'Weak peso doesn't mean weak economy'

Posted at 01/15/14 11:15 PM

MANILA – Both Socio-economic Planning Secretary Arsenio Balisacan and Bank of the Philippine Islands (BPI) economist Jun Neri said a weak peso doesn't mean a weak economy.

Balisacan said the P45 to the dollar level will make the Philippine economy more competitive by boosting manufacturing industries.

“At the P45 per dollar level, it makes the economy more competitive as its boosts manufacturing industries, which generates high quality jobs,” he told ANC’s “Inside Business.”

Balisacan also believes that the peso's depreciation will be offset by strong remittances and exports as well as foreign investments.

Neri, meanwhile, forecasts the peso will weaken further, but only to the P45.40 to the dollar level.

“What's going to be unique about 2014 is we'll experience a competitive currency without necessarily having a weaker economy. In the past it's always synonymous to see a weakening currency with a weakening economy here in the Philippines. But this time around, it’s going to be very different, we'll have a competitive currency but the economy is going to be vibrant,” said Neri.

GDP forecast

Meanwhile, Balisacan revised his fourth quarter gross domestic product (GDP) forecast for 2013 to 5.8-6.5 percent.

Last month, the National Economic and Development Authority (NEDA) said GDP could slow to 4.1 percent due to the massive destruction wrought by typhoon “Yolanda.”

But Balisacan said the impact wasn't as bad as they thought.

“It turns out that the expectations were not that as bad with the numbers showing now. For example, the export and manufacturing numbers turns out to be quite robust and does not seem to show the bad effect of Yolanda. I think we'll see a better number than we thought would be,” he said.

The typhoon killed over 6,000 people and caused damages worth P37 billion.

Balisacan said disasters are still a big worry this year, but he assured the public that government is working on making the country more resilient against calamities. -- ANC