THE PESO continued to strengthen on Tuesday as central bank data showed improved remittances from overseas Filipino workers (OFWs) and foreign direct investments amid the coronavirus pandemic.
The local unit closed at P48.40 versus the dollar on Tuesday, up by 11 centavos from its P48.51 finish on Monday, data from the Bankers Association of the Philippines showed.
The peso opened Tuesday’s session at P48.48 per dollar which was also its weakest showing for the day. Meanwhile, its closing level was its intraday best.
Dollars traded surged to $884.3 million on Tuesday from $212.6 million on Monday.
Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a text message that the local currency strengthened following the release of central bank data showing higher remittances in July.
Money sent home by OFWs stood at a seven-month high in July, the Bangko Sentral ng Pilipinas (BSP) reported on Tuesday. Cash remittances coursed through banks rose 7.8% year on year in July to $2.783 billion. This was the biggest monthly inflow since the $2.902 billion logged in December.
In the first seven months of the year, cash remittances dropped 2.4% to $16.802 billion against the $17.219 billion seen in the same period of 2019.
The central bank expects remittances to decline by 5% this year due to the impact of the coronavirus pandemic.
The peso likewise strengthened as the country recorded higher foreign direct investment (FDI) net inflows in June, UnionBank of the Philippines, Inc. Chief Economist Ruben Carlo O. Asuncion said in an e-mail.
The BSP reported separately on Tuesday that net inflows of foreign direct investments rose for a second straight month in June, growing 7.1% year on year to $481 million.
The central bank said investments mostly went to the manufacturing, human health and social work, financial and insurance, and real estate industries.
For the first semester, net FDI inflows sank 18.3% from a year ago to $2.997 billion.
For today, Mr. Ricafort expects the peso to range from P48.30 to P48.45 versus the dollar while Mr. Asuncion sees the local currency moving from P48.30 to P48.40. — K.K.T. Jose