Gov’t unfazed by weak peso, says Diokno

Budget Secretary Benjamin Diokno said on Friday he is not worried about the weakening peso because the country has enough buffers and a steady source of foreign exchange inflows.

Diokno added he does not see the peso's weakness having an adverse impact on the government's infrastructure spending plan, with the country less reliant on foreign loans.

The Philippine peso hit elevenyear lows this week, partly due to a widening goods trade deficit.

"I am not worried about the peso depreciation," Diokno told a media briefing. "Crisis, or no crisis, we are OK."

Diokno said the weak peso should benefit the country's exports and boost the purchasing power of recipients of money sent by Filipinos working and living abroad, boding well for the consumption driven economy.

The Philippines, Diokno added, enjoys an adequate level of foreign reserves and a steady stream of inflows from remittances and receipts from the business process outsourcing sector.

Foreign reserves of $81.4 billion at end-June can cover 8.7 months worth of imports of goods and payments of services, central bank data showed, while remittances rose 4.2 percent in the first four months to $9.04 billion.

The government will submit its proposed R3.77-trillion ($74.57-billion) budget to congress on July 24, Diokno said.

The planned 2018 budget, which compares with this year's R3.35trillion spending plan and assumes a budget deficit of 3 percent to GDP, would be funded by revenues and debt, Diokno said.

Borrowings from local and foreign creditors were expected to rise to

R889.7 billion next year, up 22 percent from this year's borrowing plan, with 80 percent of the total to be sourced domestically, according to government documents. (Reuters)