Weak economic performance in Q1 drags peso

The Philippine peso retreated against the US dollar on Thursday, dragged by the contraction of the local economy in the first quarter of the year.

The local currency lost 10 centavos to close at P50.56:$1 from Wednesday's finish of P50.46:$1.

"Market factored in GDP (gross domestic product) data which brought the peso weaker as this missed most market forecasts. A contraction was not widely expected," a foreign exchange trader from a local bank said in a phone interview.

The Philippine economy contracted by 0.2% in the first quarter of 2020, the weakest performance in at least two decades since GDP growth was recorded at -0.5% in the fourth quarter of 1998 when the Philippines was suffering from the Asian Financial Crisis and the El Nino situation.

"Full-year outlooks are most likely going to be revisited and revised lower after the disappointing figures," the trader said. —LDF, GMA News