Peso strengthens as oil prices fall
THE PESO appreciated versus the greenback on Monday as oil prices declined and amid the growth in infrastructure spending.
The local unit closed at P52.13 per dollar on Monday, gaining two centavos from its P52.15 finish on Friday, based on Bankers Association of the Philippines data.
The peso opened Monday’s session at P52.18 versus the dollar. Its weakest showing was at P52.30, while its intraday best was at P52.08 against the greenback.
Dollars exchanged declined to $778.55 million on Monday from $1.105 billion on Friday.
The peso strengthened as global oil prices declined, a trader said.
Reuters reported that fuel prices dropped by more than $5 on Monday due to expectations of weaker fuel demand due to the lockdown in Shanghai as coronavirus infections there surged anew.
Brent crude futures fell to as low as $115.32 a barrel and declined by $5.15 or 4.3% at $115.50 at 0731 GMT. Meanwhile, the US West Texas Intermediate crude futures reached a low of $108.28 per barrel, and dropped by 4.7% or $5.30 at $108.60.
Meanwhile, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message that the market also priced in news of rising infrastructure spending as it is an import growth driver.
Data from the Department of Budget and Management showed infrastructure spending in 2021 jumped by nearly a third to P895.1 billion. It also surpassed the P761.2-billion target for the year.
The rise was attributed to the low base in 2020 as well as spending on roads, flood barriers, multipurpose buildings, railways and airports, the agency said.
For Tuesday, Mr. Ricafort gave a forecast range of P52.05 to P52.20 per dollar, while the trader expects the local unit to move within P52.00 to P52.30. — L.W.T. Noble with Reuters
