MANILA — Malacañang said the Bangko Sentral ng Pilipinas (BSP) remains the lead institution responsible for stabilizing the peso and addressing excessive volatility in the foreign exchange market, as the Philippine currency hit record-low levels against the US dollar.

In a press briefing, Palace Press Officer Claire Castro said the peso’s continued depreciation is being driven mainly by external pressures rather than domestic economic weaknesses.

Castro cited sustained global factors such as the strong US dollar and rising international oil prices as key drivers of the currency movement.

“There are two major ones. One is the unusually strong US dollar, which is pulling capital toward US assets and away from emerging markets like the Philippines. This makes the peso weaker-simply because the dollar is rising faster,” she said, citing Department of Economy, Planning, and Development (DepDev) Secretary Arsenio Balisacan.

“The other main factor is the sharp global oil price spikes, combined with the country’s dependence on imports. This causes the country’s demand for dollars to spike, the trade and current account deficits to rise, and, in turn, the peso to weaken,” she added.

Castro said President Ferdinand R. Marcos Jr. and Malacañang share the assessment that the currency movements are largely influenced by global developments, including geopolitical tensions.

She explained that the peso’s depreciation reflects an imbalance between dollar demand and supply.

“In short, the peso depreciation reflects the rise of the demand for dollars faster than the supply of dollars,” she said.

She noted that demand for dollars is driven by import payments, debt servicing, and other foreign currency obligations, while supply comes from export earnings, remittances, and foreign direct investments.

Castro also emphasized that the BSP has the mandate and policy tools to address currency fluctuations, including the use of foreign exchange reserves, policy rate adjustments, credibility signaling, and macroprudential measures.

“It is the BSP, our central bank, that has the institutional mandate to stabilize the peso and prevent excessive volatility. Its ammunition is sufficient to prevent excessive volatility,” she said.