FOCUS: Forex Liberalization Too early to fully assess its impact

comes to between $4 billion and $7 billion. Prior to the deregulation, the gray market found funding from remittances.

Travel receipts likewise improved, amounting to $667.41 million, up 56.06% from $427.65 million. Investment income was steady at $254.21 million, up slightly by 4.71% from last year’s $242.77 million.

Receipts from exports added up to $4.636 billion as of end- September, up slightly by 4.27% than the level posted for the first three quarters last year at $4.446 billion.

Export earnings during the period are, however, below target due to a strengthening peso including reduced imports from the country’s trading partners which are now experiencing recessions.

For September alone, or a full month after the deregulation, forex receipts added up to $1.51 billion — services, $881.8 million; merchandise exports, $521.9 million; inward foreign investments, $78.5 million; and transfer payments, $28.9 million.

Disbursements for the month amounted to $1.4 billion — import payments, $863.9 million; services, $455.2 million; outward investments, $81.7 million; and transfer payments, $1.1 million.

STRONGER PESO

Predictably, the huge influx of dollars has caused the peso to appreciate, dampening export competitiveness. From P26.65 in end1991, the peso surged to around P24.6 to $1 as of October 30, hitting a high of P22.90 in August.

The deregulation of the forex market was earlier expected to lead to a surge in demand for dollars, thus exerting strong pressure on the peso to depreciate. So far, this has not happened.