By Bianca Cuaresma, April 5 2019; Business Mirror
Image Credit to Business Mirror
LOCAL businesses expect the peso to appreciate in the second quarter of the year, compared to its level in the same period last year.
Data from the Bangko Sentral ng Pilipinas’s (BSP) recent survey on local firms show the optimism of businesses about the prospects of the local currency.
In particular, the BSP said businesses expect the peso to average at around 52.80 to a dollar in the months of April to June this year.
This is slightly stronger than the 53 trade average of the peso in June 2018.
In a separate research note, economists at the First Metro Investment Corp. (FMIC) and the University of Asia and the Pacific (UA&P) believe the strength of the peso will likely be “short-lived.”
“The peso may remain strong only for a limited time as the US dollar has rebounded, amid a robust economy and slightly higher interest rates that go with it,” FMIC and UA&P economists said.
Earlier, Standard Chartered Economist for Asia, Chidu Narayanan, also expressed bearish views on the local currency’s run for this year.
“Monetary policy easing expectations are likely to add to existing pressure on the Philippine peso from a persistent current-account deficit amid strong capital-goods imports, an elevated real effective exchange rate [REER], and stretched market positioning,” he said.
The latest data from the Bankers’ Association of the Philippines showed the local currency trading at 52.08 to a dollar on Wednesday’s trade.