Saturday, October 07, 2006
Government may rein in rising peso: socioeconomic chief
MANILA -- Socioeconomic Planning Secretary Romulo Neri on Friday said the Bangko Sentral ng Pilipinas (BSP) may intervene in the market "just to reduce the fluctuation" of the peso.
Neri earlier said he prefers the peso at P51 to the dollar. "P51 is okay. That would be ideal," he said, adding that the level would be "fair to both exporters and the consumers."
He said the peso is not appreciating because it is strong but because the dollar is so weak.
Neri, a member of the Monetary Board, said the BSP is "trying its best to lessen the fluctuation."
He explained that his statement does not go against President Gloria Macapagal-Arroyo's pronouncement Thursday that government will let the market forces decide the true value of the peso.
"They (BSP) are part of the market. So when they buy and sell dollars, they also participate in the market," he said.
He feared that any more appreciation of the peso would be hard for exporters, especially the small ones.
"They may not contribute much but they're labor intensive and since it's a high local content, they have a lot of linkages with the local sector," he said.
He said the demand for oil is also going down because of the inventory glut and the market's realization that China would not be consuming as much as initially feared.
Neri said the demand should stay high enough to encourage the government's bio-diesel program, especially the jathropa tree-planting program. Jathropa has been identified as an alternative source of fuel. (JMR/Sunnex)
(October 7, 2006 issue)
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