Peso plunge temporary — BSP chief

Monetary authorities are convinced the weakness of the peso, which fell to an all-time low of 56.35 to the dollar last week, is a "temporary blip," Bangko Sentral ng Pilipinas (BSP) Governor Rafael Buenaventura said yesterday.

The BSP, however, is "closely monitoring developments affecting the peso and it stands prepared to use the tools available to it as the need arises," he said in a statement.

Buenaventura said he met President Arroyo and her key economic advisers over the weekend to brief her on "developments relating to the movement of the peso" after Mrs. Arroyo expressed concern over the currency’s decline.

"We remain convinced that this is a temporary blip and that the peso should stabilize once the political scenario becomes clearer," Buenaventura said.

The central bank will meantime closely monitor foreign exchange transactions of banks, he added.

Presidential Spokesman Ignacio Bunye said Mrs. Arroyo believes the country’s economic fundamentals remained sound and that economic prospects for the year remain on track.

"There should be no cause for panic," Bunye told reporters. "Things will improve and that’s the general forecast."

Buenaventura blamed the peso’s drop to political jitters "caused by fears of the unknown" ahead of the May 10 presidential election.

Actor Fernando Poe Jr., a political novice with no public service record, is leading Mrs. Arroyo in opinion polls.

— AFP, Marichu Villanueva

Buenaventura warned local banks they should comply with regulations and not take advantage of the political uncertainty.

Mrs. Arroyo earlier warned that efforts to revitalize the nation’s struggling economy might be derailed if the next president does not have the required experience to run the country.