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The peso’s performance against the dollar is still consistent with government expectations.

The peso has been declining for days, but a high-ranking Bangko Sentral ng Pilipinas (BSP) official claimed that its level is still within government expectations and linked this development to the overall strengthening of the dollar.

In relation to the US dollar, the local currency ended Thursday at 54.7, down from its previous day’s close of 54.47, which was close to its 17-year low.

The peso’s average exchange rate versus the US dollar, according to BSP Deputy Governor Francisco Dakila Jr. at a virtual briefing on Thursday, is 51.98, which is within the 51–53 range of the interagency Development Budget Coordination Committee’s (DBCC) US dollar assumption for the year.

“We can observe that the more aggressive normalization of monetary policy in advanced nations is the reason for the current weakness of the peso, along with the other currencies in the region,” he said.

Dakila responded, “The currency exchange rate is something intrinsic and diffident to foresee,” when asked if he anticipates the peso reaching the 55-level.

“There are other elements that lend support to the currency and these are structural sources of foreign exchange, including our highly resilient remittances,” he added. “As there are dynamics that tend to weaken not just the peso but also other currencies in the region.”

Dakila said that the money that overseas Filipino workers (OFWs) returned home demonstrated its durability by showing only a slight shrinkage during the epidemic.

This year, remittances are predicted to increase by 4%.

By the end of 2021, cash remittances had increased by 5.1 percent annually, compared to a 2.7 percent increase in April.

Business process outsourcing (BPO) is a further source of long-term dollar inflows for the Philippines, according to Dakila.

The BPO industry is expected to grow by about 8% this year, according to authorities.

The increase in demand for technologically intensive modes of employment, according to Dakila, is expected to enhance exports, which are also expected to increase the Philippines’ structural flows this year. She specifically mentioned electronics exports as an example.

Foreign direct investments (FDIs), according to BSP Department of Economic Research Managing Director Zeno Ronald Abenoja, are expected to expand more this year and total about USD11 billion.

As local and international travel is now permitted, he claimed that travel receipts are also anticipated to expand more this year.

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