THE Duterte administration is "very closely" watching the movements of the peso and other currencies as the local currency breached the P50 level against the dollar, the Department of Finance (DOF) said Thursday.
Finance Secretary Carlos Dominguez III said they were no longer surprised that the peso reached the P50 level against the greenback.
He said it is an expected reaction of the local currency to the anticipated early rate increase by the US Federal Reserve, with other Asian currencies also moving in the same direction.
"We are watching the currency movements very closely. We seem to be moving in the same direction as the other currencies. We just want to avoid abrupt changes in the exchange rates," Dominguez said.
But he added that the country’s rock solid macroeconomic fundamentals will enable the domestic economy to survive external shocks such as higher US interest rates and a stronger dollar.
Undersecretary Gil Beltran, the DOF’s chief economist, said the strengthening of the greenback against the peso “is expected as an impact of the Fed normalization.”
“The peso is just normalizing. It was P57 per the US dollar in 2004. All other currencies are moving in the same direction,” he said.
With interest rates on American government bonds now rising, investors have began shifting their focus on the United States, which means that countries like the Philippines, Malaysia, Korea, Thailand and other Asian economies are seeing their currencies weakening against the dollar, he said. (SDR/Sunnex)