THE peso's current weakness is in line with movements of other regional currencies and monetary authorities stand ready to act if needed, a Bangko Sentral ng Pilipinas (BSP) official said on Thursday.
"The movement of the peso is not volatile," BSP Senior Assistant Governor Iluminada Sicat told reporters on the sidelines of a Manila Times economic forum.
The currency has been trading in the $58:$1 level for nearly a month after the central bank indicated that it could start cutting key interest rates ahead of the US Federal Reserve (Fed), which would make Philippine assets less attractive.
It touched P58.83 to the dollar on Thursday before regaining some ground to close two-and-a-half centavos lower at P58.78:$1.
"The peso is not a laggard," Sicat said.
"Actually, we are in the middle. The other currencies in the region are also depreciating just like us," she added, noting that this was largely due to market expectations regarding the timing of Fed rate cuts and stronger dollar demand to pay for imports.
"[T]he thing here is to be mindful of how much the depreciation is," Sicat said, adding that "if we see that there is market stress, that's the time that we can intervene."
She said the peso was continuing to be influenced by the broad dollar strength, but pointed out that the central bank had structural sources of foreign exchange that would help address any volatility.
She reiterated earlier statements that a higher balance of payments (BoP) surplus would be a stabilizing factor on the exchange rate.
The BSP's policymaking Monetary Board last week raised the expected BoP surplus for this year to $1.6 billion from $700 million. The forecast for 2025 was also revised to a $1.5-billion surplus from a $500-million deficit.
Among others, the forecast for merchandise exports was raised to $58.1 billion from $57.0 billion previously while that for goods imports was trimmed to $123.5 billion from $126 billion.
Economists and government officials share their insights during The Manila Times midyear economic forum, “Inspiring optimism, stimulating growth,” at Lanson Place, Mall of Asia Complex, Pasay City on June 20, 2024. Speakers were Philippine Chamber of Commerce and Industry President Enunina 'Nina' Mangio, International Workplace Group Philippine Country Manager Lars Wittig, Investment banker and Times columnist Stephen CuUnjieng, Citi Philippines CEO Paul Favila, and Bangko Sentral ng Pilipinas Senior Assistant Governor Iluminada Sicat. PHOTO BY J. GERARD SEGUIA Economists and government officials share their insights during The Manila Times midyear economic forum, “Inspiring optimism, stimulating growth,” at Lanson Place, Mall of Asia Complex, Pasay City on June 20, 2024. Speakers were Philippine Chamber of Commerce and Industry President Enunina 'Nina' Mangio, International Workplace Group Philippine Country Manager Lars Wittig, Investment banker and Times columnist Stephen CuUnjieng, Citi Philippines CEO Paul Favila, and Bangko Sentral ng Pilipinas Senior Assistant Governor Iluminada Sicat. PHOTO BY J. GERARD SEGUIA Economists and government officials share their insights during The Manila Times midyear economic forum, “Inspiring optimism, stimulating growth,” at Lanson Place, Mall of Asia Complex, Pasay City on June 20, 2024. Speakers were Philippine Chamber of Commerce and Industry President Enunina 'Nina' Mangio, International Workplace Group Philippine Country Manager Lars Wittig, Investment banker and Times columnist Stephen CuUnjieng, Citi Philippines CEO Paul Favila, and Bangko Sentral ng Pilipinas Senior Assistant Governor Iluminada Sicat. PHOTO BY J. GERARD SEGUIA Economists and government officials share their insights during The Manila Times midyear economic forum, “Inspiring optimism, stimulating growth,” at Lanson Place, Mall of Asia Complex, Pasay City on June 20, 2024. Speakers were Philippine Chamber of Commerce and Industry President Enunina 'Nina' Mangio, International Workplace Group Philippine Country Manager Lars Wittig, Investment banker and Times columnist Stephen CuUnjieng, Citi Philippines CEO Paul Favila, and Bangko Sentral ng Pilipinas Senior Assistant Governor Iluminada Sicat. PHOTO BY J. GERARD SEGUIA Economists and government officials share their insights during The Manila Times midyear economic forum, “Inspiring optimism, stimulating growth,” at Lanson