Peso seen testing 48.80:$1 level

THE Philippine peso may touch the weaker P48.80 to a US dollar level this month on the account of international and local developments, according to bank analysts.

Union Bank of the Philippines chief economist Ruben Carlo Asuncion told The Manila Times that the local currency’s exchange rate against the greenback may move from P48.50 to P48.80 as early as this week after peaking at P48.75 in February.

“I do expect USD-PHP (US dollarPhilipine peso) prices to move to an upward trend (depreciation) in March, as the US economy will largely influence the local pair,” he emphasized.

Asuncion said this month, “the market is watching how the US fiscal stimulus eventually unfolds and how this can further impact the recovery prospects.”

He added any developments in the US economy can affect its trade performance, particularly its imports.

“The revival of imports in the country may further weaken the PHP as the economy resumes more consumer movement and economic activities,” the UnionBank economist explained.

For his part, Rizal Commercial Banking Corp. (RCBC) chief economist Michael Ricafort said the local unit softened by 0.51 or 1.1 percent in February from its P48.08:$1 finish at end-January this year.

This March, he forecasted the next resistance for the peso is likely at 48.80 levels against the dollar.

Ricafort said domestic developments that could affect the local currency’s performance include the arrival of the first batch of coronavirus disease 2019 (Covid-19) vaccines to kick off inoculation in the country; the ongoing retail treasury bond offer of the national government, which could attract foreign buyers; the expected signing into law of the Corporate Recovery and Tax Incentives for Enterprises; and the further progress on the Unified Initiatives to Distressed Enterprises for Economic Recovery bill.

Other catalysts he identified were: any additional measures to reopen the economy that fundamentally help economic recovery prospects in a more sustainable manner; any additional Covid-19 vaccine supply deals for the country; trend in new Covid-19 cases locally and worldwide; and the detection of new coronavirus variant cases locally.

“On external factors, most of the upcoming US economic data expected to still show some recovery from previous levels...,” Ricafort also noted.

The peso closed the last trading day of December and 2020 at P48.02 against the United States dollar, its best finish in more than four years.

For this year, the government has a peso-dollar exchange rate assumption of P48 to P53.