The influx of “pamasko” (Christmas gift) and holiday remittances will strengthen the peso against the US dollar in November and December, an official of the National Economic and Development Authority said Friday.
NEDA Undersecretary Rosemarie Edillon said in a briefing Friday the peso’s depreciation against the greenback is also “likely temporary”.
The peso hit a new all-time low of P58.50 against a dollar on Friday after the dollar rallied, driven by the US Federal Reserve’s big time interest rate hike and the signal that it plans to implement more.
“We are hoping that is very temporary. In the case of the Philippines, we are hoping to see some stabilization toward November, December.
Historically this is when we receive many remittances, pamasko na padala (Christmas gifting). This will also prop up the peso,” Edillion said.
The government is not yet revising its July peso-dollar exchange rate assumption, which is currently at the range of P51 to P53 for 2022 and P52 to 55 for 2023, she added.
While a higher dollar value is good for families of overseas Filipino workers, Edillion said “we are hoping they will keep their purchases in the country.”
Local manufacturers and exporters will also be able to use the weakness of the Philippine peso to capture more market share in the international market. A cheaper peso makes Philippine products cheaper.
“We are hoping our domestic producers and exporters take advantage of this weakness in Philippine peso. If we are able to do that, we increase those gains, and hopefully, that will generate more opportunities and more income for Filipinos,” Edillon said.
The Bangko Sentral ng Pilipinas, which hiked interest rate to 4.25 percent to cool down inflation, said the peso movement is normal in a growing economy. But some economists are concerned with the depreciating peso since the US dollar is used to pay for imports, including petroleum products.
Edillion said the government is aggressively pursuing medium-term plans to support domestic food production, which would reduce the need for food imports in the future.