Manila: Malaca±ang on Thursday said the Bangko Sentral ng Pilipinas (BSP) remains the primary institution mandated to stabilize the peso and manage excessive volatility in the foreign exchange market, as the Philippine currency hit record-low levels against the US dollar.

According to Philippines News Agency, in a press briefing, Palace Press Officer Claire Castro stated that the continued peso depreciation is largely driven by external pressures rather than domestic weaknesses. Castro explained that the peso's weakening is the result of overlapping global factors, particularly the sustained strength of the US dollar and rising international oil prices.

Castro noted, "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," referencing a statement from the Department of Economy, Planning, and Development (DepDev) Secretary Arsenio Balisacan.

She further identified the other main factor as sharp global oil price spikes, coupled with the country's reliance on imports, causing the demand for dollars to rise, which in turn leads to increased trade and current account deficits and a weaker peso.

Castro mentioned that President Ferdinand R. Marcos Jr. and the Palace recognize these external pressures and align with the economic assessment provided by Balisacan. The administration views the currency movements as reflective of international developments, including geopolitical tensions.

She clarified that the peso's depreciation is due to a disparity between dollar demand and supply, driven by import payments, debt servicing, and other foreign currency obligations, while supply is supported by export revenues, remittances, and foreign direct investments.

Castro affirmed that the BSP has the mandate and policy tools to address currency volatility, which include foreign exchange reserves, policy rate setting, 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 stated.