Palace says Marcos closely monitoring the weakening of peso

MANILA, Philippines — President Ferdinand Marcos Jr. is closely monitoring the weakening of the peso against the US dollar, which is seen to raise the prices of imported oil and other products and contribute to a higher inflation.

Press Secretary Trixie Cruz-Angeles said the peso depreciation was not tackled during the Cabinet meeting Tuesday but Marcos is "in constant touch" with his economic team on the development.

"As you know, the inflation rate isn’t due to any local factors, it’s really about the exchange rate, but it is a matter for the President which the President closely monitors on a regular basis, and he is in close contact with the economic managers on this matter," Angeles said at a press briefing Tuesday.

The local currency dropped to a new record low last Friday, closing at P58.50 against the US dollar. National Statistician Claire Dennis Mapa has said imported commodities purchased using dollars like petroleum could affect local pump prices and in turn, inflation.

At the same press briefing, Angeles maintained that the administration's economic managers are in a better position to make projections about the Philippines' economic prospects.

She made the remark after the International Monetary Fund (IMF) lowered its 2022 growth forecast for the Philippines from 6.7% to 6.5% due to "global shocks" that may weigh on the economy in the coming months. The IMF's forecast is within the lower end of the government's growth target of 6.5% to 7.5%.

"Well, we will have to see about that... Our economic managers forecast a higher growth. So, they are in a much better position to make that determination and that forecast. Our fundamentals are strong, the economy is in a good resurgence, and we are experiencing a good rate of growth right now," Angeles said.

In a statement issued last Monday, the IMF said the growth outlook on the Philippines is subject to significant downside risks, including a surge in COVID?19 cases from more severe variants, a more abrupt or larger-than-expected tightening of global financial conditions, a deepening of the global slowdown, persistently high domestic inflation, and natural disasters.

An end to Russia’s war in Ukraine and the taming of inflation could lay the foundations for stronger-than-expected growth, it added.

“Looking ahead, sustaining the (economic) recovery will require a focus on policies to address inflationary risks, increase fiscal and financial resilience to adverse shocks, and successful implementation of reforms to mitigate pandemic scarring and raise productivity growth,” the IMF said.