Peso depreciation 'no cause for concern' – Diokno

MANILA, Philippines – Budget Secretary Benjamin Diokno downplayed worries over the depreciation of the Philippine peso.

"The depreciation of peso as far as I'm concerned is no cause for concern. We've seen the peso go up to P55 [to $1] in the past," said Diokno on Tuesday, September 27, during a Palace press conference.

The Budget Secretary said the depreciation of the peso "is a result of the strengthening of the dollar more than the weakening of the peso."

The strengthening of the dollar is due to the "impending increase of the interest rate by the Fed (US Federal Reserve)" by the end of 2016, a move which aims to attract more investments to the US, he explained.

The peso's depreciation may not even be bad news for all economic players, Diokno added.

"There are winners and losers in the depreciation of the peso. Clearly, the winners are the families of the OFWs (overseas Filipino workers) and the exporters. The losers are those who crave for imported goods – imported shoes, imported bags. To me, it's not a big deal," he said.

Diokno echoed Trade Secretary Ramon Lopez when he gave assurances that in terms of "economic fundamentals," the Philippines is doing well. (READ: Duterte gov't assures PH economic policies 'predictable')

He contradicted claims that President Rodrigo Duterte's aggressive public statements against the United States and the European Union will bring down the economy.

"Our official inflation target is 2% to 4%. We are much lower than 2%, we are at 1.4%...I've not seen this kind of inflation rate. We can borrow money at a very low interest rate...Economic fundamentals are pretty good," said Diokno.

Despite the weakening of the peso, the Duterte administration is sticking to its economic growth rate targets. 

Diokno said the Philippines is well on its way to reaching its 2016 growth rate target of 6%. (READ: PH cuts GDP growth target for 2016, 2017)

"We only have to grow 5.1% in the second half of this year to hit 6% and that's pretty easy to do," he said.

Towards the end of Duterte's term, Diokno is still confident that the economy will be growing by 7% to 8% mainly due to ramped-up infrastructure spending.

"Between 2017 [and] 2022, we'll be spending something like P8.2 trillion for infrastructure so that's very ambitious," he said. (READ: 2017 budget priorities: Infrastructure, agriculture, peace and order) – Rappler.com

Pia Ranada

Pia Ranada covers the Office of the President and Bangsamoro regional issues for Rappler. While helping out with desk duties, she also watches the environment sector and the local government of Quezon City. For tips or story suggestions, you can reach her at pia.ranada@rappler.com.

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