MANILA (UPDATE) - A weak peso will increase the competitiveness of the country's exports and boost the spending power of Filipinos who rely on overseas remittances, the Department of Finance said Wednesday.

The peso slumped to its lowest level against the dollar in seven years this week due to high dollar demand from importers and outflows from the equities market.

"While the peso has moderately depreciated in nominal terms in recent weeks, the peso in real terms is still very strong, which deters competitiveness," said Finance Undersecretary Karl Kendrick Chua said.

The peso's weakness was also in line with the global currency market, and even depreciated less compared to the Malaysian ringgit, the British pound, the Australian dollar and the Japanese yen, he said.

Finance Undersecretary Gil Beltran said the peso was just seeking its appropriate value given its significant appreciation in previous years.

Budget Secretary Benjamin Diokno, meanwhile, downplayed the impact of the peso's weakness against the US dollar, instead saying the recent slide could benefit local exporters and Filipinos receiving money from their relatives working abroad.

"The peso is not deteriorating. It just moved a bit," he said. "It is good for OFW (overseas Filipino worker) families so it will boost aggregate spending." -- With Reuters