Peso may remain at P58:$1 level on improving sentiment

THE PESO is seen holding within the P58-per-dollar level this week on improved market sentiment after S&P Global Ratings last week affirmed the Philippines’ credit rating.

The local unit closed at P58.645 per dollar on Friday, 11.5 centavos stronger than its P58.76 finish on Thursday, Bankers Association of the Philippines data posted on its website showed. Week on week, the peso climbed by 21 centavos from its P58.855 close on Nov. 21.

“The US dollar-peso exchange rate again slightly improved… as market sentiment largely boosted by the S&P’s latest affirmation on the Philippine credit ratings and positive outlook shows that the country’s economic and credit fundamentals remain intact despite geopolitical risks, Trump factor, local political noises recently,” Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

S&P Global Ratings last week affirmed the country’s long-term “BBB+” and short-term “A-2” investment grade credit ratings with a “positive” outlook as it sees long-term growth recovery despite the impact of the corruption scandal on the Philippine economy.

Meanwhile, Jonathan L. Ravelas, a senior adviser at Reyes Tacandong & Co., said in a Viber message that prospects of a US Federal Reserve rate cut weighed on the dollar last week, which propped up the peso.

For this week, analysts see the local unit moving sideways before the release of key economic data, including the November inflation report and data on manufacturing activity.

Mr. Ricafort said the peso might trade between P58.40 and P58.90 against the dollar this week, while Mr. Ravelas expects it to move between P58.60 and P58.90 versus the greenback. — K.K. Chan