MANILA, Philippines – The country’s top economic manager said he remains unperturbed by the weakening of the peso and the local bourse, saying these barometers are going into a ‘dip’ cycle.
Socioeconomic Planning Secretary Arsenio M. Balisacan pointed out that the peso at one time weakened to beyond 53 to the US dollar, and that the present level of the Philippine Stock Exchange index (PSEi) is still well above the 1,800-mark a few years back.
“I would like to think that it is just a dip,” Balisacan told reporters on the sidelines of a World Bank presentation on climate change yesterday.
The PSEi fell below 5,800 yesterday, entering bear market territory, according to market analysts.
Nonetheless, Balisacan said the real economy remains strong based on sound fundamentals and strong domestic market.
“The weak peso is good for our competitiveness. It is not only good for exports, but for our local industries which are competing with imports,” he added.
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A stronger dollar makes imported products more expensive, allowing locally-produced goods to compete in the market. Increased local production would, in turn, create more jobs.
“The weakening of the peso will not only benefit the exporters or the families of overseas Filipinos sending dollar or dollar-denominated remittance inflows, but broadly our local industries that are producers or assemblers of exports using imported parts,” said Balisacan, who is also director general of the National Economic and Development Authority (NEDA).
Meanwhile, robust investments in the power and transportation sectors drove overseas purchases to a solid 7.4 recovery in April to $5.1 billion.
Imports of capital goods rose 19.7 percent to $1.5 billion as a result of higher import bills for aircraft, ships and boats as well as power generating and specialized machines and land transportation equipment.
“The increased import value of capital goods during the period coincides with the re-fleeting of a major airline and the purchase of gensets (generation sets) for use by electric cooperatives in Mindanao,” Balisacan pointed out.
He also stressed that the Chamber of Automotive Manufacturers of the Philippines Inc. (CAMPI) and the Association of Vehicle Importers and Distributors Inc. (AVID) both reported double-digit increases in car sales in April.
“Confidence of both consumers and the business sector in the strong economy is glaring in the growth in capital and consumer spending as reflected in March and April imports,” he added.
Imports of mineral fuels and lubricants were also up 21.4 percent to $1.3 billion in April due to the increase in imports of petroleum crude and other mineral fuels and lubricants, which offset the reduction in import payments for coal and coke.
“Imports increased, which is a positive indication, especially if you look at the composition of imports, capital goods, that’s a good signal,” he added.