Whenever the value of the US Dollar rises versus the Peso, the PH stocks tend to sink. Hot institutional money, the large cash that readily flows in an out of the system from one market moves to where more value can be generated. I'm buying the dip and coping.
I did expect the USD to go down but I underestimated how much the US election change the course of the markets in the short term, and possibly long term. My PH stock portfolio went from green to red but I'm on copium trying to scoop up some stocks "buy the dip" and cope further. But on the bright side, this meant the dollar value of my crypto holdings went greener so praise diversification?
Why is it bad if the Philippine Peso increases in value as compared to the US dollar?
As much as we want to have our own money appreciate in value, it's a tricky situation because that means our exported products become more expensive due to a stronger currency and countries that patronize our products would prefer buying the same products elsewhere. Why buy Bananas from PH when there's another county in the SEA that grows the same variety and sells it cheaper?
Overseas Filipino Workers would see their remittances have less purchasing power because their USD gets them less Peso in return.
The 3 top industries that support our economy include OFW remittances, BPO, and export of electronic products and raw minerals. Whenever Peso strengthens, all these sectors get affected.
The BPO industry here thrives because our labor is relatively cheaper compared but it's not unlikely to see other SEA countries to develop their BPO industries.
So it's in the best interest of PH to strike a balance between increasing the value of the Peso overtime without making it too valuable that it deters foreign trade.
Currently, the forecasts don't favor PH due to Trump's policies regarding foreign trade but who knows?
Despite the red candles, from the fundamental side of things, PH companies have reported large net positive gains for the 3rd and previous quarters which meant it's just the USD being stronger than the Peso that's at play rather than something inherently wrong within the industries present here. My opinion anyway.
Thanks for your time.