Peso weakness vs dollar 'temporary': BDO Unibank

ABS-CBN News

Posted at Oct 02 2017 11:07 AM

MANILA - The peso's decline to 10-year lows against the dollar is "temporary" and does not signal trouble for the economy, an analyst said.

Faster growth in imports compared to exports, as companies positioned themselves for the government's P8-trillion infrastructure program, is causing the peso to weaken, said BDO Unibank chief market strategist Jonathan Ravelas.

The peso opened at P50.90 to the dollar on Monday from P50.815 on Friday.

"Most of the time, when the peso depreciated, the tendency is there is a problem with the economy," Ravelas told ANC's On the Money.

"The important (thing) today, we need to understand why it is weakening. The weakness is eventually driven by more imports. The imports is eventually driven by capital goods and investments," he said.

A weak peso also makes the Philippines more attractive to foreign investors, Ravelas said.

"The weaker peso, in the eyes of foreign investors, makes it cheaper for them to invest in the Philippines," he said.

"A weaker peso is good for OFW families because they have more money to spend," he said.