Peso to climb as parts of the country reopen to tourists

THE peso is expected to rise further this week as the government reopens some areas for tourism.

The local unit closed at P48.46 versus the dollar on Friday, up by 10 centavos from its P48.56 finish on Thursday, data from the Bankers Association of the Philippines showed.

Week on week, however, the peso was lower than its P48.395-per-dollar close on Sept. 18.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the peso strengthened on Friday after the release of August net foreign portfolio investments data.

Hot money posted an outflow of $126.76 million last month, smaller by 67% from the net $391.74 million that exited the country a year ago, data from the Bangko Sentral ng Pilipinas released Friday showed.

The August figure is also the smallest net hot money outflow since June’s $235 million.

For this week, Mr. Ricafort said the peso may strengthen as tourism activities in some areas resume.

“Any further moves to reopen the economy, such as tourism, would help improve economic recovery prospects and valuations,” Mr. Ricafort said in a text message.

Local governments announced tourists will be allowed to enter Boracay, Baguio City and Ilocos Norte beginning Oct. 1.

The Tourism department said these “tourism bubbles” will revive the hospitality industry while businesses continue to enforce health protocols.

Mr. Ricafort said drivers for the peso this week also include the central bank’s policy meeting and manufacturing data.

“The markets will anticipate the monetary policy-setting meeting of the BSP and the IHS Markit Philippines Manufacturing Purchasing Managers’ Index,” he said.

For this week, Mr. Ricafort sees the peso moving from P48.35 to P48.65 versus the dollar while a trader expects a range of P48.40 to P48.60. — KKTJ