MANILA — Seasonal increase of remittances from overseas Filipino workers (OFWs) in the last quarter of the year is expected to support the local currency, a National Economic and Development Authority (NEDA) executive said.
During the virtual public briefing on Wednesday, NEDA Assistant Secretary Sarah Daway-Ducanes said the government has no control on the peso’s weakening.
Daway-Ducanes attributed the local unit’s slide to the policy rate normalization, particularly in the United States (US).
She, however, said authorities expect the current performance of the peso to be temporary.
“Inaasahan namin na sa pagpasok ng mga remittances ngayong mga huling buwan ng taon ay makakatulong ito sa pag-stabilize ng halaga ng piso kontra dolyar (We expect that inflows of remittances in the latter part of the year will help stabilize the peso against the US dollar),” she added.
The local unit registered a fresh all-time low against the US dollar last Oct. 3 when it finished the trade at 59.00 to a US dollar.
Meanwhile, remittance inflows are historically high in the last quarter of the year due to the holiday season and this is expected to give the local currency a breather in the last months of the year.
Aside from higher remittances, Daway-Ducanes said Bangko Sentral ng Pilipinas (BSP) Governor Felipe Medalla has indicated readiness to use available tools, such as the key policy rate or to join the foreign exchange market to help address the peso’s depreciation.
Monetary authorities said foreign exchange in the country remains market-determined but the BSP joins the market to help address extreme volatility.
Daway-Ducanes said the peso’s long-term performance leans on the country’s fundamentals.
She added that amendments on several legislations, such as the Public Services Act (PSA), the Foreign Investments Act (FIA), and the Retail Trade Liberalization Act (RTLA), are expected to attract foreign investments and help stabilize the exchange rate. (PNA)