The Philippine peso remains competitive as it moves in line with other Asian currencies, the Department of Finance (DoF) said on Friday.
The peso returned to above P51 per dollar after hitting P52 on February 14.
The peso’s weakening in relation to other currencies in the first two months of the year is just a correction for previous appreciations, DoF said in an economic bulletin.
This assessment was based on a longer-term analysis comparing the peso’s movements with that of other Asian currencies between the end-February exchange rate and when the peso was at its weakest against the US dollar in 2004 and at its strongest in 2007.
“Note that in all three years, the real GDP (gross domestic product) growth was between 6.6 percent and 6.7 percent,” it said.
The analysis showed that from 2004 to last month, the peso appreciated by 7.3 percent, from P56.27:$1 to P52.16:$1. This made the peso the fifth most appreciated among 12 Asian currencies.
Average depreciation of these currencies was 5.65 percent during the period.
From 2007 to last month, the peso depreciated by 25.38 percent, from P41.60:$1 to P52.16:$1. This made it the ninth most appreciated among the dozen currencies.
Average depreciation during the period was 13.51 percent.
These movements should not be taken as a sign of structural weakness in the economy, DoF said.
This came after First Metro Investment Corp. and the University of Asia and the Pacific projected the peso to remain under pressure for most of 2018 and end the year at P52.50 against the dollar.
According to London-based research consultancy firm Capital Economics, the peso’s recent weakness is not a major economic concern, given the Philippines’ relatively low foreign debt.