MUFG Bank sees peso at P51.50-P52.50 per US dollar in 2020

As the government’s infrastructure spending is expected to pick up and put pressure on importation, the Philippine peso is seen weakening within the P51.50-P52.50 per dollar in 2020, Japanese banking giant Mitsubishi UFJ Finance Group (MUFG) said Friday.

The local currency will fluctuate between P51.50 and P52.50 from the first to the third quarter of 2020, MUFG head of ASEAN Global Markets Research Leong Sook Mei told reporters in a roundtable discussion in Makati City.

The uncertainties over the US presidential elections and the expected no-deal Brexit will be negative for the dollar, Leong said. “We still expect the peso to depreciate due to infrastructure spending.”

The local unit’s projected weakness, however, is not “negative depreciation” but is more on “growth factor” since the importation of construction materials to support the government’s infrastructure program supports the economy.

The country’s strong buffer brought by business process outsourcing revenue and overseas Filipino remittances will support the peso from further depreciation, keeping it within the P51.50 to P52.50 per dollar territory, Leong noted.

MUFG expects benign petroleum prices next year, but sudden attacks on oil facilities are a risk to the local currency, she said.

MUFG Bank acquired a 20% stake in Security Bank Corp. for P36.9 billion in 2016. The Japanese bank has been in the Philippines since 1953 to serve Japanese companies operating in the country. —VDS, GMA News