Connect with us

Hi, what are you looking for?


Peso drops on Powell hints, wage hike risks


THE PESO weakened anew versus the greenback on Monday following hawkish signals from the US Federal Reserve and due to inflation risks amid wage hikes.

The local unit closed at P52.493 per dollar on Monday, shedding 4.3 centavos from its P52.45 close on Friday, based on Bankers Association of the Philippines data.

The peso opened Monday’s session at P52.40 against the dollar. Its weakest showing was at P52.499, while its intraday best was at P52.38 versus the greenback.

Dollars exchanged dropped to $549.84 million on Monday from $978.4 million on Friday.

The peso depreciated as the Fed chief continued to hint on the central bank’s monetary policy tightening plans this year, a trader said in an e-mail.

US Fed Chairman Jerome H. Powell on Thursday reaffirmed they are likely to increase interest rates by 50 basis points (bps) for each of their policy review on June and July, Bloomberg reported. He also said they are prepared to do more, although he said they are not actively considering a 75-bp hike.

Meanwhile, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the peso weakened following the approved wage hikes in some areas of the country.

“This could lead to higher inflation amid possible risk of second-round inflation effects that also justify any hike in local policy rates,” Mr. Ricafort said in a Viber message.

The Department of Labor and Employment this Saturday approved a P33 increase for the daily minimum wage in Metro Manila and by P55 to P110 for the Western Visayas Region.

The Bangko Sentral ng Pilipinas (BSP) Monetary Board is meeting to review its policy settings on Thursday.

A BusinessWorld poll of 17 analysts conducted last week showed they are divided on the BSP’s next move, with nine betting rates will remain unchanged, while eight are expecting a 25-basis-point (bp) hike on Thursday.

Some analysts said the central bank could still keep rates at record lows on Thursday to wait for more proof of a robust economic recovery, although some analysts said the BSP can already start tightening following stronger-than-expected economic growth in the first quarter.

For Tuesday, both Mr. Ricafort and the trader gave a forecast range of P52.35 to P52.55 versus the dollar. — L.W.T. Noble with Bloomberg

You May Also Like


THE Securities and Exchange Commission (SEC) said it received on Wednesday the registration statement of SM Investments Corp. (SMIC) for a P15-billion fixed-rate bond...


BW FILE PHOTO THE CENTRAL BANK wants lenders to keep a close eye on environmental and social (E&S) risks in their credit exposure, in...


OCEANAGOLD.COM CANADIAN-AUSTRALIAN mining firm OceanaGold Corp. said it started mineral processing at its Didipio gold and copper mine project in Nueva Vizcaya and Quirino...


The healthcare ecosystem is one that has thrived on the cusp of scientific progress, benefitting enormously from the winds of change in the technological...

Disclaimer:, its managers, its employees, and assigns (collectively "The Company") do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

Copyright © 2022 PoliticalInvestorsDaily. All Rights Reserved.