Peso closes flat against US dollar

The Philippine peso closed almost unchanged against the US dollar on Tuesday, albeit still slightly stronger, as imports continue to fade.

The local currency closed at P48.5:$1 versus Monday's finish of P48.51:$1.

According to ING Bank Manila senior economist Nicholas Antonio Mapa, the peso has continued to outperform regional peers, but this reflects the weak imports.

"The Philippine peso continues to outperform regional currencies, currently registering a 4.5% gain in 2020," he said in an emailed commentary.

"Some government officials would highlight investor sentiment in the Philippine given our 'solid macroeconomic fundamentals' as the reason for the currency’s sustained resilience but we have oftentimes tied PHP’s strength to the reversal in the current account balance," he added.

According to the latest data available from the Philippine Statistics Authority (PSA), imports fell 24.4% in July to $7.48 billion.

"[T]he Peso is up 4.5% for the year and continues to reflect the current anemic demand for imports as the economy remains in recession," said Mapa. 

"The current account surplus coupled with the heavy intake of foreign loans to help shore up our recovery efforts has supported the currency so far with little signs of a quick turnaround for the economy on the horizon," he added. — RSJ, GMA News