Peso drops anew over setbacks in global economy

MANILA, Philippines—The peso, together with a few other Asian currencies, dropped further on Wednesday, amid challenges in the global economy and expectations that these would dampen growth even of developing nations.

The local currency closed on Wednesday at 43.53 against the US dollar, down by 7 centavos from the previous day’s finish of 43.46:$1.

Intraday high hit 43.39:$1, while intraday low settled at 43.55:$1. Volume of trade amounted to $1.2 billion, down from $1.57 billion previously.

The depreciation of the peso on Wednesday came following the release of the latest report by the International Monetary Fund, saying that the problems in the global economy, led by the sluggish US and European economies, have been dragging the performance of emerging markets, such as the Philippines.

The IMF slashed its growth forecast for the global economy for 2011 from 4.3 to 4 percent, and for 2012 from 4.5 to 4 percent.

The IMF said emerging markets, even if they had better fundamentals, would also be affected given globalization. The US and European economies serve as major export markets for many developing nations.

In the case of the Philippines, the Western region likewise serves as home to many overseas Filipino workers, whose remittances help fuel domestic consumption.

The IMF cut its growth projections for the Philippines as well. It now sees the Philippines growing by only 4.7 percent for this year from the previous outlook of 5 percent. For next year, it sees the country growing by 4.9 percent from the earlier forecast of 5 percent.