MANILA — The National Economic and Development Authority is betting on the influx of "pamasko" and holiday remittances to strengthen the peso against the US dollar in November and December, an official said Friday.
The depreciation against the greenback is also likely temporary, NEDA Undersecretary Rosemarie Edillon said in a briefing.
The peso hit a new all-time low of P58.49 against a dollar on Thursday after the dollar rallied, driven by the US Federal Reserve's big time interest rate hike and the signal that it plans to implement more.
"We are hoping that is very temporary. In the case of Philippines we are hoping to see some stabilization toward November, December. Historically this is when we receive many remittances, pamasko na padala. This will also prop up the peso," Edillion said.
She said the government is not yet revising its July peso-dollar exchange rate assumption, which is currently at the range of P51 to P53 for 2022 and P52 to 55 for 2023.
While a higher dollar value is good for families of overseas Filipino workers, Edillion said “we are hoping they will keep their purchases in country.”
Local manufacturers and exporters will also be able to use the weakness of the Philippine peso to capture more market share in the international market. A cheaper peso makes Philippine products cheaper.
"We are hoping our domestic producers and exporters take advantage of this weakness in Philippine peso. If we are able to do that, we increase those gains, and hopefully, that will generate more opportunities and more income for Filipinos," she said.
Meanwhile, the Bangko Sentral ng Pilipinas, which hiked interest rate to 4.25 percent to cool down inflation, said the peso movement is normal in a growing economy.
But some economists are concerned of the depreciating peso since US dollar is used to pay for imports, including petroleum products.
Edillion said the government is aggressively pursuing medium term plans to support domestic food production, which would reduce the need for food imports in the future.
Inflation is seen to average at 5.6 percent in 2022, higher than the previous BSP forecast of 5.4 percent.
The consumer price index slightly eased to 6.3 percent in August from 6.4 percent, but it remains above the government target of 2 to 4 percent.