Peso weakens on virus fears

MANILA, Philippines — The peso shed 47 centavos yesterday to close at a five-month low of 51.5 to $1 from Friday’s 51.03 as the coronavirus disease 2019 or COVID-19 continued to wreak havoc on financial markets around the world.

Bangko Sentral ng Pilipinas Governor Benjamin Diokno brushed aside the weakening of the peso, saying the Philippines has strong macroeconomic fundamentals enough to survive the impact of the virus outbreak. 

“The peso is fairly stable and in fact it is at the lower end of our macroeconomic assumptions and has been fairly stable because of the strong economic fundamentals of the country,” Diokno said in a television interview.

 The BSP chief said the country has enough foreign exchange buffer as the gross international reserves (GIR) increased to $87.61 billion in February from $86.87 billion in January.

 The central bank continued to beef up the buffer that peaked at an all-time high of $87.84 billion last December due to strong inflows from overseas Filipino workers’ remittances, tourism receipts, earnings of the business process outsourcing sector, among others. 

“Because of our huge GIR, I am not a bit worried about the peso in the light of the current developments. In fact it is the fourth strongest currency in the world,” Diokno said. 

Diokno said the peso is “strong and a bit sustainable at the current level.” 

“It is not affected at all by the global drop in the stock market as a result of this COVID-19,” the BSP chief said.

 The BSP is expected to slash interest rates by as much as 50 basis points to cushion the impact of COVID-19 on the economy.