THE PESO could bounce back against the greenback this week on hopes that more businesses could reopen by March.
The local unit ended trading at P48.451 per dollar on Friday, barely changed from its P48.50 close on Thursday, data from the Bankers Association of the Philippines showed.
Week on week, however, the peso shed 40.6 centavos from its finish of P48.045 per dollar on Feb. 11.
The peso’s slight appreciation on Friday was backed by the slight easing in the spike in global oil prices in the latter part of the week amid a supply disruption in Texas, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a text message.
Reuters reported that pump prices were down from Thursday to Friday as energy companies in Texas position to restart their operations that were shuttered by freezing weather and power outages.
Brent crude futures dropped $1.02 or 1.6% to $62.91 per barrel while the US West Texas Intermediate (WTI) crude inched down by $1.28 or 2.1% to settle at $59.24. However, both the Brent and the WTI prices cumulatively gained 0.5% and 0.7% for the whole week.
Analysts estimated that up to 4 million barrels per day of crude production and 21 billion cubic feet of natural gas were slashed due to the disruptions caused by the extreme weather in Texas.
For this week, Mr. Ricafort said the market will watch out from the government’s decision on whether a further reopening of the economy could be possible by March.
He said a decision on the restriction measures could be given by President Rodrigo R. Duterte during his Monday briefing.
Members of the Inter-Agency Task Force for the Management of Emerging Infectious Diseases agreed to recommend putting the entire country under modified general community quarantine (MGCQ), which is the least restrictive lockdown level, Presidential Spokesperson Herminio “Harry” L. Roque, Jr. said on Friday.
Most provinces in the country are already under MGCQ, with only areas such as Davao, Iligan, Tacloban, Batangas, Lanao Del Sur, the Cordillera Administrative Region, and Metro Manila still under the slightly tighter general community quarantine.
Meanwhile, a trader said peso-dollar trading will be affected by the expected release of the Bureau of the Treasury’s December cash operations report on Friday.
Finance Secretary Carlos G. Dominguez III earlier said the government’s budget deficit hit P1.36 trillion or about 7.5% of the gross domestic product (GDP) in 2020 as revenues slumped while spending increased due to the pandemic. This is more than double the 3.4% deficit-to-GDP ratio seen in 2019.
For this week, Mr. Ricafort gave a forecast range of P48.25 to P48.55 per dollar while the trader expects the local unit to move within the P48.30 to P48.50 band. — L.W.T. Noble with Reuters