DOF supports weakening local currencyThe Department of Finance (DOF) is favoring a weaker peso to improve the competitiveness of the country’s exports and the value of remittances of overseas Filipinos and business process outsourcing (BPO). Insisting that the peso remains “very strong” in real terms, Finance Undersecretary Karl Kendrick T. Chua said in a statement yesterday that the weakening local currency would benefit 40 percent of economy. But Chua said “we should be prudent to ensure that volatilities are managed.”The Bangko Sentral ng Pilipinas (BSP) earlier said the temporary depreciation of the local currency is likely to have “minimal” impact on macroeconomic conditions also over the medium term. “This limited impact on the price level gives flexibility for monetary policy to refrain from reacting aggressively on such movements of the peso,” BSP said. The central bank pointed out that as a result of the depreciation trend, “the peso gained external price competitiveness against its trading partners.”

Source: Manila Bulletin September 28, 2016 07:07 UTC