Peso up on trade data

THE PESO strengthened against the greenback on Thursday following the release of trade data, which showed a continued slump in imports in February.

The local unit closed at P48.54 per dollar on Thursday, gaining 4.5 centavos from its P48.585 finish the day prior, data from the Bankers Association of the Philippines showed.

Week on week, however, it depreciated by a centavo from its P48.53 close on March 31.

The market is closed on Friday in observance of the Day of Valor.

The peso opened the session at P48.64 per dollar. Its weakest showing was at P48.66, while its intraday best was at P48.50 against the greenback.

Dollars exchanged rose to $659.28 million from $581.8 million on Wednesday.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort attributed the peso’s gains continued signs of weakness in imports.

The country’s imports dropped 5.6% to $16 billion in the first two months of 2021 from $16.96 billion a year earlier, data released by the Philippine Statistics Authority on Thursday showed. For February alone, merchandise imports grew 2.9% to P7.6 billion.

Meanwhile, UnionBank of the Philippines, Inc. Chief Economist Ruben Carlo O. Asuncion said the peso was affected by the optimistic global economic outlook of the International Monetary Fund (IMF).

The IMF on Tuesday said it expects the global economy to bounce back this year with a growth of 6.5% from the previous 5.5% estimate on additional fiscal stimulus in large economies and an anticipated vaccine-induced recovery in the second half of the year.

The multilateral lender likewise upgraded its growth forecast for the Philippines to 6.9% from 6.5% amid base effects from the record 9.5% economic contraction logged last year. It however warned that the virus surge and the lockdown are “substantial” threats to recovery. — L.W.T. Noble