Peso seen to weaken ahead of gov’t move on lockdown levels
THE PESO may weaken versus the dollar this week on anticipation of the government decision to relax lockdown levels in January.
The local currency closed at P50.04 per dollar on Friday, inching up from its P50.045 finish on Thursday, data from the Bankers Association of the Philippines showed.
Week on week, the peso moved by two centavos from the P50.02 per dollar finish on Dec. 17.
The local currency strengthened as overseas Filipino workers sent remittances back home amid the holiday season, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.
Factors that could affect the exchange rate this week include the government decision on lockdown levels for early January and the trend in new coronavirus disease 2019 (COVID-19) cases, he said.
He said President Rodrigo R. Duterte possibly signing the 2022 national budget before yearend could also affect the exchange rate.
Economic managers have said that they expect lockdown measures to ease to alert level 1 by the new year.
The Philippines logged 433 new COVID-19 infections on Saturday and has so far recorded three Omicron variant cases.
The Budget department has said that it expects Mr. Duterte to sign the proposed P5.024-trillion budget for 2022 after Christmas and before yearend.
On external factors that could affect the exchange rate, Mr. Ricafort said economic data on trade balance, jobless claims, and home prices in the United States could still show some recovery from previous levels.
Meanwhile, UnionBank of the Philippines, Inc. Chief Economist Ruben Carlo O. Asuncion in an e-mail said market trading will be driven by limited liquidity amid limited local and overseas data to be released this week.
Onshore players could bolster their positions through thin trading volume, he said, but added that this could be moderated by the effect of the COVID-19 variant on demand.
For this week, Mr. Asuncion gave a forecast range of P50 to P50.3 per dollar, while Mr. Ricafort said the local unit would range P49.8 to P50.2. — Jenina P. Ibañez
