Peso weakens further as BoP deficit widens
THE PESO sank further versus the greenback on Tuesday as the country’s balance of payments (BoP) position was at a wider deficit in May.
The local unit closed at P54.265 versus the dollar on Tuesday, dropping by 20 centavos from its P54.065 finish on Monday, data from the Bankers Association of the Philippines showed.
This was the local unit’s worst close in more than three years or since its ended at P54.32 against the greenback on Oct. 4, 2018.
The peso opened Tuesday’s trading session at P54.10 versus the dollar. Its intraday best was at P54.05, while its weakest showing was at P54.40 against the greenback.
Dollars exchanged rose to $1.389 billion on Tuesday from $1.015 billion on Monday.
Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the peso weakened versus the dollar as latest BoP data released by the Bangko Sentral ng Pilipinas (BSP) on Tuesday showed the country’s external position was at a deficit last month.
The country posted a $1.61-billion BoP deficit in May, bigger than the $415-million gap in April. This was also wider than the $1.4-billion deficit seen in May 2021 and the widest in 15 months or since the $2.019-billion gap recorded in February 2021.
In the first five months of 2022, the Philippines’ external position was at a $1.53-billion deficit, narrower than the $1.63 billion logged in the comparable year-ago period.
The BSP expects the BoP to yield a deficit of $6.3 billion this year or equivalent to -1.5% of gross domestic product.
The peso also weakened due to concerns over rising coronavirus disease 2019 (COVID-19) cases in the country, Mr. Ricafort said.
An additional 529 new COVID-19 cases were reported on Monday by the Health department, bringing active cases to 4,740.
Monday’s new cases were slightly lower than the 612 recorded on Sunday but were higher compared with the average of 435 recorded from June 13 to 19.
For Wednesday, Mr. Ricafort gave a forecast range of P54.15 to P54.35 per dollar. — K.B. Ta-asan