Peso down on remittances

THE PESO slumped against the dollar on Tuesday as central bank data showed remittance growth slowed in November.

The local currency closed the session at P50.49 versus the greenback yesterday, losing 12 centavos from its P50.37-per-dollar finish on Monday.

The local unit traded weaker the whole day, opening at P50.40 versus the dollar. Its intraday low stood at P50.505, while its best showing was at P50.375 against the greenback.

Dollars traded climbed to $875.37 million from the $697 million that changed hands a session ago.

Traders interviewed on Tuesday attributed the peso’s weakness to the “disappointing” growth in remittance in November last year.

“I think it’s because of the perception on the slower growth in remittances. There’s a perception that remittances might not come in as expected,” Ruben Carlo O. Asuncion, chief economist of UnionBank of the Philippines, said over the phone.

Money sent home by overseas Filipinos stood at $2.262 billion that month, higher than the $2.217 billion posted in a comparable year-ago period, but lower than the $2.275 billion in October 2017, central bank data released on Monday showed.

The rise in remittances in November was slower at 2%, compared with the 18.5% growth the same period in 2016 and October 2017’s 8.4%.

“This was lower than the 7.3% year-on-year increase to $2.45 billion,” Jose Mario I. Cuyegkeng, senior economist of ING Bank, said in an e-mail sent to reporters.

Meanwhile, another trader said on Tuesday: “The peso weakened today as traders positioned ahead of resumption of US financial markets this week from a holiday [on Monday] despite the stronger balance of trade figures from the Euro area.”

For today, Mr. Asuncion said the local currency might move within P50.30 to P50.60, while another trader gave a slightly lower range of P50.35 to P50.65.

“The local currency is expected to move sideways [today] due to lack of fresh leads but may be driven by significant movements on the US markets,” the trader said. — Karl Angelo N. Vidal