EconomyEditor's PickPeso steady amid US debt ceiling woes, PHL GDP bets

January 23, 2023
BW FILE PHOTO

THE PESO closed unchanged against the dollar on Monday as negative sentiment brought by developments in the United States was offset by expectations of strong Philippine gross domestic product (GDP) growth.

The local currency ended at P54.54 versus the greenback on Monday, steady from Friday’s finish, data from the Bankers Association of the Philippines showed.

The peso opened Monday’s trading session at P54.40 per dollar. Its weakest showing was at P54.60, while its intraday best was at P54.30 against the greenback.

Dollars traded went up to $1.24 billion on Monday from $1.05 billion on Friday.

The local currency was steady on Monday amid mixed developments, a trader said in an e-mail.

“The peso was unchanged due to mixed signals from lingering concerns over the US debt limit and prospects of a likely strong Philippine GDP report this week,” the trader said.

The US government hit its $31.4-trillion borrowing limit on Thursday, equivalent to around 120% of the country’s annual economic output.

Back home, the Philippine Statistics Authority is set to release the fourth-quarter and full-year 2022 GDP report on Thursday.

The economy likely grew by 6.8% in the October-to-December period in 2022, according to the median forecast of 23 economists polled by BusinessWorld. This is slower than the 7.6% expansion in the third quarter and the 7.8% print in the same period in 2021.

For 2022, GDP likely expanded by 7.5%, according to the median estimate of the economists, matching the high end of the government’s 6.5%-7.5% target.

Meanwhile, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message the peso closed unchanged “after latest signals acknowledging the recent strength or appreciation of the peso.”

Bangko Sentral ng Pilipinas (BSP) Governor Felipe M. Medalla said in a Bloomberg interview on Friday that the central bank is “giving the peso some room to appreciate,” but noted that the currency’s excessive strengthening could be bad for the economy.

For Tuesday, the trader said that the peso might appreciate ahead of the release of likely weaker US manufacturing data for January.

The trader sees the peso moving between P54.40 and P54.65 a dollar on Tuesday, while Mr. Ricafort gave a narrower forecast range of P54.45 to P54.60. — A.M.C. Sy

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