Pernia thinks P52:$1 level is acceptable

The Philippine peso at 52 to a dollar may still be acceptable until the P52:$1 is breached, Socioeconomic Planning Secretary Ernesto M. Pernia said Thursday.

The Cabinet official was responding to queries by reporters on the acceptable threshold of peso depreciation. "I think P52 would be okay," Pernia said on the sidelines of a press briefing in Quezon City.

The peso sank to P51.35 per dollar on Wednesday, the weakest since August 25, 2006 when the pair finished at P51.38:$1.

Pernia noted the Bangko Sentral ng Pilipinas is closely monitoring the situation and will intervene if the situation warrants it so.

"Binabantayan maiigi ng Bangko Sentral kasi may instrument sila, may panlaban naman sila sa depreciation para hindi talagang mag-depreciate," he said.

Earlier this week, BSP Governor Nestor A. Espenilla assured the public that the recent depreciation of the local currency would not lead to a "free fall," that it was "natural for it to show volatility."

"The peso is capable of correcting itself as the market calms down and digests the relevant information. Moreover, BSP will always be there strategically if volatility is considered excessive," he said.

"We have a huge pile of fx (foreign exchange) reserves to play an effective stabilizing role. The Philippines is an emerging market economy that wants to grow," he added.

Pernia said the depreciation of the peso will have minimal impact on inflation. "Mataas and international reserves so walang rason, walang cause for worry. Dapat hindi magbawas sa tulog ng mga tao 'yun," he said.

"'Yung kaunting deprecaition ng peso, maliit lang ang effect niyan sa inflation. For every peso depreciation, 0.14 [percent] lang ang effect sa inflation," he added.

The depreciation of the peso could benefit families receiving remittances from relatives who live and work abroad, Pernia said.

"Ang depreciation ng peso, ang epekto diyan ay dadami 'yung pera ng mga remittance recipient households, kasi mas maraming peso ang makuha nila for every dollar they exchange," he said.

"And also those exporting are benefitting from more competitive export prices. Mas mura 'yung export natin kung mag-depreciate 'yung peso, so magkakabenefit 'yung export sector at saka BPO sector," he added. — VDS, GMA News