THE PESO continued to weaken on Tuesday due to uncertainties from regulatory risks and as the market awaits data on the country’s economic growth in the fourth quarter.
The local unit ended trading at P51.015 against the greenback, weakening by four centavos from its Monday finish of P50.975 per dollar.
The peso opened at its Monday close of P50.975 versus the dollar. Its weakest showing for the day was at P51.10, while its intraday best was at P50.975 against the greenback.
Dollars traded slipped to $1.35 billion from $1.559 billion on Monday.
A trader attributed the peso’s weakness to “cautious” trading before the gross domestic product (GDP) growth report this week.
“The peso depreciated above the P51 level as market participants remained cautious ahead of the Philippine GDP (gross domestic product) growth report this Thursday,” the trader said in an e-mail.
The Philippine Statistics Authority is set to report the fourth quarter and full-year 2019 GDP growth data on Jan. 23.
Economic growth quickened to 6.2% in the third quarter after logging a pace of 5.6% and 5.5% in the first and second quarters, respectively. This brought average growth for the first nine months to 5.8%.
The government targets at least a six percent GDP growth for 2019. Socioeconomic Planning Secretary Ernesto M. Pernia last week said GDP growth for the last quarter of 2019 might have ended around 6.6-6.7%.
Meanwhile, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the peso depreciated alongside the decline in the local stock market due to some regulatory risks.
“The peso exchange rate closed the weakest in more than three weeks and in nearly three months after the recent regulatory risks,” he said in a text message.
“Peso [is] also weaker amid the latest decline in the local stock market, to new one-year lows for the PSEi (Philippine Stock Exchange index) still partly due to the regulatory uncertainties,” he added.
Ayala Land, Inc (ALI). and Ayala Corp. were two of the most actively traded stocks on Tuesday, with shares in each losing 2.47% and 4.67% at the close of the market, respectively.
This follows the government’s threat of probing the contract between ALI and the University of the Philippines for UP-Ayala Land Technohub in Quezon City due to alleged underpayment.
For today, the trader sees the peso playing around P50.90 to P51.10 while Mr. Ricafort gave a forecast range of P50.80 to P51.10. — L.W.T. Noble with Reuters