THE PESO strengthened slightly versus the dollar even as the country posted its widest trade deficit in October.
The local currency closed Tuesday’s session at P52.77 against the greenback, three centavos stronger than the P52.80-per-dollar finish on Monday.
The peso opened the session weaker at P52.83 per dollar, reaching an intraday low of P52.91. Meanwhile, its best showing stood at P52.76 versus the greenback.
Dollars traded grew to $906.85 million from the $603.12 million that switched hands the previous day.
A foreign exchange trader said the peso strengthened a tad versus the dollar even as the latest trade balance figures showed a wider deficit in October.
According to the Philippine Statistics Authority, the country’s import bill grew 21.4% to $10.3 billion in October, outpacing the 3.3% growth in exports, which stood at $6.1 billion.
This pushed the country’s trade deficit to widen to $4.21 billion from the previous month’s $3.92 billion.
“The trade balance data is actually negative for the Philippine peso, but I think there’s some correction at the P52.90 level due to technical views only,” the trader said in a phone interview.
Nicholas Antonio T. Mapa, economist at ING Bank NV-Manila, explained that capital imports and raw material growth are “not expected to slow down in the near term,” as the country continues to bring in infrastructure-related materials in line with the government’s “Build, Build, Build” push.
Michael L. Ricafort, economist at Rizal Commercial Banking Corp., attributed the slight peso appreciation to a lower dollar against major global currencies after the latest decline in the 10-year US government bond yields to a new three-month low and softer US jobs data, among others.
“Peso also stronger ahead of the seasonal surge in the conversion of [overseas] remittances…especially one to two weeks before Christmas for yuletide-related spending,” Mr. Ricafort said in a text message.
For today, the trader expects the peso to move between P52.70 and P52.90, while another trader gave a P52.65-P52.85 range. — K.A.N. Vidal