Economist and PLM president Emmanuel Leyco said regular people will suffer the most owing to the Philippines' imports of basic commodities.
"The average folks will feel the depreciating peso," he stated Tuesday (September 6). "We import practically everything: onions, garlic, salmon. Without price changes in the oil market, pump prices will rise.
The Philippines achieved P56.999 to $1 on September 2. Leyco compared this to the Fed's rate hikes to combat inflation.
The US continues to contemplate boosting interest rates since inflation is uncontrollable and interest rates are rising. If that happens, the peso would keep falling, Leyco added.
"P57 to $1 was a psychological level; once you hit it, anything may happen. It may be P57.06 or P57.25 tomorrow because the US dollar is still moving, he said.
The BSP said Tuesday that inflation predictions for 2022 remain above goal. The government's inflation objective is 2 to 4 percent, significantly below August 2022's 6.3 percent rate.
Leyco said the BSP's dollar reserve "is already being scrutinised" and may lead to additional speculation.The Philippine central bank will release additional dollars into the market, but our dollar reserve is limited. More Bangko Sentral intervention increases speculation, he said.
"We must be wary about what Bangko Sentral does in the currency market." In the 1990s, currency speculation drove additional speculation rather than controlling it.