THE Philippine peso remains one of the most stable Asian currencies amid rising risks, the Department of Finance (DOF) said yesterday.
The DOF pointed out in its latest economic bulletin that despite the rising risks in the global economy, heightened by the spread of the coronavirus disease, the collapse of global stock markets, the crash in Latin American currencies and the downgrading of credit ratings of many economies, the Philippine peso remained firm, almost unmoving from yearend 2019 level.
As of April 15, the Philippine peso ranked third year-to-date among the three currencies in Southeast Asia that maintained their value against the US dollar.
During the year, the DOF said the peso appreciated by 0.04 percent relative to the US dollar, ranking third behind the Japanese yen which appreciated by 2.05 percent and Hong Kong dollar which appreciated by 1.28 percent. All the other currencies depreciated against the US dollar.
“The peso-dollar exchange rate also remains stable throughout the period, its coefficient of variation at 0.26 percent, ranking first among 12 regional currencies and lower than the 1.94 percent Asian average,” the DOF said.
“The main reasons for the peso’s growing strength and stability are the country’s strong balance-of-payments (BOP) position and rising Gross International Reserves (GIR). Strong foreign exchange inflows from exports of services, remittances, income from investments abroad, direct foreign investments and foreign borrowing all contributed to the strong BOP position. These in turn boosted the confidence in the Philippine peso,” it added.
The DOF said the strong macroeconomic fundamentals support the country’s financial position.
“The BOP surplus in 2019 was the highest in recent history. Manageable budget deficits and prompt adjustment of monetary settings in response to current developments help maintain investor confidence,” it said.
