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By Chino S. Leyco, Reporter
PHILIPPINE economic managers are set to revise
downwards the peso-dollar exchange rate assumption incorporated in
their macroeconomic targets this year, a government source said
Friday.
A source said the Development and Budget
Coordinating Committee (DBCC) is set to revise its foreign-exchange
rate assumption to P40 to P43 for every dollar, from the P42 to P45
estimate made earlier.
The figures were set by the DBCC for approval as
of May 2. The interagency body, which sets the country’s
macroeconomic goals and assumptions, is composed of the heads of the
finance and budget departments, of the National Economic and
Development Authority (NEDA) and the Bangko Sentral ng Pilipinas (BSP).
The interagency body will revise its peso
assumption after the local currency averaged 41.86 to the dollar at
end-March.
The DBCC said that for every P1 appreciation,
the country enjoys P2.2 billion in savings from interest payments on
its foreign debt.
The BSP said a stronger peso helps dampen
inflationary pressures arising from increases in international
prices of oil, metals and certain agriculture commodities.
Its estimates show that a P1 appreciation
results in a 0.04 percentage point reduction in the average annual
inflation rate, as the stronger currency cuts the cost of imports.
Due to a new foreign exchange target, the DBCC
is also expected to revise its export and import growth targets. It
earlier set an 8 percent goal this year until 2009 and 10 percent in
2010 for exports. For imports, the inter-agency body said growth
would come in at 9 percent this year and next, and 11 percent in
2010.
Despite the benefits of lower debt servicing
costs, a strong peso however cuts the earnings of exporters and
overseas Filipino workers (OFW).
The peso appreciation of 18.8 percent against
the greenback made the local currency one of Asia’s best
performers last year.
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