Manila: The Philippine peso gained 0.6% Friday as it continues a rebound against the US dollar amid a global decline in fuel prices.
The local currency has appreciated in the first week of August from a 18-year low of Php56.52 vs $1 on July 18, to close Php55.22 on Friday (August 5) — on the back of positive market sentiment.
For overseas Filipinos, this means you fetch Php11,044 for every $200 or Php27,610.9 for every $500 remitted home.
While the Philippine has been clawing back lost ground, UAE expats looking to remit more pesos back home could continue getting favourable rates, if not better, in the weeks to come.
Analysts predict a downward move for the Philippine currency for the rest of 2022 and into 2023, owing to fundamental challenges, including the back-to-back US Fed policy rate hikes (which boosts the US dollar value) and the Philippines' huge current account deficit that makes rising inflation a feature of the economy.
BSP data
Data from Bangko Sentral ng Pilipinas (BSP) show that the bank’s peso buying rate stood at Php55.35 vs $1, and the selling rate at Php55.850.
Phisix, the country’s benchmark stock index, rose for the third straight day on Thursday (August), before profit-taking pared the week’s gains by 77.61 points, or 1.20%, on Friday.
The oil price drop this week came following reports of an unexpected surge in US crude and gasoline stockpiles last week. Concerns over oil supply crunch also eased in recent days after the resumption of supply flows from Libya and Russia’s gas supply to Europe.
Moreover, the Organisation of the Petroleum Exporting Countries (OPEC) +, including Russia, had agreed to raise its oil output target by 100,000 barrels per day, equal to about 0.1% of global oil demand.
The peso’s rise came following a higher-than-expected 6.4 per cent Philippine inflation rate in July from 6.1 percent in June, according to the Philippine Statistics Authority.
The global oil price slide to five-month lows helped Asian currencies.
In a briefing, National Statistician Dennis Mapa said that higher inflation was mainly due to faster increases in prices of meat and fish, petrol and transport, and electricity.
The July report brought the seven-month average (January to July) to 4.7 percent, higher than the upper end of the government’s target range of 2 to 4 per cent.
Earlier, a BSP official stated they expect inflation to remain high for the remainder of this year, but expected to ease in 2023 — and settle within target in 2024.
The overall price of goods and services in the country has been going on an upward move since February.
Regional currencies
On Friday, the Thai baht appreciated 1% ahead of a central bank meeting next week which is expected to see the tourism-reliant country at last join regional peers in policy tightening, while South Korea's won also firmed 1% on strong inflows.
Investors awaited widely anticipated U.S. jobs data amid growing worries of a recession. The baht strengthened as much as 0.9%, hitting a one-month high, with investors eyeing next Wednesday's Bank of Thailand (BoT) meeting, which is widely expected to mark the beginning of its policy normalisation to stem soaring inflation.
