Paeng defends BSP moves on peso

Bangko Sentral ng Pilipinas Governor Rafael B. Buenaventura lashed out yesterday at critics who have been accusing the BSP of allowing the peso to depreciate to record lows amid political uncertainties that have dimmed market prospects in the country.

Irked by suggestions that the BSP deliberately allowed the peso to depreciate last week either through inaction or actual maneuverings, Buenaventura chided his critics and said the situation was uncertain enough without kibitzers adding to the confusion.

"It’s not as if we need more confusion and noise," Buenaventura said, reacting to public statements that BSP had allowed the peso to plummet last week in order to blame actor Fernando Poe Jr. for triggering the widespread pessimism.

Buenaventura also lashed out at former central bank governor Jose Cuisia Jr. who was quoted as saying that the BSP had been lax on peso speculators.

"I spoke to him myself and explained that this is not the first time we are running after speculators," Buenaventura said. "Anyone who knows the operations of the BSP would know that the monitoring of forex trades is a regular and constant function of the BSP. It’s not something we turn on and off, it’s always there."

Cuisia was once governor of the defunct Central Bank of the Philippines in the 1990s when it was dissolved and declared bankrupt before the creation of the new BSP. He is now chairman of Philippine American Life Insurance Co.

"He should stick to selling insurance," Buenaventura said. "If he wants my job, he should just wait instead of adding to the noise.

Cuisia was not the only one who suggested that the BSP was deliberately allowing the peso to plummet. Sen. Vicente Sotto III was also quoted in the press as saying that Malacañang had ordered the BSP to let the peso fall in order to blame it on Poe.

"Absolutely not," Buenaventura said, declining to elaborate. "I will not even dignify that insinuation by explaining why it is not possible."

The BSP announced last week that it was prepared to impose stiffer sanctions against banks found speculating on the peso-dollar exchange rate, as roving bank examiners were sent out to monitor the daily forex trading of banks.

As the peso plummeted to record lows, the BSP said it was on the lookout for possible speculation by banks that want to take advantage of the political uncertainties.

BSP Deputy Governor Alberto V. Reyes told reporters the BSP’s roving teams have been fielded since the peso became unusually volatile earlier this year.

"We would not hesitate to impose stiffer sanctions on banks and bank officers that we find violating our rules on forex trading," Reyes said. "When the peso becomes volatile, our examiners are instructed to be on their toes and become more vigilant."