Connect with us

Hi, what are you looking for?

Economy

Peso to rise on lower imports due to lockdown

THE PESO is likely to appreciate against the greenback due to the shortened trading week and expectations of lower import demand due to the reimposed lockdown in Metro Manila.

The local unit closed at P48.49 versus the dollar on Friday, gaining nine centavos from its previous close of P48.58, data from the Bankers Association of the Philippine showed. It also strengthened by 13 centavos from its P48.62-per-dollar finish on March 19.

The peso appreciated versus the greenback on Friday on the back of market optimism amid anticipation over the passage of the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a text message.

President Rodrigo R. Duterte’s signing of the CREATE Act was announced after the market closed on Friday. The tax reform measure will immediately bring down corporate income tax to 25% from 30% and will further slash the rate by a percentage point every year from 2023 to 2027 until it reaches 20%.

Mr. Duterte vetoed some sections of the measure, including one that allows incumbent and future presidents to exempt an investment promotion agency from CREATE’s coverage and another section that increases the threshold of low-cost housing eligible for VAT exemption to P4.3 million from P2.5 million.

Meanwhile, UnionBank of the Philippines, Inc. Chief Economist Ruben Carlo O. Asuncion said news of further stimulus in the United States was among the biggest factors that dictated foreign exchange trading last week.

For this week, Mr. Asuncion said the peso may strengthen due to a likely decline in imports amid the Holy Week holidays and the stricter lockdown in the country’s capital and nearby areas.

Mr. Duterte approved the recommendation to place Metro Manila and surrounding provinces Bulacan, Cavite, Laguna and Rizal under the tightest restriction measures starting March 29 until April 4, Presidential Spokesperson Herminio “Harry” L. Roque, Jr. said in a televised briefing on Saturday.

The announcement followed the record 9,595 new cases on Saturday which brought the country’s total to 712,442. Mr. Roque said the renewed lockdown was prompted by the diminished capacity of hospitals amid the surging cases.

Meanwhile, Mr. Ricafort said the release of February budget balance data on Monday may also affect market sentiment.

The Bureau of the Treasury will release its cash operations report for February today. In January, the fiscal gap stood at P14 billion, reversing the P23-billion surplus a year earlier due to lower tax collections and muted spending amid the pandemic.

Mr. Ricafort gave a forecast range of P48.35 to P48.60 per dollar this week while Mr. Asuncion expect the local unit to move around the P48.40 to P48.70 levels. — L.W.T. Noble

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Get the daily email that makes reading the news actually enjoyable. Stay informed and entertained, for free.
Your information is secure and your privacy is protected. By opting in you agree to receive emails from us. Remember that you can opt-out any time, we hate spam too!

Latest

Investing

A UK-backed mission which will search for Earth-like planets orbiting alien stars has been given the green light to continue with its development after...

Investing

According to a new survey a staggering 3 out of 5 UK professionals are unhappy with their current salary. The study, which surveyed 1,500...

Investing

A mental health crisis is looming among small business owners – with 82% reporting that their mental health has already declined due to the...

Investing

One of Britain’s biggest banks has called on the “social conscience” of large businesses to encourage them to settle bills to small and medium-sized...

Investing

The UK’s deep regional divides are widening despite the government’s promises to level up the country, a think tank for the north of England...

Investing

Britons are consuming too much alcohol at home due to sessions lasting longer than pub visits, an expert said, after data suggested millions of...

You May Also Like

Investing

Having a good Instagram marketing agency to back up your Instagram account is an absolute must going into the new year. With competition stronger...

Economy

Ivermectin, an existing drug against parasites including head lice, has had a checkered history when it comes to treating COVID-19. The bulk of studies...

Investing

Insomnia is the most common sleep disorder in the global population. Therefore, it is a problem that many people suffer or have suffered throughout...

Investing

As a traditionally rigid insurance industry becomes bogged down by antiquated processes and operations, a handful of industry leaders are seeking to shake things...

Disclaimer: SmartRetirementReport.com, its managers, its employees, and assigns (collectively "The Company") do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

Copyright © 2021 SmartRetirementReport. All Rights Reserved.