The Philippine peso rebounded Thursday from a record low hit in the previous session as the Bangko Sentral ng Pilipinas (BSP) governor indicated that current economic conditions do not justify market intervention.
The peso closed at 59.17 against the US dollar Thursday, rising from its all-time bottom of 59.355 reached Wednesday. The previous record low was 59.22 recorded on Dec. 9.
BSPO Governor Eli Remolona Jr. told reporters on the sidelines of a Rotary Club event that the central bank has steered clear of the foreign exchange market despite external volatility.
“There’s tremendous pressure to defend the peso, and we’ve resisted that pressure,” Remolona said, noting that the country’s underlying economics do not warrant such action.
The governor said that while a weaker currency can benefit export-led economies by making manufactured goods more competitive abroad, the Philippines no longer maintains the same significant manufacturing base it once had.
He said that neighboring countries pursuing export-led growth often purposely weaken their currencies to support those sectors.
The BSP’s current stance suggests a preference for allowing market forces to determine the currency’s value unless extreme volatility threatens broader economic stability.
