Gov’t should explain ‘alarming’ peso fall – Robredo

MANILA, Philippines – Vice President Leni Robredo said the government should explain what she called the “alarming” fall of the Philippine peso to its lowest level in 12 years, to put to rest any speculations over it.

Robredo made the call in a media interview on the sidelines of the opening of the Istorya ng Pag-asa-Negros Occidental photo exhibit on Thursday, June 14, a day after the peso breached the P53 to $1 mark, closing at P53.23.

“Alarming siya kasi ganito kabilis, ganito kababa iyong inabot, at kailangan natin ng paliwanag kung bakit nagkakaganito (It’s alarming because of how fast and how low it has fallen, and we need an explanation on why this is happening),” she said, in response to questions.

Robredo said an official explanation from concerned government officials would put to rest any speculation on the peso fall – the lowest since June 2006 – which some have even attributed to the Tax Reform for Acceleration and Inclusion (TRAIN) law.

Asked whether the weaker peso was caused by a lack of investor confidence, the Vice President said: “Marami kasi siyang bagay kung bakit ganoon, maraming ispekulasyon kung bakit ganoon, pero tingin ko ang nasa pinaka nasa posisyon para sumagot nito, iyong pamahalaan….May nagsasabi na dahil sa TRAIN law, sabi ng pamahalaan hindi naman, so ano iyong explanation sa atin?”

(There are many factors why this happened, many speculations, but I think the one in the best position to explain this is the government….Some are saying it’s due to the TRAIN law, the government said it’s not, so what is the explanation?)

“Kasi iyong pakiramdam ko, mas lalong mahirap na magspeculate kasi puwedeng iyong ispekulasyon hindi naman tama o hindi totoo. Kaya iyong hinihingi natin na ano iyong paliwanag. Bakit ganito?” she added.

(I feel that it’s hard to speculate because speculations may turn oout to be wrong or false. So what we’re asking for is an explanation. Why did this happen?)

Robredo said her concern is that the weaker peso would burden businesses and may lead to job losses. It would further jack up prices of goods that have imported components.

“Tingin ko iyong pinakahigit na epekto nito, ‘yung epekto niya sa pang-araw-araw na pagbuhay ng ordinaryong Pilipino. Medyo nakakabahala, nakakabahala na ganito kabilis [ang pagbagsak ng piso],” she said.

(I think its most serious effect is on the daily lives of ordinary Filipinos. It’s alarming that this [peso fall] is happening so fast.)

The weakening of the peso on Wednesday was attributed to external factors such as the anticipated continued tightening of US monetary policy. The US Federal Reserve announced another interest rate hike that same day.

At home, some of the factors that economists said affect the peso value against the US dollar are the wider trade deficit, the government’s fiscal deficit spending, and the wider current account deficit due to inadequate remittances from overseas Filipinos and receipts from the business process outsourcing (BPO) sector.

Money sent home by over 10 million overseas Filipinos is the second largest source of foreign exchange for the Philippines, next to revenues from the BPO industry.

Remittances from overseas Filipinos help fund the country’s widening current account deficit, which is due to more importation of raw materials and capital equipment. – Rappler.com