Peso strengthens vs dollar as economic managers raise growth target for 2021

THE PESO strengthened versus the greenback on Wednesday after the government raised its growth target and as more vaccines arrived in the country.

The local unit closed at P50.27 per dollar on Wednesday, gaining eight centavos from its P50.35 finish on Tuesday, data from the Bankers Association of the Philippines showed.

The peso opened the session at P50.32 per dollar on Wednesday. Its weakest showing was at P50.36, while its intraday best was at its close of P50.27.

Dollars exchanged slipped to $650.8 million on Wednesday from $651.7 million on Tuesday.

A trader attributed the peso’s strength to positive sentiment after economic managers upgraded their growth target for the year.

The Development Budget Coordination Committee on Tuesday said it revised its growth target anew for 2021 to 5-5.5% from the 4-5% it gave in August.

Economic managers said the continued easing of restrictions and increase in business activities would push faster growth this year.

The economy expanded by 7.1% year on year in the third quarter, bringing gross domestic product (GDP) growth for the first nine months to 4.9%. GDP shrank by a record 9.6% last year.

Meanwhile, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said investors were also bullish after more vaccines arrived in the Philippines.

More than 8.2 million vaccine doses arrived in the Philippines on Tuesday night. Vaccine czar Carlito G. Galvez, Jr. said the country is set to receive 24 million doses this week.

For Thursday, Mr. Ricafort gave a forecast range of P50.17 to P50.32 per dollar, while the trader expects the local unit to move within P50.10 to P50.35. — LWTN