Foreign Exchange
• Previous week: The local currency has displayed significant strides toward the appreciation side in the previous week. The peso started its value at 46.48 to a dollar on Monday, to slightly appreciate on Tuesday at 46.47 to a dollar. The biggest change seen in the local currency was on Wednesday when the peso hit 46.14 to a dollar. The appreciating trend continued on Thursday at 46.11 to a dollar and ended the week back to the 45 territory at 45.87 to a dollar. The average trading value of the peso was at 46.214 to a dollar. The total traded volume was also significantly larger at $5.098 billion from the $3.424 billion seen in the previous week.
• Week ahead: While the peso is expected to still display strength against the dollar in the coming week, ING Bank economist Joey Cuyegkeng earlier warned that risks still surround the local currency. Cuyegkeng particularly said that speculation about the looming US rate hike causes risks against currencies in emerging markets, such as the Philippines, and thus, the strength “may be temporary.”
Remittances (August)
Thursday, October 15
• July remittances: Money from Filipino migrant workers stumbled in July this year and posted a growth of 0.5 percent from the same month last year. The barely improved remittance growth is the slowest growth since January this year when remittance growth also slowed to 0.5 percent. In absolute terms, the total remittances hit $2.08 billion during the month.
• August remittances: The slowdown seen in July is seen to be a “one-off” thing and is seen to recover in the months ahead. In Fitch’s recent assessment on the Philippine economic dynamics, the credit watcher said that remittances will continue to provide and offsetting factor to weaker trade numbers going forward.