Peso hits lowest in more than 5 years

AFP file photo

Amid near-term volatility, the peso is still expected to fare better than the rest of the region, trading at more stable levels than its counterparts in other Asian economies.

Economic managers said the Philippines’ strong fundamentals would help bolster investor confidence and keep the local currency firm.

“I think our strong macroeconomic fundamentals, particularly the structural flows in the balance of payments, will provide a natural support to a stable peso,” Bangko Sentral ng Pilipinas (BSP) Deputy Governor Diwa C. Guinigundo said on Wednesday.

Speaking to reporters at the sidelines of a Senate budget hearing, Guinigundo noted that the Philippines has so far proven more resilient than other Asian units.

Finance Secretary Cesar V. Purisima, who was also at Wednesday’s Senate hearing, said investors should be able to “differentiate” between the Philippines and its neighbors that have dimmer economic prospects.

From the middle of 2013 to Tuesday this week, the peso lost 3.45 percent of its value against the dollar. In comparison, India’s rupee lost 25 percent, Indonesia’s rupiah depreciated by 5 percent and the Japanese yen retreated by 23 percent.

On Wednesday, the peso breached the 46-to-$1 level for the first time since 2010 to close at 46.26: $1, the lowest in more than five years, from Tuesday’s 45.93: $1 level.

The peso opened at 46 to $1 before hitting an intra-day low of 46.33. The currency’s opening level was its strongest point of the day. Volume was steady at a robust $1.1 billion.

This followed China’s announcement to relax its peg on the yuan, sending the currency falling against the greenback, which itself is climbing against other major global currencies.