THE Bangko Senral ng Pilipinas (BSP) yesterday reiterated that it has not issued any instruction to close or suspend remittance services in the country despite the enhanced community quarantine in Luzon to combat the coronavirus disease.
In a statement, BSP said it continues to provide payment and settlement system support to banking and financial market transaction, and maintained that banks are operational.
“Banks, as well as remittance companies, are operating to serve the needs of the public even during the enhanced community quarantine,” the central bank said.
The BSP also said it has not changed the country’s exchange rate policy, and when warranted, it is ready to provide dollar liquidity and ensure that legitimate demands for foreign currency are satisfied.
“At present, the country’s exchange rate policy supports a freely floating exchange rate system whereby the BSP leaves the determination of the exchange rate to market forces,” Benjamin Diokno, BSP governor, said.
He stressed the central bank is ready “to ensure order and temper destabilizing swings in the exchange rate.”
“We have adequate reserves of more than $87 billion to perform our mandate of maintaining the international stability and convertibility of the Philippine peso. When warranted, the BSP will provide dollar liquidity and ensure that legitimate demands for foreign currency are satisfied,” Diokno said.
He explained that smoothening out the exchange rate volatility is “critical in performing our primary mandate of price stability since fluctuations in the exchange rate tend to feed directly into domestic prices of imported goods and services, and indirectly, through the prices of goods and services that use imported inputs.”
Section 65 of Republic Act No. 7653, as amended by Republic Act No. 11211, states that “In order to maintain the international stability and convertibility of the Philippine peso, the Bangko Sentral shall maintain international reserves adequate to meet any foreseeable net demands on the Bangko Sentral for foreign currencies.“
The peso yesterday closed at P51.14 to a dollar, 0.24 centavos lower than the previous day’s close of P50.90.
