Peso climbs further to new three-year high at 48.575 to $1

The Philippine peso continued to appreciate against its US counterpart to mark another three-year high, as the market continued to cheer the easing of lockdown restrictions.

The local currency gained 5 centavos to close at P48.575:$1 versus Tuesday's finish of P48.625:$1. This is the strongest showing of the peso in three years since it closed at P48.48:$1 on November 4, 2016.

According to Rizal Commercial Banking Corp. (RCBC) chief economist Michael Ricafort, Wednesday's appreciation came amid the shift back to the general community quarantine (GCQ).

"The peso closed stronger today... amid continued positive reaction to the easing of the MECQ to GCQ in Metro Manila and nearby areas starting today as this helps improve economic recovery prospects and valuations," he said in a mobile message.

Metro Manila, along with 11 provinces, was placed under the general community quarantine (GCQ) from Wednesday, August 19 until August 31.

"Peso also stronger after the continued weakness of the US dollar vs. major global currencies to the lowest levels in more than two years amid less demand for the US currency as a safe haven in view of the improvement in global market risk appetite," Ricafort said.

"Peso has continued to appreciate vs. the US dollar in recent weeks, largely brought about by the slowdown in imports and the demand for US dollar to pay for imports largely due to the COVID-19 lockdowns/pandemic that significantly reduced business/economic activities," he added.

In a separate email interview, Security Bank Corp. chief economist Robert Dan Roces said the latest appreciation came amid strong inflows ahead of the Monetary Policy meeting later this week.

"Strong inflows still ahead of MB meeting, combined with weak USD cross the board. Remittance figures also still weighing," he said.

Data released by the Bangko Sentral ng Pilipinas (BSP) showed that cash remittances grew by 4.2% to $2.465 billion in June.

Meanwhile, the Monetary Board of the BSP is scheduled to meet on Thursday, August 20, to discuss whether or not a change in policy is warranted given the current conditions. —LDF, GMA News