Foreign short-term capital is the initiator of the currency crisis now sweeping Asia. There existed a vulnerability in the affected countries consisting of their massive exposure to foreign capital and foreign loans on the one hand and their limited capacity to service these on the other. Short-term capital speculated against the countries' currencies and depreciated them to depths never known before. In this essay, Philippine macro institutions are commended for shielding the Philippine economy from more severe damage, particularly the Bangko Sentral ng Pilipinas for implementing a market-driven foreign exchange rate policy. It suggests courses of action to prevent the occurrence of similar problems in the days ahead.