Peso closes slightly stronger at P58.55 vs USD
‘The next seasonal surge in OFW remittances and conversion to pesos will be in preparation for the holidays in December 2022, especially a few days/weeks before the Christmas and New Year holidays,’ Ricafort said.
The Philippine peso slightly appreciated at P58.55 against the US dollar on Friday.
Trading opened at P58.8, data from Bankers' Association of the Philippines showed.
The local currency also traded between P58.34 and P58.89 and stood at an average rate of P58.622.
Data from BAP also showed that the volume reached $1.1097 billion, higher than the previous session's $847.7 million.
After rising for two straight days, the US dollar corrected lower by -0.25 or -0.4 percent on Friday.
The peso also became stronger on Friday after the latest trade deficit or net imports eased to the narrowest in 6 months.
Nonetheless, the peso exchange rate is still relatively stable for the sixth week, which remained below the P59.00 level.
Sought for comment, Rizal Commercial Banking Corp. chief economist Michael Ricafort told Daily Tribune that the local currency appreciated on Friday after the expected seasonal increase in remittances from overseas Filipino workers and conversion to pesos for travel funds and another holiday-related spending for the long Undas holiday weekend.
The next seasonal surge in OFW remittances and conversion to pesos will be in preparation for the holidays in December 2022, especially a few days/weeks before the Christmas and New Year holidays, Ricafort said.
According to Ricafort, the relatively stable peso exchange rate was recently brought about by signals and reiterations on local policy rate hikes of as much as +0.75 on the next rate-setting meeting on 17 November 2022.
He also attributed the relatively stable peso exchange rate to the latest signals on local policy rate hikes of as much as +0.75 on the next rate-setting meeting on 17 November 2022 and local policy rate hikes of at least +1.00 for the rest of 2022, alongside other measures.
Peso purchasing power down
While the local currency slightly appreciated against the greenback, the Philippine Statistics Authority said on Friday that the purchasing power of the peso further declined.
For October, the purchasing power of peso is only P0.85 from our base year of 2018; that's a drop, said PSA Chief and National Statistician Claire Dennis Mapa in a press briefing.