Connect with us

Hi, what are you looking for?

Stock Markets

Peso weakness ‘not that bad,’ but needs to be stable — NEDA 

PERSISTENT VOLATILITY in the peso exchange rate is a bigger concern than the currency’s current spell of weakness, National Economic and Development Authority (NEDA) Secretary Arsenio M. Balisacan said on Monday.

“The issue is really more on the stability of the peso,” Mr. Balisacan told reporters on Monday. “If the peso weakens a bit, it’s not that bad,” adding that volatility is disruptive to business overall, though it may benefit some industries.

“(A weaker peso) would make our exports more competitive… like bananas, fruits, vegetables… they become now more attractive, and farmers could earn more from those commodities,” Mr. Balisacan said.

A weaker peso can also increase the value of remittances and benefit tourism, Mr. Balisacan said.

“Foreigners would be enticed to visit because they can get more for their currency,” he said.

On Tuesday, the peso closed at P58.68 to the dollar, stronger than its P58.79 finish on Monday, according to the Bankers Association of the Philippines.

“Manufacturing, whether they are import substituting or producing for exports, benefits from the weaker peso,” he said. 

May factory activity as expressed in the Purchasing Managers Index (PMI) was 51.9 from 52.2 in April, S&P Global said.

A PMI reading above 50 signifies that manufacturers are purchasing more raw material for factories to process a few months hence, thereby serving as a leading indicator for improved factory activity. A reading below 50 indicates a slowdown in raw material purchases, signaling that manufacturers are planning for reduced production.

Mr. Balisacan said monetary policy can help stabilize the peso and contain the inflationary impact of a weak currency.

“There are ways of tempering the effects of those to inflation, that’s what monetary policy makers do,” he said. “Having said that, I don’t want to see a sharp depreciation because that disrupts planning and business decisions.”

Headline inflation accelerated to a six-month high 3.9% in May, the Philippine Statistics Authority said.

Filomeno S. Sta. Ana III, coordinator at the Action for Economic Reforms, said the weaker peso has yet to manifest in hotter inflation.

“What should continue to worry us more is the main driver of inflation in the Philippines — food. So the major interventions still relate to food and trade policy in increasing the food supply,” he said in a Viber message.

“The BSP (Bangko Sentral ng Pilipinas) can use foreign exchange intervention to smoothen exchange rate fluctuations,” Mr. Sta. Ana said. — Beatriz Marie D. Cruz

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

You May Also Like

Stock Markets

PANGILINAN-LED PXP Energy Corp. is gearing up to boost its ownership in Forum Energy Ltd. The move comes after its board of directors greenlit...

Finance

<?xml encoding=”utf-8″ ?????????> Lorries carrying perishable goods such as meat, cheese, and cut flowers from the EU are experiencing delays of up to 20...

Finance

<?xml encoding=”utf-8″ ?????????> The UK’s unemployment rate has climbed to its highest level in nearly a year, as the number of job vacancies continues...

Finance

<?xml encoding=”utf-8″ ?????????> Chancellor Jeremy Hunt has urged regulators to rigorously scrutinise Daniel Kretinsky’s proposed £3.6 billion takeover of Royal Mail, amidst concerns about...

Disclaimer: CaptainOfSuccess.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice.
The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

Copyright © 2024 Captain Of Success. All Rights Reserved.