Peso weakens on PHL posts BoP deficit in September

THE PESO retreated versus the greenback on Tuesday after the country recorded a balance of payments (BoP) deficit in September.

The local unit ended trading at P50.761 per dollar, shedding 8.1 centavos from its P50.68 close on Monday, based on data from the Bankers Association of the Philippines.

The peso opened Tuesday’s session slightly weaker at P50.70 versus the dollar. Its weakest showing was at P50.795, while its intraday best was at P50.63 against the greenback.

Dollars exchanged inched up to $956.38 million on Tuesday from $923.4 million on Monday.

The peso weakened from its previous close as the market factored in the BoP data released by the central bank on Monday evening, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

The country’s BoP stood at a deficit of $412 million in September, a reversal from the surplus worth $2.104 billion a year earlier and the $1.044-billion surfeit in August, as the government paid its foreign obligations.

For the first nine months of the year, the country’s BoP position was at a deficit of $665 million, reversing the $6.878-billion surplus in the same period of 2020.

Meanwhile, a trader said the peso weakened as Democrat lawmakers are expected to reach agreement on a US social spending bill.

Bloomberg reported that President Joseph Biden and Democrat legislators are fast-tracking an agreement on a scaled-back version of his economic agenda.

For Wednesday, Mr. Ricafort gave a forecast range of P50.65 to P50.85 per dollar, while the trader expects the local unit to move within P50.65 to P50.90. — L.W.T. Noble with Bloomberg