Interviewed separately over Radio Mindanao Network, Presidential Spokesman Ignacio Bunye and Economic Planning Secretary Romulo Neri acknowledged there was a downside to the peso’s continued rally against the dollar, but said this would only affect OFWs and exporters since the peso value of their dollar earnings might be reduced.
Friday’s closing rate was the strongest since the local currency last touched the 54.640 to $1 level on Oct. 20, 2003. It was also 23 centavos stronger than Thursday’s close of 54.910.
Traders said the peso was building momentum for a significant rally supported by a bullish investment outlook.
Bunye said the positive effects of a stronger peso will filter down to ordinary Filipinos since Philippine manufacturers buy much of their raw material from abroad and pay for them in dollars.
As a "net importing country," he said local prices will go down since "when the peso gets stronger, these raw materials that we pay (for) become cheaper."
Bunye said the stronger peso will not have much effect on OFWs at this time since they usually remit most of their dollars during the run-up to graduation day in March, at the start of the school year in June, and during Christmas season in December.
"There is really a regular need for these remittances to come in to pay for these expenditures," he said.
Bunye added that President Arroyo always invites OFWs "to add to their remittances because these remittances really make our economy stronger and (help) their families."
Neri concurred with economic experts and analysts who believe the peso could recover even more lost ground in the next few weeks as Mrs. Arroyo’s fiscal reforms continue to attract the attention of international investors.
Analysts said the spate of good news, particularly the continued strong equity inflows into the stock market and the recent inflation report, continues to boost investor sentiment.
The National Statistics Office (NSO) reported that the nationwide inflation rate slowed to 8.4 percent in January from 8.6 percent in December as a result of a slower increase in the prices of basic food items.
Analysts said the peso could recover to as much as 50 to a dollar as fiscal reforms being put in place by the government continue to attract the attention of global investors.
Bunye, in a statement he issued yesterday, echoed the President’s appeals for Filipinos to support her fiscal reform program, which includes new taxes to help reduce the budget deficit.
"As we continue to earn points on our economic scorecard, we urge all sectors to maintain our teamwork for urgent change," he said.
Bunye added that "the battle for the welfare of the average Filipino has just begun and we must not be overwhelmed by impatience to fully enjoy the economic gains we are experiencing."
He said the President expressed optimism that her administration’s fiscal reforms will soon be felt by the people all down the line.
"The fruits will ripen in due time due to the resiliency and hard work of our people and the unity of our institutions, combined with a clear policy direction," Bunye said. "We are already headed in the right direction. We only have to stay the course together."