Malacañang says low inflation, strong reserves to support Philippine peso

THE Philippines’ economic managers remain confident the peso will be underpinned by low and stable inflation, ample foreign-exchange reserves and an improving investment climate, Malacañang said on Monday, even as the currency continues to trade near the P59-a-dollar level. Pal

ace Press Officer Clarissa A. Cas

tro said the Bangko Sentral ng Pilipinas continues to allow the peso to be determined by market forces, while maintaining what the central bank has described as “robust” foreign-exchange reserves. “The Ba

ngko Sentral ng Pilipinas allows the exchange rate to be determined by market forces,” she told a news briefing. “We continu

e to maintain robust reserves.” The peso has br

eached the P59-a-dollar mark several times since November and slid to a record low of P59.22 on Dec. 9. Analysts hav

e l

inked the weakness partly to soft investor sentiment amid a widening graft scandal that has weighed on local confidence. A weaker peso r

aises the cost of imports such as fuel, food and raw materials, adding pressure to inflation and squeezing household and business budgets. Still, authorit

ies said inflation remains subdued and is expected to stay within target over the next two years, helping support domestic demand. Inflation eased