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.