Exporters warned the government on Wednesday that targeted revenues of $50 billion this year will not be met due to the peso’s rapid appreciation.
"We share the concern of the export industry over the continued strength of the peso," Presidential spokesman Ignacio Bunye, said in a statement.
"But as a policy, we always leave it to market forces to determine the true value of our currency.
Speaking before the joint foreign chambers of commerce yesterday, Mrs. Arrroyo admitted there was concern over the strength of the peso against the dollar particularly its impact on the export industry. But the President indicated that pegging the peso at any level was not under consideration.
"We will leave it to the market to determine the foreign exchange rate," Mrs. Arroyo said. "But we will assist exporters with concrete measures outside of the foreign exchange rate."
The President scheduled to met with exporter groups today. Mrs. Arroyo said the government intended to offer other forms of support to allow industries to weather the initial adverse impact of peso appreciation.
"We will assist exporters with better infrastructure, also lowering barriers to investments," Mrs. Arroyo said.
The Bangko Sentral ng Pilipinas (BSP) said the peso was not actually surging on its own since all other currencies in the region was appreciating against the dollar.
This meant that the peso was not actually losing competitive edge compared with the country’s main export competitors.
BSP Governor Amando M. Tetangco Jr. said the year-to-date volatility of the peso was still well within the range of regional volatility when compared to other Asian currencies.
"Our volatility has been in the middle of the volatility range against the US dollar," Tetanco said. "These currencies have all appreciated against the dollar. We are not exactly moving in isolation."
On Tuesday, the peso climbed to a new four-year high of 49.88 to the dollar, fueled by sustained foreign exchange inflows and a regional currency market anticipating cuts in the US interest rate.