Peso falls as BSP announces plan to curb currency speculation

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MANILA, Philippines—The peso fell against the US dollar on Thursday following a statement from the Bangko Sentral ng Pilipinas that it would implement another measure to curb currency speculation.

The local currency closed at 40.965 against the greenback, down by 11.5 centavos from the previous day’s finish of 40.85:$1.

Intraday high hit 40.85:$1, while intraday low settled at 40.97:$1.

Volume of trade amounted to $676.4 million from $754.2 million previously.

Traders said the statement from the BSP prompted some portfolio investors to shift their investments to dollars.

On Wednesday, BSP Governor Amando Tetangco Jr. said the central bank has been looking at imposing a cap on the non-deliverable forwards (NDFs) held by banks as a means to curb currency speculation, which was believed to be one of the reasons behind the significant appreciation of the peso since the start of 2012.

NDFs are hedging instruments intended to keep exporters and importers from losses resulting from exchange-rate fluctuations. However, the BSP believes NDFs also are being used by investors and banks to earn from currency speculation.

The nearly 7-percent appreciation of the peso since the start of the year has made it one of the strongest Asian currencies but has elicited complaints from the export sector. Exporters said the strengthening of the peso has made Philippine-made goods more expensive in dollar terms and, therefore, less competitive.

The BSP said it has allowed the exchange rates of the peso to be generally flexible, but stressed that appreciation or depreciation of the currency due to speculation should be curbed.

It said speculation could cause excessive volatility of the exchange rate that could harm businesses and the economy.

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  • joboni96

    bayaran na lahat ng foreign loans ng gobyerno
    ng hindi 1/4 ng national budget pinambabayad

    at magamit na para sa mga projects
    malaki pa maiiwang forex reserves

    tututulan ito ng mga dayuhan para
    pagkwartahan pa tayo sa interes ng utang

    walang b_yag ang bsp para gawin ito
    kasi nakikinabang

  • http://profile.yahoo.com/AND7MQ5FERICDOIAUW56RYT45A tower_of_power

    This is BSP firefighting!!! BSP must lay down monetary policies to stabilize the peso. Stability is more important than an appreciating peso. Volatility invites speculators of all kinds!!!

  • ako_to

    not just exporter who are hurt..can you please insert the word O-F-W…there millions of them and their dependent family.

  • Hayek_sa_Maynila

    Report paints a partial picture. Regional currencies also weakened yesterday so PHP has no monopoly of depreciation. Korean won also fell yesterday.

     BSP should not intervene during these depreciation episodes. It may have to continue buying USD to push the market above 41 and possibly close to 42 before the end of 2012.

    • Baket?

      Pareng Friedrich, tumira ka na naman. Hindi ba’t sabiko, tumahimik ka na. Magagalit sa atin ang mga may kapangyarihan sa ginagawa mo. Basta go lang ng go. Para bumulusok ang piso. Yang gusto ng BSP, para maganda tignan. Ok lang ang bubble, basta masaya tayong lahat. Ikaw naman, masyado kang kayjay.

      • Hayek_sa_Maynila

        Yan ka nanaman. Di bale nang bumulusok ang stock market sa 5,000 o 6,000 o bumaba ang interest rates sa 3.0% pero ang palakasin ang piso ang pinaka malaking kamalian na puede nating gawin ngayon.

        Pero do bale. Palagay ko pareho kami ng side ni Presidente. Di tulad mo, ayaw nya rin sa palagay ko nang mas mababa sa 41 na palitan. Ayaw din ni Presidente na magking KJ sya sa pasko ng mga OFWs. Mabait yung tao, di tulad mo tila walang awa. Sila na nga itong naghihirap na magtrabaho sa labas ng bansa at iwanan ang pamilya nila para magka investment grade tayo, gusto mo pa siang parusahan ng malakas na piso.

