The Department of Finance (DOF) said the Philippine peso remains one of the most stable currencies in Asia amid the currency’s latest plunge at P53 against the US dollar on Friday (June 10).
In a statement on Sunday (June 12), Department of Finance (DOF) chief economist Gil Beltran said that the peso remains stable despite inflationary pressures from skyrocketing global fuel prices.
“Strong macroeconomic fundamentals continue to support the peso, despite external headwinds from tighter monetary policy actions by the US Federal Reserve and inflationary pressures from heightened global fuel prices,” Beltran said.
Beltran said that the country’s gross international reserves of $106.76 billion at the end of April could cover 9.4 months of imports of goods and services.
He also cited the Philippines’ exposure to external debt, which is measured in percent to gross domestic product (GDP), being the lowest among major Southeast Asian economies.
As of the end of 2021, the country’s foreign debt-to-GDP ratio stood at 27%. In comparison, there was 69% for Malaysia, 39% for Thailand, and 35% for Indonesia. Meanwhile, Vietnam has a projected ratio of 39%.
The peso has depreciated by 5.4% in 2021, ending at P50.77 against the US dollar, ranking 8th among 11 Asian currencies and being one of the fastest recovering economies in the world, according to DOF.
“In 2022 [so far], the peso was one of the strongest Asian currencies, ranking second only to the Vietnamese dong,” Beltran said.
“Prudent macroeconomic management, sustaining the vaccination program, and safely reopening the economy, among others, will be important in maintaining investor confidence as recovery gains traction and the economy chugs its way past its pre-pandemic level,” the official said.
The DOF has earlier proposed a “fiscal consolidation” plan for the next administration as the Duterte administration contracts a huge debt pile amounting to P5.3 trillion.
The Philippines' external debt increased by 8% to $106.43 billion (P5.67 trillion) last year, from $98.49 billion (P5.24 trillion) in 2020, according to the Bangko Sentral ng Pilipinas.
Pola Rubio is a news writer and photojournalist covering Philippine politics and events. She regularly follows worldwide and local happenings. She advocates for animal welfare and press freedom. Follow her twitter @polarubyo for regular news and cat postings.
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