THE PESO strengthened further on Tuesday as the National Economic and Development Authority (NEDA) expressed optimism about reaching its target economic growth for the year.
The local currency ended at PHP 55.24 against the greenback, up by 17 centavos from Monday’s PHP 55.41 close, data from the Bankers Association of the Philippines showed.
The peso opened Tuesday’s session at PHP 55.40 per dollar and reached its weakest showing for the day at PHP 55.45. Its intraday best was at PHP 55.23 versus the greenback.
Dollars traded jumped to $940.55 million from $627.25 million on Monday.
Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message that the peso’s further strengthening is due to the NEDA statement on Monday that the country’s gross domestic product (GDP) growth might exceed the government target.
NEDA Secretary Arsenio M. Balisacan said at a briefing that the economy expanded by 7.6% as of September, beating the government’s 6.5% to 7.5% forecast and bringing the nine-month average to 7.7%.
Mr. Balisacan added that the GDP needs to grow by only 3.3-6.9% in the fourth quarter to achieve the full-year target.
He also said that consumption, investments in construction, utilities, and mining, and increased productivity in agriculture, likely drove this year’s strong growth.
Meanwhile, Mr. Ricafort said that the recently extended reduction in tariffs on pork, corn, rice and coal for at least one year supported the peso’s strength.
President Ferdinand R. Marcos, Jr. approved on Monday the recommendation of the NEDA Board to extend Executive Order (EO) No. 171.
EO No. 171, signed by former President Rodrigo R. Duterte in May, originally extended the lower tariffs on pork and rice, as well as cut duties on corn and coal but only until end-2022.
The Palace said the order was aimed at mitigating inflationary pressures arising from the Ukraine-Russia war, addressing supply issues and reducing prices of key commodities.
Meanwhile, two traders reaffirmed the effect of the continued seasonal increase in foreign exchange inflows on the local currency’s movement.
“The peso appreciated amid increased peso demand due to expected year-end foreign remittances,” one trader said.
For Wednesday, Mr. Ricafort expects the peso to move between PHP 55.15 and PHP 55.35 per dollar. One of the traders expects the peso to move in the PHP 55.10-PHP 55.35 range, while the other sees its movement at PHP 55.10-PHP 55.50 a dollar. — Aaron Michael C. Sy
This article originally appeared on bworldonline.com