MANILA - The peso will not "free fall" against the dollar despite breaching the P51-level last week, Bangko Sentral ng Pilipinas Governor Nestor Espenilla said Sunday, citing "very strong" economic fundamentals.

Espenilla said the peso's fall was due to uncertainties in North Korea, whose leader, Kim Jong Un, had been trading threats of nuclear attacks with US President Donald Trump.

"We don't expect it to do a free fall because our economic fundamentals now, unlike before, are solid and very strong," Espenilla said in a statement to reporters.

"The peso is capable of correcting itself as the market calms down and digests the relevant information," he said.

The peso closed at P50.98 on Friday, after falling to P51.08 in intra-day trading, its lowest since Aug. 2006 according to Bloomberg data.

The local unit has hovered at its lowest levels in a decade as import requirements for the government's massive infrastructure program drives demand for dollars.

"Moreover, BSP will always be there strategically if volatility is considered excessive. We have a huge pile of FX (foreign exchange) reserves to play an effective stabilizing role," Espenilla said.

Espenilla cited recent findings by the International Monetary Fund that the Philippine economy is "not overheated."

"Nonetheless, the BSP stands vigilant. Lets calm down. We're on the right track," he said.