MANILA – The peso has been depreciating for days now but a ranking Bangko Sentral ng Pilipinas (BSP) said its level remains within the government’s assumptions and traced this development to general strengthening of the greenback.
The local currency finished Thursday at 54.7 against the US dollar, down further from its 54.47 close a day ago, which is near its 17-year low.
In a virtual briefing on Thursday, BSP Deputy Governor Francisco Dakila Jr. said the peso’s average against the US dollar to date is at 51.98, within the 51-53 level to a US dollar assumption of the inter-agency Development Budget Coordination Committee (DBCC) for the year.
“We can see that the recent weakening of the peso, along with the other currencies in the region, is due to the more aggressive monetary policy normalization in advanced economies,” he said.
Asked if he sees the peso touching the 55-level, Dakila said “the currency exchange rate is something inherent and diffident to predict.”
“As there are forces that tend to weaken not just the peso but also other currencies in the region, there are other factors that provide support to the currency and these are structural sources of foreign exchange, including our very resilient remittances,” he said.
Dakila said money sent home by overseas Filipino workers (OFWs) proved its resilience after posting minimal contraction during the pandemic.
Remittances is expected to grow by 4 percent this year.
Cash remittances grew by 5.1 percent year-on-year as of end-2021 while these rose by 2.7 percent as of last April.
Another source of structural dollar inflows for the Philippines is the business process outsourcing (BPO) sector, Dakila said.
Authorities forecasts the BPO sector to grow by around 8 percent this year.
Dakila said exports are also seen to boost the Philippines’ structural flows this year, citing in particular electronics exports, which is seen to benefit from increased demand for technology-intensive mode of working.
During the same briefing, BSP Department of Economic Research Managing Director Zeno Ronald Abenoja said foreign direct investments (FDIs) are seen to post higher growth this year to reach around USD11 billion.
He said travel receipts are also expected to post higher growth this year as domestic and foreign travels are now allowed. (PNA)