Photo from Mediamerge Corporation BSP What we need is a competitive peso

A ‘competitive peso’ and not a strong one is what the country needs to sustain economic growth, Budget Secretary Benjamin Diokno said amid concerns the weak currency against the US dollar is hurting the purchasing powers of the Filipinos.

According to the budget chief, the current peso-dollar exchange rate is actually beneficial for some sectors. He said these segments include the manufacturing, business process outsourcing, overseas Filipino workers, among others. Those who are going to get hurt by a weak peso are people who prefer imported brands, he said.

“For the nth time, as an economist, what we need is a competitive peso — not a strong peso; a strong peso does not mean strong economy; nor does a weak peso mean a weak economy,” he said then.

Diokno was reacting to the latest Bloomberg’s median survey predicting the local currency to hit rock bottom to 56 against the greenbucks before the end of 2018. The peso at 53.13 per dollar on Friday from 53.09 on Thursday.

From January to June, the peso lost six percent making it the worst-performing currency in Asia and touched 53:1 in July on concerns over expanding current account deficit, runaway inflation and higher interest rates in the US.

But the peso was on a steady rebound since Friday before a slight decline on Thursday closing at 53.09, a centavo down from Wednesday’s 53.08. The currency is also outperforming its Asian peers since mid-year on anticipation the Bangko Sentral ng Pilipinas (BSP) would announce a 50 basis points interest rate hike on Thursday.

BSP Governor Nestor Espenilla echoed Diokno’s observation saying the weakening peso had helped bolster the nation’s export competitiveness. KM and JL