The Philippine peso continued its upward trajectory, surpassing the 55 to $1 threshold and reaching a three-month high. This surge was attributed to an optimistic outlook for remittances from overseas Filipino workers (OFWs) in anticipation of the holiday season and the dovish signals coming from the US Federal Reserve.
The local currency strengthened by 19 centavos, concluding at 55.91 from its previous 56.1 to $1 on Friday. This marks the peso’s most robust performance since it last closed at 55.74 on August 4.
Starting the day on a strong note at 55.80, the peso reached an intraday high of 55.73 before losing some steam and hitting an intraday low of 55.93. Trading volume experienced a 37.4 percent decline, totaling $1.15 billion yesterday compared to Friday’s $1.84 billion.
During the past week, the peso gained 85.50 centavos, closing at 56.10 from 56.955 to $1 on October 27.
BMI Country Risk & Industry Research predicts a slight strengthening of the peso to 55.60 to $1 this year. This comes after the peso was the worst-performing currency in the region, depreciating by 9.3 percent to 55.755 to $1 last year from 50.999 to $1 in 2021.
BMI commented, “We forecast the Philippine peso to depreciate against the dollar from 55.6 to $1 in 2023 to 56.8 to $1 in 2024. For the Philippines, which remains heavily reliant on imports to meet local demand, this will provide further headwinds as imports will become costlier.”
Michael Ricafort, chief economist at Rizal Commercial Banking Corp., expects the peso to fluctuate between the 55.85 and 56.35 levels this week.
Ricafort explained, “The peso was stronger due to the long holiday weekend, with accumulated remittances and anticipation of upcoming remittances for the holiday season.” The economist anticipates that the peso will trade between 55.80 and 56 in today’s trading.
