MANILA - The Philippine peso further lost ground to the US dollar, weakening to 54.265 to $1.00 at the end of Tuesday’s trading, according to the Bankers Association of the Philippines.

This was 20 centavos lower than its previous close of 54.065.

Since the start of the year, the peso has been sliding against the greenback. It began the year at 50.999 to the dollar.

Bangko Sentral ng Pilipinas Governor and incoming Finance Secretary Benjamin Diokno however said the depreciation of the peso was not a cause for alarm.

At the sidelines of the 'Release of the Statement on the State of Financial Stability' event, Diokno said the peso was not a weak currency.

"Hindi dahil mahina ang piso, kundi malakas masyado ang dolyar (The peso is not weak, the dollar is just much stronger). All currencies are responding to the strength of the dollar," said Diokno.

He added the peso’s depreciation “is not a reflection of the weakness of the economy.”

Diokno also said that the peso remains a competitive currency and the overall domestic market remains very strong. Overseas Filipino Workers will also even benefit from the weakening of the peso, he noted.

He said that unlike past crises where the country was left with little foreign exchange reserves, the Philippines today had ample international reserves.

“Again, I've seen many crises in the past. Basta may crisis tayo, nauubusan tayo ng dolyar dahil pambayad ng utang. Hindi tayo ganun ngayon (Whenever there’s a crisis, we would run out of dollars to pay our debts. We’re not like that now)."

However, Diokno admitted that prices of some goods may still rise because of a weak peso, but stressed that most of the affected goods are from abroad.

A weak peso makes imports such as oil more expensive. The Energy Department has said that the depreciation of the peso was one of the factors for the continuous rise in fuel prices. The country also imports rice, pork and other food items.

An analyst earlier said the peso could depreciate even further to P54.50 to P55 to the dollar.

Ed Franciso, president of BDO Capital and Investment Corp on Monday, cited the weak peso as one of the reasons that the Bangko Sentral will likely hike its benchmark rate by 50 basis points during its next policy meeting on Thursday.

“So what does that mean for our local companies? You might want to stock up on dollars already for your importation, especially for Christmas or as you build up your inventories,” Francisco said in an interview with ANC.

-With a report from Jekki Pascual, ABS-CBN News

• Bangko Sentral may hike rates by 50 basis points after Fed move: BPI

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