Connect with us

Hi, what are you looking for?

Economy

Peso weakens as gov’t cuts growth targets

THE PESO declined against the dollar on Wednesday as the government cut its growth target for this year and next, as the fresh spike in coronavirus disease 2019 (COVID-19) cases and the reimposition of strict restrictions cloud recovery prospects.

The local unit closed at P47.875 versus the dollar on Wednesday, dropping by seven centavos from Tuesday’s finish of P47.805, data from the Banker’s Association of the Philippines’ website showed.

The peso opened the session at P47.81 against the dollar. It dropped to as low as P47.894, while its intraday best was logged at P47.77 versus the greenback.

Dollars traded went up to $947.25 million on Wednesday from $925.20 million the day before.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the Development Budget Coordination Committee’s (DBCC) decision to slash the country’s growth outlook caused the peso to weaken versus the dollar on Wednesday.

In its 179th meeting on Tuesday, the DBCC downgraded its gross domestic product (GDP) growth target to 6-7% from the 6.5-7.5% outlook in December 2020. However, this would still be an improvement from the record 9.6% contraction logged in 2020.

“The emerging GDP growth projection is slightly adjusted to 6-7% from 6.5-7.5% in view of the emergence of new COVID-19 variants and the reimposition of enhanced community quarantine in the National Capital Region Plus area during the second quarter of the year,” the DBCC said in a joint statement.

Economic managers expect the economy to return to its pre-crisis level next year, with GDP seen to grow by 7-9%, lower than the previous target of 8-10%. The economy’s expansion is seen to slow to 6-7% in 2023 and 2024.

Mr. Ricafort added that the peso was also affected by the recent weakness in the local stock market, as well as global inflation concerns.

For Thursday, a trader said the market will watch out for the release of the minutes of the US central bank’s latest policy review.

“The local currency might move based on policy cues from the US Federal Reserve policy meeting minutes due to be released overnight as global investors will be looking for the US central bank’s assessment about the recent elevated US inflation reports,” the trader said.

Mr. Ricafort gave a forecast range of P47.82 to P 47.92 per dollar, while the trader expects the peso to move between P47.80 and P48.

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

Economy

Last Tuesday, I moderated the BusinessWorld insights panel entitled, “Saving, Spending, Investing: Achieving Financial Goals even amid a Crisis” with top financial advisors in the country –...

Economy

PearlPay, an all Filipino-led fintech company, took home the third prize during the global finals of the Visa Everywhere Initiative (VEI) last Sept. 15. Started in...

Economy

Follow us on Spotify BusinessWorld B-Side Despite saying that the pandemic response is a top priority, the executive department of the Duterte administration slashed the P50.4...

Economy

Wilcon Depot celebrates the successful opening of its newest retail store in Pila, Laguna, as part of its ongoing #FlyingHighTo100 store expansion campaign. Opened...

Economy

As climate change takes center stage as one of the world’s most pressing challenges, and countries race to transition from fossil fuels to clean energy...

Economy

Willis Towers Watson shares the secret to its successful 40 years of providing world-class advisory, broking services and business solutions The COVID-19 pandemic has...

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

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

Economy

US President Joseph R. Biden, Jr., will rely on ally countries to supply the bulk of the metals needed to build electric vehicles and focus on...

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.

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!