By Ruth Abbey Gita-Carlos | Philippine News Agency
Malacañang on Thursday said the Bangko Sentral ng Pilipinas (BSP) remains the primary institution mandated to stabilize the peso and manage excessive volatility in the foreign exchange market, as the Philippine currency hit record-low levels against the US dollar.
In a press briefing, Palace Press Officer Claire Castro said the continued peso depreciation is largely driven by external pressures rather than domestic weaknesses.
Usec. Castro said the peso’s weakening is the result of overlapping global factors, particularly the sustained strength of the US dollar and rising international oil prices.
“There are two major ones. One is the unusually strong US dollar, which is pulling capital toward US assets and away from emerging markets like the Philippines. This makes the peso weaker-simply because the dollar is rising faster,” she said, citing the statement from the Department of Economy, Planning, and Development (DEPDev) Secretary Arsenio Balisacan.
“The other main factor is the sharp global oil price spikes, combined with the country’s dependence on imports. This causes the country’s demand for dollars to spike, the trade and current account deficits to rise, and, in turn, the peso to weaken,” she added.
Usec. Castro said President Ferdinand R. Marcos Jr. and the Palace recognize these external pressures and share a similar economic assessment provided by Balisacan.
She said the administration views the current currency movements as largely reflective of international developments, including geopolitical tensions. She said the peso’s weakening stems from a gap between dollar demand and supply.
“In short, the peso depreciation reflects the rise of the demand for dollars faster than the supply of dollars,” she said.
Demand is driven by import payments, debt servicing, and other foreign currency obligations, while supply is supported by export revenues, remittances, and foreign direct investments.
Usec. Castro said the BSP has both the mandate and the policy tools to address currency volatility.
These include foreign exchange reserves, policy rate setting, credibility signaling, and macroprudential measures aimed at managing currency movements.
“It is the BSP, our central bank, that has the institutional mandate to stabilize the peso and prevent excessive volatility. Its ammunition is sufficient to prevent excessive volatility,” she said.
