Peso firms up on Duterte call to pass P4.5T 2021 budget on time

The Philippine peso closed stronger against the US dollar on Friday after President Rodrigo Duterte stood firm that the P4.506-trillion national budget for 2021 should be passed on time despite the ongoing House leadership squabble.

The local currency gained 5 centavos to close at P48.305:$1 from Thursday’s finish at 48.355.

This is the strongest for the peso in nearly four years, when it closed at P48.19:$1 on October 24, 2016.

“Peso stronger after President Duterte reassured that the 2021 national budget will be passed on time,” Rizal Commercial Banking Corp. chief economist Michael Ricafort said.

The President certified as urgent the proposed budget next year as he called for a special session of Congress from October 13 to 16 to ensure the passage of the national spending bill.

Once a bill is certified as urgent, Congress can skip the three-day rule, allowing lawmakers to pass a measure on third reading immediately after it is passed on second reading.

The President’s call for a special session happened three days after Speaker Alan Peter Cayetano suspended the session of the House of Representative until November 16 without approving the chamber’s final version of the general appropriations bill, raising concerns that the budget might not be passed before the end of the year.

On Thursday, Duterte reminded lawmakers to resolve their leadership stalemate and pass the national budget. He also said that he would step if he sees a delay in the approval of the budget that will derail government service.

“Peso also stronger after the gauge of the US dollar versus major global currencies posted new two-week lows recently amid less demand for the US currency as a safe haven amid improved US/global market risk appetite with US stock markets at new one-month highs on renewed discussions in large-scale US stimulus, US President Trump responding well to treatment for COVID-19, and less uncertainties on the US presidential elections as Joe Biden leading surveys recently,” Ricafort said.

For the week, the local currency appreciated by 0.175 or 0.4%.

Since the start of the year, the peso appreciated by P2.33 or 4.6%.—AOL, GMA News