The mouth speaks, the peso sinks

It seems the peso is no longer sinking merely because of market forces but also because of what some public policy and officials say.

- DIWA C. GUINIGUNDO

Indeed, it is no less than the open-mouth operations of many in government that continue to drive the peso down.

The other day, every major broadsheet bannered the Philippine currency's latest fall: "slump" (BusinessWorld), "record low" (Philippine Star, Inquirer, Manila Times), "historic low" (Manila Bulletin), and "breaches P59" (Malaya Business Insight, Business Mirror).

We doubt the peso has reached bottom. The torrent of careless commentary on the nation's prospects reflects the deeper malaise of governance: weak leadership, muddled policy, and the erosion of public trust. Poor leadership begets poor policy; bad policy leads to weak execution and stagnant innovation throughout the bureaucracy. The repeated plunder of public funds signals a steady decline in both public spending and productive investment. And the neglect of health and education reveals a poverty not merely of resources but of foresight - a failure to prepare the next generation for political and economic leadership.

For a potential investor conducting due diligence, such signals are disheartening, Why would anyone choose to place or keep money in a country that continually undermines its own credibility?

THE BSP'S MEASURED EXPLANATION