Wednesday, October 24, 2007

Changing my forecast on Peso-Dollar

Now my forecast is even worse that what I posted a few days ago. By year end, 43 to the dollar is really cheap. My new forecast would be, lets hear it: 41 something to the dollar! And even worse by next year.

Why is this so?

1. The BSP already accumulated losses of over 40 billion pesos in the 3rd quarter of 2007 just to make sure our OFWs and our exporters get a reasonable exchange rate in the range of 45 to 44. If the BSP continue to temper the Peso's ascent in the 4th quarter, they may take another loss of more than 50 billion pesos. Is the BSP willing to do this? My bet..NO. They already learned their lesson last quarter. Besides, the government would have to temper the rise of oil prices (now at 90 dollars + in the international market) in the domestic market which could be helped by a stronger Peso. Also there is now so much reserve, that the BSP would no longer have the vault (so to speak) to put dollars in, hehehe.

2. Demand of dollars for raw materials import is low in the 4th quarter. So demand for dollars is lower, while...

3. Inflow of dollars would be stronger because of Christmas. Over the past several years, and decades; dollars inflow in the 4th quarter is strongest.

4. And next year, more privatization, more investors, the economy picking etc.

There is the larger picture now. is even worse than we all expect.

This of course, barring any unlikely events such as coup' d'etat, major crisis which our politicians love to do, among others.

Just let things be, as they are now, i.e. explosion there and here, money pay offs over there, hehehe. And we will be meeting the next year...2008 with flying colors.

Good luck to us.


An Appeal to the President

I was told, no one is above the law. Our law says a convicted person must suffer the consequences. A convicted plunderer of people's money must pay the price of looting the country.

Our leaders must set the proper example to our youth, and to the whole country. If the government is serious in eradicating corruption, then why pardon a plunderer?


Erap must be jailed and NOT PARDONED.

This maybe hard for the President, politically among other reasons, but it is the right thing to do.


I have to write this post quickly before I go to my farm.