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Managers downplay weakening of peso

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By Chino S. Leyco

The Duterte administration’s economic managers downplayed fears that the weakening local currency could hurt the country’s growing economy.

Finance Secretary Carlos G. Dominguez III, Budget Secretary Benjamin E. Diokno, and Socioeconomic Planning Secretary Ernesto M. Pernia are confident the Philippines could withstand any adverse effects of global uncertainty.

“We have the imports and exports sectors. I think it [weak peso] is sort of balanced, we can’t say it is 100 percent bad for us because it is good for overseas Filipino workers (OFWs), business process outsourcing (BPOs) and export sector,” Dominguez told reporters.

However, Dominguez admitted the weak local currency would lower import receipts.

“But overall, it is positive [for the economy],” the finance chief believes.

Diokno, meanwhile, expects the peso may temporarily further weaken to P52 against the dollar in the short-term due to uncertainty in the US, but will return to the P48 levels in the medium-term.

But the budget chief said the stronger dollar should benefit the Bureau of Customs’ collection, which was adversely affected by the cheaper crude prices in the recent years.

“For every peso depreciation, revenues will increase by P9.2 billion because of higher collections of the Customs. But at the same time, the government is losing P2 billion on the expenditure side because of higher foreign debt servicing,” Diokno said.

“On the net, for very peso depreciation, the impact on the budget would be P7.2 billion reduction in the budget deficit,” Diokno said. “We are not concerned about that [weak peso].”

The peso opened at P49.13 to the dollar yesterday, after closing at an eight-year low of P49.20 on Monday.

Pernia, who is also the National Economic and Development Authority (NEDA) head, explained that the peso along with other currencies were affected by the uncertainly.

But the NEDA chief said the Philippines will remain competitive even if the peso breaches the P50 or P51 levels.

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  • Yolanda Santos

    Why has the Philippine peso weakened to an 8-year low of P52 to $1? Investors hate uncertainty of having a psychopath Communist Idioterte as President, so they have been dumping the peso. Since the Philippines is a big importer of oil, rice, wheat, electronic products, meat, chicken, motor products, etc, the increased costs of imported goods due to low peso will of course raise the prices of these goods. Who would shoulder the additional cost of these goods? The Filipino consumers, of course.

    What else could our economic managers do except say the Philippine economy may be down now, but it will recover in the medium term. Not so fast. The downed PH economy will recover only when the Idioterte is gone. That’s when spooked investors and tourists will return to the Philippines.

    • mamamiamia

      There is uncertainty talaga hija, as the prevailing powers in Manila has
      shown to us “would be investors” their incompetence in economic
      management of a whole country. Magaling lang sila sa regional but not
      national. abay, takot na kami dahil baka madampot kami at i -confiscate
      ang mga investments namin in Pinas. And, observers, would advise us,
      The present dispensation is leaning too too much to the left. Investors
      beware! Saklap mga hija!