Optimism on COVID-19 vaccines continues to drive peso strength

The Philippine peso continued to appreciate against its US counterpart on Monday, driven by optimism on the impending arrival of vaccines against the coronavirus disease 2019 (COVID-19).

The local currency gained 2.4 centavos to close at P48.046:$1 versus last Friday's finish of P48.07:$1. This is among the strongest in over four years since it closed at P47.99:$1 on September 23, 2016.

Over the weekend presidential spokesperson Harry Roque Jr. said the Philippines targets to start vaccinations of frontline healthcare workers next Monday, February 15, as the government aims to inoculate the sector's 1.4 million individuals in a month.

"The peso exchange rate stronger vs. the US dollar... amid continued market optimism on the expected/scheduled arrival of the first batch of COVID-19 vaccines in the country by next week," Rizal Commercial Banking Corporation (RCBC) chief economist Michael Ricafort said in a mobile message.

Ricafort said the peso could have also been affected by the proposed P420-billion stimulus bill at the lower house, and both the Corporate Recovery and Tax Incentives for Enterprises (CREATE) and Financial Institutions Strategic Transfer (FIST) which are awaiting the signature of President Rodrigo Duterte.

The peso strength also came as the upcoming three-year retail treasury bonds (RTBs) this week could entail foreign investments, as well as global market risk appetite after US stocks rose to record highs. — BM, GMA News