The rapid rise of the Philippine peso is identified as a likely reason for the country to lose its edge in the industries related to exports and business process outsourcing (BPO), according to Singapore-based investment bank, DBS Ltd.
The financial institution also noted that the Philippine peso increased 6.1 percent compared to other currencies in Asia. However, locally, it was identified to have appreciated 7.3 percent.
Eugene Leow, economist at DBS, said even if the peso is increasing its purchasing power, itís negatively affecting its competitiveness and it will definitely affect the export segment.
Meanwhile, Bangko Sentral ng Pilipinas said the said currency appreciated by 6.8 percent versus the dollar last year. Moreover, it identified the Philippines as Asiaís second best-performing currency and was starting the year with a 58-month high of 40.77.
According to AmandoTetangco Jr., BSP Governor, the central bank will continue purchasing dollars to counter its strength. He added that based on the other currency-related events in other countries, the Philippine peso is doing well and is at the middle range.
Leow reminded that if the peso continues to gain strength more than its current level, remittances from overseas Filipinos and the BPO sector will be affected.