-
8/2/2019 International Economics - Historial Exchange Rate Philippines
1/5
Historial Exchange Rate Regime of Asian Countries
Argentina
Australia
Bangladesh
Bolivia
Brazil
Cambodia
Canada
Chile
China
France
Hong Kong
India
Indonesia
Iran
Israel
Japan
Jordan
Macau
Malaysia
MexicoNew Zealand
Pakistan
Peru
Philippines
Romania
Saudi Arabia
Singapore
South Korea
Sweden
Taiwan
Thailand
United States
Viet Nam
Philippines
intl.econ.cuhk.edu.hk/exchange_rate_regime/index.php?cid=1
ational Economics - Historial Exchange Rate Regime of Asian Countries
-
8/2/2019 International Economics - Historial Exchange Rate Philippines
2/5
*
Philippine Peso is the currency of the Philippines. The Central Bank of the Philippines, theBangko Sentral ny Pilipinas (BSP) administers foreign exchange controls and all othercurrency problems in the Philippines.
The former Marcos government of Philippines, known for its corruption, always aimed atretaining the foreign exchange earnings from traditional exporters. From 1970 to 1984, thePhilippines had an intermittent history of multiple rate structure with different rates to
foreign exchange transactions for exports, imports and foreign debts, on the basis of a daily"Guided Rate". From 1970 till 1973, traditional exporters were required to surrender 80%of the foreign exchange earning at a "Official Rate" fixed at 3.9, which is moredisadvantageous to exporters than other rates. This requirement was later replaced by astabilization tax on traditional exports, which also worked to siphon off the gains oftraditional exports. (Bautista, 1987)
In mid 1980s, with the economic takeoff of the neighbouring Asia-Pacific area, thePhilippines witnessed the importance of removing distortions in its economic regimes andopening up the highly protected economy. Also partly due to the 1983 financial crisis, in1984 the multiple rate structure was abolished. Ever since then, the Philippines has
maintained a floating exchange rate regime. An Inter-bank Rate, determined on the basis ofsupply and demand in the exchange market, has governed all transactions. The authoritiesintervene in the medium to maintain orderly market conditions and the political objectives.In addition, the Bankers Association maintains a Reference Rate as the Peso-U.S. Dollarconvention rate for customs valuation purposes and for computation of importduties/taxies.
Major sources of reference include:
1. World Currency Yearbook. (WCY)2. Annual Report on Exchange Arrangement and Exchange Restriction. (IMF)
3. Romeo M. Bautista (1987): Production Incentives in Philippine Agriculture: Effects ofTrade and Exchange Policies.
Date Changes to the exchange rate regimePeso per
U.S.Dollar
8November
1965
The fluctuating free rate was abolished. (WCY, 1984, p.614) 3.900
21
February1970
A multiple rate structure with a Mixed Rate (not explained in WCY)
was reinstated based on a controlled, floating Official FreeFlucturating "Guided" Rate. (WCY, 1984, p.614) . The daily "GuidedRate" was establishedby the Bankers' Association. (IMF 1976,p.369). 80% of foreign exchange earnings from some traditionalexports (including copra, sugar, logs, and copper concentrates)
were to be surrendered to the Central Bank at the Official Rate ofP3.90 per U.S. Dollar, while the remaining 20% could be sold at thefree market rate. (Bautista, 1987, p.24)
5.500
May 1970 The requirement of surrender 80% of export earnings was replacedby a stabilization tax on traditional exports. (Bautista, 1987, p. 24)
intl.econ.cuhk.edu.hk/exchange_rate_regime/index.php?cid=1
ational Economics - Historial Exchange Rate Regime of Asian Countries
-
8/2/2019 International Economics - Historial Exchange Rate Philippines
3/5
22September
1970
6.435
20December
1970
The gold content of the Peso was cut 7.89%, paralleling the U.S.Dollar devaluation.
