MANILA — A Department of Finance (DOF) official said depreciation of the Philippine peso is not purely negative since it boosts the country’s foreign reserves.
In a report to Finance Secretary Carlos Dominguez III, Finance Undersecretary Gil Beltran said the local currency has depreciated by about 1.47 percent when it finished at 47.85 against the greenback last Sept. 22.
He said this deprecation is in the middle of pack when compared to the 0.1 to 9.9 percent weakening of other Asian currencies.
Despite this, Beltran said the country’s gross international reserves (GIR) remain strong with the end-August level at USD85.9 billion, enough to cover 10.5 months’ worth of imports and payments of services and income.
“The BSP’s current reserve level also stands very comfortable than other Asian central banks,” he said, noting Indonesia’s 3.9 months worth of import duties cover, Malaysia’s 5.4 months and Singapore’s 6.3 months.
The Finance department official also said the Philippines’ GIR is better against ASEAN-6’s 6.5 months cover and ASEAN-5’s 5.7 months worth of import duties.
ASEAN-6 groups six of the 10 Association of Southeast Asian Nations (ASEAN) members namely Brunei Darussalam, Indonesia, Malaysia, the Philippines, Singapore and Thailand while ASEAN-5 groups Indonesia, Malaysia, the Philippines, Singapore and Thailand.
Aside from advantage on foreign reserves, Beltran said weakening of the local unit also boosts competitiveness of the country’s exports. PNA-northboundasia.com