The Bangko Sentral ng Pilipinas (BSP) yesterday said that even as the peso fell to 11-year lows in recent months, there was no foreign exchange crisis given the central bank’s firm hold on the exchange rate.
“We allow the peso to adjust moderately and gradually. But I can assure you that the BSP is in firm control of the exchange rate. And this development is consistent with an investment-and export-led strategy,” BSP Governor Nestor A. Espenilla Jr. said during the economic forum organized by the Economic Journalists Association of the Philippines.
“We remain confident that we are not talking about a freefall situation here. The fundamentals are very strong in terms of the macrofundamentals,” Espenilla added.
Espenilla noted that both inflation and the budget deficit were “under control,” the economy continued to post robust growth and the country had ample dollar reserves while the share of debt to gross domestic product had gone done in recent years.
In reaction to comparisons with the peso’s depreciation to the 55:$1 level in 2005, Espenilla pointed out that “2005 and 2017 have very different scenarios—we have market access; back then we were junk rate but today we are investment grade.”
“Definitely, we are not in a foreign exchange crisis,” Espenilla said. —BEN O. DE VERA