Peso remains competitive, BSP maintains
Cagayan de Oro City (30 November) -- The peso remains a competitive currency, the Bangko Sentral's chief said, as it has appreciated less and has been less volatile than other currencies in the region.
"We have appreciated less than currencies of other countries such as the Thai baht, Malaysian ringgit and Indonesian rupiah, so in relative terms, we have not appreciated against the dollar more than those currencies," he told reporters last Friday.
"This means that in terms of relative strength, the Philippine peso has remained more or less [competitive], and even had an improvement in competitiveness because other currencies have faster appreciation."
Exporters have complained of a strengthening peso, saying this has eroded their competitiveness.
The peso appreciated to the P42-per-dollar level this year amid large dollar inflows and a weak dollar but had fallen to the P44-per-dollar level in recent weeks due to central bank intervention and euro zone and Korean peninsula worries that sent investors trooping to the dollar as a safe haven.
Data from the central bank showed that as of Friday, the peso appreciated by 5.1% from a year ago. In contrast, the Thai baht jumped by 11.1% against the dollar, followed by the Malaysian ringgit that climbed by 9.7%.
The Singaporean dollar strengthened by 7.6%; the Taiwan dollar by 5.9%; and the Indonesian rupiah by 5.5%.
Chinese yuan was allowed to rise by 2.7%, while the Korean won added 2.2%.
The peso closed at P44.18 per dollar last Friday, losing 51 centa-vos on a week-on-week basis.
In terms of volatility, Mr. Tetangco said the Philippine peso was in the middle compared to the other currencies as well. Volatility refers to fluctuations in the exchange rate.
Data from the central bank showed that as of Friday, the peso exhibited a 2.4% volatility from a year ago.
This was not as bad as the Thai baht (3.4%), Korean won (3.1%) and Singaporean dollar (2.9%), but was worse than the Taiwan dollar (1.8%), Indonesian rupiah (1.6%) and Chinese yuan (1%).
Mr. Tetangco also noted that while the peso has appreciated, exports are still up.
Exports in the January to September period increased by 38.5% to $38.298 billion from the same period a year ago.
"So this shows that it is not only the exchange rate that determines the country's [export] competitiveness. There are other factors, such as efficiency, productivity, marketing, research and development, and power costs," he said. (PIA) [top]