Peso may strengthen ahead of 2022 budget’s signing
THE PESO may strengthen versus the dollar this week ahead of the possible signing of the national budget for 2022.
The peso closed at P50.02 against the dollar on Friday, down by six centavos against its P49.96 finish on Thursday, according to the Bankers Association of the Philippines.
Week on week, the local unit appreciated by 33 centavos from its P50.35 per dollar finish on Dec. 10.
The peso strengthened due to the seasonal surge on remittances from overseas Filipino workers ahead of a holiday spending rush, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.
US dollar inflows are expected during the Christmas season amid more spending from consumers, including the families of overseas workers, he said, adding that inflows also finance holiday payrolls and other expenditures from businesses with US dollar income sources.
He said major factors that could affect the exchange rate this week include continued remittances as well as the possible signing into law of the 2022 national budget.
Congress last week approved the Bicameral Conference Committee report for the P5.024-trillion budget for 2022.
Senator Juan Edgardo M. Angara, chair of the Senate Finance Committee, had said that he hoped President Rodrigo R. Duterte will sign the General Appropriations Bill before Christmas.
“On external factors, most of the upcoming US economic data expected could still show some recovery from previous levels,” Mr. Ricafort said, noting gross domestic product, consumer confidence, and jobless claims data set for release this week.
Meanwhile, UnionBank of the Philippines, Inc. Chief Economist Ruben Carlo O. Asuncion in an e-mail said market activity could trail off ahead of the Christmas holidays and as the market waits for European and British central bank policy meetings.
He said risk appetite may recover this week, which would depend on Omicron variant concerns.
For this week, Mr. Asuncion gave a forecast range of P49.8 to P50.30 per dollar, while Mr. Ricafort said the local unit would range P49.75 to P50.15. — Jenina P. Ibañez
