By the staff
The Bangko Sentral ng Pilipinas (BSP) is holding off from aggressively defending the peso, even as the local currency tests fresh lows against the U.S. dollar.
Speaking on the sidelines of a Rotary Club event, BSP Governor Eli Remolona Jr. emphasized that the central bank’s policy is guided by economic fundamentals rather than the symbolic value of the exchange rate.
“There is tremendous pressure to defend the peso and we’ve resisted that pressure,” he said, adding that the BSP ignores market or political pressure to prop up the currency.
The peso fell 14.5 centavos on Wednesday to a record low of 59.355 per dollar, weaker than the previous Dec. 9 low of 59.22.
Remolona said the BSP continues to intervene in the market, but in “small amounts” aimed at smoothing sharp swings rather than maintaining a fixed target. When asked about interventions the previous day, he said: “I don’t know. I don’t track it day by day. But the policy is not to allow sharp movements.”
Asked how the central bank would respond if the peso hit 60 or 61 per dollar, he downplayed the significance. “It’s just a number,” he said.
Remolona explained that the peso’s role in the economy has shifted. While a weaker peso once benefited manufacturing and merchandise exports, the current economy is dominated by services, making currency swings less impactful. “It’s neither a big help nor a big threat,” he said.
