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Peso weakens after pickup in infrastructure spending

THE PESO weakened Friday after a pickup in infrastructure spending was taken by traders to mean an increase in dollar outflows stemming from expanded imports of raw materials and capital equipment. 

The peso closed at P47.945 against the dollar Friday, against the Thursday finish of P47.94, according to the Bankers Association of the Philippines.  

Week-on-week, the peso retreated from its P47.81 close on May 14. 

The peso opened Friday at P47.85. The low was P47.93, while the high was P47.84.  

Dollar volume was $941.25 million on Fridayagainst $979.8 million a day earlier.  

The government increased infrastructure spending in the second half of 2021, with the building program intended as a key component of the economic recovery. 

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the associated capital outlays could affect the peso’s performance because they will lead to outflows of foreign currency. 

However, an offsetting positive was the decline in crude oil prices in anticipation of lifting of sanctions against Iranian, thereby reducing the Philippines’ oil import bill, Mr. Ricafort added. 

A trader said the market retains an overhang from an impending move by the Federal Reserve to possibly taper its asset purchases. 

Mr. Ricafort gave a forecast range of P47.88 to P47.98 for Monday, with the range for the week seen at P47.75 to P48.05. – Isabel B. Celis  

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