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Economic managers of the Duterte administration reiterated their stand on the recent depreciation of the peso against the dollar, saying that managing inflation is of utmost concern.
"Managing the inflation rate rather than the exchange rate is more important for us," Finance Secretary Carlos Dominguez III told reporters during a forum organized by the Foreign Correspondents Association of the Philippines in Manila on Tuesday.
"Better to look at management of inflation rather than the management of exchange rate," Dominguez said.
The foreign exchange rate is determined by market forces, the Cabinet official noted. "It's healthier to have an exchange rate that is determined by the market," Dominguez said.
The government is targeting an inflation rate of 3 percent, ± 1 percentage point, in 2017 to 2019.
The Bangko Sentral ng Pilipinas (BSP) earlier said that inflation remains "manageable" despite a slight acceleration in July.
During the same forum, Budget Secretary Benjamin Diokno noted the peso-dollar exchange rate at 5-$1 is also manageable.
"We’ve seen 55 before and we’re still alive. I’m not saying 55 is the alarming level," Diokno said.
Socioeconomic Planning Secretary Ernesto Pernia earlier said that the peso at 52-to-a dollar may still be acceptable until that level is breached.
"But it’s the speed of adjustment that worries us," Diokno said.
Dominguez noted "it is not so much the rate we watch, but the rate of change – the speed by which the currency moves ... So far, the rate of change is not surprising. It is typical of a country that is growing very fast, where our imports are outpacing exports."
The exchange rate is a concern, but the administration is not uncomfortable with it, he added. — VDS, GMA News