THE PESO strengthened on Tuesday as the country’s dollar reserves rose as of October and as the unemployment rate dropped to its lowest level since the coronavirus pandemic.
The local unit ended trading at P58.275 per dollar on Tuesday, appreciating by 30.5 centavos from its P58.58 close on Monday, based on data from the Bankers Association of the Philippines.
The peso opened Tuesday’s session stronger at P58.38 per dollar. Its weakest showing was at P58.45, while its intraday best was at P58.10 against the greenback.
Dollars exchanged increased to $954.9 million on Tuesday from $574.2 million on Monday.
Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort attributed the peso’s appreciation to the increase in the country’s gross international reserves (GIR) as of October.
Data from the central bank showed GIR stood at $94.1 billion at end-October, up 1.9% from the $93 billion at end-September. Still, this was 12.8% lower than the dollar reserves of $107.89 billion as of end-October 2021.
Stronger Philippine employment data and continued growth in manufacturing output also affected sentiment, Mr. Ricafort said.
Preliminary data from the Philippine Statistics Authority (PSA) showed the unemployment rate was at 5%, slightly lower than the 5.3%% in August and 8.9% in September last year.
This was equivalent to 2.5 million jobless Filipinos in September, which is lower than 2.681 million in August and 4.28 million in September last year.
Meanwhile, PSA data released separately showed the country’s factory output as gauged by the volume of production index rose to 2.4% in September, marking the sixth consecutive month of increase.
For the year so far, the Philippines’ manufacturing output rose by an average of 7.6%.
A trader said the peso also rose “amid growing speculation that the Chinese government might consider loosening its lockdown restrictions in the future.”
For Wednesday, the trader said the local unit may continue to rise against the dollar on expectations of strong third quarter Philippine gross domestic product growth, with data to be released on Thursday.
Mr. Ricafort gave a forecast range of P58.10 to P58.40, while the trader said the peso could move from P58.15 to P58.35 versus the dollar. — K.B. Ta-asan