If the market's trend is about to turn, there is no apparent sign of it. Philippine Stocks have been on a downward path since around November of last year. That was the time the harsh effects of the mortgage crisis were being seen in concrete figures.
Political Uncertainty & the Falling Dollar
Even after a banner year for our economy in 2007, our good fundamentals could not withstand the global financial market's jitters and caved in under the pressure. Early in the year, Philippine companies were reporting left and right about how much their profits increased. This news was eclipsed by Political uncertainty and the falling U.S. dollar. Politics brougth the infamous ZTE-NBN to light then the questionable north rail project, now the spratlys.
Higher Oil Prices
One of the greatest overall benefits of the falling dollar was that the relatively higher peso shielded us from feeling the effects of rising oil prices. Even that benefit however is being eroded as oil producing countries increase the pace of price increases to keep their economic position strong. Many of those countries peg their currency to the dollar and have hoardes of dollar reserves.
Ron Nathan believes that the U.S treasury is printing U.S. dollars like its monopoly money. As a child, I wondered often why countries didn't do that. Now we'll find out.
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