No US manipulation of peso–Diokno

Newly confirmed Budget Secretary Benjamin Diokno on Wednesday said that there was no manipulation of the peso by the United States after the local currency fell to a seven-year low against the US dollar early this week.

Speaking to reporters after the Commission on Appointments budget and management committee recommended his confirmation as budget secretary, Diokno explained that the improved US economy was strengthening the US dollar and thus, prompting short-term investors here and other countries to redirect their investments to the United States.

He said it was a “natural and rational behavior… not a manipulation on the part of investors.”

Diokno also said the United States was not manipulating the peso because for the longest time it wanted to raise its key interest rates but the US economy then was not as good as it is now.

“So if you have money, you will put it where you will get a huge return,” he said.

President Duterte on Tuesday accused the United States of manipulating the peso after it dropped to P48.25 to a US dollar on Monday,  its weakest level since falling to P48.335 on Sept.19, 2009. The peso recovered slightly on Tuesday to close at  P48.17 but fell anew on Wednesday to P48.25.

The peso’s plunge was also attributed to investors’ concerns over the uncertainty about Philippine foreign policy and diplomacy following controversial statements made by Mr. Duterte against the United States and the European Union, the country’s major trading partners.

But Diokno advised foreign investors eyeing long-term investments in the country “not to be distracted by the noise.”

“They should look at the forest, not the trees,” the budget secretary stressed.

Diokno earlier told reporters that he was not worried about the peso’s decline against the greenback, and was “comfortable” with the present forex level.

“If you compare the depreciation of the peso relative to other currencies, it’s really not that bad. The weakening of the peso is the reflection of the strengthening of the US dollar. And that is because of the possible [rate] adjustment of the Fed,” Diokno said.