Peso rises to near 3-month high

THE PESO surged to a near threemonth high against the dollar on Monday following an upgraded credit outlook for the Philippines.

The local currency ended Monday’s session at P51.74 against the greenback, a 22.5-centavo jump from the P51.965-per-dollar finish on Friday.

This is the peso’s best showing since closing at a P51.48-perdollar exchange rate last Feb. 9.

The peso traded stronger the whole day, opening the session at P51.68. It peaked at as high as P51.67, while its intraday low stood at P51.795 versus the greenback.

Dollars traded dropped to $556.2 million from the $806.05 million logged Friday last week.

A trader said the peso strengthened even though the dollar was higher across the board.

“The peso is trading stronger against the dollar. Maybe one of the reasons why we continue to see this [ uptrend in peso] is because of the positive outlook given by the S&P,” the trader said in a phone interview.

Debt watcher S& P Global Ratings upgraded its credit outlook for the Philippines to “positive” from “stable” last week, hinting on better chances of a rating upgrade.

“The positive outlook reflects our view that improvements to the [ Philippine] policy- making settings could support a track record of more sustainable public finances and balanced growth over the next 24 months,” S& P said in a statement sent late Thursday.

The Philippines currently holds a “BBB” rating from S&P, a notch above minimum investment grade. The rating was on a “stable” outlook since April 2015 prior to this revision.

The trader added that investors are pricing in expectations of a rate hike at the Bangko Sentral ng Pilipinas’ May 10 monetary policy meeting amid higher inflation expectations.

“The market is expecting a hike in the next meeting. We’re seeing the offshore market trying to sell dollar-peso right now,” the trader added.

Meanwhile, UnionBank of the Philippines chief economist Ruben Carlo O. Asuncion said although he did not see any domestic developments which pushed the peso upwards, the local currency “is set to strengthen further I believe, when data on GDP ( gross domestic product) comes out soon.”

The economy grew 6.7% in 2017, the Philippine Statistics Authority revealed last January, slightly below the 6.9% growth tallied in 2016.

For today, the trader sees the peso moving between P51.65 and P51.85 when the trading reopens on May 2, with financial markets closed today for the Labor Day holiday.