By: Reigh John Bench Almendras
Photo source: INQUIRER
The Philippine peso depreciated for the third straight day on Nov. 21, Thursday, closing at record-low PHP 58.9 to USD 1 with a nine-centavos decline according to the Bankers Association of the Philippines (BAP).
The same depreciation record was last recorded in Oct. 2022, when the peso reached the same ratio as dollar challenged peso due to the rate hikes by the United States Federal Reserve (USFR) and the Bangko Sentral ng Pilipinas (BSP).
This year, the transition of administration in the United States, with President-elect Donald Trump setting the tone in reorganizing taxations and tariffs in the country, caused the depreciation of peso and placed uncertainty in future monetary policy actions in the market.
Michael Ricafort, the chief economist at Rizal Commercial Banking Corp. (RCBC), also added that the heightened tensions between Russia and Ukraine also puts pressure on the peso as the situation continues to challenge global trade and monetary policies.
Meanwhile, trading volume went down by 22.9 percent to $842.68 million from $1.09 billion.
In an interview during BSP-IMF Systemic Risk Dialogue, BSP governor Eli Remolona Jr. said on Tuesday, Nov. 19, that he is not worried about the weakness of the peso to the dollar and that depreciation is not a significant factor in navigating the monetary policy of the country.
“We don’t worry so much about whether the peso depreciates. We worry about the pass-through effect, pero ngayon medyo okay pa naman.” Remolona stated.
“If it depreciates very sharply, then we talk. Kung hindi naman very sharply, it doesn’t become inflationary. It’s inflationary kung medyo sharp at tsaka tuloy-tuloy. Hindi kami nakikialam dun sa day to day movements,” he added.