Peso rise in tandem with other currencies

MANILA, Philippines - Bangko Sentral ng Pilipinas Governor Amando M. Tetangco Jr. said yesterday the peso’s slight appreciation in the first quarter is in tandem with other currencies in the region.

“We’re moving together with the region… volatility-wise, same thing – we’re in the middle,” Tetangco said when asked if the local unit has been strengthening too much since the start of the year.

The local unit closed 44.09 to a dollar in end-February, almost unchanged from its 44.08:$1 finish in end-January. Both levels are stronger than the peso’s 44.72:$1 close in end-2014.

Exporters last week expressed concern on the peso’s uptrend against the greenback as this “lessens” the competitiveness of the country’s shipments against other products.

The peso on Tuesday closed 44.55:$1, weaker than its 44.15-per-dollar finish on Monday.

But Tetangco argued “the exchange rate is not the only determinant of competitiveness.”

“There are so many other factors that affects competitiveness, for instance, infrastructure, cost of power, efficiency of producers, and use of new technology,” the BSP chief said.

The local unit remains largely affected by the uncertainty in the path of oil prices in international markets and the timing of the US central bank’s rate hike which is widely expected to happen this year.