Manila: The Bangko Sentral ng Pilipinas (BSP) announced that the recent depreciation of the peso might be a reflection of market concerns regarding a potential slowdown in economic growth. This slowdown is partly attributed to controversies surrounding infrastructure spending and expectations of further monetary policy easing.

According to Philippines News Agency, the BSP issued this statement after the peso reached the 59 to a dollar level during Tuesday's trading session. The central bank emphasized its stance on allowing the exchange rate to be determined by market forces. "The Bangko Sentral ng Pilipinas allows the exchange rate to be determined by market forces," the BSP stated.

The BSP also highlighted its strategy in participating in the market. "We continue to maintain robust reserves. When we do participate in the market, it is largely to dampen inflationary swings in the exchange rate over time rather than to prevent day-to-day volatility," it added.

Despite the depreciation, the BSP assured that the peso is still backed by resilient remittance inflows, relatively fast economic growth, low inflation, and ongoing structural reforms. "Foreign exchange inflows from business process outsourcing, tourism, and overseas Filipino workers continue to buffer external shocks," the central bank noted.