Place, Mall of Asia Complex, Pasay City on June 20, 2024. Speakers were Philippine Chamber of Commerce and Industry President Enunina 'Nina' Mangio, International Workplace Group Philippine Country Manager Lars Wittig, Investment banker and Times columnist Stephen CuUnjieng, Citi Philippines CEO Paul Favila, and Bangko Sentral ng Pilipinas Senior Assistant Governor Iluminada Sicat. PHOTO BY J. GERARD SEGUIA Economists and government officials share their insights during The Manila Times midyear economic forum, “Inspiring optimism, stimulating growth,” at Lanson Place, Mall of Asia Complex, Pasay City on June 20, 2024. Speakers were Philippine Chamber of Commerce and Industry President Enunina 'Nina' Mangio, International Workplace Group Philippine Country Manager Lars Wittig, Investment banker and Times columnist Stephen CuUnjieng, Citi Philippines CEO Paul Favila, and Bangko Sentral ng Pilipinas Senior Assistant Governor Iluminada Sicat. PHOTO BY J. GERARD SEGUIA Economists and government officials share their insights during The Manila Times midyear economic forum, “Inspiring optimism, stimulating growth,” at Lanson Place, Mall of Asia Complex, Pasay City on June 20, 2024. Speakers were Philippine Chamber of Commerce and Industry President Enunina 'Nina' Mangio, International Workplace Group Philippine Country Manager Lars Wittig, Investment banker and Times columnist Stephen CuUnjieng, Citi Philippines CEO Paul Favila, and Bangko Sentral ng Pilipinas Senior Assistant Governor Iluminada Sicat. PHOTO BY J. GERARD SEGUIA Economists and government officials share their insights during The Manila Times midyear economic forum, “Inspiring optimism, stimulating growth,” at Lanson Place, Mall of Asia Complex, Pasay City on June 20, 2024. Speakers were Philippine Chamber of Commerce and Industry President Enunina 'Nina' Mangio, International Workplace Group Philippine Country Manager Lars Wittig, Investment banker and Times columnist Stephen CuUnjieng, Citi Philippines CEO Paul Favila, and Bangko Sentral ng Pilipinas Senior Assistant Governor Iluminada Sicat. PHOTO BY J. GERARD SEGUIA Economists and government officials share their insights during The Manila Times midyear economic forum, “Inspiring optimism, stimulating growth,” at Lanson Place, Mall of Asia Complex, Pasay City on June 20, 2024. Speakers were Philippine Chamber of Commerce and Industry President Enunina 'Nina' Mangio, International Workplace Group Philippine Country Manager Lars Wittig, Investment banker and Times columnist Stephen CuUnjieng, Citi Philippines CEO Paul Favila, and Bangko Sentral ng Pilipinas Senior Assistant Governor Iluminada Sicat. PHOTO BY J. GERARD SEGUIA Economists and government officials share their insights during The Manila Times midyear economic forum, “Inspiring optimism, stimulating growth,” at Lanson Place, Mall of Asia Complex, Pasay City on June 20, 2024. Speakers were Philippine Chamber of Commerce and Industry President Enunina 'Nina' Mangio, International Workplace Group Philippine Country Manager Lars Wittig, Investment banker and Times columnist Stephen CuUnjieng, Citi Philippines CEO Paul Favila, and Bangko Sentral ng Pilipinas Senior Assistant Governor Iluminada Sicat. PHOTO BY J. GERARD SEGUIA Economists and government officials share their insights during The Manila Times midyear economic forum, “Inspiring optimism, stimulating growth,” at Lanson Place, Mall of Asia Complex, Pasay City on June 20, 2024. Speakers were Philippine Chamber of Commerce and Industry President Enunina 'Nina' Mangio, International Workplace Group Philippine Country Manager Lars Wittig, Investment banker and Times columnist Stephen CuUnjieng, Citi Philippines CEO Paul Favila, and Bangko Sentral ng Pilipinas Senior Assistant Governor Iluminada Sicat. PHOTO BY J. GERARD SEGUIA
Gross international reserves are also expected to end the year higher at $104 billion instead of $103 billion, which will give the BSP more firepower to defend the peso.
Sicat also said that the BSP would keep monetary policy settings tight as it worked to keep inflation in check.
The Monetary Board will meet on Thursday next week and is expected to hold fire anew for a sixth straight policy meeting. Markets will be watching for fresh clues as to when it will finally start easing given the current pressure on the peso.
Read The Rest at :
