Tuesday, January 20, 2009

The Philippine peso, from 1950 to 2009

A 60-year history of the Philippine peso packed into one happy graph:

What we have here is a chart showing the historical exchange rate of the Philippine Peso against the US Dollar from 1950 to 2009. (Data from 1950 to 1997 from Penn World Tables; Data from 1997 onwards from Oanda, using exchange rates on January 1 of each year)

It's just really weird that I haven't seen a graph like this available anywhere else on the internet, because there's so much that can be learned from it. Look at how all the significant movements in the graph can be traced to events in Philippine history (which is, looking back at it, composed almost entirely of bad news):
  • 1961: President Diosdado Macapagal allows the peso to float on the free currency exchange market, unpegging it from the US dollar to stimulate economic development. Its value sinks from P2 to P3.7 to the dollar.
  • 1970: I can only assume this is due to the First Quarter Storm, where a series of heavy demonstrations and protests and marches take their toll on the country. The value of the peso slips from P4 to P6 to the dollar.
  • 1983: Ninoy Aquino assassinated, and Marcos' shit hits the fan. The country rapidly deteriorates, culminating in the EDSA Revolution. Value of the peso dives from P8 to 20 to the dollar over a few years.
  • 1989: A series of ugly coup attempts threatens the Aquino administration, including a bloodbath in January 1989. Peso descends from P21 to P27 to the dollar over two years.
  • 1997: The Asian Financial Crisis occurs, and I can't understand it no matter how many times I check Wikipedia, but the peso crashes from P26 to P41 to the dollar in a single frickin' year.
  • 2000: Economic mismanagement and political instability during the Estrada administration, plus charges or corruption leading to an impeachment trial. Peso nosedives from P40 to P50 to the dollar.
And finally there's 2005 to the present, the only time in history that the Philippine peso has significantly strengthened in value, albeit with a sharp rebound in 2008. I'm at a loss to attribute this to any single event, but history has shown that movements of that scale do not happen without a reason.

46 comments:

  1. A stock trader told me something, and I don't know if he was trying to impress those of us in the room at the time, but he told us that the stock market often effectively predicted the short-term future. Those dips and spikes, he said, would actually start shortly before the actual bad news happened or became evident. This is apparently because the people who instigate the events have their own interests in the stock market, and so pull out as necessary.

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  2. For the dip during the Asian Financial Crisis, check out the newspaper archives. If I recall correctly, the drop was done partly to save the stock market(?)

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  3. Devalue currency to save the stock market? How... how does the logic work itself out here? Actually, spare me the explanation, it would just get me more confused. :-S

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    Replies
    1. you'll have more efficient economy if you have a floating/flexible peso. I don't know yet why.but that's the truth :)

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    2. the chart shows that in the 70s to the early 80s, the us dollar to peso rate was almost constant and steady . . . not until 1983 when ninoy was assassinated that usd rate had become 13-14. In 1986, if i could still well remember, usd was about 14-16 a dollar. In the third quarter of 1987, the usd went up to php 20. . . from then on . . . . it's all devaluation

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    3. devaluating a currency allows foreign investors to buy more stocks before a crisis can began can either prevent the looming crisis or have it a minimal effect sadly businessmen are also in watch whether a crisis is looming or not so it was too late to recover

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  4. A quick response to that question: devaluing the currency can boost share prices as exporters get a boost by virtue of the goods they are selling being cheaper to foreign buyers. Witness UK market when Britain fell out of the Exchange Rate Mechanism in early nineties (as I recall).

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  5. Awesome graph. Exactly what I needed. :)

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  6. I like Dinar.and its revaluation of currency.
    Dinar

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  7. Thanks for posting this with a graph. A big help for my homework. :)

    Philippine Peso Exchange Rate

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  8. can you provide me the currency (php to US dollar) before 1940? maybe about 1900 to 1950?? it would really be a big help.

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  9. @aa find it out yourself

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  13. From 2 to 50 in 59 years calculates out to be 5.61% per year - not so dramatic when compared to worldwide inflation rates!

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  23. Not really accurate data but if we analyzed this data, a group of persons with hidden motives against in some past governments were the cause of Philippine peso devaluations and not the government of the said era. Like for example, during Marcos time the peso was quite stable but due to CPP NPA activities in early 70's who want to topple down the government affects the peso conditions, same in 1983 when Ninoy Aquino was assassinated by someone who want destabilized the Marcos government. But I'll give my credit to Marcos Administration for keeping the peso strong in spite of the challenges compared to his successors.Same with Estrada, the peso going strong at the start of his administration but it falls when a conspiracy happened by a group of ambitious politicians and military to oust him. In Cory's time, a series coup attempt also affects the peso but the fast devaluation continues in early 90's even though without destruction in the government, same with Ramos. Maybe we can say, it depends to the person who governed it, same to other administrations that's why the peso falls.

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    Replies
    1. It has nothing to do with your conspiracy theories idiot. Take a few proper global economics courses and stop drinking that Marco Kool-Aid. Stupid dumbass!

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    2. It has nothing to do with your conspiracy theories idiot. Take a few proper global economics courses and stop drinking that Marco Kool-Aid. Stupid dumbass!

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    3. It has nothing to do with your conspiracy theories idiot. Take a few proper global economics courses and stop drinking that Marco Kool-Aid. Stupid dumbass!

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    4. Did the Marcoses hand over you some penny from their Swiss Bank account to generate some cover up statement? His dictatorship was the cause of economic downfall of the Philippines while he and his family acquired billion worth of I'll gotten wealth. How much was the salary of a president during his era for him to earn those kind of figure?

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  25. Before Marcos was President, it was 3 pesos equals 1 dollar..when Marcos became President..it was 4 pesos equals 1 dollar when he started then it fell to 20 pesos equals 1 dollar at the end part of his term..my source is credible..before believing the comments here, please research first ok.

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    Replies
    1. don't just look at the figures, look at the events happening behind it. thank you you need to ask yourself why? I think you are just focused of Marcos but never the reasons

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    2. Marvz, thanks! It is very clear on your graph with series of events. Any coup or destabilization plot weakened the value of peso over dollar. Any form of political turmoil, stabilization, or coup are enemies of economic growth and phl currency

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    3. The downfall of the philippines economic is not solely based on Marcos debt but also all these demonstration that lead to devaluation of Philippines peso. That is including those Communists or any group who wants to destabilize the government. Even after Marcos death and Philippines was ruled by Ramos, Estrada, Arroyo - any political turmoil and destabilization further decreased Philippines currency

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  28. please... it's about time to update the graph and the figures and everything... today we are almost 1:50. your post on this is really interesting.

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  29. Yes, your graph is the only one I could find on the net and I searched for a long time. Thank you for the information and your post.

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  30. Anyone knows the exchange rate of US Dollar to Philippine peso in 1995?

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