Macroenvironment factors are categorized using the PESTLE Analysis which

means: Political, Economic, Social, Technological, Legal, and Environmental. Under the
Economic Factor is the Interest Rate and the Foreign Exchange.

Interest Rate is the amount of interest due per period, as a proportion of the amount
lent, deposited, or borrowed. It is typically expressed as an annual percentage of the loan
outstanding. Remember, you must pay at least the interest each month. A higher interest
rate means a higher cost of borrowing. High interest rate is beneficial because it makes
attracts the consumer to save their money and it makes the domestic currency of the
country to appreciate. The formula for finding the Interest Rate is shown: Total
Repayment Amount - Amount Borrowed / Amount Borrowed.

Foreign Exchange, on the other hand, also called as Forex or FX, is a the trading of
one currency for another. It can take place on the Foreign Exchange Market which is also
known as the Forex Market. Forex Market is the largest, most liquid global market in the
world, with trillions of dollars changing hands everyday, and where the national
exchange of currencies happen. In foreign exchange, the demand determines the value of
the currency. It will be the basis to know if the peso will appreciate or depreciate.

The relation between the two is that the change in the interest affects the exchange
rate. A higher interest rate in the Philippines makes the peso currency to be more
attractive than other currencies. It increases the demand for peso-dominated assets which
pushes up the value of peso.