The President reassured the public that the government is taking action to prevent the "adverse domino effects" of election-related conflicts on the currency and economy.
The Chief Executive has called a meeting of the country’s economic managers led by Finance Secretary Juanita Amatong to discuss the currency situation with Bangko Sentral ng Pilipinas (BSP) Gov. Rafael Buenaventura.
"We are taking the necessary means to cushion the negative impact of the weak peso on the lives of ordinary people and to prevent the adverse domino effect it could bring," the President said in an official statement released by the Palace after the peso fell to a new low of 56.35 to $1 at the end of trading Friday amid concerns over the political uncertainties generated by the May 10 polls.
"Our currency will continuously be attacked by political developments in the country, but we assure the public that we will not be rendered helpless by the situation," Mrs. Arroyo said.
The President has renewed her calls for the "highest statesmanship" among all political leaders and contenders in the coming elections to help put a stop to the political instability that has triggered the peso’s fall.
While she said the peso’s decline is a "transient" or a temporary setback due to the raging political developments in the country, she expressed concern that the weakened peso would continue to be battered by the controversies related to the elections.
"The heat of the partisan politics must not be allowed to seep into the economy and batter the peso," she said.
"Controversies are being handled with justice and fair play and the police have effectively maintained law and order," the President said.
"I ask for the highest level of statesmanship among all political leaders and contenders," she said. "Even as we carry out the contest for power, we must always keep the supreme interest of the people in mind," she said.
The President, an economist, had earlier reassured the public that the government’s implementation of "economic reforms, clean politics and public sobriety" help ensure that the economy will be able to absorb the adverse effects of a weakened peso.
"Governance is institutionally stable, but good sense is being overriden by phantom fears," she said.
The President said the strong macro-economic fundamental of the Philippine economy will enable it to weather the continuing slump of the peso.
She also renewed her warning to dollar speculators and "doomsayers" not to fan public fears about the state of the peso-dollar exchange rate.
Meanwhile, the opposition Koalisyon ng Nagkaisang Pilipino (KNP) said the administration’s mismanagement, not their standard-bearer Fernando Poe Jr.’s candidacy, caused the peso’s plunge.
KNP spokeman and former Negros Oriental Rep. Miguel Romero said it was the Arroyo administration’s fault that the peso weakened against the dollar.
"It is because of the administration’s mismanagement that the peso had been going down," Romero said.
The peso also weakened against the dollar last month and Poe was blamed for it. However, Romero said, figures from the Bangko Sentral ng Pilipinas showed how much money was wasted by the administration due to heavy borrowing.
Romero cited as an example the fact that the Philippines has to pay $8.5 billion in principal and interest payments on loans this year, "almost 50 percent of the country’s $16 billion reserve."
Corruption makes the situation worse he said, adding that "we don’t have money at all. We cannot import oil and the transport sector wants a fare hike. There’s no work available. This year alone, 500,000 people are unemployed."
Makati Business Club executive director Guillermo Luz Friday attributed the peso’s decline to the political uncertainty in the country,
"It’s the peso’s reaction to the political uncertainty. There is nervousness in the market. — With Nikko Dizon