Peso rebounds as global oil prices drop

The Philippine peso rebounded against the US dollar on Monday, as the coronavirus disease 2019 (COVID-19) dragged demand for oil with prices now at new lows.

The local currency gained 11 centavos to close at P50.79:$1 from last Friday's finish of P50.9:$1.

"The peso exchange rate closed stronger after the sharp decline in global oil prices to new lows in more than 18 years amid the supply glut, sharply lower global oil demand amid COVID-19 economic fallout/lockdowns, and lack of storage facilities," Michael Ricafort, chief economist at the Rizal Commercial Banking Corp. (RCBC), said in a mobile message.

Oil prices have remained under pressure as the global lockdown saw fuel demand evaporate, Reuters reported, leaving extra supply that countries were finding it hard to find space to store it.

Locally, President Rodrigo Duterte ordered an enhanced community quarantine in Luzon from March 17 to April 13. It has since been extended to last until April 30 given the rising number of confirmed COVID-19 cases.

"The US dollar also corrected lower vs. major Asian currencies, including the peso, after the latest gains in the US/global stock markets amid the latest decline in global oil prices that fundamentally leads to lower inflation," Ricafort said. --KBK, GMA News