Peso up on GDP revision, farm output

THE PESO continued to rise versus the greenback on Wednesday as data showed the Philippine economy expanded faster than initially reported in the second quarter and as agricultural output rose in the third quarter.

The local unit closed at P57.99 per dollar on Wednesday, appreciating by 28.5 centavos from its Tuesday finish of P58.275.

The peso opened Wednesday’s session stronger at P58.17 against the dollar. Its weakest showing was at P58.22, while its intraday best was at P57.9 versus the greenback.

Dollars exchanged rose to $1.107 billion on Wednesday from $954.9 million on Tuesday.

The peso strengthened on Wednesday on the back of the country’s upward-revised gross domestic product (GDP) growth print in the second quarter and improved farm output in the third quarter, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

GDP growth in the second quarter was revised to 7.5%, up from the initial 7.4% estimate, the Philippine Statistics Authority (PSA) said on Wednesday.

Meanwhile, the value of production in agriculture and fisheries at constant 2018 prices grew 1.8% in the third quarter versus the 0.6% contraction in the second quarter.

This was also an improvement from the 2.6% decline logged in the third quarter of 2021.

Better financial results from most listed companies recently also boosted market sentiment, Mr. Ricafort said.

“The peso strengthened below the P59 level from local optimism ahead of the third-quarter Philippine GDP report,” a trader said in an e-mail.

The economy likely expanded at a slower pace last quarter as high inflation, rising interest rates, and the peso’s depreciation dampened consumer spending, analysts said last week.

A BusinessWorld poll of 16 analysts last week yielded a median estimate of 6.1% for third-quarter GDP growth. If realized, this would be slower than the 7.5% expansion posted in the second quarter and the 7% seen in the same quarter of 2021.

The PSA is scheduled to release third-quarter GDP data today.

For Thursday, the trader said the peso may extend its climb on expectations of weaker October US inflation data, which will also be released on Nov. 10.

Mr. Ricafort said investors expect the US consumer price index to have slowed to about 7.9% in October from 8.2% in September.

Both Mr. Ricafort and the trader expect the peso to move from P57.90 to P58.10 per dollar on Thursday. — KBT