26 April1972
6.780
13February
1973
The gold content of the Peso was cut 10%, in the aftermath of theU.S. Dollar devaluation. (WCY 1984, p.614)
31December
1974
7.070
1975 In spot transactions between commercial banks and customers, themaximum and minimum spot buying rates are 0.5% and 1% belowthe guiding rate, respectively. The minimum and maximum spot
selling rates are 0.75% and 1.25 % above the guiding rate,respectively. (IMF 1976, p.369)
31December
1975
7.510
31December
1976
7.440
1977 For spot transactions in excess of US$100,000 between banks andtheir customers, the margins are competitively determined. (IMF
1978, p.331)
31December
1977
7.380
31December
1978
7.380
31December
1979
7.420
31December
1980
7.600
31December
1981
8.200
31December
1982
9.170
intl.econ.cuhk.edu.hk/exchange_rate_regime/index.php?cid=1
ational Economics - Historial Exchange Rate Regime of Asian Countries
-
8/2/2019 International Economics - Historial Exchange Rate Philippines
4/5
*
23 June1983
11.000
5 October1983
Inter-bank trading in foreign exchange was suspended. The"Guided" Rate was phased out in favor of a controlled, floatingEffective Rate. (WCY 1984, p.614)
14.000
31December
1983
14.000
1984 All spot buying and selling margins were to be determined on acompetitive basis. (IMF 1985, p.400)
6 June1984
The exchange rate system was revised into a de facto multiple ratestructure as follows: The Effective Rate applied only to essentialimports and interest on the foreign debt.
Based on a 10% tax on the purchase of foreign exchange, anexchange for other transactions.
An exchange rate for export proceeds. The Black Market Rate wasofficially recognized as the major source of foreign exchange. (Theexchange rate for purchase of exchange in other transactions:19.80; Export proceeds were exchanged at P16.20 per U.S. dollar;The Black Market Rate: P20.00-P24.00) (WCY 1985, p.669)
18.000
10 October1984
The multiple rate structure was abolished.
Inter-bank trading in foreign exchange was resumed. An InterbankRate, determined on the basis of supply and demand in theexchange market, was to govern all transactions. Authoritiesintervene when necessary to maintain orderly conditions. (WCY
1990-1993, p.510)13
December1984
The Peso-U.S. Dollar guiding rate was abolished. (IMF. 1986. p.422)
31December
1984
19.760
29 March1985
The Central Bank announced that, the reference rate of the BankersAssociation should be the Peso-U.S. Dollar conversion rate forcustoms valuation purposes and for computation of import
duties/taxies. (IMF. 1986. p.422)31
December1985
19.030
31December
1986
20.530
31December
20.800
intl.econ.cuhk.edu.hk/exchange_rate_regime/index.php?cid=1
ational Economics - Historial Exchange Rate Regime of Asian Countries
-
8/2/2019 International Economics - Historial Exchange Rate Philippines
5/5
*
1987
31December
1988
21.340
31December
1989
22.440
13September
1990
Guidelines were issued that the buying rate for spot transactionsmust not be less than 1% below the reference rate of the Bankers'
Association, while the spot selling rate must not be more than 2%above the reference rate.
For transactions other than spot, the buying rate must not be lessthan 1% below the spot buying rate, while the selling rate must not
be more than 1% above the spot selling rate. (IMF. 1991, p.398)
31 October1990
28.000
31December
1990
28.000
28 January1991
The margins for spot buying and selling rates for commercialreference transactions around the official reference rate wereeliminated. (IMF. 1991, p.400)
31December
1991
26.650
30 July
1992
A system of eight-hour continuous interbank foreign exchange
trading under the Philippine Dealing System (PDS) was introduced.(IMF. 1993, p.405)
31December
1994
24.418
31December
1995
26.214
15 March1998
The authorities allowed the Peso to float more freely against thedollar by lifting the volatility bank system. The band include a 6%
limit around the exchange rate of the previous day, with tradingbeing suspended for the remainder of the day if the limit wasreached. (IMF 1999, p. 683)
Notes:
Throughout the course, the Philippine authority posted an Official Rate of P3.90 per U.S.Dollar. This rate was originally used for exporters to surrender their exchange earnings tothe Central Bank since 1965. However, this rate is now left inoperative since the exportersare not required to render their export earnings any more. (WCY 1986-1987, p.511)
intl.econ.cuhk.edu.hk/exchange_rate_regime/index.php?cid=1