The Bangko Sentral ng Pilipinas (BSP) on Tuesday attributed the peso’s recent slide to 59 against the US dollar to investor concerns over potential headwinds in economic growth, partly stemming from the ongoing controversy surrounding government infrastructure spending, as well as expectations of further monetary policy easing.
In a statement, the central bank emphasized that it continues to allow market forces to determine the exchange rate.
“The Bangko Sentral ng Pilipinas allows the exchange rate to be determined by market forces,” the BSP said. “We continue to maintain robust reserves. When we do participate in the market, it is largely to dampen inflationary swings in the exchange rate over time rather than to prevent day-to-day volatility.”
The BSP underscored that the peso remains fundamentally supported by steady inflows and a stable macroeconomic backdrop.
“The peso continues to be supported by resilient remittance inflows, still relatively fast economic growth, low inflation, and ongoing structural reforms,” the central bank added, noting that foreign exchange inflows from the business process outsourcing (BPO) sector, tourism, and overseas Filipino workers (OFWs) continue to cushion the impact of external shocks.