MaharlikaNews | Canada’s Leading Online Filipino Newspaper – No. 1 Information Hub for Filipino-Canadians with 250K Visitors in 2020 MaharlikaNews is Canada’s premier online Filipino newspaper, delivering the latest news, stories, and updates for Filipino-Canadians. Stay informed and engaged.
Read this in The Manila Times digital edition.
THE peso could face continued but manageable pressure amid an ongoing corruption scandal, a senior Bangko Sentral ng Pilipinas (BSP) official said on Friday.
“There could be some noise, but what we have observed in the past two weeks, it could be limited or manageable,” BSP Deputy Governor Zeno Abenoja said during a Manila Times forum.
While a lot of currencies have appreciated this year as the dollar weakened, he said that in “the past few weeks, we've seen that there's some separation in the trend.”
“[T]hat could be an indication of some domestic developments that are being reflected in the volatility, the noise in our financial markets,” Abenoja said.
The currency ended Friday at a near nine-month low of P58.625 to the dollar, weaker by one and a half centavos and its lowest close since Feb. 8’s P58.659:$1.
Rizal Commercial Banking Corp. chief economist Michael Ricafort said the peso weakened further as the greenback continued to gain strength against major global currencies.
A decline in gold prices also contributed, he added.
Gov't response tempering impact
Abenoja acknowledged that there was “some volatility, but the momentum of that volatility seems to have moderated in the past two or three weeks.”
“[W]e think that is reflective of the response of the government to the issue of the leakages in the infrastructure projects of the national government.”
Abenoja said that central bank officials had spoken with investors and credit rating agencies who emphasized that what mattered was how the government addressed this particular challenge.
“Accountability is being emphasized,” he said, “and these are taken to be good elements of that response.”
“But more importantly, there's a commitment to pursue reforms to improve both the project or the budget formulation all the way to the implementation of the budget, as well as the assessment of the different projects that are being financed by the national government,” the BSP official added.
The central bank bucked market expectations earlier this month and cut key interest rates anew, citing a weaker economic growth outlook.
Following the Oct. 9 policy meeting BSP Governor Eli Remolona said governance issues surrounding public infrastructure spending were dampening business sentiment and Abenoja added that growth could fall below target.
“As the extent of the issues related to infrastructure spending became clear, our estimates of the output gap needed to be recalibrated,” he said.
“We now think the gap is wider than we thought.”
Abenoja, meanwhile, said the near-term growth outlook could be lower than initially anticipated.
“There's probably a greater probability that we will be slightly below those targets that have been set by the government,” he said.
“Of course, a lot of this depends on the infrastructure spending, how it will evolve the rest of the year as well as into the next year, so we're looking at this very closely.”
*****
Credit belongs to : www.manilatimes.net/