  • http://twitter.com/erncastillo ern

    Kung may dollar ka at ayaw bilin ng kahit sino sa mas mataas na gusto mo, may magagawa ka ba? Edi itago mo na lang! Pero kailangan mo ng piso…so bibigay ka. Ganyan lang naman ang exchange rate. Pwede mo ba pilitin na mag-abono ang bangko kung mababa din ang palit sa kanila sa international transactions? Ano gusto mo mangyari…mag-imprenta ng santambak na peso ang central bank para maging malabnaw ang piso? Pero asahan mo mag i-spiral ang local prices at mas masakit ang tama nito. Ikaw ba naman, kung kayang bayaran ng tao sa mas mahal ang tinda mo (dahil mas malaki palit sa sa dollar nya), di ka ba magtataas ng presyo? ah… one dollar lang yan…. ganyan ang katwiran ng dollar earner.

    The stark reality is that the salaries of OFWs are really low. But what can you do? Ganun din… take it or leave it…wag ka mag-abroad.

    We are undergoing transformation, where overseas work will lose its glory in favor of local jobs. Aren’t you happy? Mas masaya ka ba na malayo sa asawa at pamilya mo? Alam ko napakaraming masaya….

    • oh_noh

      ulul ka pala e!

      maliit na nga ang sweldo ng mga ofw (na bumubuhay sa pinas!!!), tapos tatarantaduhin pa ng gobyerno!

      we are undergoing transformation, sang-ayon ako dyan, basta ba totoong lumalago ang ekonomiya – not at the expense of the ofw’s!

      *tsk3x* mayabang ka pang magasbi na wag mag-abroad, e bulok nga ang ekonomiya n pinas kaya nandito kami sa ibang bansa!

  • oh_noh

    kunware lang yang mga ulul na yan na bumagsak ang PHP (ng ilang sentimo kontra dolyar) samantalang at least sampung piso dapat ang ibagsak ng piso…

    papalugi ba naman ang mga “ekonmositang negosyante?”

    • http://pulse.yahoo.com/_EXFI4EUGM23PQ4FMQKLVH36OXI Jose

      Learn about economics before you start posting about economics, please.

      • oh_noh

        hoy, iho pasensya ka na… makakalimutin na talaga ang lolo mo, nasabi nga pala ng nanay mo na b-a-d-i-n-g ka D

        wala akong pakialam sa inyong mga nag-aaral sa abroad, mabibilang lang kayo sa daliri :P

      • http://pulse.yahoo.com/_EXFI4EUGM23PQ4FMQKLVH36OXI Jose

        Kung sobrang pikon ka, baka dapat di ka na magpost sa internet.

      • oh_noh

        haha, b-a-d-i-n-g! :P

    • http://twitter.com/erncastillo ern

      nag-iintervene lang po ang gobyerno para maiwasan ang sudden spikes. Wala silang magagawa o pakialam kung ang dalawang tao nagkasundo na magbentahan sa mas mahal o mas mura. Ano gusto mo, price controls? Magsara ang mga pabrika dahil hindi profitable? At mawalan ka ng trabaho? Ah, hindi ka nga pala sa pabrika nagtatrabaho….pero ang workers dyan kustomer sa tindahan mo….di ka ba apektado kung mawalan sila ng trabaho?

      • oh_noh

        ayun… pwede palang mag-intervene!

        tapos sasabihin mong market driven :D

        di kaya ng tinderong sinsabi mo na magkaron ng condo/townhouse sa pinas :P

  • http://pulse.yahoo.com/_EXFI4EUGM23PQ4FMQKLVH36OXI Jose

    As a Pinoy studying abroad, this isn’t great for me.

    Still, in general, an uncontrollably rising peso wouldn’t be good for the country either.  I’d like them to just ensure it remains stable against the dollar / euro, to be honest.

    • oh_noh

      iho, ang lolo mo ito… sa abroad ka nag-aaral, ibig lang sabihin mayaman tayo :D

      mabuti naman at nag-aaral ka pa lang e alam mong ang palakas na palakas na piso ay hindi rin maganda sa bansa – lalu na’t minamaddyik lang ng bsp/pamahalaan!

      siguro pag nakita mong may sarili na man lang tayong pagawaan ng bisikleta *hehe* ibig kong sabihin, kapag marami nang mga pabrika/planta/totoong agrikultura sa pinas na nag-po-produce ng kung anu-ano (hindi yung puro lang tayo import!) at habang lumalakas ang piso e nagbababaan ang mga presyo, yan ang tinatawag na malakas na ekonomiya… hindi yung porket lumakas lang ang piso e maganda na ang ekonomiya!!!

      sana pag nakatapos ka wag kang maging utak biya tulad ng mga ekonomista / negosyante natin ngayon na walang inatupag kunde ang sariling mga bulsa sa pamamagitan ng pananamantala!!!

