The central bank says it knows exactly how bad things must get before it steps in, and it would prefer that nobody ask.
MAKATI, Philippines (ManilaNews.PH) – The Philippine peso slid past 64 to the US dollar this week, and the nation’s central bank responded with the serenity of a man watching his neighbor’s kitchen catch fire while consulting a laminated chart titled “When To Care.” Along Ayala Avenue, office workers stopped at money changers’ windows to photograph the rate board, the way tourists photograph a glacier they have been told will not be there next year.
According to Philstar’s account of the fresh low, the currency touched 64 pesos per dollar, the weakest level in its history, after logging its 32nd record-low close of the year. The week before, the BSP governor had said the central bank did not see a need to defend the peso, explaining that it keeps estimates of how much the currency has to move before it becomes inflationary, and that this is when it tends to intervene.
That sentence has since become the most closely studied text in Metro Manila since the fine print on a postpaid plan. Somewhere inside the Bangko Sentral complex on Roxas Boulevard, the public now understands, there is a number. It is not 64. It is apparently not 63.95 either. It is a figure so precise and so tightly held that analysts in Makati have begun calling it simply “Ang Numero,” in the hushed tone normally reserved for the Wi-Fi password at a five-star hotel.
The Hunt for the Number That Makes the BSP Worry
“We know it exists. We just don’t know what it is,” said Dr. Lorenzo Batungbakal, senior fellow at the Pasig-based Institute for Applied Hand-Wringing, who has spent eleven straight trading days refreshing a currency app with one thumb. “It could be 65. It could be 70. For all we know, the threshold is the morning the rate board at the money changer simply reads ‘Huwag na.'”
A betting pool has reportedly formed among traders at a Salcedo Village coffee shop, where participants pay 64 pesos, adjusted hourly, to guess the exact rate at which the central bank will act. The pot currently stands at 11,400 pesos, which organizers stress is worth noticeably less than it was when the pool started on Monday.
A survey of 400 Makati office workers by the Philippine Council for Exchange Rate Sentiment found that 71 percent believe the secret threshold exists, 18 percent believe it is written on a sticky note that has fallen behind a filing cabinet, and 11 percent believe they personally crossed it, financially speaking, around the 9th of every month.
Leaked Annex Shows a Carefully Graduated Response
A document circulating among currency desks, described by one trader as “either a leaked internal annex or a very committed intern,” appears to set out the full response ladder. Its authenticity could not be confirmed, but it was printed on the kind of thick, cream-colored paper that only government agencies and wedding suppliers can afford.
ANNEX F – GRADUATED THRESHOLDS OF INSTITUTIONAL CONCERN. At 62: Monitor developments. At 63: Monitor developments more closely, with reading glasses. At 64: State that fundamentals remain sound. At 65: Repeat statement, more slowly. At 66: Remind the public that a weak peso helps exporters and OFW families, and name at least one exporter from memory. At 67: Convene a technical working group to define “panic.” At 68: Postpone the technical working group, as the hotel function room is now priced in dollars. At 70: Intervene, ideally before lunch.
The annex sits comfortably beside the official messaging. Philstar reported that the President told Filipinos not to panic over the weakening peso, advice that Makati residents have followed faithfully by panicking quietly, in installments, through a buy-now-pay-later app with a 0 percent interest promo that expires the moment you read the terms.
Metro Manila Learns to Convert Everything Twice
On the street, the slide has produced a new national skill: double conversion. Shoppers at a Greenbelt gadget store were observed converting the price of a phone from pesos to dollars, then back to pesos, then into “months of rent,” and finally into “number of times Tita will bring this up at Noche Buena.”
“I don’t check the exchange rate anymore. I check my tita in Dubai,” said Bea Manalastas, a stand-up comic who works the late slot at a comedy bar on Timog Avenue. “Every time the peso drops, her Facebook posts get more confident. At 58 she was sending love. At 64 she is sending opinions. If it hits 70, she will be sending instructions on how to raise my kids, and I will follow them, because she paid for the school.”
Fellow comic Raffy Dumalagan, who performs in Cubao, rejected the popular claim that the peso is crashing. “A crash is quick. A crash has dignity. The peso is doing that thing where you step onto the down escalator at the mall, and it is longer than you thought, and at every level somebody offers you a credit card.”
Personal finance influencers have responded the way they always do, with a carousel post. The most shared one, titled “5 Ways To Beat the Weak Peso,” lists buying dollars, earning dollars, marrying dollars, moving to where the dollars are, and, at number five, “manifesting.” It has 2.1 million likes and has been screenshot by three government agencies for possible use in a briefing.
Imported Goods, Imported Worries
Economists note that a weak currency does not stay politely on the rate board. In a separate report, Philstar flagged warnings that the weak peso will hike the costs of imported farm goods, a category that reaches feed, fertilizer and much of what eventually lands on a plate in Mandaluyong at a price the plate did not agree to.
Farm groups say growers are, as usual, the first Filipinos to learn that a currency is a cost. A feed supplier in Nueva Ecija said his invoices now arrive with a footnote reading “subject to change before you finish reading this footnote.” The pattern will be familiar to anyone who has followed the long-running agricultural arithmetic on farm.fm, where the finding that farmers earn 0.5 percent more while paying 5.2 percent more is treated less as news than as a law of physics.
Meanwhile, the Interagency Committee on Currency Optimism, a body that meets every Thursday in a Pasay hotel function room booked through the end of the fiscal year, urged the public to “focus on the positives.” Committee spokesperson Atty. Rhodora Pacheco-Villaflor listed three. Imported goods are now more exclusive. Foreign vacations have become more aspirational. And every Filipino who bought dollars in January is now technically a forex genius, “at least within their own group chat.”
Readers who follow the American money pages at bohiney.com will recognize the other side of the story: the US dollar, which has done nothing in particular this month, is enjoying the most flattering press coverage in Makati of its entire career.
The Bounce, and the Warning Stapled to It
By midweek the currency had clawed some ground back. Manila Bulletin reported the peso bounced back to 62 against the dollar, while noting economists warned the recovery may not last. The Manila Times had earlier charted just how close the slide came to an even rounder milestone, with the peso nearing 64 to 1 at a new record low.
In Makati, the bounce was received with the guarded joy of someone whose ex has just texted “hey.” A money changer on Makati Avenue, who asked to be identified only as Mang Ditas because “the rate board knows my face,” said customers had begun applauding when the numbers fell. “One man cried at 62.10. I told him, sir, a few months ago this was the record low. He said, I know, but it is our record low, and we raised it ourselves.”
Dr. Batungbakal, for his part, has stopped refreshing the currency app and started refreshing the central bank’s careers page, on the theory that the only reliable way to learn the secret number is to be hired by the people who keep it. He has his application ready. He is only waiting for the exchange rate on passport photos to come down.
SOURCE: https://bohiney.com/