External factors affecting peso, says DOF exec

The Philippine economy needs to diversify and not rely on remittances and business process outsourcing alone to prevent the peso from depreciating too much whenever uncertainties arise from advanced economies, the Department of Finance (DOF) said.

In an economic bulletin on Asian currencies, Finance Undersecretary Gil Beltran said the Philippine peso was among Asian currencies that appreciated eight years before the global financial crisis in 2008.

Citing the Bloomberg and Asian Development Bank, data showed that the currencies of 12 Asian economies appreciated by 9.3 percent from December 2000 to December 2007.

The most appreciated currencies were the Korean won (26 percent), Thai baht (22.1 percent), Singapore dollar (16.9 percent), the Philippine peso (16.8 percent), the Indian rupee (15.7 percent) and the Malaysian ringgit (12.9 percent).

But nine years after, as the international economy started to recover from the global financial crisis, Asian currencies reversed and depreciated by 14.6 percent.

Except for Singapore dollar and the Thai baht which continued to appreciate, the same currencies that appreciated were among the most depreciated.

These were the Indian rupee (62.1 percent depreciation), Indonesian rupiah (35.4 percent), Malaysian dollar (27.2 percent), Philippine peso (21.9 percent), and Korean won (20.7 percent).

“Currency movements in Asia are a complex product of external and internal economic factors. But in the case of movements from 2008 to 2017, these are mostly accounted for by external factors, mainly the Fed QE [quantitative easing] policy,” Beltran said.

Beltran said regression results show that Fed QE policy accounted mostly for currency movements from 2008 to 2013, with domestic inflation accounting for less than 10 percent. | DOF- PR

Popular

Teodoro warned military takeover would bring consequences similar to Myanmar

By Patrick de Jesus | PTV News Defense Secretary Gilberto Teodoro Jr. warned that a military takeover would bring more consequences for the Philippines. This comes...

PBBM vows continued 4PH expansion

By Brian Campued President Ferdinand R. Marcos Jr. on Thursday reiterated his administration’s commitment to provide every Filipino family with a safe, decent, and affordable...

Palace questions credibility of citizen complaint submitted to ICI

By Dean Aubrey Caratiquet On the heels of the Independent Commission for Infrastructure’s (ICI) receipt of a letter of sentiment from a private citizen on...

PBBM hails dedication to public service of 2025 Metrobank Foundation Outstanding Filipinos awardees

By Dean Aubrey Caratiquet “They remind us that integrity and excellence must be at the heart of the work that we all do.” Amid the various...