      • http://pulse.yahoo.com/_EXFI4EUGM23PQ4FMQKLVH36OXI Jose

        May pera rin ang pamilya ko, pero mahal pa rin ang tuition, at kung bumaba ang pero mas mahihirapan kami.  Di kami sobrang yaman na wala kaming pakialam sa pera.

        Pero wala akong pakialam sa opinyon mo.  Kung di mo naiintindihan ang ekonomiya, huwag mo pagusapan.

      • oh_noh

        wag ka nang mag-re-reply kung wala kang pakialam :P

  • monses

    Peso appreciation mainly benfits importer,but a nightmare for OFW’s.Statistics shows our imports exceed our exports and our economic surge is in fact consumer driven, as evidence by the influx of remittances from abroad.OFW’s are likewise facing some problems from their host country like rising prices of commodities and labor malpractices specially having no salary increases.They were merely biting the bullet since our government cannot offer a compettitive job and salary.Our government should utilize our dollar reserves to create more jobs through infrastructure development, advance technology and scientific research for the benefits of our environment and our countrymen.

    • rezli

      ano ang export natin OFW..? 

  • TheStaple

    The bittersweet smell of success to Filipinos working abroad. It’s great to see Philippines in progress but I felt sad coz the exchange rate is moving on the opposite direction. Now I’m thinking of cancelling my investment in the Philippines coz I can no longer cope my budget. Grrrrrr! :(

    • http://www.facebook.com/profile.php?id=100003712489179 Michelle Martin

      Dont blame the Philippine Peso for your lack of budget. How can you make an overseas investment if you dont have enough budget to invest in the first place? 

      Peso is still 40-1 dollar. having a rising peso should benefit you as an investor because you will gain more value in your profit. Duh. Wag ka na magimbento alam kong Pilipino ka rin, TheStaple. Kunwari investor daw hahaha echosera! :)))

      • TheStaple

        Yes I am a Filipino working in a foreign country just to be able to help my brother and sister finished their studies. I’m one of the Filipinos who works hard just to be able to give my family back home a better quality of life. One way or another we the OFWs help improve our economy thru our hard earn remittances that we send regularly.

        Sorry but you Michelle Martin don’t need to insult me for having a budgeted income coz this is the life of being an OFW. Three years ago, the exchange rate wasn’t this bad when I first decided to own a property. Hindi mo siguro ako maintindihan coz you haven’t experience working in another country. Kaya sabi ko na bittersweet coz masaya kaming mga OFWs na makikitang  umunlad ang Pilipinas pero at the same time nahihirapan din kaming mag adjust sa kinikita namin para mababayaran yung investment namin due to the volatile peso to dollar/pound exchange rate. Pasensya na Michelle Martin pero ngayun sa palagay ko ikaw yung echosera! double DUH!!!

  • http://profile.yahoo.com/GHH2IPW7ZSTQX4JCYQWL2BLXOE MarcialA

    its the BSP who is circulating speculation see now peso falls against dollar.

    • oh_noh

      c’mon bsp – kunware mga negosyante ang nag-i-speculate… e yang mga negosyanteng ekonomista na yan ang mga ngising kabayo ngayon!
      itigil nyo na ang “pagmanipula” ng “lakas” ng piso!

      stop this strong economy – in paper!

    • http://www.facebook.com/profile.php?id=100003712489179 Michelle Martin

      actually the peso fell because the BSP intervened and tightened its rules. it did not speculate the value, it simply tightened its regulations over speculations made by banks.

    • http://profile.yahoo.com/GHH2IPW7ZSTQX4JCYQWL2BLXOE MarcialA

      hayaan nlng lumakas ang piso kasi ang defense department are acquiring must needed military hardware alam muna china magulang.buying 12 jetfighter 2 missile frigate radar installation attack helicopter submarine by 2015.baka maudlot nman modernization like the first time na planuin ito.

    • rezli

      mga intsik po sir, nandiyan lang sila sa paligid ng binondo central bank…

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