Economist-solon Albay 2nd district Rep. Joey Salceda projects the Philippine peso (PHP) to hit as high as P68 against the United States (US) dollar.
In a statement Friday, Sept. 23, Salceda claimed that "there is no resistance" against the strong US dollar.
“There is no resistance. There is no anchor, so to speak. So, I can see the dollar sustaining its strength against the peso. It will continue,” Salceda, the House Committee on Ways and Means chairman, said.
“This could go as high as P65 to P68 per dollar. And, frankly, there’s not much we can do," he noted.
“Based on the country’s recent history, periods of currency weakness average at 38 percent depreciation. Depreciation in the early 1970s, by 41 percent, even led to an eventual boom in Philippine exported commodities by 1974. Depending on where you start counting, the PHP has depreciated by 18 percent to 23 percent against the dollar during this period of depreciation. So, if history repeats, there’s quite some way to go,” Salceda explained.
According to the Bicolano, the Bangko Sentral ng Pilipinas (BSP) will not be able to sustain a policy of keeping local interest rate differential with the US.
"We can’t raise rates too aggressively without sacrificing economic recovery because the currency depreciation isn’t primarily our fault. We can’t do much to protect the peso.
“Instead, what we can do, as I’ve said repeatedly this year, is – if the dollar is stronger than the peso, then let’s just earn more dollars," Salceda said.