Peso poised for boost from holiday remittances: BSP


Posted at Sep 18 2018 10:39 AM | Updated as of Sep 18 2018 03:06 PM

Peso poised for boost from holiday remittances: BSP 1
A money changer counts peso bills at a shop in Manila. Jonathan Cellona, ABS-CBN News/File

MANILA -- Bangko Sentral ng Pilipinas Governor Nestor Espenilla said Tuesday the peso was poised for relief on dollar remittances from Filipinos overseas in the run up to the Christmas holidays.

President Rodrigo Duterte's economic managers, at the same time, dismissed a Capital Economics report that the local unit could fall to the P58 per dollar level.

The peso fell to P54.15 to the dollar on Tuesday, from P54.11 on Monday, holding at its weakest in nearly 13 years. Analysts have blamed the peso's slide on a widening trade deficit as imports continue to outpace exports.

Socioeconomic Planning Secretary Ernesto Pernia said a fall to the P58 per dollar level was unlikely.

The Bangko Sentral ng Pilipinas is seen supporting the local currency at the P54.28 level, said First Metro Securities analyst Paul Angelo.

Espenilla earlier said the BSP would defend the peso against speculators.

"In the coming months, higher remittances could offer some support to PHP (peso), but we maintain our concerns over the broad balance of payments..." according to a research note from Nomura Global Markets Research.

Nomura said the peso was being bragged by portfolio outflows and the weakening of other emerging market currencies. It also flagged the US-led trade war as a risk.

Christmas remittances "will really help mitigate" pressure on the peso, said First Metro's Angelo.

Cash remittances from overseas Filipinos grew 5.2 percent in July to $2.4 billion, with the 7-month total at $16.6 billion.