BSP resists pressure to defend peso

Bangko Sentral ng Pilipinas (BSP) Governor Eli M. Remolona Jr. admitted there is intense pressure to defend the Philippine peso against its continued decline, but said the central bank has held its ground, as the economics of it do not justify intervention.

- BY DERCO ROSAL

NEWEST MONETARY BOARD MEMBER - Finance Secretary Frederick D. Go (right) takes his oath of office before Bangko Sentral ng Pilipinas (BSP) Governor Eli Remolona Jr. at the BSP headquarters in Manila on Thursday, Jan. 8. Go, the former Robin-sons Land Corp. chief, joins the seven-member policy-making body as the Cabinet representative, succeeding Executive Secretary Ralph Recto.

"There’s tremendous pressure to defend the peso, and we've resisted it,” Remolona told reporters on the sidelines of a Rotary Club event on Thursday, Jan. 8, noting that “the economics of it doesn’t warrant defending the peso.”

Remolona added that, in the past, he would have encouraged a weaker peso to boost manufacturing exports, but now any intervention is unnecessary, as the current economy benefits neither from a weak nor strong peso, given that it is dominated by services.

This came as conversations steered toward the peso plunging on Wednesday, Jan. 7, to a fresh all-time low of P59.355 versus the United States (US) dollar.