Peso weakens as virus continues to spread

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THE PESO weakened versus the dollar on Friday due to market jitters as more coronavirus disease (COVID-19) infections were reported outside China and following the balance of payments (BoP) deficit logged in January.

The local unit closed at P50.94 versus the dollar, weakening by 36 centavos from its Thursday finish of P50.58 against the greenback.

Week-on-week, it also shed 38 centavos from its P50.56 close on Feb. 14.

The peso opened at P50.69 per dollar. Its worst showing for the day was at P50.98, while its intraday best was at P50.67 against the greenback.

Dollars traded climbed to $1.372 billion from $1.235 billion on on Thursday.

A trader said the local unit weakened on news of more further cases of COVID-19.

“It led to risk-off sentiment for the peso, being an emerging market currency. Of course, because it seems like the virus may continue to spread,” the trader said in a phone call.

UnionBank of the Philippines, Inc. Chief Economist Ruben Carlo O. Asuncion said market fears related to COVID-19 as well as weak local data dragged the peso against the greenback on Friday.

“Aside from the peso’s response to COVID-19’s increasing spread outside of China, weakness also came from the January 2020 BoP (balance of payments) deficit,” Mr. Asuncion said in a text message.

Reuters reported that South Korea’s confirmed cases grew by 52 to 156 on Friday, with 111 cases logged in Daegu.

The virus was traced to be from a 61-year old woman who attended services at the Shincheonji Church of Jesus the Temple of Tabernacle of the Testimony. More than 400 members of the said church have been showing symptoms of COVID-19, although tests are still in the works, according to officials.

Meanwhile, in China, 234 people in two prisons outside Hubei have been infected.

Back home, the Bangko Sentral ng Pilipinas (BSP) reported late Wednesday that the country’s BoP position swung to a $1.355 billion deficit in January, a reversal of the $2.704 billion surplus in the same month of 2019.

This latest BoP figure ended six months of surplus and due mainly to foreign loan payments at the start of the year. — L.W.T. Noble with Reuters