The Philippine peso remained firm last year despite extreme volatility in currencies and rising risks in the global economy heightened by the spread of coronavirus disease, the Department of Finance (DOF) said.

In his latest economic bulletin, Finance Undersecretary Gil S. Beltran, said the peso was in the middle of the pack among the nine currencies in Asia that maintained their value against the US dollar in 2020.

Beltran also noted that the local currency appreciated against the US dollar from its yearend-level in 2019 by 5.18 percent.

“ in the middle of the pack of nine Asian currencies including the Taiwan dollar, Chinese yuan, Taiwan dollar, Korean won and Japanese yen which appreciated by 6.33 percent, 6.26 percent, 6.07 percent, and 4.94 percent, respectively,” Beltran said.

The peso-dollar exchange rate also remained stable last year, the finance official said, noting its coefficient of variation at 2.11 percent, in the middle of the pack of 12 regional currencies and an improvement against the 2.24 percent Asian average.

However, the peso has weakened slightly in the first month this year, but Beltran said this is in line with regional currencies which also depreciated at a slightly higher 0.11 percent average. 

“The main reasons for the peso’s continued strength and stability are the country’s strong balance-of-payments (BOP) position and rising Gross International Reserves (GIR),” he said.

The country generated a BOP surplus of $12.8B in last year due to slower imports and outward payments. 

 
The GIR, meanwhile, rose to $109.8B at end-2020, up 21.6 percent from $87.84 the year before. As a ratio of imports of goods and services, it rose to 11.7 months from 7.7 months in 2019.  

Beltran said these key economic indicators have boosted the confidence in the Philippine peso.

“Despite the pandemic and global economic contraction, strong macroeconomic fundamentals support the country’s favorable financial footing,” Beltran said.

“The BOP surplus in 2020 was the highest in recent history. Manageable budget deficits and prompt adjustment of monetary settings in response to current developments help maintain investor confidence,” he added.