The Philippine peso is seen to prolong its rise against the US dollar this week. This forecast is based on expectations of robust remittance inflows.
We find this foreign exchange-related news worthy of sharing with our readers. We believe they will learn about the Philippine forex scene, in which remittances sent by overseas Filipino workers greatly drive the country’s national currency.
According to the news posted online by Philippine business, markets, and finance newspaper BusinessWorld, the Philippine peso finished trading at P49.85 per US$1 last Friday, November 12. The local unit gained 31.5 centavos from its P50.165 close last Thursday.
Based on data from the Bankers Association of the Philippines, the Philippine peso also appreciated 48 centavos, compared with a week earlier’s close of P50.33 per dollar. Michael L. Ricafort commented via Viber.
The Rizal Commercial Banking Corporation Chief Economist relayed that the Philippine peso’s close last Friday was its most robust in almost two months, or since it ended at P49.79 per dollar last September 15. Ricafort pointed out that the surge in the Philippines’s foreign exchange buffers supported the Philippine currency and caused the bullish sentiment.
Last Friday, the Bangko Sentral ng Pilipinas, which is the Philippine central bank, reported that gross international reserves as of the end of last month surged month-by-month by 1.3 percent to US$107.946 billion. Plus, it likewise gained by four percent from the US$103.802 billion a year earlier.
At this level, the US dollar buffers are reportedly sufficient to cover 7.8 times the Philippines’s short-term external debt based on original maturity and 5.4 times based on residual maturity. They are also equal to 10.8 months’ worth of payments of services and primary income and imports of goods.
The Philippine central bank is slated to release the September remittance data today, November 15. Cash remittances increased yearly in August for the seventh straight month by 5.1 percent to US$2.609 billion.
This development brought inflows for the first eight months to US$20.38 billion. This figure is up by 5.7 percent from the same period of 2020. Ricafort provided a forecast range for this week of P49.50 to 50.10 per US$1.
We think the Philippine peso’s rise against the US dollar is beneficial for the Filipinos. This scenario means the consumers can purchase more goods with their local currency, and the Philippine economy is treading rosy grounds.
We believe this news is favorable for the Filipinos, especially now that the holiday season is fast approaching. We gathered that people from the Philippines regard families highly.
With the possibility of the Philippine peso extending its climb against the greenback this week due to the strong remittance inflows, we believe Filipino families can celebrate the upcoming Christmas and yuletide season happily and end the year 2021 on a positive note.