Peso drops on weak remittances

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THE PESO dropped on weak February remittances data.

THE PESO weakened against the dollar on Monday as data on money sent home by Filipinos overseas in February came out weaker than expected.

The local unit ended yesterday’s session at P52.07 versus the greenback, 12 centavos weaker than its P51.95-per-dollar finish on Friday.

The peso opened the session stronger at P51.92, which was also its best showing for the day. During the day, it dipped to as low as P52.12 against the US currency.

Dollars traded slipped to $518.1 million from the $522.65 million logged during the previous session.

“The peso broke from its tight range [on Monday] as it ended weaker,” a trader said in a phone interview. “I think it’s mostly on the back of the remittance data of the Philippines coming in weaker than expected.”

Overseas Filipino workers (OFWs) sent more money home in February although at a slower pace from the previous month, the central bank reported yesterday.

Remittances totalled $2.267 billion for the month, up 4.5% from the $2.169 billion inflows tallied in February 2017, the Bangko Sentral ng Pilipinas (BSP) said. However, the figure slipped from the $2.379 billion cash transfers received in January.

February’s growth pace is likewise the slowest in three months since a 2% increase recorded in November, data showed.

Despite the decline, February remittances brought 2018’s tally to $4.647 billion, 7.1% higher than the $4.338 billion received during the comparable period last year.

“The peso weakness is quite surprising because other currencies are seeing a weaker dollar. This is a specific move for the peso,” the trader added.

Meanwhile, another trader said the peso weakened “amid safe-haven buying for the dollar following the escalation of geopolitical concerns on military activities in Syria during over the weekend.”

The White House announced that American, British and French military forces struck what is believed to be a chemical weapons facility in Damascus, Syria following a suspected gas attack.

In response, Russia vowed to respond to any attack on its ally, adding that the Syrian military had intercepted 71 of the missiles fired.

For today, the first trader expects the peso to move between P52 and P52.20 against the greenback, while the second trader gave a slightly lower range of P51.95 to P52.15.

“The local currency is expected to continue losing strength on expectations of upbeat US retail sales data and increased geopolitical involvement in Syria,” the second trader noted. — Karl Angelo N. Vidal