Neda says PH to gain from weak peso

The country’s chief economist said the recent weakening of the peso should be viewed positively, adding that this augured well for the local manufacturing sector and would help generate badly needed jobs.

Economic Planning Secretary Arsenio Balisacan said the Philippine economy stood to gain from a modest depreciation of the peso against the US dollar.

With the weaker peso, Balisacan said imported goods become more expensive, thereby boosting demand for locally produced merchandise.

“What many people do not understanding is that when the peso falls, domestic industries become more productive,” he told reporters Friday.

The peso, which weakened by about 8 percent against the greenback last year, has sustained its downtrend.

It touched the 45-to-a-dollar territory last week for the first time since 2010.

The depreciation was attributed mainly to the US Federal Reserve’s easing of its stimulus program for the US economy, which has shown signs of improvement.

The tapering of the stimulus measure, done through heavy monthly purchases of bonds, has led to a dumping of emerging market assets in favor of dollar-denominated ones.

Emerging markets’ currencies, including the Philippine peso, have depreciated as a consequence.