Since the beginning of the year, we have allowed a modest and gradual depreciation of the peso which we consider to be consistent with economic fundamentals, complements the Philippines’ gradual shift from a consumption-led to an investment-led economy and bolsters our export price competitiveness. The exchange rate has now stabilized at the present narrow range.
Based on our studies, the pass-through effect of this on inflation is very minimal. This development is reflected in the country’s external payments position, wherein rising imports have resulted in a modest deficit in our current account.