THE peso strengthened further against the US dollar on Friday, breaching the P51 level, after S&P Global Ratings upgraded its outlook on the Philippine economy.
The local currency ended the session at P51.965 versus the greenback, 18.5 centavos stronger from the P52.15-per-dollar finish on Thursday.
This is the peso’s strongest showing in two weeks since it closed at P51.95 on April 13.
The peso opened at P51.95 against the US currency, while it touched P51.89 as its strongest point. Its intraday low, meanwhile, was at P52.03.
Dollars traded rose to $806.05 million on Friday from the $736.2 million that switched hands on Thursday.
Traders attributed the peso’s strong performance on the news that S&P revised its outlook on the Philippines to “positive” from “stable.”
“The dollar was weaker and the peso got a boost from the S&P upgrade,” UnionBank of the Philippines chief economist Ruben Carlo O. Asuncion said in a text message.
S&P’s revision of its credit outlook for the Philippines is seen as a hint of a stronger possibility of the country bagging a rating upgrade.
“The [Philippine] government is enacting increasingly effective fiscal policies, marked by improvements to the quality of expenditures, still-limited fiscal deficits, and low levels of general government indebtedness,” the credit rater said.
At present, the Philippines holds a “BBB” rating from S&P, which is a notch above minimum investment grade.
“We opened [stronger] against the dollar, and we continued to trade in favor of the peso throughout the day,” a trader added.
Meanwhile, another trader said: “The peso heavily strengthened today following the beginning of inter-Korean summit, in which the two Korean leaders met for the first time since the Korean armistice in 1953. “
North Korean leader Kim Jong-un and South Korean President Moon Jae-in met at the Korean Demilitarized Zone on Friday, pledging to pursue peace after decades of conflict, Reuters reported.
“We are at a starting line today, where a new history of peace, prosperity and inter-Korean relations is being written,” Kim said before they began talks.
“This event likewise gave strength to the South Korean won against the dollar,” the trader added. — Karl Angelo N. Vidal