, Singapore and Thailand's currency should also be in a worst condition than ours, since they've spent more than the Philippines as % of GDP as shown in the chart above.
On the contrary they've all outperformed us.
The following are the one year chart of our contemporaries:
Thailand's Baht
Indonesia's Rupiah
Singapore Dollar
Malaysia Ringgit
Philippine Peso
Here is what I wrote,
``The Peso’s woes can’t be about deficits (US has bigger deficits-nominally or as a % to GDP), or economic growth (we didn’t fall into recession, the US did), remittances (still net positive) or current account balances (forex reserves have topped $40 billion historic highs) or interest rates differentials (Philippines has higher rates)."
courtesy of Deutsche Bank: EM Anti-Crisis MeasuresI would say that caution should be exercised when listening to experts oversimplistically pin the blame on fiscal stimulus deficit spending.
That would be a function of available bias...looking for data to retrofit into an explanation.
If deficits have indeed been the sole determinant of a currency's price direction then Malaysia, Singapore and Thailand's currency should also be in a worst condition than ours, since they've spent more than the Philippines as % of GDP as shown in the chart above.
On the contrary they've all outperformed us.
The following are the one year chart of our contemporaries:
Thailand's Baht
Indonesia's Rupiah
Singapore Dollar
Malaysia Ringgit
Philippine Peso
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