MANILA, Philippines (UPDATE) - An analyst said a weaker peso will be good for the Philippine economy.
The Philippine peso has lost over 4% so far this year, failing to sustain gains in the first quarter.
In an interview with ANC, BDO Unibank chief market strategist Jonathan Ravelas said a weaker peso will boost the income of dollar earners, especially exports, whose lackluster performance dragged Philippine growth in the first quarter.
He added because OFW dependents here will get more pesos from dollar remittances, they will likely spend more, boosting the economy.
"A weaker peso is in our best interest. First, this will allow competitiveness. Second, we know that our economy is driven by consumer spending and the OFW continues to be main contributor. A weaker peso gives them more purchasing power to buy houses and eventually spend in the economy. Your call centers are the ones taking the office space, which is supporting your real estate and construction sectors," he said.
However, the trade-off would be more costly imports, like oil.
Like most Asian currencies, the Philippine peso has been falling, as fund managers flee from Asian stock and currency markets, because of expectations the US Federal Reserve would soon scale back its stimulus. - ANC