This week will be the release of the national budget balance on how spending has been coming along. If spending is happening, then this may help the peso strengthen.

The country’s local unit, the peso, is seen to keep its strength for the week ending 29 November, various private economists said over the weekend.

Rizal Commercial Banking Corp. lead economist Michael Ricafort said that the local currency might appreciate by as much as P50.5 against the dollar but not lower than P51 as the market awaits important economic data such as inflation and local output measured in gross domestic product (GDP) growth.

“For the week, the peso could range P50.5 to P51. The markets will be anticipating the latest inflation data on 5 November, GDP data on 7 November as well as the effectivity date of the 1 percentage point cut in banks’ RRR (reserve requirement ratio) on the first week of November 2019 that would infuse about a total of P125 billion of additional peso liquidity,” Ricafort said in a text message.

According to him, inflation for November might dip slightly at 0.8 percent, a little lower than October’s 0.9 percent while third quarter GDP data could hit 6.3 percent, significantly higher than the four-year low of 5.5 percent recorded in the second quarter this year.

Also, the analyst said that the expected RRR reduction will further support economic sentiment and thus help spur GDP growth. Remittances from overseas Filipino workers, which normally spike on the last months of the year were also seen supporting the peso and offsetting the foreign selling witnessed in the local bourse.

At the Union Bank of the Philippines, chief economist Carlo Asuncion cast a narrower range for the peso with P50.7 to P51 as the market awaits another important economic data, government spending.

“(This) week will be the release of the national budget balance on how spending has been coming along. If spending is happening, then this may help the peso strengthen,” Asuncion said.

“Clarity on the Phase 1 deal between the US and China may also stabilize and strengthen the peso. Otherwise, we may see weakness (for the peso) this week,” he added.

To recall, the peso finished last week’s trading strong at P50.8 against the greenback, an 8-centavo improvement versus the P50.86 a dollar recorded on Thursday.

Meanwhile, demand for the Bureau of Treasury’s 20-year treasury bond offer next week was eyed to remain strong as investors will still be at the long-end of the curve.

“Longer tenors are usually preferred when most of the market expect the economy will grow or is on track to recover. So, it is expected that the long end will be in demand. This is on the back of continuous economic growth of the Philippines in 2020,” Asuncion explained.