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| The peso dropped in value for the sixth straight day when it dipped to 64.17 to the dollar Tuesday |
The Philippine peso dipped to a new record low of 64.17 to $1 on Tuesday, before recovering slightly to close at 64.025 to $1 on Wednesday.
Tuesday was the sixth consecutive trading day that the
peso reached a historic low, and the 33rd time this year that it
bottomed out.
With the rapid decline of the national currency’s
value and no relief in sight in the near term, analysts say the peso could soon
be hitting the 65-to-a-dollar level.
The peso’s fall is attributed to several factors,
including a strong US dollar and expectations of higher interest rates in the
United States, the Philippine’s large trade and fiscal deficits, declining
foreign investments and weaker dollar inflows, due in part to the ongoing
crisis in the Middle East.
President Ferdinand Marcos, Jr. has sought to allay
concerns over the 64-to-a-dollar breach, saying the government is doing all it
can to defend the peso.
"People can take
solace (in) the fact that our policy towards the peso is to continue to defend
the peso as hard as possibly we can. We have all the tools to defend the peso.
We have all the means to defend the peso," Marcos said Wednesday.
But
the analysts say the Bangko Sentral ng Pilipinas is right in
not propping up the peso each time because of the country’s dwindling dollar
reserves.
Marcos attributed the drop in the currency’s value to the continuing
rise in oil prices due to the Mideast conflict.
But he said the government
is doing everything to bring down food prices, which have risen considerably because
of the oil crunch.
Amid the dire outlook,
some economists say the seasonal rise in remittances and bonus payments to business
process outsourcing staff could bring some relief before the year-end.








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