THE PESO weakened against the dollar on Thursday as the National Government’s debt climbed further as of April amid increased borrowings due to the pandemic.
The local unit closed at P47.825 versus the dollar on Thursday, inching down by half a centavo from Wednesday’s finish of P47.82, data from the Bankers Association of the Philippines’ website showed.
The peso opened Thursday’s session at P47.78 against the dollar. Its intraday best was at P47.76, while it dropped to as low as P47.845 versus the greenback.
Dollars traded went down to $820.06 million on Thursday from the $1.044 billion seen on Wednesday.
The peso declined against the dollar as the government’s debt stock continued to rise, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a text message.
The government’s outstanding debt stood at P10.991 trillion at end-April after it tapped the international debt market twice that month, data from the Bureau of the Treasury showed.
Preliminary data showed the country’s debt pile grew by 2% from the end-March level and by 27.8% from a year ago.
The peso also dropped after the bill imposing taxes on Philippine Offshore Gaming Operators (POGOs) was approved on final reading at the Senate, Mr. Ricafort added.
With 17 affirmative votes, three negative votes and no abstention, the senators approved Senate Bill No. 2232 which sought to amend provisions of the National Internal Revenue Code of 1997 to impose a tax regime for POGOs as the government seeks new revenue sources amid the coronavirus pandemic.
Under the bill, offshore gaming licensees, whether Philippine-based or abroad, but are considered doing business in the Philippines will be subject to 5% gaming tax on gross gaming revenues or receipts from their gaming operations. The gaming tax will be imposed in lieu of all taxes.
Non-gaming revenues of Philippine-based offshore gaming licensees shall also be subject to a 25% income tax. Non-gaming revenues attributed to game offerings or facilities within the Philippines of foreign-based offshore licensees shall be pay income tax equivalent to 25% of gross income yearly.
Meanwhile, a trader said the peso moved sideways amid remarks from several US Federal Reserve officials on the timing of the tapering of the central bank’s bond purchases.
For Friday, the trader expects the peso to move between P47.80 and P48 versus the dollar, while RCBC’s Mr. Ricafort gave a forecast range of P47.77 to P47.87. — IBC