THE PESO continued to climb against the dollar on Friday after S&P Global Ratings affirmed its “BBB+” rating for the Philippines on expectations that the economy would rebound from the coronavirus pandemic’s impact.
The local unit closed at P47.80 versus the dollar on Friday, strengthening by 18.5 centavos from Thursday’s finish of P47.985, data from the Bankers Association of the Philippines’ website showed.
Week on week, the peso also rose from its P47.945 close on May 21.
The peso opened Friday’s session stronger at P47.97 against the dollar. It dropped to as low as P47.98, while its intraday high was at P47.777 versus the greenback.
Dollars traded went down $1.056 billion on Friday from the $1.089 billion seen on Thursday.
“The peso continued to appreciate after the latest affirmation of the Philippine credit rating by S&P for the second straight year despite the pandemic,” Rizal Commercial Banking Corp. (RCBC) Chief Economist Michael L. Ricafort said in a text message.
This “would also help support international investor and creditor sentiment in the Philippines in terms of more international investment inflows into the country and more lending/credit for the country at much lower cost and at better terms largely due to the relatively favorable credit rating developments recently,” Mr. Ricafort added.
S&P on Thursday kept its “BBB+” rating on the Philippines and assigned a “stable” outlook on expectations of a “healthy” economic recovery, which will help improve the country’s fiscal standing that has weakened because of the coronavirus crisis.
The current “BBB+” sovereign rating is a notch away from the “A”-level grade targeted by the government, while a “stable” outlook means the rating is likely to be maintained in the next six months to two years.
S&P also maintained its A-2 short-term credit rating for the Philippines, while the outlook on long-term rating is still stable.
The debt watcher last affirmed its credit rating for the country in May 2020 with the same “stable” outlook. — IBC