RP Gov't to Adopt Peso Dollar Rate Range for 2008

News from the Inquirer: Gov't to adopt fixed range for Peso Dollar Exchange Rate.

"THE GOVERNMENT HAS ADOPTED an exchange rate of P42-45 to a US dollar as basis for the setting of economic targets and policies next year, taking into account the unexpected sharp rise of the peso this year.

The rate assumption was approved last Friday by the interagency Development Budget Coordination Committee (DBCC).

The foreign exchange and other macroeconomic assumptions are used as basis in drafting the government’s fiscal program for a year, including revenue collections and expenditures.

The DBCC’s technical board was said to have assumed an economic growth target of between 6.3 percent and 7 percent, in terms of gross domestic product, for next year.

In terms of the peso-dollar rate, the mid-point of a projected range is normally used. For next year, therefore, an exchange rate assumption of P43 to $1 will be taken into account in drafting the fiscal program.

The DBCC’s exchange rate forecast for next year took note of the projection made by the National Economic and Development Authority that the peso would remain strong next year at 43 to a dollar."