The Philippine peso is seen depreciating further this week as the country is seen to rely more on imported products this year.
A government source said that the local currency may range between P41 and P44 a dollar as reconstruction in the typhoon-devastated areas of Eastern Visayas may require more imported construction materials.
The source said that the domestic production of construction materials in the Philippines is not enough to cover the reconstruction and rehabilitation of the areas affected by Super Typhoon Yolanda. With this, the country may rely on importing more construction materials like GI sheets to start the reconstruction efforts.
This year, the government said that imports may reach $66.5 billion, or a 6-percent growth, while exports receipts were seen to reach $51 billion, or growing by 6 percent.
On the other hand, the country’s money supply is expected to slowdown starting December 2013.
According to the Bangko Sentral ng Pilipinas (BSP), M3 or domestic liquidity may slow down since the operational adjustment in the special deposit account (SDA) facility ended in November last year.
SDA is a monetary facility instrument under the BSP that was made available to banks to managing excess domestic liquidity in the financial system.
Last year, a BSP guideline was issued restricting individuals to make direct placements in the facility until November 30. The facility can only be accessed through participation in pooled funds of the Trust departments of banks.
The guideline said that any remaining balance in the investment management accounts shall be phased out by November 30.
As of November, the country’s money supply recorded a year-on-year growth of 36.5 percent, reaching P6.7 trillion, driven largely by sustained expansion in domestic claims, or credits to the domestic economy.