Peso regains strength, moves back to P58:$1 level

The Philippine peso regained its footing on Friday after touching the P59:$1 level, its worst showing in two years, after the greenback saw a “correction” against other major global currencies.

The local currency increased by 13 centavos to close at P58.87:$1 from P59:$1.

In a commentary, Rizal Commercial Banking Corp. chief economist Michael Ricafort said that the  dollar “slightly corrected lower versus the Japanese yen and also versus other ASEAN/Asian currencies.”

“Going forward, the performance of the US dollar/peso exchange rate would be partly a function of intervention/defense as consistently seen over the past two years… amid the need to better manage inflation and inflation expectations to fulfill the price stability mandate that would also require stability in the peso exchange rate, which affects import prices/costs and overall inflation,” Ricafort said.

The economist added that the local unit appreciated as markets are anticipating a seasonal increase in conversion to pesos of overseas Filipinos’ remittances to finance holiday or Christmas-related spending next month.

For the week, the Philippine peso had depreciated for three straight days before it took a breather on Friday, November 22.

Since the start of 2024, the peso has shed P3.50 of its value against the US dollar.

The Bangko Sentral ng Pilipinas (BSP) earlier this week said it is monitoring the movement of peso against the dollar, but it does not worry much about the depreciation, as it lets the market dictate the movement.

“We don’t worry so much about whether the peso depreciates. We worry about the pass-through effect, pero ngayon medyo okay pa naman (but for now, it’s still okay),” BSP governor Eli Remolona Jr. said Tuesday.

“If it depreciates very sharply, then we talk. Kung hindi naman (If not) very sharply, it doesn’t become inflationary. It’s inflationary kung medyo (if it’s a bit) sharp at tsaka tuloy-tuloy (and continuous). Hindi kami nakikialam dun sa (we do not intervene on the) day to day movements,” he added.

Remolona also reiterated that the central bank is still on its easing cycle, adding that it can cut by 25 basis points in the policy meeting scheduled on December 16, 2024, or the next one. — RSJ, GMA Integrated News