MANILA - Prepayments of foreign debt jumped 35.1 percent from January to April leading to the further weakening of the peso against the US dollar, the Bangko Sentral ng Pilipinas (BSP) said Thursday.
The central bank said public and private firms prepaid $2.01 billion of foreign debt in the first four months of the year or $523 million higher than the $1.49 billion recorded in the same period last year.
"When you prepay, you demand dollars to pay your indebtedness. Therefore the peso-dollar rate is determined by supply and demand. It's an additional demand for dollars, but the purpose of that is to lower your indebtedness," said Francisco Dakila Jr., managing director at the BSP's Monetary Policy Sub-Sector.
The peso has emerged as one of the weakest performing currencies in Asia as it breached the 51 to $1 level this month.
Philippine economic managers, however, have downplayed the depreciation saying it reflected the Duterte administration's efforts to grow the economy.
The peso closed P51.00 to the dollar Thursday.