THE Philippine peso remains broadly stable despite the strength of the greenback, Bangko Sentral ng Pilipinas (BSP) Governor Amando Tetangco Jr. said on Tuesday, noting remittances and other dollar-earning sectors will continue to support the local currency.
During the Management Association of the Philippines (MAP) Economic Briefing 2017 in Makati City, Tetangco said prospects of higher interest rates in advanced economies like the United States have affected emerging markets like the Philippines in terms of foreign exchange.
“We have seen that kind of volatility from the Philippine peso in recent periods,” he said.
The Philippine peso touched the P50:$1 level on November 24 last year on expectations of interest rate hikes in the US, which actually happened in December. The peso depreciated by 5.35 percent against the US dollar in 2016.
The peso depreciated back to the P50:$1 on February 17 and is currently trading at around P50.18.
“However if we take a longer term view on the peso movements. We can see the peso has been broadly stable and has maintained its broad competitiveness over the medium-term,” Tetangco pointed out.
Looking ahead, he said the peso is expected to continue to draw strength from overseas Filipinos workers’ remittances and dollar receipts from tourism and business process outsourcing.
Latest available data showed that personal remittances from OFWs rose by 4.9 percent year-on-year to $29.7 billion last year, exceeding the projected growth rate of 4 percent by the BSP for 2016.
In January this year, personal remittances rose by 8.5 percent to $2.39 billion from $2.20 billion a year earlier. Six million foreign tourists visited the Philippines in 2016, surpassing the 5.9-million target set by the Department of Tourism (DOT).