Manila: Malaca±ang on Thursday cautioned that while the Philippine peso remains broadly stable, sliding past the PHP60-per-US-dollar mark could have significant economic implications, including an increase in government debt. Palace Press Officer Claire Castro said President Ferdinand R. Marcos Jr. is closely monitoring the currency amid recent global uncertainties and profit-taking in the local market.

According to Philippines News Agency, Castro explained that if the exchange rate increases to 60 pesos per US dollar, the value of the peso will decrease, leading to an increase in government debt due to the higher exchange rate. The peso closed at 59.26 on Wednesday, an improvement from 59.45 the previous day, trading within a range of 59.23 to 59.26 and averaging at 59.32.

Analysts have attributed the recent appreciation of the peso to a weakening US dollar and robust demand for Philippine government US dollar-denominated global bonds, valued at USD2.75 billion. Castro noted that the Bangko Sentral ng Pilipinas (BSP) is prepared to intervene if necessary, highlighting the administration's aim to prevent the peso from breaching the PHP60 threshold.

President Marcos has expressed a strong preference for keeping the exchange rate below PHP60 per dollar, as reaching this level would be unfavorable for the peso and could broadly affect the Philippine economy. Despite experiencing slight weakening earlier in January due to market volatility, the peso has generally maintained its position near the 59-level, buoyed by global bond sales and other stabilizing factors.

The Palace has assured that inflation remains controlled and emphasized that the government is continuously monitoring risks in the financial markets. Corrective measures will be implemented as needed to ensure economic stability.