President Rodrigo Duterte shrugged off Tuesday the weakening of the peso against the US dollar, which hit an intra-day seven-year low of 48.40, before closing at 48.170.

"They said the peso (weakening is a product) of manipulation, " said Duterte said in a speech during his inspection of an abandoned laboratory of illegal drugs in Arayat, Pampanga.

Volume at the Philippine Dealing System reached 666.1 million pesos from Monday’s 758 million.

In a press briefing in Malacanang, Budget Secretary Benjamin Diokno said the depreciation of the peso to the greenback was "no cause for concern," citing the exchange rate even reached 55 to one US dollar during the time of then President now Manila Mayor Joseph Estrada.

Diokno was Estrada's budget secretary.

"The depreciation of the peso is a result of the strengthening of the dollar more than the weakening of the peso. And why is the dollar strengthening? Because of the impending increase in the interest rate by the Fed," Diokno explained.

"This has been ongoing for several quarters already and the guessing is before the end of the year, the Fed will eventually increase the interest rates so it is now more attractive for hot money to go back to the US," he added.

Diokno said there are winners and losers in the depreciation of the peso.

The winners are families of overseas Filipino workers so the peso value of the remittances is higher, and also exporters, he said.

As to losers, these are those "who crave for imported goods," he said.

He also allayed concern the peso depreciation could result to higher inflation. "That is misplaced because in fact our inflation target, official inflation target is 2 to 4 percent. We are much lower than 2," he said.

He said gross international reserves of 85.7 billion US dollars is at its “heftiest”.

"That’s equivalent to ten months of our import requirements. The rule of thumb is three months. If you have the equivalent of three months of imports, you’re okay. We have the equivalent of ten months, all right," Diokno said. Celerina Monte/ DMS