BSP will not intervene to soften the heavy weight

Bangko Sentral ng Pilipinas (BSP) will not intervene to soften the strengthening of the local currency that is weighing on the income of Filipinos and exporters abroad.

BSP Governor Benjamin E. Diokno said a stronger peso against the US dollar is more advantageous for all Filipinos amid the uncertainty brought on by the coronavirus pandemic.

“We adopt a policy that what is the greatest good for the greatest number,” Diokno said during the virtual briefing of the Development Budget Coordination Committee in the House of Representatives.

“A strong peso means that we can control inflation, as you now know, low inflation favors everyone – exporters, importers, found and old, rich and poor – favors everyone,” he added.

So far this year, the local currency appreciated 3.9 percent to close today at P48.62 against the US dollar, compared to its closing rate of P50.64 at the end of December.

Among the Asian currencies being monitored, the peso has also strengthened so far this year against the Chinese renminbi, the Taiwanese dollar and the Japanese yen.
Diokno also said that a stronger peso will help boost the country’s gross international reserves (GIR).

“This time we are experiencing a slight strengthening of the peso, in fact I predict that before the end of the year we will reach the GIR up to $ 100 billion, it is the highest in history,” said the head of the central bank.

“Which is good for the most part, I think right now, especially because of the uncertainty, a stronger peso, a higher GIR is more advantageous for all Filipinos,” he added.

Earlier, the Philippine Chamber of Commerce and Industry urged the government to “review” the constant appreciation of the peso against the US dollar following concerns raised by businessmen and exporters about the competitiveness of their products in the world market.