Palace, economic team working on managing inflation, peso fall

MANILA, Philippines — President Marcos and his economic managers are addressing the impact of a weaker peso on the prices of goods, Malacañang said yesterday, after the local currency hit a record low in the face of rising fuel prices and stronger dollar.

The Philippine peso sank to P62.565 to a dollar on Wednesday, surpassing its previous record low of P62.40 last Tuesday. It was the fourth consecutive day the local currency depreciated against the greenback.

“Managing inflation and foreign exchange is the primary mandate of the BSP (Bangko Sentral ng Pilipinas). On the national government’s part, the President has been working closely with the economic team to manage the inflationary effects of higher foreign exchange, including on food, business, logistics and other prices,” the Office of the Executive Secretary (OES) said in a statement read by Palace press officer Undersecretary Claire Castro yesterday.

The weakening of the peso is seen to increase the prices of imported goods, which could raise consumer prices.

Executive Secretary Ralph Recto’s office said the government efforts started immediately following the start of the Middle East conflict, citing the UPLIFT program, which involved the reprioritizing of spending, the reducing of non-essential expenditures and the directing of resources toward sectors affected by rising prices.

“The main thrust of the economic team is to support economic growth, and one way we are doing this is by increasing productive public spending,” the OES said.

“The administration’s approach is focused on fiscal discipline and more efficient use of public funds. This means reviewing spending proposals carefully and prioritizing programs that have high economic and social returns.”

Attributing the weakening of the peso to “brewed US dollar strength and rising global prices of oil,” the OES said the BSP’s rate hike last week was done to anchor inflation expectations as it also helps support the local currency.

“Moving forward, we expect the BSP to act decisively based on available data and intervene when necessary to reduce exchange rate volatility,” the executive secretary’s office said.

“The administration’s approach is focused on fiscal discipline and more efficient use of public funds; this means reviewing spending proposals carefully and prioritizing programs that have high economic and social returns,” it added.