Government sees peso rebounding to 52-54 to a dollar

The current weakness in the peso was temporary and it should rebound to average around 52 to 54 against the dollar for this year, Finance Secretary Jose Camacho said yesterday.

"The present exchange rate reflects the concern about a couple of things which are temporary in nature – the Iraq situation and potential sanctions by the FATF," Camacho said, referring to the possible sanctions by the Paris-based Financial Action Task Force (FATF) on the country due to its failure to come up with acceptable laws to curb money laundering.

"We also feel that the exchange rate eventually would normalize when these two issues are resolved. We will still be able to achieve the average (government’s official target) for the full year of 52 to 54," he said.

Camacho reiterated the government’s calculations that it would be paying P300 million more in debt servicing for every one peso fall in the exchange rate beyond the target range.

Local legislators are set to meet with representatives of the FATF on Monday to discuss what specific measures are required to align the country’s anti-money laundering law to global standards.