Economics.

2. WOULD YOU RATHER? WHY?
• Would you rather lose your phone or have no internet?
• Would you rather go without shampoo for the rest
of your life or toothpaste for the rest of your life?
• Would you rather have a job you hated that made you
rich or have a job you loved that ensured you would
always be poor?
• Would you rather have a pet tiger or a pet lion?
• Would you rather ask for help or figure it out yourself?
• Who is your favorite super hero character? Why?

3. EXCHANGE RATE

4. PESO-DOLLAR RATE 1980-2010
7.77
9.311
17.69 19.07
23.25
22.89
30.32
26.43
24.19
32.51
42.84
51.19
56.08
51.28
44.46
46.07
0
10
20
30
40
50
60
Series 1
Series 1

5. PESO-DOLLAR RATE 1980-2010
7.779.311
17.69 19.07
23.25 22.89
30.32
26.43
24.19
32.51
42.84
51.19
56.08
51.28
44.46
46.07
0
10
20
30
40
50
60
Series 1
Series 1
Philippine
Debt Crisis

6. PESO-DOLLAR RATE 1980-2010
7.779.311
17.69 19.07
23.25 22.89
30.32
26.43
24.19
32.51
42.84
51.19
56.08
51.28
44.46
46.07
0
10
20
30
40
50
60
Series 1
Series 1
Philippine
Debt Crisis
Philippine Balance of
Payment Crisis

7. PESO-DOLLAR RATE 1980-2010
7.779.311
17.69 19.07
23.25 22.89
30.32
26.43
24.19
32.51
42.84
51.19
56.08
51.28
44.46
46.07
0
10
20
30
40
50
60
Series 1
Series 1
Philippine
Debt Crisis
Philippine Balance of
Payment Crisis
Asian Financial Crisis

8. PESO-DOLLAR RATE 1980-2010
7.779.311
17.69 19.07
23.25 22.89
30.32
26.43
24.19
32.51
42.84
51.19
56.08
51.28
44.46
46.07
0
10
20
30
40
50
60
Series 1
Series 1
Philippine
Debt Crisis
Philippine Balance of
Payment Crisis
Asian Financial Crisis
Global Financial Crisis

9. PESO-DOLLAR RATE 2010-2020
45.07
43.3 42.22 42.47 44.4 44.8
47.49
50.4
52.66
51.79 50.8
0
10
20
30
40
50
60
2010, 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Series 1
Series 1
COVID19 Pandemic

10. WHAT IS EXCHANGE RATE?
•This is the value of one currency in terms of
another currency
-This means our Philippine Peso in relation to
the US dollar, Japanese Yen, Euro, UAE
Dirham, etc.
•The most common exchange rate quotes is
USD

11. Why there is a differentiated
exchange rates

12. •Does it have anything to do with their
economy?
•Are those country with lower exchange
rate better than those with higher
exchange rate?

13. What is really the meaning of
exchange rate?

14. Some Confusing Terminologies
Kapag ang exchange rate ay mataas
(high) o malakas (strong), ibig sabihin
ang Piso ay nag-appreciate: from 52 =
1USD to 51 = 1USD

15. Some Confusing Terminologies
Kapag ito naman ay mababa (low) o
mahina (weak), the peso is
Depreciating: from 52 = 1USD to 53 =
1USD

16. To Understand this better, let us review
the concept of SUPPLY and DEMAND
Every Supplier is either a producer or a seller.
Their incentive is to make PROFIT. They will
produce more as they make more Profit
Every consumer desires to enjoy what they
consume and their incentive is SATISFACTION.
They will buy more as the price becomes
affordable

17. Demand or Those Who Need Foreign
Exchange
• Importers
• Filipino Tourists
• Filipino Companies Investing Abroad
• Government
• Multinational Corporations

18. Supply or Those Who Earn and
Provide Foreign Exchange
• Exporters
• Foreign Tourists
• Foreign Inventors
• OFW
• BPOs
• Banks: Development, International and Local

19. Trade Balance
• Export = Import
• The price of the trade balance is the
fundamental value of the exchange rate

20. More Imports than Exports
0
10000
20000
30000
40000
50000
60000
70000
80000
90000
100000
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
More USERS than SUPPLIERS of Foreign Exchange
Export Import

21. Exports of the Philippines
0%
10%
20%
30%
40%
50%
60%
70%
80%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Chart Title
Electric Components Agricultural Fishery Clothing Others

22. Imports of the Philippines
• Machinery and Transport Equipment
• Mineral Fuels
• Manufactured goods
• Chemical Related Products
• Food and live animals

23. Global
Value Chain
Baguio City

24. TRADE DEFICIT
• To adjust for deficit, the value of the local
currency adjusts to the foreign currency
• Export > Import = Appreciation
• Export < Import = Deppreciation

25. Winners and Losers
• Low exchange rate or a depreciating peso is not
necessarily bad
• High exchange rate or appreciation is also not
necessarily bad
• So which is better exchange rate: 50 = 1USD or
52 = 1USD?
• The answer is: IT DEPENDS

27. Household Final Consumption Expenditure .17
Government Final Consumption Expenditure 7.13
Gross Capital formation -18.31
Gross Fixed Capital Formation -4.31
Construction -3.43
Durable Equipment -7.66
Breeding Stocks and Orchard Development -1.21
Intellectual Property Products -1.21
Changes in Inventories -699.48
Valuables -29.57
Exports -3.05
Exports of Goods -1.78
Exports of Services -4.34
Total Imports -9.04
Import of Goods -11.25
Import of Services -0.31
Statistical Discrepancy
Gross Domestic Product -0.15

28. DECLINE OF IMPORTS IN
BIGGER THAN DECLINE OF
EXPORTS.

29. If the exchange rate between the U.S. dollar
and the Philippine peso changes from $1 =
20 Pesos to $1 = 25 Pesos, then
a.The U.S. dollar has depreciated against the Philippine peso.
b.The Philippine Peso has appreciated against the U.S. dollar.
c.The Philippine government is manipulating currencies.
d.The U.S. dollar has appreciated against the Philippine peso.

30. The exchange rate between the U.S. dollar and the
euro is 1 euro = $1.25. Which of the following
exchange rates shows a depreciation of the euro?
a. 1 euro = $1.35.
b. $1 = 0.7 euro.
c. 1 euro = $1.49.
d. 1 euro = $1.15

31. If the U.S. dollar is appreciating that means it is
worth ________ because it is ________ compared
to other countries’ currencies.
a.less; weakening
b.less; a problem for international bankers
c.more; depreciating
d.more; strengthening