Modestdomesticcapitalflightcoupled with an unwind inforeignborrowingcan make a seriousdent in foreign reserves, impartsignificantdepreciationpressure, orboth.
As domestic and foreign capital has taken flight, the peso has dropped to about 50 to the dollar-off 25% from its average of 40 in 1999 and about half its value of 26 at the onset of the Asian financial crisis in 1997.
This not only reduces the creative potential to support economic development in the country, but accentuates capitalflight and reduces domestic consumption.