Malacañang expressed confidence that the Bangko Sentral ng Pilipinas (BSP) has enough tools to stabilize the peso and prevent further sharp depreciation, even as the currency slipped to around P61 against the US dollar amid tensions in the Middle East.
Palace Press Officer Claire Castro said the recent weakening of the peso was anticipated given global developments, but stressed that monetary authorities remain fully equipped to manage volatility in the foreign exchange market.
Castro said the government shares the assessment of the Department of Economy, Planning and Development (DEPDev), which noted that the central bank has sufficient policy instruments to contain excessive currency swings.
She pointed out that the BSP’s toolkit includes foreign exchange reserves, policy rate adjustments, macroprudential measures, and credibility in signaling markets, mechanisms that allow it to respond to sudden pressures on the peso.
Economic officials also attributed the peso’s recent depreciation to external factors rather than domestic weaknesses.
According to Castro, the first major driver is the unusually strong US dollar, which continues to attract global capital into American assets and away from emerging markets like the Philippines, putting downward pressure on regional currencies.
The second factor is the surge in global oil prices, which has increased demand for dollars as the country imports fuel and other energy needs. This, officials said, has widened the trade and current account deficits, contributing further to the peso’s weakness.
Castro quoted economic planners as explaining that the peso’s decline reflects a faster rise in dollar demand—driven by import payments, debt servicing, and other obligations—compared to the supply coming from exports, remittances, and foreign investments.
The peso closed at P61.567 against the dollar on Wednesday, weighed down by sustained high oil prices and ongoing geopolitical tensions in the Middle East.
Despite the pressures, Malacañang maintained that existing monetary and fiscal coordination efforts are sufficient to manage the situation and prevent destabilizing fluctuations in the currency.