The recent depreciation of the Philippine peso is a “momentary” fluctuation led by seasonal demand and supply factors, according to a lawmaker and veteran customs broker.
The peso-dollar exchange rate observed on Oct. 28 when it closed at an all-time low of 59.13 against the US dollar was merely a snapshot, a normal pre-year-end occurrence, according to Manila Second District Rep. Rolando Valeriano.
The weeks leading up to the holiday season typically see importers using up large amounts of dollars to purchase goods for consumer holiday spending and raw materials for the hectic production months extending into the summer, he said in a statement.
Valeriano, chair of the House Committee on Public Order & Safety and vice-chair of the Committee on Ways & Means, said the supply of dollars in the Philippine market often improves in December, March, May, June and July.
These are the usual months when overseas Filipinos remit dollars, euros, riyals, dinars and other currencies to their families for holiday spending, school fees and emergencies, he said.
While acknowledging that investor confidence is a factor, the lawmaker pointed out that international trade and global finance issues are also affecting the economy.
Rising tariffs in the United States, for example, make Philippine exports more expensive for U.S. consumers, effectively adding to inflation. This has prompted some Filipino exporters to pivot and focus more on markets in Europe, Asia and Australia, he said.
Addressing concerns that higher inflation in the US might dampen remittances from migrant Filipino workers and Filipino-Americans, Valeriano cited historical data showing that remittances keep coming, driven by the commitment of Filipinos abroad to their families in the Philippines, saying they “find ways to save and to remit, no matter what happens over there.”
Low infrastructure spending has historically been a significant constraint, especially when compared to more affluent Southeast Asian neighbors.
Foreign investors are concerned by reports of public works debacles and a potential slow-down in infra spending, as the country is already lagging in this area. They want increased, but properly managed, spending, free from corruption, he said.
